Innes v University of Adelaide
[2007] FMCA 1137
•20 July 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| INNES v UNIVERSITY OF ADELAIDE | [2007] FMCA 1137 |
| INDUSTRIAL LAW – Employment – claim of unfair termination of employment – whether applicant was an employee bound by a fixed term contract or a full time employee. PRACTICE & PROCEDURE – Injunctions – interlocutory injunction – where applicant sought injunction to restrain respondent from terminating applicant’s employment –– whether serious question to be tried – whether applicant likely to suffer irreparable harm – whether damages would compensate for financial loss suffered prior to final determination – whether balance of convenience would favour the granting of an injunction – whether relief sought would preserve status quo or create a new set of rights. |
| ABC v O’Neill 229 ALR 457 Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 ABC v Lenah Game Meats Pty Ltd (2001) 185 ALR 1 |
Andersen v Umbakumba Community Council
(1994) 126 ALR 121
(1994) unreported.
Cooper v Darwin Rugby League Inc.
Amec Engineering Pty Ltd v Shanks [2001] SASC 257
| Applicant: | JOHN MICHAEL INNES |
| Respondent: | UNIVERSITY OF ADELAIDE |
| File number: | ADG127 of 2007 |
| Judgment of: | Raphael FM |
| Hearing date: | 13 July 2007 |
| Date of last submission: | 13 July 2007 |
| Delivered at: | Sydney |
| Delivered on: | 20 July 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr M Keith |
| Solicitors for the Applicant: | Gun & Davey Solicitors |
| Counsel for the Respondent: | Mr T Stanley QC |
| Solicitors for the Respondent: | Minter Ellison |
ORDERS
Application dismissed.
Costs reserved.
The matter be listed for further directions at 9.00am Adelaide time on Monday 23 July 2007 by videolink.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADG127 of 2007
| INNES |
Applicant
And
| UNIVERSITY OF ADELAIDE |
Respondent
REASONS FOR JUDGMENT
Professor Innes is a distinguished social psychologist who, on 6 June 2002, accepted an offer to become Executive Dean in the Faculty of Humanities and Social Science at the University of Adelaide. He relocated to Adelaide from Western Australia where he had been Dean of Psychology and Chair of the Centre for Social Change and Social Justice at Murdoch University. The terms of Professor Innes’ employment can be found in an agreement dated 6 June 2002 (JMI6 to the affidavit of John Michael Innes dated 16 May 2007). This agreement was superseded by another agreement dated 20 November 2004 that had two differences significant for this proceeding:
Clause 1.1
Agreement dated 6 June 2002:
“1.1 The University appoints the Employee and the Employee agrees to serve the University as Executive Dean, Faculty of Humanities and Social Sciences (or such other position as determined by the University from time to time) on a full time basis for a period of three (3) years, renewable annually by mutual agreement.”
Agreement dated 20 November 2004:
“1.1 The University appoints the Employee and the Employee agrees to serve the University as Executive Dean of the Faculty of Humanities and Social Sciences on a full time basis (or such other position as determined by the University from time to time) and Adjunct Professor in the Department of Psychology, from the period 29 July 2005 to 28 July 2007. This is a fixed term appointment pursuant to Clause 41.5.7 of the Enterprise Certified Agreement 2000 to 2003 and any replacement agreements and subsequent clauses.”
Clause 2.1
Agreement dated 6 June 2002:
“2.1 The Employee’s total remuneration package is $152,027 per annum from the date of commencement and includes all employer superannuation contributions and any fringe benefits tax payable in respect of the package. The makeup of the package will be determined, and may be varied, by the University in consultation with the employee.”
Agreement dated 20 November 2004:
“2.1 The Employee’s total remuneration package is $171,137 per annum from the date of this contract and includes all employer superannuation contributions and any fringe benefits tax payable in respect of the package. The makeup of the package will be determined, and may be varied, by the University in consultation with the employee. “
and one clause that was significantly unaltered:
Agreement dated 6 June 2002:
“12.1 Either party may terminate employment by giving to the other written notice for a period of not less than three (3) months. The University may give pay in lieu of notice.”
Agreement dated 20 November 2004:
“13.1 Either party may terminate employment by giving to the other written notice for a period of not less than three (3) months. The University may give pay in lieu of notice.”
It is accepted that the agreement upon which this action is brought is the one dated 20 April 2004. That contract incorporates the Enterprise Certified Agreement 2000-2003 and in particular cl.41 thereof (Exhibit 1). This clause relevantly states:
“41.1The University shall engage a person as a staff member on terms that correspond with one or other of the types of employment prescribed in this section and in accordance with this agreement. To avoid doubt nothing in this agreement prevents a staff member engaging in additional work as a casual staff member in work unrelated to, or identifiably separate from, the staff member’s normal duties. Nothing in this Agreement and, after the making of this Agreement, nothing in any agreement covering staff members to which this Agreement applies, shall limit the umber or proportion of staff members that the University may employ in a particular type of employment.
41.2Full-time employment means all employment other than ‘fixed-term’, ‘part-time’, or ‘casual’. Full-time employment may contain a reasonable probationary period that is directly related to the nature of the work to be carried out under the contract. As a condition incidental to employment on probation, a staff member shall be advised of, and given an opportunity to make response to, any adverse material about the staff member which the University intends to take into account in a decision to terminate the employment upon or before the expiry of the period of probation.
…
41.4Fixed-term employment means employment for a specified term or ascertainable period, for which the instrument of engagement will specify the starting and finishing dates of that employment, (or in lieu of a finishing date, will specify the circumstance(s) or contingency relating to a specific task or project, upon the occurrence of which the term of the employment shall expire), and for which, during the term of employment, the contract is not terminable, by the University, other than during a probationary period, or for cause based upon serious or wilful misconduct.”
…
41.5.7Senior contract positions
A staff member in the positions listed below or their successor positions may enter into fixed-term contract with the University:
· Executive Deans
· Director, Executive Services
· General Manager, Client Services
· General Manger, Human Resources
· General Manager, Information Technology Services
· Financial Controller
· University Librarian
· Director, Research Branch”
In the letter of 6 June 2002, in which he accepted the position, Professor Innes wrote:
“I believe that it is important for me in the position of Executive Dean also to have a title that recognizes my reputation as a scholar in my field. I would like to request, therefore, that I be appointed to an honorary position of Professor within the University. My preferred appointment would be to be a Professor in the Department of Psychology. This would facilitate my access to research facilities in the disciple [sic] should the need arise and also make easier the collaboration of scholars in that discipline in the application for competitive external grants.”
On 8 August 2002 the Vice-Chancellor wrote to Professor Innes:
“Dear Professor Innes
Re: Adjunct Title
I have pleasure in advising you that the University has accorded you the title of Adjunct Professor in the Department of Psychology at the University of Adelaide. You will hold this title concurrently with your appointment as Executive Dean of the Faculty of Humanities and Social Sciences until 28 July 2005.
This title is conferred to enable you to maintain a presence as an active researcher and scholar in your professional field.
Yours sincerely
Professor James A McWha
Vice-Chancellor”
The term of Professor Innes’ appointment is due to expire on 28 July 2007. In August 2006 he requested a further term as Executive Dean from Professor McDougall the Deputy Vice-Chancellor (Academic). Professor McDougall and the Vice-Chancellor agreed that Professor McDougall should take soundings within the Faculty. Professor McDougall reported to the Vice-Chancellor in a letter dated 14 August 2006:
Dear Vice-Chancellor:
Re: Reappointment of Professor Mike Innes as Executive Dean, Faculty of Humanities and Social Science
Professor Mike Innes has requested reappointment for a third term as Executive Dean of the above Faculty. As agreed, I have met with all the Heads of Schools and Associate Deans in the Faculty to gauge their views on this request. I met with most of them individually over a period of three weeks. A list is attached for your information.
A small majority of the senior staff of the Faculty is of the view that the University should seek to appoint a new Executive Dean. All staff made the point that Professor Innes was the right person for the first 2-3 years of his appointment, as the Faculty needed a period of stability after a relatively traumatic experience under the former Executive Dean, Professor Malcolm Gillies. However, a majority made the strong point that the Faculty now needs to move forward, and that they feel that Professor Innes is unable to provide a vision and the leadership for this phase of the Faculty’s future.
All staff strongly stressed that they highly appreciated the personal assistance, guidance and friendship that they had received from Professor Innes, and admired him as a person and a scholar. However, it was with reluctance that some had formed the view that the Faculty needed a new leader.
Four of the five Heads of Schools/Units believe that change is necessary. In regard to the Associate Deans, one is of the view that change is necessary, one is supportive of Professor Innes remaining in the position, and two did not have a firm view – essentially not unhappy for Professor Innes to remain as Executive Dean.
I am happy to discuss these results with you.
Yours sincerely
Professor Fred McDougall
Deputy Vice-Chancellor (Academic)”
The Vice-Chancellor responded on 15 August 2006:
“I am responding to your letter of 14 August 2006 concerning the position of Executive Dean of the Faculty of Humanities and Social Sciences.
Having regard to your report, my view is that we should commence a competitive appointment process as soon as possible. Please liaise with the relevant staff in Human Resources to put this into effect. Professor Innes’ current contract extends to 28 July 2007, and it is highly desirable that an appointment be made well in advance, so as to ensure a smooth handover following his retirement.
I would be grateful if you would manage this process, though I will serve as Chair of the Appointment Committee, when formed.
Professor James A McWha”
On 1 September 2006 Professor McDougall wrote to Professor Innes:
“Dear Mike
I am writing to confirm the situation in regard to your request for a further term as Executive Dean of the Faculty. As discussed with you early this week, the Vice-Chancellor has decided that he does not wish to offer you a third term as Executive Dean. He wants to see a competitive appointment process put in place for this position. He also wants to see this process start this year to ensure that an appointee is able to commence at the expiry of your current contract on the 28 July 2007.
He has asked me to manage the appointment process in regard to this position. At this stage, I intend to start the appointment process at the end of September 2006, with the development of selection criteria and an information memorandum for the position, and the possible briefing of a recruitment agency to undertake the search task.
It is probably unnecessary to say this, but you have my full support and confidence in fulfilling your current role for the remainder of your contract period.
Yours sincerely
Professor Fred McDougall
Deputy Vice-Chancellor (Academic)”
Professor Innes wrote on 26 October 2006:
“Dear Vice-Chancellor
I am writing to you with respect to the decision by you not to extend my contract beyond 2007 for the position of Executive Dean, Faculty of Humanities and Social Sciences.
I would like to have in writing the reasons why this decision has been made. I have had no explicit or clear reasons given to me.
In any performance review with the previous Deputy Vice-Chancellor (Academic), Professor Penny Boumelha, at no time was any performance indicator identified as unsatisfactory. Quite to the contrary all indicators indicated highly satisfactory performance. In any meeting with the incoming Deputy Vice-Chancellor, Professor Fred McDougall, no discussion of performance indicators occurred and certainly there was no indication of any concerns.
It is the case, therefore, that while I was aware, of course, that my contract could be terminated, no indication was given, explicitly or implicitly, that I was acting in a manner that would result in termination. With proper performance management it would seem appropriate that indication would be given that I was seen, in some sense, to be acting unsatisfactorily. That the performance indicators were changed without notice would, in itself, I think be indicative of inappropriate management practice. A failure to provide me with appropriate feedback that I was seen as failing to manage properly is a further problem.
…
I need, therefore, to be given explicit feedback, in writing, as to the reasons for not extending my contract. It is vital for me, in entering a competitive job market, that I know how some managers view my performance so that I can address such perceived failings for my future employment.
I must also request, with my preparations to enter the job market, that you make clear to me whether you will be able to give clear support for me in any reference that you may be asked to give, officially or unofficially, by any prospective employer.
I would ask that this advice be given to me in a timely manner so that I can proceed effectively and efficiently to apply for other positions.”
to which the Vice-Chancellor responded on 13 November 2006:
“Dear Mike
I am responding to your letter of 26 October which arrived on the day I left for overseas, so apologise that it was not possible to respond to you more speedily.
The terms of your appointment as Executive Dean do not provide for an automatic right of renewal, and the University does not propose to move along those lines. You have had the responsibility of leading the Faculty in a time of transition and consolidation. Having taken advice, my view is that a change is needed, going forward. The decision not to offer a further contract has been made not in response to perceived shortcomings, but out of a recognition that a different skill set is needed for the future.
While I realise that this decision is difficult for you, I hope that you will accept that it is made in what I believe are the best interests of the Faculty and the University. I likewise hope that we can work towards a transition that encompasses not only the ongoing responsibilities of your office, but a fitting celebration of your contribution.
With regard to your future plans, I am happy to act as a referee for you, and assure you of my clear support in this regard.
Best regards,
Professor James A. McWha
Vice Chancellor and President”
The search for a replacement for Professor Innes was not an unmitigated success; an overseas candidate was selected and then declined. An internal candidate was sought and on 25 May 2007 Professor Harvey was appointed. On 22 May 2007 Professor Innes commenced these proceedings. He sought two interim orders:
(1) An order that the Respondent be restrained, until the determination of the substantive relief sought by the Applicant in this matter, from terminating the Applicant’s employment in accordance with the letter of termination date heard that 1 September 2006, or at all.
(2) An order that the Respondent be restrained, until the determination of the substantive relief sought by the Applicant in this matter, from taking any further steps to fill the position currently described as Executive Dean, Faculty of Humanities and Social Sciences”.
When the matter was opened by his counsel Mr Keith the applicant restricted the application to Order 1.
Professor Innes argues that the University is not entitled to treat his contract as expiring by effluxion of time on 28 July 2007 because it is not a fixed term contract. He argues that whilst the University purported to create such a contract, by making it subject to the terms of the Certified Agreement it took the agreement outside the definition because it contained a provision for termination on 3 months’ notice. That provision is contrary to the definition which states that the contract:
“is not terminable by the University other than during a probationary period or for cause based upon serious or wilful misconduct.”
Professor Innes argues that he is in reality a full-time employee as defined but accepts he is one to whom 3 months’ notice can be given. He argues that the attempt to claim his employment contract will expire on 28 July 2007 is in breach of contract and that, as he has not been given notice, his employment is continuing. If he was to be given notice he would be able to exercise his rights to seek review of the decision on the grounds that the dismissal was unfair. He says that he has never been advised that his performance was unsatisfactory. Professor Innes claims that he is entitled to interim relief to preserve the status quo pending the hearing of his substantive action.
Discussion
The application currently before me is for interim relief in the form of an injunction. The purpose of obtaining that injunction is to maintain the status quo prior to the hearing. It has long been settled that:
“In all applications for an interlocutory injunction a court will ask whether the plaintiff has shown that there is a serious question to be tried as to the plaintiff’s entitlement to relief, has shown that the plaintiff is likely to suffer injury for which damages will not be an adequate remedy and has shown that the balance of convenience favours the granting of an injunction.”: ABC v O’Neill 229 ALR 457 at [19] per Gleeson CJ and Crennan J.
I will deal with each of these “organising principles” in turn and then consider the argument put by the respondent that in the particular circumstances of this case the interim relief sought would not preserve the status quo but would create a new set of rights.
Serious question to be tried
Gummow and Hayne JJ in ABC v O’Neill expanded the discussion of the organising principles quoting first from Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622-623 where that court noted that it should address itself to two main enquiries:
“The first is whether the plaintiff has made out a prima facie case in the sense that if evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief.”
Gummow and Hayne JJ qualified the phrase “prima facie case” by excluding a probability test and indicating that the proper way to look at the matter was whether “the plaintiff had shown a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial.” Their Honours also emphasised that any consideration of the arguability of the case would depend on the rights asserted and the practical consequences likely to flow from the orders sought.
Assistance in achieving the goal set by their Honours can be found in the judgment of Gleeson CJ in ABC v Lenah Game Meats Pty Ltd (2001) 185 ALR 1 at [18]:
“The extent to which it is necessary, or appropriate, to examine the legal merits of a plaintiff’s claim for final relief in determining whether to grant an interlocutory injunction will depend upon the circumstances of the case. There is no inflexible rule. It may depend on the nature of the dispute. For example, if there is little room for argument about the legal basis of a plaintiff’s case and the dispute is about facts the court may be persuaded easily at an interlocutory stage that there is sufficient evidence to show prima facie an entitlement to final relief.”
In the instant case there does not seem to be me to be very much dispute as to the essential facts. Professor Innes signed an agreement, the agreement contained certain terms, Professor Innes argues that those terms constitute a different type of agreement with different legal ramifications than the University does. Professor Innes argues, with the support of cases such as Andersen v Umbakumba Community Council (1994) 126 ALR 121, that a contract purporting to be for a fixed period of time which contains a clause providing for termination upon notice is not a fixed term contact; see also Cooper v Darwin Rugby League Inc. (20 September 1994, unreported). Professor Innes argued that the structure of contracts between the University and its senior staff was governed by the collective agreement which defined the type of contracts into which the University could enter. The fixed term contract under that agreement could not contain a notice clause such as the one contained in the agreement that Professor Innes signed. The University may have wished to bind Professor Innes to a fixed term contract but they failed to do so because the contract they drew was not such. Professor Innes was therefore a full time employee. As against this argument the University submits that the agreement signed by Professor Innes and the University was one in which there were two repugnant clauses to which the dicta of the Full Court of the Supreme Court of South Australia in Amec Engineering Pty Ltd v Shanks [2001] SASC 257 at [36] should apply:
“If there are two clauses or parts of a deed repugnant to each other the first will be received and the latter rejected unless there is some special reason to the contrary: Bateson v Gosling [1871] LR 7 CP 9, per Willes J at p 12. If in a deed an earlier clause is followed by a later clause which destroys altogether the obligation created by the earlier clause, the later clause is to be rejected as repugnant and the earlier clause prevails: Forbes v Git [1922] 1 AC 256 at p 259. Repugnancy arises where one provision is contrary or contradictory to another or where one provision is inconsistent or incompatible with another. That is the case here. The rule as to repugnancy has been described as an expedient to which the court very reluctantly has recourse, and never until it has exhausted every other means in its power to reconcile apparent inconsistencies: Bush v Watkins (1851) 14 Beav 425 at p 432. In the present case we are not concerned with a deed but rather with a contract in writing. I see no reason why this rule should not be applicable to such an instrument. The rule is subordinate to the general principle that the intention must be ascertained from the entire contents of the document. Hence, when one clause is in accordance with, and the other is opposed to, the real intention, the former must be received and the latter rejected whatever their relative positions: Halsbury's Laws of England, 4th Ed vol 12 par 1504.”
The University argues that Professor Innes treated the contract as a fixed term one up to 28 July 2007 at all times prior to the commencement of proceedings. It points to the letter from the Professor asking for an extension of his fixed term contract upon its expiration. But Professor Innes is no lawyer and he should not be condemned for misunderstanding the nature of his arrangements prior to taking legal advice upon them. I am of the view that the dispute as to whether the Professor is a person to be considered bound by a fixed term contract or a full time employee of the University constitutes a serious issue to be tried. Having taken into account the nature of the relief argued for and the practical consequences likely to flow from such an order I am satisfied that Professor Innes has shown a sufficient likelihood of success to justify the preservation of the status quo (if that is in fact what he is seeking).
Irreparable Harm
Irreparable harm is more accurately described by Gleeson CJ and Crennan J in ABC v O’Neill as “injury for which damages will not be an adequate remedy”. Professor Innes submits that there is potential for adverse inference on the basis of the perception of his qualities. In other words the act of dismissal or termination will reflect upon Professor Innes’ reputation in a way that cannot be remedied. Professor Innes deposed to the fact that there are few available vacancies in Universities of the quality of the University of Adelaide in senior managerial roles. He points to his age, almost sixty-five. He says that the effect of not granting the injunction would be that he ceases to be a full time employee of the University. But, of course, I have not found as a fact or as a matter of law that he is such even though I believe there is a strongly arguable case. I fully accept that damage to reputation is one of those areas in which irreparable harm can occur but I think that when dealing with a highly sophisticated workplace such as a University there is a realisation that nothing has been decided until the court has had its final say. I am also of the view that if a court should come to the opinion that Professor Innes was unfairly dismissed then its judgment would have to reflect as much and that judgment could be used by the Professor to counter any suggestions to the contrary that might be raised in any future employment situation. If the reputational damage is thereby neutralised damages will adequately compensate the applicant for any financial loss that he might suffer pending the final determination of the dispute.
I should also point out in regard to the reputational loss alleged that Professor Innes is no longer requesting an interim injunction to maintain him in his position as Dean. He is merely asking to be maintained as a full time employee of the University. Another way of putting it is for him to be maintained in his position as adjunct professor. On that ground there is some dispute between the parties as to the nature of the position. The University argues that the position of adjunct professor is an honorary one carrying with it no rights to teach, research or be paid by the University without the University’s express agreement. These matters will be more particularly taken up in the discussion of maintaining the status quo; but the doubts which I express there concerning the nature of the relief sought supports my view on irreparable harm.
Balance of convenience
Professor Innes argues that the balance of convenience favours granting him an injunction now that the position of Executive Dean is not in issue. He says that as the new Executive Dean is an internal appointment there is no new additional salary to be paid if Professor Innes was continued on the payroll as an adjunct professor. He would not expect to be paid his Dean’s allowance. The University argues that as Professor Innes is no longer requesting to be maintained in his position as Executive Dean the balance of convenience falls in favour of the University. Against this the Professor argues that he is seeking to maintain his position as a full time staff member. It is accepted by the University that no official notice has been given to Professor Innes. Consistent with its view that he is an employee on a fixed term agreement the University proposed to allow his employment to expire by effluxion of time. There was some suggestion made that the letter of September 2006 in which the Professor was advised that the Vice Chancellor did not wish to renew the arrangement constituted notice, but this was not pressed hard. If the Professor does turn out to be a full time employee then any loss of wages whilst the case is being determined would have to be made up and there is no suggestion that the University would not be able to fulfil that obligation. Given the limited nature of the injunction now claimed I am of the view that the balance of convenience does not favour the applicant.
Retention of the status quo
The University argues that Professor Innes’ employment was as Executive Dean. He was also given the honorary title of adjunct professor. He no longer seeks an injunction requiring the University to retain him as Executive Dean and another Executive Dean has been appointed. He did not bring his claim against the University until some considerable time after a search for a new Executive Dean was commenced. If the court is not being asked to maintain him as Executive Dean then how is the status quo being maintained? The University argues that the Professor is asking the court to maintain him as a type of employee the court has not yet decided he is. That, it argues, constitutes asking the court to alter the rights of the parties which is not appropriate for an interim order in a case of this type. The evidence which I have seen concerning the appointment as an adjunct professor indicates that it was made as a result of a request by Professor Innes for an indication to the world that he maintained professorial status even though he was acting in an administrative capacity. His adjunct professorship was not in his own department. I have seen no evidence that it involved the requirement for the Professor to undertake any academic work. I think that on balance, and as things stand at this point in time when no decision has been made as to the type of employee Professor Innes was, the current limited request is not a request to maintain the status quo.
It follows from the above that I am unable to grant Professor Innes the injunction he seeks. I dismiss the interim application and I reserve the costs. I have already indicated to the parties that I am available to commence hearing the substantive case on 2 and 3 August 2007. Whilst it is to be hoped that the case will be determined within those two days I can quite understand that it may not be if there comes to be heard a significant argument as to the fairness of the termination or expiry of Professor Innes’ contract. If Professor Innes is found to have been employed under a fixed term agreement then this may not be a matter which would need to be considered. But if he is found to be a full time employee then the facts surrounding his termination would be very much an issue. I propose to invite the parties to appear before me for further directions at which these issues can be discussed at 9.00a.m. Adelaide time on Monday 23 July 2007.
I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date: 20 July 2007
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