Re: Team Employment & Training Network P/L - [1998] QSC 228

IN THE SUPREME COURT
OF QUEENSLAND
Brisbane O.S. No.9599 of 1998
Before the Hon. Mr Justice Mackenzie
[re: Team Employment & Training Network P/L]

IN THE MATTER of Order 64 of the Supreme Court Rules
- and -

IN THE MATTER of an agreement in writing made 20 December 1996 between TEAM Employment & Training Network Pty Ltd ACN 069 372 881 and Commonwealth of Australia acting through the Department of Employment, Education, Training and Youth Affairs [”the agreement”]

CATCHWORDS: CONTRACT - Labour market programme services - obligations under the contract - whether all obligations under the contract were satisfied.

Counsel:Mr P Hackett for the applicant
Mr P O’Shea for the respondent

Solicitors: Toogoods Solicitors for the applicant
Australian Government Solicitor for the respondent

Hearing date: 20 October 1998
JUDGMENT - MACKENZIE J.

Judgment delivered 27 October 1998

This is a construction summons seeking a declaration as to the entitlement of the applicant to payment of a portion of monies under a contract.
On 20 December 1996 an agreement was signed between the applicant, TEAM Employment & Training Network Pty Ltd, and the Commonwealth of Australia acting through the Department of Employment, Education, Training and Youth Affairs in connection with the provision of labour market programme services to the Commonwealth. The agreement, in paragraph A, says that the contract includes the General Conditions of Contract (version 2) and the Specific Conditions of Contract for the Special Employer Support Programme (which are contained in separate documents). After a subsequent amendment the applicant’s obligation with which this matter is concerned was to provide 20 weeks work experience and training placements for 56 participants referred to it by the CES from the Moorooka CES area. Services to be provided by the applicant included interviewing job seekers referred by the Commonwealth to it to determine their suitability for a placement and arranging placement with employers (Cl 1.2 Specific Conditions). Cl 1.3 obliged the applicant to provide or arrange placements with employers who had an intention and a capacity to provide ongoing employment beyond the period of placement.
Paragraph G of the agreement is in the following terms:-
“The ongoing employment target for payment of the final 25 per cent of the Broker Fee is for 60 per cent of Participants to be employed for at least 4 weeks after completion of their placements.”
The broker fee applicable to the contract was up to $140,000 of which 75 per cent has been paid. The current dispute concerns the remaining 25 per cent ($35,000).
Four of the participants dropped out within the first 4 weeks and were not able to be replaced. Twenty-three of the remaining 52 (44.2%) were in employment after completion of the placement. The focus of the argument is that only six other people completed the 20 week work experience and training programme. The applicant claims that 23 out of 29 people (79.31%) fitted the criteria in the contract, thereby entitling it to payment of the remaining 25 per cent of the broker fee. The Commonwealth contends that the relevant outcome was 23 out of 52 (44.2%) which did not reach the required 60 per cent for payment of the remaining 25 per cent of the broker fee.
The argument turns on what is meant by para.G of the agreement. The word “participant” is defined in the General Conditions of Contract, and by incorporation, in the agreement, as meaning a person who is referred to the applicant by the respondent and participates in the labour market programme activity. “Labour market programme” is defined to be a generic term that refers to a range of employment and training initiatives provided by the Commonwealth to job seekers registered with the Commonwealth.
In clause 1 of the Specific Conditions it is stated that “for the purposes of the SES programme a job seeker referred to the applicant by the respondent becomes a participant once he or she is selected for a placement by the applicant.” “Placement” is defined as meaning any period during which a participant undertakes work experience with an employer.
The principal point relied on by the applicant is that since only 29 people completed the 20 week work experience and training programme contemplated under the agreement, of whom 23 secured employment which lasted for the required duration under the agreement, the relevant target outcome reached was 23 out of 29 (79.31%). It was submitted that the department’s contention that it was 23 out of 52 (44.2%) failed to take into account the words “after the completion of their placements” in para.G of the agreement. In effect it was submitted that para.G should be read as envisaging a situation where the words “after the completion of their placements” required account to be taken of the fact that a number of people failed to complete the period of the placement, and that the baseline for deciding whether the target of 60 per cent of participants had been employed for at least 4 weeks was the number of people remaining in the scheme at the end of the 20 week period.
I do not accept this as a correct interpretation of para.G. In my opinion the concept embodied in it is that the final 25 per cent of the broker fee is payable only if 60 per cent of those who undertake a placement gain employment for an additional 4 weeks after it is finished. It seems to have been accepted by the Commonwealth that if a participant is employed by an employer for 4 weeks even though that period of employment commences before the expiry of the envisaged 20 week work experience, that is sufficient to enable the broker to have that person counted as one of those employed for at least 4 weeks after completion of a placement for the purposes of the 25 per cent final component of the broker fee. There was no argument addressed to the contrary.
During the course of submissions, an argument was developed that there was an obligation on the Commonwealth to replace people who dropped out of the scheme. It was accepted that four people had dropped out in the first 4 weeks but had not been replaced. Clause 1.8 of the Specific Conditions provides that the broker must replace a participant who leaves his or her placement within the first 4 weeks at no extra cost to the Commonwealth, but if a participant is not replaced during that time they will not be included as part of the broker’s performance of the contract and a pro rata proportion of the broker fee and SES training allowance funds attributable such a participant will be recoverable by the Commonwealth from the broker.
In the event, since no replacements were available the four were deleted from the number of participants for calculation purposes. Whether they were included or not, the proportion was below 60 per cent if the Commonwealth’s interpretation of the contract is correct. Further, clause 3.13 of the General Conditions of Contract, which requires withdrawal of a participant to be reported to the Commonwealth, speaks in terms of a right to provide a replacement participant, not an obligation.
The provisions relating to possible action being taken against the person who withdraws in respect of benefits is phrased in terms of a discretion not an obligation. It is in my view impossible to construe the provisions of the contract as imposing an obligation to provide a replacement. In any event, the fact is that failure to find replacements for the four early withdrawals did not affect the achievement of the performance standards since the calculation was done on the assumption that they should not be counted.
For the reasons developed above, I have concluded that the key declaration, that upon the proper construction of paragraph G of the agreement the applicant is entitled to be paid the agreed brokerage fee, having achieved the target outcome of at least 60% in respect of participants who completed the programme referred to in the agreement, cannot be granted. The summons is dismissed with costs to be taxed.