Roberts v University of New England
[2009] FMCA 964
•2 October 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ROBERTS v UNIVERSITY OF NEW ENGLAND | [2009] FMCA 964 |
| TRADE PRACTICES – Alleged held position of Network Communications Officer – applicant required to participate in the workplace change process for restructure of University’s Information Technology Department – applicant did not express interest in new position – unilaterally transferred to another position – claim that University contravened s.52 and s.53B of the Trade Practices Act 1974 (Cth) – claim dismissed. ACCRUED JURISDICTION – Contention that when Trade Practices claim found not to be made in trade and commerce, the accrued jurisdiction in tort and contract fails – exercise of discretion – tort and contract claim should be heard. TORT AND CONTRACT – Claim of variation of contract of employment – incorporation of variation by reference – breach of implied term of trust and confidence – negligent advice – claim dismissed. |
| Federal Court of Australia Act 1976 (Cth), s.32A(b) Federal Magistrates Act 1999 (Cth), ss.10(1), 18 Trade Practices Act 1974 (Cth), ss.51A, 52, 53B, 82 University of New England Act 1993 (NSW), ss.5, 16 |
| Beck v Spalla [2005] FCAFC 82 Practice & Procedure – High Court and Federal Court of Australia, Federal Court (Butterworths Australia 2000) |
| Applicant: | PETER EDWARD ROBERTS |
| Respondent: | UNIVERSITY OF NEW ENGLAND |
| File number: | SYG 3790 of 2007 |
| Judgment of: | Lloyd-Jones FM |
| Hearing dates: | 29-31 July 2008 in Armidale |
| Date of last submission: | 13 August 2008 |
| Delivered at: | Sydney |
| Delivered on: | 2 October 2009 |
REPRESENTATION
| Counsel for the Applicant | Mr MJ Heath |
| Solicitors for the Applicant: | Rice Moore & Gibson |
| Counsel for the Respondent: | Mr A Britt |
| Solicitors for the Respondent: | Australian Higher Education Industrial Association |
ORDERS
The application made on 5 September 2007 is dismissed.
There be no order as to costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 3790 of 2007
| PETER EDWARD ROBERTS |
Applicant
And
| UNIVERSITY OF NEW ENGLAND |
Respondent
REASONS FOR JUDGMENT
Application
The Application filed in the Federal Court of Australia on 5 September 2007, classifies the nature of the claim as lost opportunity, damages arising from misleading and deceptive conduct alleged against the respondent, breach of contract and negligent advice. The Application was supported by a Statement of Claim filed on the same day. The matter was transferred from the Federal Court to the Federal Magistrates Court pursuant to orders made by Jacobson J on 6 December 2007. The matter was listed for directions on 8 February 2008.
Background
In setting out the following background material I have either quoted directly or paraphrased from the written submissions prepared by Mr Heath, Counsel for the applicant. I have not made direct attributions as this would make the summary unwieldy. The information is provided to assist in understanding the nature of the application but not to establish any evidentiary point.
The applicant, Peter Edward Roberts, was an employee of the University of New England (“the University” or “UNE”) and held the substantive position of Network Communications Officer at the Level HE06.
In 2006, UNE was formulating its budget for 2007. The Information Technology Directorate (“ITD”), a division of UNE, was directed to prepare a budget and cut that division’s expenditure by $850,000. This required cut was in addition to one which had been made in previous years. The consequence was that restructuring of the ITD was to take place. Staff of UNE were governed by an industrial instrument known as the University of New England’s Workplace Agreement 2006-2008 (“the Agreement”). Mr Roberts was required to participate in a Workplace Change process (“the WPC process”).
Mr Heath claims that Mr Roberts participated in that process in a bona fide way and was told that in the event that he does not apply for a position in a “Spill and Fill” of employment positions, he would have the option of redeployment or redundancy. By an email to ITD staff, (including Mr Roberts), the University invoked clause 41 of the Agreement, being its entitlement to review any area of activity of the University. In order to implement such a review, the Agreement required UNE to abide by a process of managing workplace change set out in Part E of the Agreement. The initial WPC process meeting occurred on 17 October 2006. Mr Roberts attended, as did other staff of the ITD. Union representatives were present as were two staff members from UNE’s Human Resources, Frank Strbik and James Simmons. The meeting was chaired by James Edwards, the then head of ITD.
On 24 October 2006, a second WPC process meeting occurred. Mr Roberts attended this meeting as did management of the ITD, union representatives and human resources representatives from UNE, including Mr Strbik and Mr Simmons.
A third WPC meeting took place on 28 November 2006 where Mr Strbik addressed staff. Following that meeting an ITD Workplace Change Flowchart (“the flowchart”) was disseminated to ITD employees along with a final workplace change document on 5 December 2006.
On 7 December 2006, ITD employees were notified that UNE’s Chief Financial Officer signed the final workplace change document (which included the flowchart) thus commencing implementation of the workplace change process with the result that Mr Roberts’ position became “displaced”. Mr Roberts did not express any interest in a new position. Once it became clear that he did not apply for a new position, UNE decided to unilaterally transfer him to another position. Consequently on 23 February 2007, Mr Roberts was transferred to the position of Communications Officer in the data centre in ITD.
Mr Roberts alleged that, by making the representations as to the choice he had during the course of the WPC process, UNE contravened s.52 and s.53B of the Trade Practices Act 1974 (Cth) (“the TPA”) and by that conduct he suffered loss or damage.
Mr Roberts invoked a grievance procedure process under the Agreement in an attempt to resolve the dispute. An independent arbitrator determined there was an industrial dispute but this is disputed by UNE.
The Evidence
The applicant in these proceedings tendered the following evidence:
a)Exhibit A1: Affidavit of Peter Edward Roberts sworn on 5 December 2007 (first affidavit of Mr Roberts);
b)Exhibit A2: Affidavit of Peter Edward Roberts sworn on 1 March 2008 (second affidavit of Mr Roberts);
c)Exhibit A3: Retirement quote;
d)Exhibit A4: Affidavit of Timothy John Cross sworn on 29 February 2008;
e)Exhibit A5: Affidavit of John Barker affirmed on 3 March 2008;
f)Exhibit A6: Affidavit of David Arthur Buckley affirmed on 4 March 2008;
g)Exhibit A7: Affidavit of Mark Allan Simpson sworn on 3 March 2008;
h)Exhibit 9A: Affidavit of Glennn Matthew White sworn on 3 March 2008;
i)Exhibit A8: Affidavit of Kylie Maree Day affirmed on 3 March 2008; and
j)Exhibit A10: email from Frank Strbik.
The respondents in these proceedings tendered the following evidence:
a)Exhibit R1: Letter to Mr Roberts – position of Nesacit Network Administrator;
b)Exhibit R2: Affidavit of Frank John Strbik sworn on 5 February 2008;
c)Exhibit R3: Letter to Robyn Trevaskis dated 19 March 2008;
d)Exhibit R4: Affidavit of James Maxwell Simmons sworn on 5 February 2008;
e)Exhibit R5: Affidavit of Brian Cameron sworn on 5 February 2008;
f)Exhibit R6: Affidavit of Daniel John Dooner sworn on 5 February 2008;
g)Exhibit R7: Affidavit of Angela Hendrick, sworn on 6 February 2008.
h)Exhibit R8: letter to Mr C Serow of Rice, Moore & Gibson dated 4 December 2007;
i)Exhibit R9: Letter to Robyn Trevaskis of Rice, Moore & Gibson of 5 December 2007;
The following witnesses gave oral evidence:
a)Peter Edward Roberts;
b)Timothy John Cross;
c)John Baker;
d)David Arthur Buckley;
e)Mark Allan Simpson;
f)Glenn Matthew White;
g)Kylie Maree Day;
h)Frank John Strbik;
i)James Maxwell Simmons;
j)Brian Gordon Cameron;
k)Angie Hendrick.
Amended Statement of Claim
1. The applicant was at all material times an employee of the respondent as a Network and Communications Officer within the Information Technology Directorate (“ITD”) if the respondent.
2. The respondent is a body corporate.
Particulars
Section 5 of the University of New England Act 1993 NSW.
Workplace Change Process
3. The applicant’s employment was at all material times subject to the University of New England Workplace Agreement 2006-2008 (“the Agreement”).
4. In or about October 2006, the respondent commenced a consultation process (including with the applicant) for the implementation of workplace change in the ITD.
Particulars
The applicant attended workplace change meetings at the request of the respondent on 17 October (first meeting), 24 October 2006 (second meeting) and 27 November 2006 (third meeting) (“the workplace change meetings”).
5. Further, during the course of the workplace change the respondent represented to the applicant that a staff member that becomes “displaced” as a result of the workplace change process would be invited to “express” an interest in new positions and if a staff member did not express an interest in any of the new positions they would be offered the “choice” of redeployment or retrenchment.
Particulars
the representation was oral and made by Frank Strbik, Senior Industrial Relations Officer of the Respondent at the Second and Third meetings (“the oral representations”).
6. Pursuant to clause 31.7 of the agreement, the respondent prepared and distributed a Final Workplace Change document (“the Workplace Change document”).
Particulars
The Final Workplace Change document came into effect on 5 December 2006 or alternatively 7 December 2006 when executed by for and on behalf of the Director of ITD and the respondent’s Chief Financial Officer.
7. The respondent commenced to implement workplace change in accordance with the Final Workplace Change Document on or after 5 or alternatively 7 December 2006.
8. On or after 5 or alternatively 7 December 2006 the applicant became “displaced” within the meaning of the Final Workplace Change Document.
9. On or about 2 February 2007, the respondent notified the applicant of certain positions that remained unfilled in the respondent’s workplace and invited expressions of interest from the applicant in those positions.
Particulars
Email dated 2 February 2007 from Ms. Kim Guthrie, Business Information Manager Information Technology Directorate of the Respondent.
10. The applicant did not express an interest in any of the positions referred to in the email of 2 February 2007 from Ms. Guthrie.
11. It was a term of the Final Workplace Change Document that following steps 1 to 5 inclusive in the ITD – Workplace Change – Flowchart on page 9 and 10 of the Final Worplace Change Document, a staff member not expressing any interest in a position would subsequently be offered “the choice” of redeployment or retrenchment.
Particulars
Item 6 of the ITD – Workplace Change – Flowchart in the Final Workplace Change Document (“the written representation”).
12. The respondent did not offer the applicant a “choice” or redeployment or retrenchment.
13. The respondent refused the applicant the choice of redeployment or retrenchment.
Particulars
14. The letter dated 23 February 2007 from Ms. Bronwyn Pearson to the applicant constituted a refusal to give the applicant a choice of redeployment or retrenchment.
Misleading and Deceptive Conduct Claim
15. the oral representations and written representations were:
a) made by the respondent in trade and commerce and were misleading and deceptive or likely to mislead or deceive the applicant; and/or,
b) were a representation as to a future matter within the meaning of s.51A of the Trade Practices Act 1974 (Cth)
Particulars
The conduct was misleading and deceptive in that the respondent did not advise the applicant in the course of making the oral representations or in the contents of the Final Workplace Change Document that following the completion of steps 1 to 5 inclusive of the Final Workplace Change Document it would not offer to the applicant the “choice” of redeployment or retrenchment (“the conduct”).
15A. Further and in the alternative, the oral and written representations were made in relation to employment that was to be offered by the respondent to the applicant that misled the applicant in that it made him believe and led him to understand that he would have the choice set out in paragraph 5 and 11 above within the meaning of s.53B of the Trade Practices Act 1974 (Cth).
Workplace Change Document as a Variation or Alternatively a Term of the Applicant’s Contract of Employment.
16. Further and in the alternative the applicant’s contract of employment with the respondent was varied.
Particulars
The variation was in writing in that it was incorporated in the Final Workplace Change document that was the product of a consultation process that included the applicant and the respondent which constituted an intention to vary the contract.
Alternatively, the variation was incorporated in the Final Workplace Change Document that was the product of a consultation process that included the applicant and the respondent and constituted a variation f the applicant’s contract of employment implied from the conduct of the parties in participating in the consultation process and assent to the Final Workplace Change Document.
17. Further and alternatively in the Final Workplace Change Document was incorporated into the applicant’s employment contract by reference.
18. Further and alternatively the applicant’ s contract of employment contained an implied term providing that the respondent would not conduct itself in a manner calculated to destroy or seriously damage the relationship of trust and confidence between the applicant and the respondent either at or in alternative without reasonable or proper cause.
Particulars
The term is implied as a necessary incident of the contract of employment because it was a reasonable and necessary incident for the operation of the applicant’s contract of employment with the respondent without which the applicant’s contract of employment would be undermined and/or the term is implied by the operation of law (“the trust and confidence term”).
Breach
19. In breach of the applicant’s contract of employment as varied the respondent did not offer the applicant “the choice” of redeployment or retrenchment.
20. Further and alternatively, in breach of the trust and confidence term the respondent did not advise the applicant that contrary to the oral representations and the written representation that following the completion of steps 1 to 5 inclusive of the Final Workplace Change Document it would not offer to the applicant “the choice” of redeployment or retrenchment.
21. Further and in the alternative, it was breach of the trust and confidence term when the respondent did not offer the applicant “the choice” of redeployment or retrenchment in accordance with the Final Workplace Change Document.
Negligent advice
22. Further and in the alternative, the respondent owed a duty to exercise reasonable care in providing information and advice to the applicant in respect of the respondent’s proposed workplace change to ITD.
23. Further, the oral representations and the contents of the Final Workplace Change Document constituted advice to the applicant as to the process and terms upon which the respondent’s proposed workplace change in ITD would take place.
24. The applicant participated in the workplace change meetings and reviewed the proposed Workplace Change Documents and relied on the oral representations and the contents of the Final Workplace Change document in making decisions about his employment with the respondent in so far as it was to be affected by the respondent’s then proposed workplace change to ITD.
25. In breach of the duty to the applicant, the respondent did not advise the applicant that contrary to the terms of the oral representations and the Final Workplace Change Document the applicant would not or may not be offered the “choice” of redeployment or retrenchment in the event that he became “displaced” within the meaning of the Final Workplace Change Document following the completion of steps 1 to 5 inclusive of the Final Workplace Change document (“the negligent advice”).
26. By reason of the conduct, breach of the applicant’s employment contract and the respondent’s negligent advice the applicant has suffered loss and damage.
Particulars
The applicant has lost the opportunity to make a “choice” of redeployment or retrenchment in the event that he became “displaced” within the meaning of the Final Workplace Change Document.
Had the applicant been offered the “choice” of redeployment or retrenchment the applicant would have chosen retrenchment.
The respondent would have received the sum of $58,491.09 (less appropriate tax) calculated as follows:
Weekly salary = $1,098.08 (Gross)
Completed Years of Service = 6 years
Redundancy Pay (Per Agreement)
Clause 34.4.1 (12 weeks at $1,098.08) $13,176.96
Clause 34.4.2 (4 weeks at $1,098.08) $4,392.32
Clause 34.4.4 (24 weeks at $1,098.08) $26,353.92
Clause 34.5.1 (4 weeks at $1,098.08) $4,392.32
Clause 34.5.2 (1 week at $1,098.08) $1,098.08
SUBTOTAL (Gross) $49,413.60
Long Service Leave Pay
Clause 26.5 $9,077.49
(1.3 weeks x 6.359 yrs at $1,098.08)
TOTAL (Gross) $58,491.09
Interest
The applicant claims interest on the above sum of $58,491.09 calculated at the rate of 10.5% per annum in accordance with Order 35, Rule 8 of the Federal Court Rules for the period between 23 February 2007 and 14 November 2007 being a period of 265 days at the rate of $16.826 per day = $4,458.89, and continuing.
Costs
The applicant claims its costs of and incidental to these proceedings.
27. The applicant claims the relief specified in this application.
This pleading was prepared by CHRISTOPHER K.C. SEROW solicitor
Date: 16 November 2007
Nature of the Claim
I note that Mr Roberts has elected not to bring any part of these proceedings under the Workplace RelationsAct 1996 (Cth) claiming a breach of the University of New England Workplace Agreement 2006-2008 on the basis that such breach would be in contravention of s.719 of the Workplace RelationsAct. There is no issue in this matter in respect of formal matters such as the incorporation of UNE: s.5 of the University of New England Act 1993 (NSW).Mr Britt, Counsel for the University, acknowledged that the University was a trading corporation.
Mr Britt, conceded that the University could have improved its process in respect of managing the workplace change from October 2006 to May 2007. He also conceded that the communication with the relevant employees could have been better and that the terms of Agreement could have been better expressed. However, the Agreement is in fact not a document of UNE but an agreement between the University and the relevant unions. In that sense, Mr Britt submits that UNE cannot bear all the blame in respect of the difficulties in considering what is in the Agreement.
Mr Britt submits that the UNE Workplace Agreement was registered under the Workplace Relations Act. He also submits that there are a range of processes under that Act which go to the registration of such an Agreement and the involvement of staff in approving the Agreement. Under the Workplace Relations Act, the Agreement must be approved by the employees who will be covered by it. The evidence of Kylie Maree Day was that the Agreement came into being during this WPC process, albeit very early in the process. Frank John Strbik gave evidence as to when the Agreement started to have effect. Evidence from Mr Strbik and Ms Day is that this was the first time the Agreement allowed the University to make general staff redundant.
Mr Britt concedes that Mr Roberts may have been confused by this process. However, notwithstanding the concessions, he submits that none of them would lead to the remedies sought by Mr Roberts. The amended Statement of Claim makes claims under the TPA and relies on both oral and written representations. The University’s position is that those representations were not made in trade and commerce. And that there have been no cases with similarities to this case which have been before the Federal Court and it has been found that the representations made during employment were made in trade and commerce.
The applicant’s amended Statement of Claim filed on 16 November 2007 makes a number of claims, some of which are made under the TPA:
a)Claim under s.52 of the TPA of misleading and deceptive conduct (paragraph 15); and
b)Claim under s.53B of the TPA (paragraph 15(b)).
The amended Statement of Claim makes other claims under general law in the Court’s accrued jurisdiction:
c)Breach of contract based upon the Workplace Change document (paragraphs 16, 17 and 19);
d)Breach of contract based on an implied term of trust and confidence (paragraphs 18, 20 and 21); and
e)Negligent advice (paragraphs 22-25).
The respondent submits that a number of these claims fail as the matter of law on the applicant’s evidence.
Mr Heath, for the applicant, submits that Mr Roberts was misled because notwithstanding the WPC process, it became clear that Mr Roberts was not a person that UNE wanted to lose. The University did not advise Mr Roberts that it was not going to actually give him “the choice” of redeployment or redundancy which they represented that he would have. Mr Roberts participated in the WPC process with the belief that he would have “the choice”. Mr Heath submits that Mr Roberts did not volunteer for any of the measures referred to in clause 38(1) of the Agreement in the first phase of the WPC process.
Mr Heath further submits that Mr Roberts considered the initial positions in the restructure but formed the view that those positions were not suitable to him. On the basis that he still had “choice” that was represented to be available to him after “spill and fill” process, he did not apply for those positions. After the completion of the “spill and fill” process, Mr Roberts considered the position he was invited to apply for (being a Level HE08), together with the duty statement, and determined that the position was not suitable to him.
Mr Heath claims that the University should have told Mr Roberts that he did not have a choice but would be transferred “on grade” to a position in the new structure. Further that in this scenario, whether or not representatives of UNE said or made reference to clause 32 in or during the WPC process is irrelevant. Mr Heath submits that the fact was that UNE induced Mr Roberts to believe that he may have had a choice when it was never intended that he did.
Mr Heath submits that UNE assumed, expected and wanted Mr Roberts to apply for a position in the new structure following the WPC process (Exhibit R7, paragraphs 8, 9 and 10, Annexure UP184). When Mr Roberts did not apply, the Manager of Support Services, ITD asked Mr Strbik (of Human Resources) whether they could “transfer Mr Roberts after the fill and spill” (Exhibit R7, Annexure UP184). It is submitted that UNE simply never contemplated that Mr Roberts would not apply for a position. UNE did not advise Mr Roberts in any form that he would not be part of the WPC process.
Trade Practices Claim
Section 51A of the Trade Practices Act 1974 (Cth)
There are two elements which must be present before s.51A of TPC will operate:
a)There must be a representation to a “future matter”;
b)The respondent must be unable to establish that it had reasonable grounds for making the representation.
Mr Heath submits that in this case, Mr Roberts was required to participate in a WPC process which was the UNE Human Resources term for restructuring in a redundancy program in ITD. As part of that process, Mr Roberts and others were told that if they became “displaced” (the position they held was dispensed with), they would be invited to express interest and new positions created as a result of the restructure. However, if they did not express an interest in any of the new positions, they would be offered the choice between redeployment within UNE or retrenchment. That representation which was “the choice” between redeployment and retrenchment was expressed orally and in writing.
Mr Roberts states at [30] in his first affidavit (Exhibit A1):
During the second and third workplace change meetings Mr Strbik said words to the following effect:
If a staff member becomes “displaced” as a result of the workplace change process they will be invited to express an interest in new positions. If a staff member does not express an interest in any of the new positions they will be offered the “choice” of redeployment or retrenchment.
He deposed to the following statement made during the third meeting at [38] of the same affidavit:
Mr Strbik also stated:
Staff that do not express an interest in an unfair position will be given ten days to choose between redeployment or retrenchment.
Timothy John Cross in his affidavit (Exhibit A4) gives his recollection of events during the third WPC meeting:
14. During a third meeting, I recall being surprised Mr Frank Strbik saying words to the effect:
If you don’t get moved across on grade and you don’t get a position following “fill and spill” you’ll be offered redundancy.
15. Later in the meeting, I recall asking Mr Frank Strbik the question with words to the effect:
If you had not been moved across on grade and were told to apply for a position and weren’t successful or you did not apply, what would happen?
To which Mr Strbik applied with the words to the effect:
You will be offered the choice between redeployment and redundancy.
I recall asking this question as I wanted to clarify what would happen if an employee did not apply for a provision after a “spill and fill”.
Both Mr Roberts and Mr Cross gave their evidence candidly and no issue of credit arose. Importantly, Mr Cross was an independent witness who still worked at UNE. The question asked by Mr Cross and set out above was directly relevant to the position which Mr Roberts was in. Mr Cross’ evidence supports that given by Mr Roberts.
The ITD – Workplace Change – Flowchart issued on 12 December 2006 (Exhibit A1, Annexure Y, p.233) states:
6. If a staff member does not express an interest in the position, they will subsequently be offered the choice of redeployment or retrenchment (Angie’s note: as per Item 7 below).
7. After all positions are filled, any still remaining “displaced staff” will be invited, in writing, to elect, within ten (10) working days, whether he or she wishes to be considered for redeployment within the University or to be retrenched.
Mr Heath submits that the representations set out above were relied upon, together with the contents of the flow chart document. Both constitute representation as to a future matter, being the “choice” to be given to Mr Roberts after the spill and fill process.
There are two elements which must be present before s.51A will operate. The first is that there must be a representation as to a “future matter”. On the evidence before the Court – including the material set out above – it is clear that the University made representations in respect of a restructure of the ITD and offered positions to existing staff including redeployment or retrenchment. I do not believe that there is any dispute between the parties that matters of this nature were raised by Mr Strbik during the Workplace Change meetings, which was subsequently supported by the flowchart documentation. However there is no evidence in these proceedings that by the time that Mr Roberts resigned from his employment at the University, the change process had been finalised. Rather the evidence is that there were still positions to be filled.
Clause 33.1 of the UNE Workplace Agreement indicates the obligation to issue invitations in writing to any “staff member to elect within ten days” etc. That obligation only arises where the change process has been finalised. I acknowledge the evidence that Ms Sozu and Mr Buckley were provided with invitations to make that election but this does not support the argument that the process was finalised.
Mr Roberts bears the onus of proof and had the opportunity to lead evidence as to when the process was formally finalised. This did not occur. There is no evidence before the Court that the change process was finalised at the time that Mr Roberts tendered his resignation. Clause 33 indicates that if a person elects to be retrenched, the University is not obliged to accept that election and retrench that person. However, the clause does contain provision for the redeployment of an employee.
The second limb of s.51A of the TPA requires that the party making the representation be unable to establish reasonable grounds for making it. If a representation was made that something would be done in the future but it does not come about, s.51A will be satisfied if the maker of the representation cannot show that it was made on reasonable grounds. As at the time of Mr Roberts’ resignation, positions remained unfilled. The Workplace Agreement was still in operation and permitted the University to continue on with the process until the vacant positions were filled. This had not occurred and consequently s.51A did not come into effect because the process was still open and not finalised.
Section 52 of the Trade Practices Act 1974 (Cth)
Section 52 prohibits a corporation from engaging in conduct in trade and commerce that is misleading or deceptive, or that is likely to mislead or deceive. The words “engage in conduct” include the making of representations about a past, present or future matter. In order to make out a case under s.52, the applicant needs to establish that:
a)The respondent is a corporation (as is conceded in this case);
b)The representation was made;
c)The representation was made in trade and commerce;
d)Viewed objectively and subject to s.51A, the representation was misleading or deceptive or likely to mislead or deceive; and
e)The applicant relied on the representation.
Mr Heath submits that the appropriate test to apply depends upon which category of person to whom that conduct was directed, falls. Where monetary relief is sought by an applicant who alleges that a particular misrepresentation was made to identified persons, of whom the applicant was one, it is necessary for the applicant to establish a causal link between the impugned conduct and the loss claimed. Mr Heath referred to Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592.
Mr Roberts was part of a Workplace Group who attended meetings and received information in relation to workplace changes, all of which were directly relevant to him. Mr Heath submits that Mr Roberts acted in reliance on representations made to him; the result of which is his depravation of redundancy payments. The people at the University making the representations were Mr Strbik and others who dealt with him. Mr Roberts was present at the workplace change meetings when the representations were being made and was an employee affected by what was being said. Mr Heath submits that Mr Roberts was misled because notwithstanding a process that was being undertaken it was clear that he was a person that UNE did not want to lose. However, UNE did not tell him that they were never actually going to give him a choice of redeployment or redundancy which they represented that they would.
Mr Heath submits that the representations to Mr Roberts were representations of something that would happen in the future and therefore fall clearly within s.52 of the TPA. As with s.51A(2) there is a requirement to have reasonable grounds. In the absence of reasonable grounds, the conduct is deemed to be misleading. Mr Heath submits that in this case the University made representations to Mr Roberts which did not apply to him. By definition, it was put that there simply could not have been reasonable grounds on which to make them and therefore they should be deemed to be misleading.
Mr Heath also submits that the University should have told Mr Roberts that in his case, he would not have “the choice” but he would be transferred “on grade” to a position in the new structure. Whether or not UNE said or made reference to clause 32 of the Workplace Agreement in or during the WPC process is irrelevant. Mr Heath submits that UNE induced Mr Roberts to believe that he may have had a choice when it never intended that he did.
Mr Heath submits that if conduct is to fall within s.52 of the TPA it must be in “trade and commerce” and referred to Walker v Salomon Smith Barney Securities Pty Ltd [2003] FCA 1099 at [180] per Kenny J:
[180] The authorities support the proposition that a statement made in the course of employment negotiations, which proves to be misleading or deceptive, can fall within s 52 of the TPA: seeO’Neill v Medical Benefits Fund of Australia (2002) 122 FCR 455 per Carr, Moore and Marshall JJ; Stoelwinder v Southern Health Care Network (2000) 177 ALR 501 (“Stoelwinder”), at 503 per Finkelstein J; and Patrick v Steel Mains Pty Ltd (1987) 77 ALR 133 (“Patrick”), at 136 per Wilcox J.
Her Honour then went on to consider the relevant authorities at [180]-[185].
Justice Kenny apparently rejected the more constrictive construction given to s.52 in Mulcahy & Ors v Hydro-Electric Commission (1998) 85 FCR 170 at 213 per Heerey J and Martin v Tasmanian Development & Resources (1999) 89 IR 98 at 117-118 per Heerey J. Her Honour preferred the wider construction first adopted in Barto v GPR Management Services Pty Ltd (1991) 33 FCR 389 at [315] and McCormick v Riverwood International (Australia) Pty Ltd (1999) 167 ALR 689 at 694-696. On appeal in Walker v Citigroup Global Markets Australia Pty Ltd (formerly known asSalomon Smith Barney Securities Pty Ltd) [2006] FCAFC 101 the view taken by her Honour Kenny J on the width of s.52 was not challenged.
In O’Neil v Medical Benefits Fund of Australia Ltd (2002) 122 FCR 455, the Full Court addressed similar facts. The availability of s.52 was assumed, where the conduct in question consisted of representations made during the course of negotiations for new employment as to the security of employment being offered. In Concrete Construction (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 604-5, Mason CJ, Dean, Dawson and Gaudron JJ held that:
the alleged misleading or deceptive conduct of the company’s foreman in the present case consists of an internal communication between one employee to another employee in the course of their ordinary activities in and about the construction of a building. It follows from what has been said above that that conduct was not, for relative purposes, conduct “in trade or commerce” and would not, if established, constitute a contravention of s.52 of the Act.
In Barto v GPR Management Services Pty Ltd (supra) at 394-5, Wilcox J stated:
Negotiations for an initial employment contract, with a person who is not presently an employee, and negotiations for a variation for a contract, with the person who is an employee, did not differ in their intrinsic character.
To further emphasis the distinction, Mr Heath referred to the decision in Hebbard v Bell Potter Securities Ltd (2005) 191 FLR 68 where McInnis FM found that statements made by an employer informing an employee of its intention of future employment were not made in “trade and commerce” because:
[32] …it does not in my view appear to be correspondence which would properly be regarded as part of negotiations or renegotiating an agreement between the parties.
The rationale on which the distinction rests is that conduct of the kind discussed in Barto v GPR Management Services Pty Ltd (supra) was “intrinsically commercial” because it was directed to the creation of a contractual relationship (Barto at 394). Conduct of the kind found in Hebbard v Bell Potter Securities Ltd (supra) did not have that character because it was undertaken only for the purpose of informing employees as to the employer’s intention, and their effect on the employees’ decisions on employment was unintended and indirect (Hebbard at [32]).
Mr Heath submits that the above distinction focuses on the capacity which the representations to Mr Roberts were made, having regard to their context and the connection to a trading or commercial relationship between him and UNE: Prestia v Aknar (1996) 40 NSWLR 165 at 197. It is submitted that the representations made to Mr Roberts have a wider commercial context which include:
a)Out of warranty support previously provided by ITD was to be provided by independently owned organisations; and
b)Some work currently undertaken in-house may be outsourced by contract.
c)Consequently in the circumstances, the representations made to Mr Roberts were “part of negotiations for renegotiating an agreement” between Mr Roberts and UNE. Mr Heath invited the Court to follow the authority in Barto v GPR Management Services Pty Ltd (supra), in that the representations had a sufficiently commercial character to be done in “trade and commerce”.
Mr Britt submits that even assuming the alleged representation was made, it was not made in “trade and commerce”. In support of this position, he submits that internal communications from one employee to another in the course of their ordinary activities is not conducted in “trade and commerce” within the meaning of s.52 of the TPA: Concrete Constructions (NSW) Pty Ltd v Nelson (supra). However, he accepts that misleading and deceptive conduct in the course of negotiations for employment may support a cause of action under s.52: Walker v Salomon Smith Barney Securities Pty Ltd & Anor (supra) at [180]-[185]. Consequently, emails, meetings and workplace change proposals can properly be regarded as communications from UNE in its capacity as employer, to Mr Roberts in his capacity as employee: Concrete Constructions NSW (Pty Ltd) v Nelson.
Mr Britt argues that the communications with Mr Roberts were not made in the context of trading or commercial transactions or activities involving the parties, so the statements were not made in trade or commerce. The communication was one employee informing or advising Mr Roberts about certain things concerning his employment. The capacity in which the communication was made signifies that it, and therefore the statement, did not bear a trading or commercial character.
Mr Britt submits that the representations relied upon by Mr Roberts were not negotiations of a new contract and/or an offer of employment and/or variations of an existing contract of employment. The communications relied upon by Mr Roberts to establish his claim under s.52 cannot properly be described as negotiations of the kind: McCormick v Riverwood International (Australia) Pty Ltd (supra) at 694-696 per Weinberg J. Although the communication might have influenced Mr Roberts to react in a certain way, it could not be regarded as negotiation or renegotiation of an arrangement between the parties.
Mr Britt submits that UNE was abiding by its legal obligations pursuant to clause 31 of the Agreement. Discussions which took place and the WPC process all occurred as part of that obligation and not part of “trade and commerce”. It is submitted that those obligations are reinforced by a consideration of clauses 32 and 33.
The leading authority of the meaning of the phrase “in trade or commerce” is Concrete Constructions (NSW) Pty Ltd v Nelson (supra). The majority judgment of Mason CJ, Deane, Dawson and Gaudron JJ notes that the phrase has a restrictive operation in that it qualifies the prohibition against engaging in conduct of the kind specified by the section. Their Honours observed that as a matter of language a prohibition against engaging in conduct “in trade or commerce” can be understood as encompassing all conduct taken in the course of carrying out an overall trading of commercial business or, alternatively, as referring only to conduct which is in itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. Their Honours took the view that when s.52 is read in the context of other provisions of the TPA, the second or narrower construction was preferred. Their Honours concluded that the alleged misleading or deceptive conduct – which consisted of an internal communication by one employee to another in the course of their ordinary activities in or about the construction of building – was not conduct “in trade or commerce” within the meaning of s.52.
The application of the principle established in Concrete Constructions (NSW) Pty Ltd v Nelson concerning contracts of employment has resulted in a divergence of Federal Court authority. A number of these have been referred to in the submissions above and I have been invited by Mr Heath to follow the authority of Barto v GPR Management Services Pty Ltd (supra) while Mr Britt submits that the conduct alleged was not in “trade or commerce”. To resolve this divergence of view I am guided by the decision in Duncan v Lipcombe Child Care Services Inc [2006] FCA 458 at [32]-[33] where Heerey J reviewed these authorities. His Honour states:
[32] … In Barto v GPR Management Services Pty Ltd (1991) 33 FCR 389 Wilcox J held that information supplied to an employee in the course of negotiating a variation to his contract of employment was “in trade or commerce”. In Stoelwinder v Southern Health Care Network (2000) 177 ALR 501, a case concerning negotiations for a new contract of employment, Finkelstein J came to the same view. Both these cases were strikeout applications and thus were governed at the time they were decided by the Dey and General Steel authorities; their Honours could only strike out the claim if it was hopeless or bound to fail.
[33] In Martin v Tasmania Development and Resources (1999) 163 ALR 79, Mr Martin claimed that a letter stating that his termination was necessary on the basis of “operational requirements” was misleading and deceptive and contravened s 52. At the trial of the action I found that there were in fact “operational requirements” within the meaning of that term in the contract of employment: 163 ALR at [55]–[67]. Mr Martin succeeded on other grounds, not relevant for present purposes. However, I held that if the representations as to operational requirements were misleading and deceptive, they would not have been made in trade or commerce. In expressing disagreement with Wilcox J, I said (at [77]):
The majority in (Concrete Constructions) clearly rejected the wider construction of ‘in trade or commerce’, which would extend to virtually any activity of a corporation. It is true that a building company could not earn income unless it had workers who received instructions from foremen. But that was not enough to bring the alleged misrepresentation within the concept of ‘trade or commerce’. Similarly, TDR could not carry out its activities of promoting Tasmanian trade and development (which activities themselves I assume for present purposes to be in trade or commerce) unless it engaged staff. Nevertheless such engagements and the necessary associated incidental negotiations, however necessary, are not in themselves of a trading or commercial nature. They are internal affairs of TDR.
In Mulcahy v Hydro-Electric Commission (1998) 85 FCR 170 at 212–213, another final hearing, a case concerning alleged misrepresentations by an employer to employees about superannuation entitlements, I took the same view.
Duncan v Lipcombe Child Care Services Inc at [32]-[33] requires first the identification of activities or transactions in the course of which the impugned conduct occurred and then a determination of whether those activities or transactions “of their nature” bear a trading or commercial character. This analysis was approached within the conceptual framework as described by Jessop J in Shahid v Australasian College of Dermatologists [2008] FCAFC 72 at [138]:
The trial Judge did approach the problem within the conceptual framework referred to above. His Honour identified the relevant activities in which the College engaged. They were:
1. Providing informal information to potential candidates on how to obtain entry into the College.
2. Inviting applicants to apply for entry into the dermatology training program in each year.
3. Publishing a training handbook setting out the selection criteria.
4. Participating in the interviewing process and recommending the candidate considered most suitable to the hospital.
5. Maintaining and undertaking an appellate process.
6. Engaging through a Fellow of the College who was a member of the Selection Committee in Western Australia in a debriefing of candidates.
7. Promotion of entry to the trainee registrarship at a conference.
His Honour’s conclusion about these activities was as follows:
Examining each of the seven items of conduct in question in turn, I am unable to conclude that such conduct or any item of it is able to be characterised as of a kind usually of a commercial nature. This is not to say that among the range of activities engaged in by the respondent (to which the applicant’s submissions appear most to advert) these are not activities of a commercial nature. However, so far as concerns the conduct in question as the source of the infringement of the proscriptions of the TPA the position is to the contrary. None of the conduct in question is of a trading or commercial character. It is not enough that it is directed to the wider activity of the respondent to promote and develop dermatology when in itself it is devoid of the requisite character.
The representations relied upon by Mr Roberts were not negotiations of a new contract or the offer of employment. Those communications can most appropriately be described as internal communications by some employees of the University to another in the course of their ordinary activities. The communications relied upon by Mr Roberts cannot properly be described as negotiations of the kind addressed in McCormick v Riverwood International (Australia) Pty Ltd (supra). I acknowledge the concession that the communications might have influenced Mr Roberts to react in a certain manner to what was set out in them, but they cannot be regarded as part of a negotiation or renegotiation of the arrangement between the parties. They are properly characterised as simple communication informing Mr Roberts of the intention of the University as an employer. The discussions which took place and the production of the Workplace Change Proposal occurred pursuant to the provisions of clause 31 of the Agreement and arose as a direct result of the University’s legal obligation pursuant to that clause. Those obligations are further enforced by a consideration of clauses 32 and 33.
Section 53B of the Trade Practices Act 1974 (Cth)
In order to make out a case under s.53B, an employee would need to establish that:
a)A representation was made;
b)Viewed objectively, the representation was likely to mislead him/her as to the availability, nature, terms or conditions of, or any other matter relating to the employment proposed; and
c)He/she relied on the representation.
Section 53B of the TPA applies to conduct “in relation to employment that is to be, or may be, offered” by a corporation. However, Walker v Salomon Smith Barney Securities Pty Ltd & Anor (supra) at [187] establishes that s.53B of the Act does not apply in relation to conduct that takes place after the commencement of employment.
Justice Kenny said at [187] of that decision:
[187] Section 53B prohibits a corporation from engaging in misleading and deceptive conduct in relation to an offer of employment before a contract of employment has been entered into. The misrepresentation must induce the applicant to take up employment with the respondent: see Callinan v Gilro-ERG Pty Ltd. The provision is limited to conduct that took place prior to the commencement of the employment: see Wright v TNT Australia Pty Ltd (1988) 15 NSWLR 679, at 691–692, per McHugh JA and 696 per Clarke JA; Dawson v Australian Consolidated Reserves Pty Ltd (1983) ATPR 40–374 per Toohey J; and Thomas v Star Maid International Pty Ltd [1999] FCA 911 at [16] per Weinberg J.
Mr Heath submits that whilst representations were made to Mr Roberts during his employment at UNE, they concerned terms upon which the employment would end. Those discussions expressly included a reference to redeployment and therefore had a sufficient relationship to an offer of new employment to meet the test laid down in s.53B. It is submitted that Walker v Salomon Smith Barney Securities Pty Ltd & Anor (and the authorities contained in the extract above) have no application to the matter before this Court. In making this submission, Mr Heath relied on the width that is traditionally given to the expression “in relation to”, see Fountain & Anor v Alexander & Anor (1982) 150 CLR 615 at 629 per Mason J:
…being an expression of wide and general import, it should not be read down in the absence of some compelling reason for so doing. Certainly neither the content nor the context of the paragraph provide any justification for taking this course…
Similarly in Tristar Steering & Suspension Ltd v Industrial Relations Commission of New South Wales (2007) 158 FCR 104 at [45] Buchanan J states:
[45] By its terms s 16 of the WR Act declares an intent that the WR Act occupy, to the exclusion of the IR Act, (subject only to the exceptions in s 16(2), (3) and (4) — which are not here relevant), the whole field of legislative activity ‘in relation to an employee or employer’ (my emphasis) where the employer is an entity identified by s 6(1) of the WR Act, including a constitutional corporation. The words ‘in relation to’ are broad. They are not confined to exclude only actual regulation of specific rights and obligations but anything done by or under a State or Territory industrial law. Furthermore, although in many, perhaps most, cases it is the relationship of employer and employee, or the relations of an employer with its employee or employees, which will provide the practical foundation from which s 16 commences that should not be understood to import a limitation upon, or add a further gloss to, the words ‘in relation to an employee or employer’. Matters which concern them individually, or separately, are also within the field covered.
Mr Britt acknowledged the expression “in relation to” has wide and general impact but that it is not as wide in respect to employment because of the qualification “that is to be, or may be, offered by the corporation or by another person”. Section 53B prohibits a corporation from engaging in misleading and deceptive conduct in relation to an offer of employment to an employee before a contract of employment has been entered into.
The misrepresentation must induce the applicant to take up the employment with the respondent: Walker v Salmon Smith Barney Securities Pty Ltd (supra) at [187]; Wright v TNT Pty Ltd (1989) 15 NSWLR 679 at 691-2 per McHugh JA and at 696 per Clarke JA; Dawson v Australian Consolidated Reserve Pty Ltd (1983) ATPR 40-374; Thomas v Star Maid International Pty Ltd [1999] FCR 911 at [16]. Mr Britt submits that s.53B is limited to conduct which took place prior to the commencement of employment, see Stryke Corporation Pty Ltd v Miskovic [2007] NSWCA 72 at [7] where Spigelman CJ stated:
[7] Section 53B of the TPA expressly applies to the period prior to the entry into a contract of employment when it uses the formulation “in relation to employment that is to be, or may be, offered by the corporation”. There is no overlap of any character with proceedings for “work injury damages” which are confined to an injury “arising out of or in the course of employment”.
I am satisfied that Mr Roberts remained in the University’s employment and was not being offered other employment. I note the argument advanced that what occurred was an offer for redeployment or retrenchment, however, redeployment is not new employment. Mr Roberts was being offered an opportunity to change his duties and as his employment never came to an end, it continued with the same employer. I am satisfied that s.53B does not apply in these circumstances.
Section 82 of the Trade Practices Act 1974 (Cth)
In order to be compensated for any loss and damage under s.82(1) of the TPA, Mr Roberts needs to establish a causal connection between UNE’s conduct and the loss for which he seeks compensation. He also has to prove that he relied on the conduct and that this reliance caused damage. This has been interpreted to mean that the loss or damage must be caused by reason of, or as a result of, the contravening conduct. Accordingly, only loss or damage that is caused by the contravening conduct can be recovered under s.82. There is no requirement that loss or damage be assessed in any different way than under the general law. Neither is there any restriction to common law concepts as to the nature and extent of damages recoverable. Damages under s.82 approximate the damages recoverable in tort. Therefore, it is appropriate to consider cases involving misleading or deceptive conduct and the making of false statements in measuring damages in tort: Brown & Anor v Jam Factory Pty Ltd & Anor (1981) 35 ALR 79 per Fox J. The assessment of damages under s.82 was also considered by Wilcox J in Nikolich v Goldman Sachs JB Were Services Pty Ltd [2006] FCA 784 at 298-307.
Mr Heath submits that Mr Roberts was induced into believing that if he did not apply for a position in the new ITD structure, he had a “choice” of redundancy or redeployment to an alternative position elsewhere within UNE. Mr Roberts refrained from applying for a position in the new structure based on the representations as to the “choice” he had. Mr Roberts’ evidence was that he refrained from applying for the HEO8 position, which was influenced by other matters such as the issue of interviews. Mr Heath submits that he was induced to believe he had the choice otherwise there would have been no point in giving him the flow chart or saying what Mr Strbik said. The result was Mr Roberts did not apply and elect for a redundancy payment but, ultimately, he was not paid the amount which resulted in that amount being pleaded. The separate payout figure provided by Mr Simmons influenced Mr Roberts.
Mr Britt submits that there is no evidence that Mr Roberts would have embarked on a more profitable course had he not been led to believe that the representations would be honoured. Conceptually, the position is similar to that in Nikolich v Goldman Sachs JB Were Services Pty Ltd (supra). The principles enunciated there means that the present trade practices claim for damages must fail. He submits that Mr Roberts has not done anything he would not have done if the representations were not made. There is no evidence from Mr Roberts that but for the alleged representation he would have applied for voluntary redundancy.
Mr Britt submits that if the Court were to consider the representation as misleading or deceptive, Mr Roberts would not be entitled to a redundancy payment unless the matters in Point 7 of the Workplace Change flowchart are satisfied. There is no evidence from Mr Roberts that such positions were in fact filled prior to his resignation and remained unfilled. It is submitted that Mr Roberts’ employment was not terminated in December 2006 but that he remained in paid employment until 11 May 2007 and continued to earn an income. After resigning he commenced employment in a better paid position: Exhibit R1.
As none of the claims under s.51A, 52 and 53B of the TPA in the amended Statement of Claim have been made out, compensation for any loss or damage under s.82(1) has not been established.
Accrued jurisdiction
Mr Britt submits that if the Trade Practices claim is found not to be in trade and commerce, then the accrued jurisdiction in tort and contract fails, see Hebbard v Bell Potter Securities Ltd at [35]:
[35] In my view, the authorities are clear that if the claim that is made before the court relying upon s 52 of the TPA fails, then in the circumstances, I cannot see any basis upon which this court can then proceed to hear the remainder of the claim based either on contract or debt as part of its accrued and/or associated jurisdiction. To that extent, I accept the submissions made for and on behalf of the respondent that it is appropriate in those circumstances that having concluded there is no jurisdiction to determine the s 52 claim under the TPA, that this court as a consequence has no jurisdiction to determine the associated contract and debt claims of the applicant as they are not then associated with any matter within the jurisdiction of the court (See Walker v Life Span Financial Planning (2003) 176 FLR 166 cited earlier in this decision).
In the circumstances where the Court decides that the s.52 and s.52B claims fails, it has no jurisdiction to determine the associated contract or negligence claims brought by Mr Roberts as these are not matters associated with any matter within the jurisdiction.
Mr Britt submits that ss.10(1), 18 of the Federal Magistrates Act 1999 (Cth) relevantly provides:
10(1) The Federal Magistrates Court has such original jurisdiction as is vested in it by laws made by the Parliament:
(a) by express provision; or
(b) by the application of section 15C of the Acts Interpretation Act 1901 to a provision that, whether expressly or by implication, authorises a civil proceeding to be instituted in the Federal Magistrates Court in relation to a matter.
18. Jurisdiction in associated matters
To the extent that the Constitution permits, jurisdiction is conferred on the Federal Magistrates Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Federal Magistrates Court is invoked.
Also see Walker v Lifespan Financial Planning [2003] FMCA 519 at [16] and Rainsford v State of Victoria [2001] FMCA 115 at [22]-[26].
The Court has exercised its discretion on the question of associated and accrued jurisdiction: Fox v Robinson & Ors [2003] FMCA 107 at [16]; Rainsford v State of Victoria at [22]-[26]. Mr Britt acknowledges that there are other decisions of the Federal Magistrates Court which have not taken such a strict approach to this question and found that there is a discretion to continue hearing matters where the Court does not have jurisdiction based on a federal claim. On the question of associated and accrued jurisdiction, see Fox v Robinson & Ors (No.2) [2005] FMCA 1310 at [9] per McInnis FM:
[9] I accept as submitted by Counsel for AIIL that apart from the issue of a common substratum of facts, the following factors are relevant:whether a matter is a "single justiciable controversy"
• the question is not a "separate and distinct matter"
• whether there is an "identity of facts" (see Tait v Harris [2003] FCAFC 117, referring to Phillip Morris)
• whether any federal jurisdiction has properly been invoked (see Hebbard v Bell Potter Securities Ltd [2005] 216 ALR 779, referring to Walker v Lifespan Financial Planning (2003) 176 FLR 166 at [16])
• whether the claim under the relevant federal law is a substantial part of a controversy the whole of which would be appropriately and conveniently determined by the court vested with jurisdiction in matters arising under that law (see Mahoney v AGD Mining, referring to Fencott v Muller (1983) 152 CLR 570 at p 610)
• whether a matter is a justiciable controversy which must either be constituted by or must include a claim arising under a federal law but which may also include another cause of action arising under another law, provided it is attached to and is not severable from the former claim (see Mahoney v AGD Mining, referring to Phillip Morris at pp .494–495)
• whether there is but one matter where different claims are so related that the determination of one is essential to the determination of the other (see re Wakim; Ex parte McNally (1999) 198 CLR 511 per Gummow and Hayne JJ at 585)
Mr Britt submits in respect to the matter before this Court should follow the decision in Fox v Robinson & Ors (No.2) because:
a)the matter is not a “single justiciable controversy” and so requires a consideration of a range of matters and issues;
b)the questions are “separate and distinct matters”;
c)there is a degree of “identity of facts”;
d)for the reasons given above the federal jurisdiction has properly been invoked;
e)the claim under the relevant federal law (Trade Practices Act) is not a substantial part of a controversy the whole of which would be appropriately and conveniently determined by the Court vested with jurisdiction in matters arising under that law;
f)the non-federal claims are severable from the federal law claims; and
g)the claims are not so related that the determination of one is essential for the determination of the others.
Mr Britt submits therefore that this Court should find that as a matter of discretion, I should not continue to hear the remaining matters in these proceedings.
Mr Heath submits that the proposition in respect of accrued jurisdiction is wrong because it contradicts authorities. If the suggestion is that it is particular to the Federal Magistrates Court, Mr Heath submits this is also wrong. Practice & Procedure – High Court and Federal Court of Australia, Federal Court (Butterworths Australia 2000) at [32,935.15] states:
The Federal Court retains its “accrued” jurisdiction in relation to a matter even if the claim which attracted jurisdiction is dismissed: Burgundy Royale Investments Pty Ltd v Westpac Banking Corp (1987) 18 FCR 212; 76 ALR 173; (1988) ATPR40-835. A “matter” does not cease to be in the jurisdiction of the court if the federal question is decided adversely or is struck out or is found unnecessary to decide: Beck v Spalla [2005] FCAFC 82; BC2000503025 at [25]. Conversely, the court will have no “accrued” jurisdiction: Glass v New South Wales (1994) 52 FCR 336; 75 A Crim R 110. Similarly, the court will attract the court’s original jurisdiction: New South Wales Aboriginal Land Council v Aboriginal Torres Strait Island Commission, above, ALR at 572.
Mr Heath submits that there is one other important aspect that is crucially different between the matter before this Court and that of Hebbard in that these proceedings were commenced in the Federal Court and not the Federal Magistrates Court. The matter was then transferred by the Federal Court. Mr Heath submits that it would be an odd result if accrued jurisdiction is lost if a matter is so transferred, as the Federal Magistrates Court’s accrued jurisdiction is the same as the Federal Court’s.
I am satisfied that the principle was clearly articulated in Beck v Spalla [2005] FCAFC 82 at [25] per Hill, Finn and Kenny JJ:
…It is well established that when the Federal Court has jurisdiction to determine a federal matter, it has authority to determine the whole controversy and not merely that part of it which attracted federal jurisdiction: Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 at 472. It is equally well accepted that if the federal question is decided adversely, is struck out, or is found not necessary to be decided the matter does not cease to be in the jurisdiction of the Court: Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212; Unilan Holdings Pty Ltd v Kerin (1993) 44 FCR 481 and Moorgate at 476 (see generally, the article by Allsop J: “Federal Jurisdiction and the Jurisdiction of the Federal Court of Australia in 2002”, (2002) 23 Australian Bar Review 29 at 41 ff).
A number of reported transfers have been made from the Federal Court to the Federal Magistrates Court under s.32A(b) of the Federal Court of Australia Act 1976 (Cth), see Garage Wholesalers Pty Ltd v Engineering Software Solutions Pty Ltd [2009] FCA 361 at [7]-[8] per McKerracher J:
[7] Section 32AB of the Federal Court of Australia Act 1976 (Cth) (the Act) provides for discretionary transfer of proceedings on the application of a party or on the Court’s own initiative. Section 32AB(6) provides that the following considerations are to be taken into account:
(a) any Rules of Court made for the purposes of subsection (4); and
(b) whether proceedings in respect of an associated matter are pending in the Federal Magistrates Court; and
(c) whether the resources of the Federal Magistrates Court are sufficient to hear and determine the proceeding; and
(d) the interests of the administration of justice.
[8] Further O 82 r 4–8 of the Rules outlines considerations which may be taken into account in addition to the factors to which the Court must have regard under s 32AB(6) of the Act. In summary, the Court may take into account the following factors:
(a) whether the proceeding or appeal is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court on one or more of the points in issue;
(b) whether, if the proceeding or appeal is transferred, it is likely to be heard and determined at less cost and more convenience to the parties than if the proceeding or appeal is not transferred;
(c) whether the proceeding or appeal is likely to be heard and determined earlier in the FMC;
(d) the wishes of the parties.
Similarly in Rixon v Business Parcel Express Pty Ltd [2006] FCA 969 at [2] Jacobson J stated:
[2] The court may transfer proceedings on its own initiative, see s 32AB(2)(b) and O 82 r 6. The primary considerations for the court in exercising its discretion are whether the Federal Magistrates Court has jurisdiction and whether the Federal Magistrates Court has the resources to hear and determine the proceedings and whether a transfer is in the interests of justice.
See also Travers v New South Wales [2000] FCA 1565. I agree with the submission made by Mr Heath that it would be an odd result if the accrued jurisdiction was lost by this transfer. Consequently, the issues in tort and contract should be heard and considered by this Court.
Contract and Tort claims
Mr Roberts makes the following claims in contract:
a)That there was a variation to Mr Roberts’ contract of employment;
b)Incorporation of variation by reference;
c)Breach of the implied term of “trust and confidence”; and
d)Negligent advice.
The initial dispute between the parties was whether the issuing of the Workplace Change document amounts to a variation of Mr Roberts’ contract of employment. This was provided to Mr Roberts by email from Angie Hendrick on 5 December 2006 at 6.17pm in both Microsoft Word and PDF format with the heading, “Please find enclosed the Workplace Change document” (Exhibit A1, Annexure ‘X’, p.223). The Workplace Change document was created pursuant to clause 31.7-31.9 of the UNE Workplace Agreement which states:
31.7 For a major workplace change, the consultation process in cl.31.4 above will include the distribution of a Workplace Change Proposal document (WorkChanges) to all staff who will be effected, and any representatives. This document will include, but not be limited to, as appropriate timelines for implementation, the rationale for the change, including objectives and aims, the likely effects of the change upon staff (including transfers, redundancies or redeployments, outsourcing equity impact, workload implications, training and professional development issues), relevant financial information; the consultative process, organisational charts, and measures to revert or mitigate any indicative impact on staff.
31.8 At the point during the consultation process that it becomes clear that forced redundancies would be required the University will provide staff with an opportunity to consider any measures which may mitigate any negative impact on staff. Such voluntary measures may include but are not limited to leave without pay, voluntary conversion to part time employment (for a specific period of time unless otherwise agreed), long service leave, secondment, internal transfers, voluntary separations, or natural attrition.
31.9 Except for minor workplace changes or as otherwise mutually agreed, staff will be provided with at least 30 working days prior to the proposal being finalised to apply for any of the voluntary measures as set out in cl.31.8. Such provision should be noted in writing of the appropriate draft of the change document (or other document) and specifically the start date of the consultation process. Staff members who have applied for any voluntary measure will be advised of the outcome of their application in a timely fashion.
Mr Heath submits that Mr Roberts’ contract of employment claim is that there was a variation in writing in that it was incorporated in the final Workplace Change document and was the product of a consultation process which included Mr Roberts and the University constituting an intention to vary his contract. Therefore, it forms part of the contract of employment by agreement: Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193.
Mr Heath submits that UNE intended to be bound by the final Workplace Change document and that both the meaning of the document and the surrounding circumstances make clear what was to occur. It is submitted that a reasonable person would have understood that if they were informed they had a choice, which was also stated a document, they would act on that information. Both the promisor and the promisee are bound. He submits that UNE did not abide by its promise.
Mr Britt referred to Exhibit R8, p.4, question 5 which asks:
5.1 Please specify each fact and matter upon which the applicant relies in alleging that the applicant’ s contract of employment was varied.
Exhibit R9 p.2 under “Reply to request in relation to paragraph 16” states:
5.1…this variation arises by reason of a consultation process in which the applicant and the respondent participated such that it was the common intention there be a variation of terms in the applicant’s employment.
Mr Britt submits that there is no evidence in these proceedings that it was:
a)The common intention of the applicant or the respondent that there would be a variation to the applicant’s contract of employment. The applicant has led no evidence that it was his intention that the contract of employment be varied by the Workplace Change document.
b)The University’s intention to vary Mr Roberts’ contract of employment.
Mr Britt submits that the key issues in this matter are contained within the documents, the first being Mr Roberts’ contract of employment (Exhibit “A1”, Annexure “B”, p.20) which states:
You will be initially assigned to the above area, however, the University may transfer you or require you to work in other areas of the University to meet workload requirements and fulfil the University’s strategic goals.
Mr Britt submits that this is a specific term in this contract giving the University the right to transfer Mr Roberts. It is conceded that there was evidence about how valued Mr Roberts was to the University and that they wanted to keep him in employment and in order to keep him in employment they relied upon specific terms in that contract.
The contract continues:
Staff conditions of employment are governed by relevant awards and agreements. The awards and agreements currently covering your employment at the University of New England are:
a) the University of New England General Staff Enterprise Agreement 2000-2003;
b) the University of New England General Staff (interim) Award 2000
These awards and agreements will vary over time…
All staff are required to abide by relevant awards, agreements and policies covering staff at this University. Awards, agreements and policies are available to be viewed or copied from personal services. Copies are also available on the intranet at from Ms Day and Mr Strbik detailed how policies of the University are formulated and the steps involving approval by the Council and Vice Chancellor. The evidence of Mr Strbik (which was uncontested) was that the workplace document is not a policy of the University and therefore is not incorporated by reference to the term “policy” contained therein.
The contract specifies how it may be varied:
Please note that only the Director, Human Resource Services is authorised to offer appointments or to vary conditions of appointment. Only those offers or variations which are made in writing and signed by the director, human resource services (or nominee) are valid.
Mr Britt submits that there is no evidence in these proceedings that the Director of Human Resource Services (or nominee) made or signed any variation which would impact upon Mr Roberts’ employment. The contract sets out how the parties have agreed it will be varied and there is no evidence that provision has been complied with. In that circumstance, any argument concerning a variation of contract must fail because it has not met the conditions specified in this clause.
The next paragraph of the contract states:
In accepting this offer, you agree to all of the terms and conditions outlined in this letter of offer. The position statement forms part of your contract of employment. The duties require to be undertaken in this position may vary over time and can be changed at the discretion of the University in line with its strategic requirements.
It is submitted that the contract gives the University the right to change Mr Roberts’ duties.
A letter from the Debbie Wilkinson, Manager, Establishment & Recruitment of the UNE dated 18 January 2005 to Mr Roberts attaches a Position Statement (Annexure D, p.122; Annexure E, p.123). The heading “Dimensions of Position” states :
From time to time, individual staff may be required to participate in designated projects.
Clause 3.1 of the UNE Workplace Agreement 2006-2008 states:
3.1 This agreement will be binding according to its terms upon:
a) the University of New England (UNE) all general staff members who are employed in classifications detailed in Schedule 9 of this agreement; (Exhibit A1, Annexure 3, p.23)
Mr Roberts’ substantive position was a Level 6 (Exhibit A1, Annexure C, p.113). Mr Britt submits that this Agreement is also binding upon Mr Roberts in these proceedings.
Clauses 5.2 and 5.3 of the Agreement state:
5.2 This agreement wholly displaces and operates to the exclusion of all the awards and all other agreements which could otherwise apply to staff whose employment is regulated by the provisions of this agreement.
5.3 Whilst UNE recognises the application of this agreement requires policy and procedures to be followed, nothing in this agreement will be taken as incorporating as a term of this agreement, or being subject to any process in this agreement, any ANE policy, procedure or process referred to in this agreement.
Mr Britt submits that one of such processes in this Agreement is the Workplace Change document and flowchart. The effect of these clauses is that the Workplace Change document and flowchart are not part of this Agreement. The parties to the Agreement specifically turned their minds to the processes and decided that the processes and documents produced as part of it were not terms of the Agreement. Mr Britt submits this is crucial to a consideration of this matter.
Clause 6.1 of the Agreement states:
6.1 During the normal term of this agreement there will be no extra claim in relation to matters covered by this agreement.
Mr Britt submits that this is something the parties agreed upon. The “normal term” will be in effect on the date of lodgement with the Office of the Employment Advocate and remain in force until 30 June 2008 (clause 4.1, p.23). The evidence of both Ms Day and Mr Strbik is that the Agreement started to apply in either late August or early September 2006. Therefore during the entire process dealt with in Part E – Managing Organisational Change, the Agreement was within its nominal term. He further submits that this application seeks to create an entitlement to redundancy where there is no such entitlement in the Agreement.
Clause 7.3 of the definition section of the Agreement states:
“Consult” and “Consultation” means that the parties would confer and the views expressed by each party will be taken into account before final decisions are made by management.
Then clause 8.1 in the Staff Consultation and Representation section states:
The University is committed to directly consulting with all staff in relation to workplace relations, workplace change and human resource matters.
Clause 26.5 in the Long Service Leave section of the Agreement states:
Where a staff member with not less than five (5) completed years of service, dies, resigns as a result of pressing domestic personal necessity for whose employment is terminated by the employer for reasons other than unsatisfactory performance or serious misconduct, the University will pay to staff member or to the staff member’s personal representative a proportionate amount on the basis of sixty-five (65) days for ten years service.
The amended Statement of Claim is brought in relation to long service leave. The applicant has more than five years service but less than 10. The requirement for 10 years’ service is found at clause 26.1:
26.1 A staff member holding a full time appointment who has completed ten years service at the University (with continuous or broken periods) is entitled to sixty five (65) paid working days long service leave. Service up to fifteen years will accrue long service leave at the rate of 65 paid working days per annum. After fifteen years of service long service leave will accrue at the rate of 10.8705 paid working days for each additional year of service.
Mr Britt submits that to have an entitlement under clause 26.5, the applicant either has to die or resign as a result of pressing domestic or personal necessity. There is no suggestion that that was the basis upon which Mr Roberts submitted his resignation. The evidence is that he submitted his resignation because he found another job which paid more than $300 more per week. Nor is there any evidence that the University terminated Mr Roberts’ employment.
Paragraphs 31.1 and 31.2 of Part E – Managing Organisational Change of the Agreement address the issue of financial difficulties which led to the need to reduce staffing levels. Paragraph 31.3 states:
Staff (and their nominated representative(s) where they chose, who are likely to be affected by change will be meaningfully involved in the consideration of change proposals throughout the process; including the development of formal proposal stage and consideration of implementation issues once the change is determined. Where practicable, the University would include staff who are on leave in the consultative process. This is a two stage process being the formal proposal stage, then the consideration of implementation.
Then paragraph 31.4 deals with the “consultation process”. In paragraph 31.5 there is an obligation on the University to avoid forced retrenchment. Paragraph 31.6 contains the definition of a “major workplace change” process and it is common ground between the parties that what occurred falls squarely within this clause. Clause 31.7 supplements the consultation process in clause 31.4. Clause 31.8 provides that the University must give staff an opportunity to consider any measure which may negate any impact on staff but this does not bind the University to agree with those matters. The clause lists matters that staff may wish to consider. Within clause 31.9 are the words:
Staff will be provided with at least 30 working days prior to the change proposal being finalised to apply for any of the voluntary measures set out in 31.8.
There is no obligation on the University to accept those voluntary measures:
Staff members who have applied for any voluntary measures would be advised of the outcome of their application in a timely fashion.
Mr Britt argues that the University has the discretion to either accept a particular voluntary measure or not.
Clause 32 of the Agreement then states:
Notwithstanding any other provision of this Agreement, the University reserves the right to transfer any member of staff to perform, at their current substantive classification level, duties for which are reasonably qualified where such transfer is reasonable and does not require a change to the staff member’s primary place of employment. For academic staff, transfers will only occur by mutual agreement.
Mr Heath submits that clause 32 has no effect or relevance in this case for the following reasons:
a)Whether or not UNE had, did or thought it had reserved to itself the right to transfer staff at any time in the WPC process, it also led Mr Roberts to believe that he had the option of a “choice” of redeployment or retrenchment. If Mr Roberts was never retrenched then it does not matter whether UNE had, did or thought it had reserved to itself the right to transfer staff at any time because he was never told he was not effectively part of the WPC process.
b)Clause 32 of the Agreement did not operate as a power to transfer at any time. The clause does not include those words. Transfer is an incident of an employee’s position. Once that position is “displaced”, the position comes to an end and the power to transfer ceases to be an available possibility. This is consistent with clause 33.1 which states:
Following the finalisation of the change process, and after placing any “displaced” staff within the new structure, the University will invite, in writing, any other staff member to elect, within ten (10) working days, whether he or she wishes to be considered for redeployment within the University or to be retrenched.
Pursuant to clause 31.11 the University is obliged to consider displaced staff for newly created positions. “Displaced staff” is defined in clause 31.12:
For the purposes of this clause, a “displaced” member will mean a staff member whose position has been made redundant.
There is an obligation in clause 31.14 not to advertise positions when there are any displaced staff members on the transfer redeployment list. This is a reference to the possibility of a transfer list. Mr Britt submits that the argument advanced by Mr Heath is that the agreement provided for a “spill and fill”, however the expression “spill and fill” is not found anywhere in clause 31. This is because clause 32 falls between clauses 31 and 33 and a linear approach to reading the clauses is normally taken. Mr Britt argues that this would lead to error as clause 32.1 starts with the powerful wording:
Notwithstanding any other provision in this agreement.
Consequently, clause 32 overrides any other provision contained within the Agreement. It gives the University a right at any time under the Agreement to transfer any member of staff to perform at their current, substantive classification level, duties for which they are reasonably qualified. It can do so where such a transfer is reasonably and does not require a change to the employee’s primary place of employment.
The argument advanced by Mr Heath is that because Mr Roberts was displaced he does not hold a position therefore clause 32 does not apply. There is no suggestion that as at February 2007, Mr Roberts did not remain a member of staff in a Level HE06 position. He continued in that position during the displacement process. Mr Britt submits that there is no suggestion or evidence that the transfer was unreasonable and that Mr Roberts was not reasonably qualified for the position. Nor does the provision in clause 32.1 – “for academic staff transfers will only be by way of mutual agreement” – apply to Mr Roberts as a general staff member. Consequently, his agreement is not required for his transfer and this is consistent with his contract of employment.
Mr Britt submits that Mr Strbik was criticised because he took the view that clause 32.1 applied at any time. Although it was conceded that those words are not found in the clause, he submits that the effect is that it does apply at any time so long as the transfer is at the current substantive classification level. Because of the words “notwithstanding any other provision of the agreement”, the practical effect is that the clause does apply at any time.
The following phrase appears in clause 33.1 of the Agreement:
Following the finalisation of the change process.
However, that term is not defined. Mr Britt argues that there is no evidence that by the time that Mr Roberts resigned from employment, the change process had been finalised. To the contrary the evidence is that there were still positions to be filled. Clause 33.1 continues:
After placing any displaced staff within the new structure, the University will invite, in writing, any other staff member to elect, within ten (10) working days, whether he or she wishes to be considered for redeployment within the University or to be retrenched.
It is submitted that this obligation only arises where the change process has been finalised. Although the argument was advanced that Ms Sozu and Mr Buckley were given the choice, this does not mean that the process was finalised. It merely means that the University offered those employees the option. Mr Britt argues that Mr Heath had the opportunity to lead evidence as to when the process was finalised but chose not to. There is therefore no evidence that the change process was finalised at the time the applicant’s employment came to an end.
Further an obligation of the University to retrench and employee if the employee elects it is not present in clause 33. The remainder of the clause deals with what happens to a person who is redeployed.
Clause 34.4 sets out the obligation for retrenchment pay. Clause 34.5 states regarding the notice period:
A staff member who is retrenched will be entitled to the following payment in lieu of notice.
Mr Britt submits that the evidence is that Mr Roberts was not retrenched but resigned in April 2007 to take up further employment (Exhibit A1, Annexure Y, p.224). The preamble to the Workplace Change document sets out the basis for the decision and the financial difficulties. Under the heading “Communications” there were four positions being disestablished where Mr Roberts worked. Mr Roberts’ evidence is that his position was that of Network and Communications Officer (Services) (HEO 6) and that there would be three new Communications Systems Officer positions from Levels HEO 5 to 8.
Under the heading “Impact on Services”, the Workplace Change document states:
ITD will no longer provide hardware services. Warranty support will be provided by the vendor. Out of warranty support will be provided by independently owned organisations.
Mr Britt submits that there was no evidence that Mr Roberts was involved in the provision of hardware services.
It has been agreed between the parties that the ITD – Workplace Change – Flowchart is part of the broader Workplace Change document. However, what is in dispute is whether that document became part of Mr Roberts’ contract of employment. It is submitted that it would be very difficult to sustain an argument that the first and second paragraphs of the Flowchart falls within Mr Roberts’ contract of employment. Clause 4 of the Flowchart states:
Where possible displaced staff are then transferred into new positions or other appropriate positions in the University as may be available.
Clause 7 states:
After all positions are filled and are still remaining, displaced staff will be invited in writing to elect within ten working days whether he or she wishes to be considered for redeployment within the university or be retrenched.
Mr Britt submits that despite Mr Heath’s argument that clause 7 contradicts clause 31.3 thereby making clause 7 inoperative, there is still a requirement for clause 7 to be satisfied.
In respect of the issue of incorporation by reference, Mr Heath referred to the contract of employment provided to Mr Roberts on 27 August 2001 (Exhibit A1, Annexure B, p.20) which states:
All staff are required to abide by the relevant awards, agreements and policies covering staff at the university.
Mr Heath submits that the Workplace Change documents are incorporated by reference into Mr Roberts’ contract of employment by his contract which states:
These awards and agreements will vary over time.
Consequently, the Workplace Change documents and the ITD flowchart come out of the Workplace Agreement and their terms become incorporated by reference into Mr Roberts’ contract.
In support, Mr Heath relies on Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120 at [23] per Black CJ, Marshall and Jessop JJ:
[23] The principles to be applied in determining whether any, and if so what, parts of WWU were terms of the contract of employment are not in doubt. It is well established that if a reasonable person in the position of a promisee would conclude that a promisor intended to be contractually bound by a particular statement, then the promisor will be so bound. This objective theory of contract has been repeatedly affirmed as representing Australian law by the High Court. Thus, in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 , 179, the Court said:
It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.
Mr Heath submits that applying the principles in the above case to the facts of this matter, a reasonable person (being an employee) participating reasonably in a workplace change process who is told certain things would look at what the document did and what representations were made and conclude that it was a common intention of parties to the contract to be bound by those changes. The test is objective in that if a reasonable person in the position of the promisee would conclude that the promisor intended to be contractually bound by a particular statement, then the promisor is so bound. Mr Heath submits that it is clear that the University intended to be bound by the final Workplace Change flowchart and the meaning and surrounding circumstances make it clear what was to occur.
The argument advanced by Mr Heath is that the University simply did not abide by its promise. Mr Heath referred to the decision in Willis v Health Communications Network Ltd [2007] NSWCA 313 at [53]:
[53] On the other hand the majority, North and Mansfield JJ, agreed with the trial judge that the policies clause in McCormick’s contract of employment imposed an obligation upon him to abide by the policies and procedures in place at the company from time to time. As a matter of construction the clause was broad enough to impose an obligation upon the employer to abide by the terms and conditions in the policies and procedures documents because the vast majority of obligations imposed were upon the company rather than the employee. Their Honours rejected the submission on behalf of the employer that the obligation of the employee to “abide by” the company policies and practices involved an acceptance by McCormick of all the burdens contained in the manual but did not entitle him to receive the benefits referred to therein.
Mr Roberts’ assertion that the Workplace Change document is incorporated by “reference” into his contract is set out in his solicitors’ correspondence dated 5 December 2007 responding to a request for further and better particulars. That letter states:
6.1 The meaning of “by reference” means in the contractual sense the document was incorporated in his contract of employment thereby becoming a term of his employment contract that bound your client the matter you seemed to grasp in your request that followed. (Exhibit R9, p.2)
Mr Britt submits that the terms of the award are not incorporated in the applicant’s contract of employment as a matter of law: Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 441-453. Mr Britt submits that the same principle applies equally to an agreement made under the WR Act.
Mr Britt concedes that documents, including the Agreement, can be expressly incorporated into a contract of employment. However, whether the Agreement and/or Workplace Change document are in fact expressly incorporated requires a consideration of the contract as well as the surrounding circumstances and contexts: Goldman Sachs JBWere Services Pty Ltd v Nikolich (supra) at [287]. In Riverwood International Australia Pty Ltd v McCormick (supra), North and Mansfield JJ (Lindgren J dissenting) confirmed the decision of Weinberg J in McCormick v Riverwood International (Australia) Pty Ltd (1999) 167 ALR 689 that a document called “Human Resources Policies and Procedure Manual” bound the employer so as to entitle an ex-employee to redundancy benefits. Mr Britt submits that there appears to have been no disagreement amongst the members of Full Court concerning the relevant principles for determining whether the terms of the document were incorporated in the contract of employment.
Mr Britt submits that the facts before this Court are considerably different from those considered in Goldman Sachs JB Were Services Pty Ltd v Nikolich and Riverwood International Australia Pty Ltd v McCormick. The Agreement and the Workplace Change document in totality do not just impose benefits on employees. The contract of employment makes no reference to Mr Roberts abiding by future policies of the University. Unlike the policies in Riverwood International Australia Pty Ltd v McCormick, the terms of the Workplace Change document are not direct and mainly deal with matters which would not be expected to be encompassed within an employment contract, see Riverwood International Australia Pty Ltd v McCormick at [151] per Mansfield J:
[151] The applicant is entitled to succeed in this application. He is entitled to have judgment in the amount of $76,435.74. The respondent must pay the applicant's costs.
In Nikolich v Goldman Sachs JB Were Services Pty Ltd at [246] Wilcox J stated:
[246] In Riverwood, the relevant term of the employment agreement was that the employee would ‘abide by’ the policies and practices contained in a secondary document. In the present case, the relevant term of the employment agreement was that GSJBWS ‘will expect’ Mr Nikolich to ‘comply as applicable’ with presently-existing and future ‘office memoranda and instructions’. There is not much difference between the wording of the two terms. Also, in both cases, the relevant secondary document clearly purported to impose obligations on the employer, some, at least, of which are obligations customarily found in employment contracts and which would otherwise be absent from the employment contract. Accordingly, it seems to me that the approach taken in Riverwood has application to this case.
Mr Britt submits that the terms of the Workplace Change document and the agreement were not provided to Mr Roberts at the time he commenced employment but only came into being more than five years after his commencement date: Nikolich v Goldman Sachs JBWere Services Pty Ltd (supra) at [247]. The language and contents of the Agreement and the Workplace Change document do not speak of a contractual purpose and Mr Roberts was not required to sign either document: Goldman Sachs JB Were Services Pty Ltd v Nikolich at [21] per Black CJ. They were not matters to which Mr Roberts was committing himself at the time of employment and the circumstances suggest that they were not incorporated: McDonald v Parnell Laboratories (Aust) [2007] FCA 1903 at [67]. Mr Roberts’ employment contract contains a mechanism for variation which is not met.
Mr Britt submits in respect of the Workplace Change document that there is:
a)No reference made to it in the contract of employment;
b)No evidence that the document is a policy of the University as defined in the letter of appointment, since there is no evidence that the document is on the University’s internet site;
c)No evidence that the Workplace Change document is a policy as found in s.16 of the University of New England Act since he University policy is made by the University Council;
d)No evidence that Mr Roberts ever consented to the Workplace Change document such that it could become part of his contract;
e)Clause 5.3 of the Agreement makes it clear that the Workplace Change document is not incorporated into the Agreement;
Consequently the Agreement and/or Workplace Change document are not incorporated into the applicant’s contract of employment.
Mr Britt further submits that if the Agreement does become part of Mr Roberts’ contract, the University has not breached the employment contract by relying upon clauses 32 and 33 of the Agreement or the express right to transfer contained in the contract. Further if the Workplace Change document (but not the Agreement) becomes part of Mr Roberts’ contract of employment it does not override the terms of the Agreement at clauses 32 and 33. He submits that there is no evidence that the parties intended to override the express right of transfer pursuant to the second paragraph of Mr Roberts’ contract of employment dated 27 August 2001 and/or require Mr Roberts to perform other duties pursuant to the position description on 6 December 2002 and provided to Mr Roberts on 18 January 2005.
Mr Britt submits that in transferring Mr Roberts rather than making him redundant, the University was exercising a right provided to it under the contract and there was no breach of contract. By not making Mr Roberts redundant and not paying him a redundancy payment while other employees were made redundant and paid such payment, it is not determinative that the University breached Mr Roberts’ contract of employment: Reilly v Praxa Ltd [2004] ACTSC 41 at [26]-[29].
I am persuaded by Mr Britt’s submission that Mr Roberts’ contract of employment (which was entered into sometime in January 2001) makes no reference to either the Workplace Change document or the Agreement. The contract is silent in respect of the incorporation of new agreements other than theis provision:
Please note that only the director, human resources services is authorised to offer appointments or to vary conditions of appointment. Only those offers or variations which are made in writing and signed by the director, human resources services (or nominee) are valid.
Nothing has been placed before the Court to indicate that Mr Roberts’ original terms of employment were formally varied in writing. Similarly the language and contents of the Agreement and Workplace Change document make no reference to a contractual purpose in respect to Mr Roberts’ contract of employment. In the circumstances, I am not satisfied that the Agreement or Workplace Change document are incorporated by reference into Mr Roberts’ contract of employment. The contract of employment states:
Staff conditions of employment are governed by relevant awards and agreements. The awards and agreements currently covering your employment at the University of New England are:
a) the University of New England General Staff Enterprise Agreement 2000-2003 and
b) the University of New England General Staff (Interim Award) 2000
These awards and agreements may vary from time to time. (Exhibit A1, Annexure A, p.16)
Rather than provide for the inclusion of new agreements, such as the Agreement and Workplace Change document as promoted by Mr Heath, the effect is that this operates as an exclusionary provision which identifies two specific agreements that may be varied from time to time but does not provide for the inclusion of a document that is not contained in that particular passage of the Employment Agreement. The argument advanced by Mr Heath in this respect cannot be sustained.
Mr Heath referred to McDonald v Parnell Laboratories (supra) per Buchanan J and the terms “mutual trust and confidence”. At [83]-[91], His Honour reviewed the relevant authorities on the obligation of an employee to avoid conduct which would destroy a relationship of trust and confidence. His Honour formed the view that, on the facts, there was no “mutual trust and confidence” implied in the contract. However Mr Heath submits that such term is implied in this the circumstances of this case, which was clearly breached by the conduct of the University in requiring Mr Roberts to participate in a process that included a “choice” when he was never given that choice. He submits that one would expect a university to act transparently, fairly and with consultation in relation to an employment contract. It was expected that if Mr Roberts was not given redundancy, he would have been told so and would have acted accordingly.
Mr Heath submits that there was a clear duty in giving advice to ensure that it was accurate. The University was clearly aware and intended for it be relied upon by those to whom it was given, including Mr Roberts. For the same reason and in relation to misleading and deceptive conduct, Mr Roberts was never offered “the choice” and this constituted a breach of that duty. He submits that when Mr Strbik provided the Flowchart documents and explained them orally, he was under a duty of care to ensure that he was giving proper advice. This clearly did not take place.
Mr Britt submits that there is considerable debate on whether an implied term of trust and confidence exists as part of Australian law: Russell v Trustees Roman Catholic Church for the Archdioceseof Sydney [2007] NSWSC 104 at [120]-[134] where it was found that such duty does exist. This is a duty not to act in a manner calculated to destroy or seriously damage the relationship of confidence and trust between an employer and employee. The existence of such a duty was rejected in Walker v Citigroup Global Markets Pty Ltd (2005) 226 ALR 114 per Kenny J at [203]-[205] and doubted in McDonald v Parnell Laboratories (supra) at [90]-[91] per Buchannan J.
Mr Britt argues that assuming such a duty does exist there is no evidence that the University has breached it by acting in accordance with Mr Roberts’ contract of employment or as permitted under the Agreement. An implied term cannot override an express term of the contract, such as the right to transfer Mr Roberts in accordance with the provisions of his contract of 27 August 2001 and/or require him to perform other duties pursuant to the position description dated 6 December 2002 and provided to him on 18 January 2005.
Mr Britt submits that assuming the duty exists, a breach of that duty does not entitle Mr Roberts to the payments claimed under the Agreement but rather damages. However, the evidence demonstrates that by resigning from his employment, even if he was motivated in part by the conduct of the University, Mr Roberts suffered no loss. A breach of this duty does not necessarily give rise to damages in every case: Russell v Trustee of the Roman Catholic Church of the Archdiocese of Sydney (supra) at [166]-[168]. A number of authorities indicate considerable doubt about whether a breach of this duty can lead to an award of damages: McDonald v Parnell Laboratories (supra) at [87]; Burazin v Blacktown City Guardian (1996) 142 ALR 144 at 151; Morris v Hanley [2003] NSWSC 42 at [48].
A breach of trust and confidence claim invokes a contractual remedy intended to return a person to the financial position they were in before the alleged breach occurred. In the matter before this Court, the position sought to be re-established is that which Mr Roberts would have been had he accepted redundancy and the redundancy payment he would have received as a consequence. In other words, the compensation to Mr Roberts for inconvenience and hardship imposed by forced termination. However, Mr Roberts was not terminated by the University but on his own election resigned from his employment. There was no hardship caused by the University and, on Mr Roberts’ own evidence, his remuneration actually increased by his accepting alternative employment.
In respect of the issue of negligent advice, Mr Heath submits that there was a clear duty on the University when giving advice to various employees to ensure that the advice was accurate. The University was clearly aware and intended that it be relied upon by those to whom it was given, including Mr Roberts. This is a simple tort proposition of duty of care. When Mr Strbik spoke in staff meetings and provided information in the Flowchart documents, he had to exercise reasonable care to ensure that the University was giving proper advice.
Mr Heath also submits that what is clear from the evidence is that the information was clearly misleading to Mr Roberts because at no time did the University indicate to Mr Roberts that he would never be offered “the choice”. Yet Mr Roberts was given information about “the choice” to make a decision about what he should do based on it and acted on the basis that “the choice” was being made available to him. If “the choice” was never in fact to be made available to Mr Roberts, then the University owed a duty of care to advise Mr Roberts of that fact.
Mr Britt indicated that Mr Heath suggested that the University deliberately did not notify Mr Roberts that he was not going to be made redundant. Mr Britt submits that if this action was deliberate it cannot be negligent.
I acknowledge that Mr Strbik’s evidence was given in a nonchalant and almost arrogant manner. The significant claim made against Mr Strbik is whether he indicated to the affected employees that the University retained the right to “transfer at any time”. This complaint was raised because of the importance and prominence that Mr Strbik claims to have given to this issue during the process. The evidence is that he took no steps to include this matter in any of the drafts or the final version of the Workplace Change document (Exhibit A1, Annexure Y, p.224).
This is notwithstanding the fact that the Flowchart was prepared by Mr Strbik in an attempt to resolve the confusion amongst staff on this issue but he did not include any reference to clause 32 of the Agreement or to compulsory “transfer at any time” in that document. In response to the emails from Stephen Good dated 1 December 2006 (Exhibit A10) and John Baker dated 28 November 2006 forwarded immediately prior to the third Workplace Change meeting, Mr Strbik did not refer to “transfer at any time” or clause 32. It is claimed that this issue is the precise situation faced by Mr Roberts.
Mr Britt submits that the leading Australian authority on negligent misstatement is L Shaddock & Associates v Parramatta City Council(No 1) (1981) 150 CLR 225 at 250 per Mason J:
Whenever a person gives information or advice to another upon a serious matter in circumstances where the speaker realises, or ought to realise, that he has been trusted to give the best of his information or advice as a basis for action on the part of the other party and it is reasonable in the circumstances for the other party to act on that other information or advice, the speaker comes under a duty to exercise reasonable care in the provision of the information or advice he chooses to give.
Mr Britt submits that the University’s employees exercised reasonable care in informing Mr Roberts of the process. The information provided to him was neither wrong nor misleading and there is no basis for a claim of damages in negligence in respect of the communication from the University to Mr Roberts. The information provided and the actions of the University were consistent with the obligations on it under the Agreement.
I have formed the view that the generalised approach to the restructuring as discussed during the Workplace Change meetings differs from the more specific approach taken in certain areas, such as the Network and Communications Group to which Mr Roberts was attached. There is no evidence formerly placed before the Court indicating that it was the University’s clear intention not to offer Mr Roberts a choice because the University does not appear to have advised him that the choice of redundancy was not being offered to him. However a strong inference can be drawn from parts of the oral evidence that the area in which Mr Roberts was employed was to be amalgamated into other parts of the ITD with a reclassification of his duties. There is evidence that it was the expectation of the Department Head that Mr Roberts would seek a position classified as HEO8 but that he did not pursue this opportunity. This supports the view that it was the University’s intention to retain Mr Roberts’ services and it did not intend for him to apply for redundancy.
If it was the intention of the University to throw all positions open and offer to all involved in the restructure the option to apply for a redundancy, the University retained the right to decline any redundancy application. On the material before the Court, it is not clear that this was the intention adopted. There is a lack of clarity in the wording of the Final Workplace Change Flowchart document under “Network and Communication” at point 6 which states that existing staff will be invited to apply for these positions. This appears to be at odds with the framing of the balance of those steps as it does not clearly indicate the fate of the closure of the Network Infrastructure Group. In that respect, the steps contained in that section of the document appear to be inconsistent. The evidence of Ms Sozu and Mr Buckley – who were clearly treated in a different manner to Mr Roberts – indicates that the University was accepting applications for redundancy and the applicants were paid out. This would support the view that it was not the intention to offer Mr Roberts a redundancy option. Nor is there any evidence before the Court that Mr Roberts formally made an application to take redundancy at any stage. Despite his old position being disestablished and his transfer to a new position and remaining in employment until 11 May 2007, at the time he tendered his resignation he did not appear to have pursued redundancy. Consequently, the claim that the University had negligently failed to advise Mr Roberts that “the choice” was not made available to him cannot be sustained because this action was deliberate. The University was not offering him a choice. The information provided to Mr Roberts was neither wrong nor misleading.
Mr Roberts was not retrenched but he resigned. To award him a redundancy package based upon clause 34 of the Agreement would be contrary to the purpose of such redundancy payments. Similarly damages are intended as compensation for a loss but, in the case of Mr Roberts, he retained employment on substantially the same salary terms and conditions as before the disestablishment of his old position, until he elected to resign to pursue a higher paying position with another organisation. I am not satisfied that damage has been established or quantified.
I certify that the preceding one hundred and thirty-six (136) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM
Associate:
Date: 2 October 2009
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