Together Queensland, Union of Employees v The State of Queensland (Queensland Health)
[2015] QIRC 57
•25 March 2015
QUEENSLAND INDUSTRIAL RELATIONS COMMISSION
CITATION: | Together Queensland, Union of Employees v The State of Queensland (Queensland Health) [2015] QIRC 057 | |
PARTIES: | Together Queensland, Union of Employees (Applicant) v State of Queensland (Queensland Health) | |
CASE NO: | B/2013/38 | |
PROCEEDING: | Application for Declaration | |
DELIVERED ON: | 25 March 2015 | |
HEARING DATES: | 16 December 2013 | |
MEMBERS: | Deputy President O'Connor | |
ORDERS: | 1. Application dismissed. | |
| CATCHWORDS: | INDUSTRIAL LAW - Contract - Whether legally enforceable - Whether there was consideration - Whether there were intentions to create legal relations - Principal and agent - Whether union was agent for employees - Whether a variation of contract of employment - Application dismissed. | |
CASES: APPEARANCES: | Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120. Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 Mr K McKay for Together Queensland, Union of Employees. | |
Decision
Background
On 29 September 2011, Mr John Cairns, Deputy Director-General, Human Resource Service with Queensland Health and Ms Julie Bignell, Assistant Secretary of Together Queensland, Industrial Union of Employees signed a document titled "Queensland Health Payroll Staff Proposal" ("the Proposal").
The Proposal was entered into as a means of resolving an industrial dispute before Commissioner Brown in the Queensland Industrial Relations Commission (QIRC) (D/2011/21, D/2011/22, and D2011/66) concerning the conditions of employment of Queensland Health staff employed at Payroll Hubs, during the early stages of the implementation of the new Queensland Health payroll system in 2010 and 2011.
The progression system proposed that Queensland Health would implement a scheme whereby eligibility requirements and determined criteria were developed with the objective of identifying who were eligible for progression from an AO3 classification to the role of Senior Payroll Specialist classified as an AO4 position.
In accordance with the proposal, Queensland Health identified potential eligible employees and invited them to apply to be assessed under the scheme.
On 26 June 2012, an email titled "AO3-AO4 Progression Scheme" was sent to 118 employees identified by Queensland Health as being potentially eligible to be assessed. Attached to the email was an Information Guide and an Expression of Interest form.
85 Queensland Health employees were assessed by Queensland Health as eligible to be progressed in terms of the proposal. None of the 85 employees have been reclassified from AO3 to AO4.
The Application
On 27 June 2013 an application was filed in the Industrial Registry seeking declarations pursuant to s 274A of the Industrial Relations Act 1999 ("the Act"). An amended application was filed in the Industrial Registry on 29 July 2013.
The amended application seeks the following declarations:
(a) "The Agreement entitled 'Queensland Health Payroll Staff Proposal' (herein referred to as the 'Payroll Agreement') signed on 29 September 2011 is a valid agreement and binding on the parties.
(b) Entitlements accrued pursuant to the Payroll Agreement by employees of Queensland Health covered by the Payroll Agreement are payable by the Department of Health notwithstanding their claim to have terminated the Payroll Agreement.
(c) That the invitation by the Department of Health to employees to submit application for assessment for progression as outlined in the 'Payroll Agreement' was an offer to vary the contract of employment for employees of the Department of Health and that the submission of an application by employees of the Department of Health was an acceptance of an offer to vary the employment contract.
(d) The offer by the Department of Health and the acceptance of the offer by employees of Department of Health amended the employees contract of employment to the extent that the employees classification could be amended by a process set out in the 'Payroll Agreement'.
(e) That representatives of the Department of Health acting with full authority made representations before the Queensland Industrial Relations Commission that the resolution of the Dispute Conference was resolved by the 'Payroll Agreement' and therefore by Judicial Estoppel, Promissory Estoppel and/or Equitable Estoppel are prevented from challenging the status of the 'Payroll Agreement', or waived any rights to challenge the legal status of the 'Payroll Agreement'."[1]
[1] Amended Application for Declaration Pursuant to s 274A, filed 29 July 2013.
The Relief Sought
The Relief sought is as follows:
i."Employees assessed under the Payroll Agreement as meeting the eligibility for Progression to A04 shall be paid by the Department of Health at the rate of A04(1) as detailed in the EB8 agreement Queensland Public Health Sector Certified Agreement (No. 8) 2011 (EB8) from 1 July 2011.
ii.Employees assessed under the Payroll Agreement as meeting the eligibility for Progression to A04 shall be paid by the Department of Health at the rate of A04(2) as detailed in the EB8 agreement Queensland Public Health Sector Certified Agreement (No. 8) 2011 (EB8) from 1 July 2012.
iii.Employees assessed under the Payroll Agreement as meeting the eligibility for Progression to A04 shall be paid at the rate of A04(3) as detailed in the EB8 agreement Queensland Public Health Sector Certified Agreement (No. 8) 2011 (EB8) from 1 July 2013."[2]
[2] Amended Application for Declaration Pursuant to s 274A, filed 29 July 2013.
The applicant submits that for the Commission to grant the relief that is sought the applicant needs to demonstrate the following:-
(a) The 'Payroll Agreement" was a legally binding agreement between Queensland Health and Together Queensland, Industrial Union of Employees and that the email of 26 June 2012 was an offer made to each individual employee to vary their employment contract and the submission of an application from each individual employee was an acceptance of that offer; or
(b) The email of 26 June 2012 was an offer made to each individual employee to vary their employment contract and the submission of an application from each individual employee was an acceptance of that offer.
The Payroll Agreement
The applicant's case is that the Payroll Agreement "…was a legally binding agreement between the applicant and respondent."
Turning to the question of binding in what sense and upon whom, the respondent directed the Full Bench to the decision of Ryan v Textile, Clothing and Footwear Union and Anor[3], a decision of the Victorian Court of Appeal dealing with "agreements" reached on a collective basis in an industrial context and a case analogous to the matter before the Commission.
[3] Ryan v Textile, Clothing and Footwear Union and Anor (1996) 2 VR 235.
In Ryan, the Court of Appeal was called on to determine the standing of agreements reached on a collective basis.
Hayne JA (as his Honour then was) wrote:
"Although it is clear that the parties intended by their signature to the documents to record something that was serious and significant, as opposed to something trifling, are they to be taken in the circumstances of this case as intending to reach an agreement enforceable at law or intending to reach an agreement that would or might have significance in the future industrial relations between the parties but not be enforceable by resort to the courts?"[4]
[4] Ryan v Textile, Clothing and Footwear Union and Anor (1996) 2 VR 235 at [265].
Has the agreement been made by the union as principal or agent?
A starting point is to pose the following two questions. What was the nature of the arrangement between the parties? Did the making of an arrangement give rise to industrial as opposed to legal consequences?
Hayne JA examined the question whether the parties intended to be legally bound and said:
"The question whether these parties intended to be legally bound must, in the end, fall to be judged according to what they said or did and what the reasonable hearer or observer would take the words or action concerned to convey. Further, that question (whether the parties intended to be legally bound by the arrangement that they made) cannot be answered in isolation. In particular it cannot be answered without identifying the parties to the arrangement and cannot be answered without identifying what the arrangement was. As I have said earlier, there is no doubt that those who participated in the process leading up to the signing of the documents said to operate from 16 September 1991 believed (and are to be taken by their words and deeds as believing) that they had reached consensus upon an important matter. Nothing in the various subjects under discussion (redundancy payments, payment of wages, redundancy procedures or shift arrangements) and nothing in the way in which the parties acted or spoke suggests that they did not intend a result that would inure to the benefit of at least some (if not all) employees of Homfray. But in deciding whether parties were to be bound in a way that would permit the opposite party to enforce rights at law, and not be confined to securing performance of the opposite party's promises only by industrial means, much may turn upon who are the parties and what it was that was agreed."[5]
[5] Ryan v Textile, Clothing and Footwear Union and Anor (1996) 2 VR 235 at [266].
At the time of signing the agreement, the employees for whom the applicant was said to be acting were not known or ascertainable. The effective date of the agreement was: "…the date on which Together Queensland advises that the ballot of members has indicated support for this Agreement."
In Ryan, Hayne JA wrote:
"A conclusion that the union was acting only for those employees who voted in favour of the proposal leads to strange and difficult results. The agreements which the unions and the employer executed were cast in general terms. There was nothing in them to suggest that only some employees were to benefit. No record was made at the meeting of who voted in favour of the proposal and thus there was no record of who, on this analysis of the matter, was to benefit from the arrangement. (Indeed, no record was made at the meeting of who attended it. All that the evidence shows is that some employees were absent from work on the day the meeting was held and it was suggested in argument that even that may not represent a sufficient basis for concluding that they did not attend the meeting, it being submitted that they might have come to the meeting but not attended work that day.)"[6]
[6] Ryan v Textile, Clothing and Footwear Union and Anor (1996) 2 VR 235 at [267].
There is no evidence before the Commission as to who voted for or against the agreement or indeed who or who was not a member of the applicant. The intended beneficiaries of the arrangement were not, at the time of signing the agreement, known or knowable as the progression process and the assessment criteria had not yet been formulated. In those circumstances, it is hard to conclude how it could be said that the applicant was acting as an agent.
Brooking JA, whilst not part of the majority in Ryan said:
"There is no reason in theory why a trade union could not, in making an agreement with an employer dealing with terms and conditions of employment, do so as agent for some or all of its members. It will usually be found, however, that there are great if not insuperable difficulties, in a given case, in treating a trade union as acting as agent in entering into a collective agreement."[7]
[7] Ryan v Textile, Clothing and Footwear Union and Anor (1996) 2 VR 235, at [239].
His Honour went on the conclude:
"It is clear that to make a contract on behalf of a principal an agent must contract on behalf of a principal who is then ascertainable: Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 at 113 per Mason CJ and Wilson J. This rule lies formidably in the way of the adoption of the view that a trade union has entered into a collective agreement as agent for its members."[8]
[8] Ryan v Textile, Clothing and Footwear Union and Anor (1996) 2 VR 235, at [239].
It was never advanced in argument before the Commission what right the applicant had to act as agent and to agree for abstaining, dissenting or absent employees or indeed, employees who were not members of the applicant.
The submission of the applicant is a bald statement that the agreement is "binding" without any consideration of the nature of the agreement or how it is said to be "binding".
In our view, if an enforceable agreement was made, it was made as a principal and not agent. As Hayne JA observed:
"The several difficulties I have mentioned lead me to reject the proposition that the unions were acting in these negotiations as agent for some or other of their members. They were not. If the unions made any agreement that was enforceable at law, they were agreements that the unions made as principals, not as agents."[9]
[9] Ryan v Textile, Clothing and Footwear Union and Anor (1996) 2 VR 235 at [270].
Was there good consideration?
The submission of the applicant is that consideration was provided in three ways. First, the Assistant Secretary of the applicant would recommend to the State Council delegates that the applicant would immediately sign the Health Payroll Heads of Agreement; secondly, that the Industrial Dispute between the applicant and respondent would cease; and thirdly, the members of the applicant would continue to perform work outside the scope of their role descriptions.
The Proposal contains the following paragraph:
"The Assistant Secretary of Together Queensland will recommend to the Together Queensland State Council that Together Queensland immediately sign the Queensland Health Payroll Heads of Agreement which includes, amongst other aspects, support for an award variation to permit automatic recovery of overpayments, with the State Council's deliberation to occur at the soonest juncture possible under the Together Queensland procedure."
The respondent argues, correctly in our view, that the recommendation by the Assistant Secretary amounted to a non-binding recommendation to the State Council which could not properly be characterised as consideration. As Hayne JA observed:
"I turn then to the respondents' alternative argument that each of the four unions, as principal, made an agreement with the employer. If that is the proper analysis of what was said and done, no difficulty arises about identifying the parties to the arrangement. But what consideration can be identified for the employer's promise to pay redundancy benefits? What was the right, interest, profit or benefit accruing to the employer or forbearance, detriment, loss or responsibility given, suffered or undertaken by the union?: Currie v Misa (1875) LR 10 Ex 153 at 162.
In no case did the union give any express promise to the employer and in my view it is not possible to imply in any of the four agreements that were reached any promise by the union concerned. I say that the union gave no express promise to the employer notwithstanding what is said in the second part of the agreement. Two aspects of the matter lead me to that conclusion. First, if consideration is to be found in some promise by the union, it must be a promise sufficiently certain to admit of enforcement before a contract can be found to exist and, secondly, if the consideration is to be found in a promise, it must be a promise by the union, not by some third party."[10]
[10] Ryan v Textile, Clothing and Footwear Union and Anor (1996) 2 VR 235 at [270].
The Rules of Together Queensland relevantly provide as follows:
Rule 15 POWERS AND FUNCTIONS OF COUNCIL AND EXECUTIVE
Powers and Functions of Council
(a) The affairs of the Union shall be managed by a Council of the Union.
(b) The Council shall exercise all such powers and do all such acts and things as may be done by the Union and are not hereby required to be exercised or done by the Union in General or Special General Meeting assembled.
Rule 16 DELEGATE RIGHTS
Council delegates shall:
(a) determine Union policy on any matter specific to Union members employed in their sub-division, which does not affect members employed in any other sub-division.
(b) determine the Union’s response to any matters raised by their employer, which does not affect members employed in any other sub-division.
Rule 17 COMPOSITION OF COUNCIL
(a) The Council of the Union shall be comprised of:
(i)the Executive;
(ii)delegates representing members employed in agencies or employing authorities determined by the Council under sub-rule (c) herein;
(iii)delegates representing members residing in Regional Zones under sub-rule (c) herein; and
(iv)delegates representing members who have identified to the Union as being of Aboriginal or Torres Strait Islander origin.
It was argued by the applicant that rules 15 and 16 when read together supports the view that the State Council cannot meet and vote on a matter which only effects members in a subdivision or discrete subdivisions.
Mr Michael Thomas was employed by the applicant as a Director, Industrial Services. He told the Commission that he invited eligible Council delegates to a meeting and advised them of the Assistant Secretary's personal recommendation that they endorse the Payroll Heads of Agreement.[11] The Council delegates voted not to endorse the Queensland Health Payroll Heads of Agreement. In his evidence he said:
[11] Affidavit of Michael Thomas affirmed 19.11.13 at [5].
"[Q:]My question, please, if you don't mind, the group that is referred to in the second dot point of the payroll staff proposal is not the group that you addressed in the teleconference according to your affidavit, is it?
[A:] No.
[Q:]So when you passed on the news, as you say, you advised the delegates that Ms Bignall was recommending that the health council delegates endorse the payroll heads of agreement, when you passed that recommendation on you were not passing that recommendation on to the Together Queensland State Council, were you?
[A:]No. I was passing it on to the group within council that the only group that has the power to accept or reject the recommendation.
…
[Q:] So to that extent, to the extent that the agreement is written in terms that require the State Council to be delivered of that recommendation, the State Council to your knowledge has not been provided with that recommendation?
[A:] No. Because under the rules it would be irrelevant."[12]
[12] T. 4-24, Ll. 10 to 4.25, Ll. 5.
In cross-examination, Ms Bignell accepted the following proposition put to her by counsel for the respondent:
"[Q:] Mr Thomas has given evidence in these proceedings that he did not give a recommendation of the kind mentioned in dot point 2 of this agreement to the State Council at all, at any time. You don't cavil with that, do you?
[A:] No."[13]
[13] T. 5-7, L. 35.
The evidence is that Ms Bignell did not personally recommend to the State Council of the applicant that it immediately sign the Queensland Health Payroll Heads of Agreement. Rather, Mr Thomas participated in a teleconference with delegates employed in Queensland Health on Monday 10 October 2011. He did do so on the verbal or written instructions of Ms Bignell.
Ms Bignell was asked:
"[Q:] But was it a formal meeting? What was the nature of the meeting?
[A:] From time to time if there are issues that affect members in particular areas – and Queensland Health is a prime example - rather than calling a full State Council meeting and asking members from other parts of the union to vote on things that don't affect them, we often do have telephone hook-ups of the relevant delegates."[14]
[14] T. 5-8, L. 40.
Mr Thomas was vague on the detail of the meeting but he recalled advising the delegates who did attend by telephone that Ms Bignell was recommending that the "Health Council delegates endorsed the Payroll Heads of Agreement." Mr Thomas said:
"[A:]The email would have gone to all Council Health delegates, so they will be Health delegates from the HP area, ED8, Payroll, so it was the entirety or it was a cross-section. I Can't - I would be surprised if every single Health Council delegate dialled in, but there were certainly a large number from across Health.
[Q:]When you say "a large number", how many delegates from your union were employed in Queensland Health?
[A:]I wouldn't know off hand. You would probably be looking around the 40/50 mark of Council delegates."[15]
[15] T. 4-22, Ll. 10-15.
What is apparent is that the recommendation was never put by the Assistant Secretary to the State Council but rather by an employee of the applicant to some sub-division or grouping of health worker delegates. Mr Thomas was unable to identify the participants and it would appear that no minutes were taken of the meeting in accordance with the requirements of the applicant's rules. Rule 16 specifically provides that "All decisions made by Council delegates for a sub-division shall be recorded in writing and a register of all such decisions shall be kept by the Secretary." Rule 28 also requires that meetings of the Council cannot be conducted via telephonic or electronic means.
Ms Bignall gave evidence about the costs associated with the calling of meeting of the State Council as a basis for not convening a State Council meeting. However, the Rules provide for a mechanism to poll delegates of the State Council in circumstances where a response is required on an urgent basis.
Dr O'Connell in his evidence before the Commission made it clear that the recommendation to the State Council to sign the Queensland Health Payroll Heads of Agreement was the only thing that the respondent hoped to gain from the proposal.
The Queensland Health Payroll Heads of Agreement was never signed by the applicant.
The applicant further submits that consideration was provided, in the form of the ceasing of the industrial dispute between the applicant and respondent.
The full bench accepts the submission that the "promise" is not binding on employees of the respondent and each would still be able to raise a dispute about the issue. Further, it could never be binding on non-union employees.
Counsel for the respondent again referred the full bench to the reasoning of Hayne JA in Ryan where his Honour wrote:
"In the end the argument for the respondents was that each union promised that it would not 'raise a grievance' if the steps set out in the document were taken. But what is the content of such a promise? What kinds of steps has the union promised to forgo? For how long does the union agree not to 'raise a grievance'?
In my view it is simply not possible to distil from the words used in the documents any agreement on the unions' part to do or refrain from doing anything.
Not only is there no express promise by the union to do or refrain from doing something, no such promise can be implied. Apart from any other reason that might stand in the way of implying a term, what is the content of the promise by the union which was so obvious that it went without saying?: BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 at 283; Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 at 347. Because the content of that promise cannot be identified, no such term can be implied."[16]
[16] Ryan v Textile, Clothing and Footwear Union and Anor (1996) 2 VR 235 at [271].
Finally, the applicant submitted that the third item of consideration was the "promise" to continue to work outside the scope of their role descriptions.
In our view there is not good consideration. The applicant has not suffered or undertaken no forbearance, detriment, loss or responsibility.
We accept that whilst no legally binding agreement has been made between the parties, we accept the respondent has undertaken to put in place (which it did) a mechanism for progression from the classification AO3 to AO4. To that extent, the agreement had industrial as opposed to legal consequences. Hayne JA wrote:
"The facts that a dispute was settled and that 'offsets' were sought and given, do not (alone or together) mean that the arrangement that was struck was a contract enforceable at law. The settlement of the dispute and the provision of the offsets is as consistent with the making of an arrangement that was to have industrial as opposed to legal consequences as they are with the parties having reached an agreement intended to be binding at law. If, as I consider to be the case, no good consideration was provided by the union for the employer's promise, then no legally binding contract was made. But that is not to say that the arrangement struck was of no significance at all. There is no doubt that the parties could properly regard the arrangement as constituting the employer's undertaking that it would in future provide redundancy benefits at the level agreed and that its employees would permit payment of wages by electronic funds transfer, permit selection of redundancies according to the criteria and procedures laid down (whatever they might mean) and allow for the introduction of more flexible shift arrangements. But the fact that that may have been the legitimate expectation of the parties does not mean that the parties are to be taken as contemplating that those expectations were to be capable of enforcement by resort to the courts."[17]
[17] Ryan v Textile, Clothing and Footwear Union and Anor (1996) 2 VR 235 at [272] to [273].
Was the contract of employment varied?
The applicant contends that the respondent invited eligible employees to particulate in the payroll progression scheme and that the email of 26 June 2012[18] from the respondent set out a promise to these employees that if they me the selection criteria their classification would be varied from AO3 to AO4.
[18] Attachment 1 to the affidavit of Maria Alice Wingrove affirmed 26.08.13 (Exhibit 1).
The applicant further contends that the invitation to the 118 employees to participate in the personal progression scheme was an offer to vary their contract of employment and the submission of the application was an acceptance of the offer.
The criteria set out in the Guideline to Applicants (which was attached to the email of 26 June 2012) were prepared in consultation with the applicant. That guideline forms part of the "invitation". Those criteria included the following:
"the KPMG report:, Queensland health payroll operating roadmap - 16 July 2010, proposed the development of an advanced payroll (PO) role to provide specialist support and advice…
Queensland health agreed to implement a progression scheme for permanent payroll offices to progress from payroll (AO3) to senior payroll specialist (AO4) based on meeting both eligibility requirements and determined criteria.
This document details the departmental arrangements for employees at the payroll (AO3) level seeking progression to the senior payroll specialist AO4 level.
This progression scheme allows permanent payroll offices to move from payroll level II (AO3) to senior payroll specialist (AO4).
Those identified as eligible will be contacted invited to apply for progression. They will be provided with this information guide, a role description and an expression of interest to assist them in making a decision about whether to apply.
Applicants are deemed competent by the panel and who are approved for progression by the delegate will be notified and appointed. They will progress to AO4 level, and in the first round, this will be backdated to the date agreed to in the Queensland health payroll staff proposal one July 2011.
Submitting your application does not guarantee progression to the role of senior payroll specialist."
The "Information Guide for Applicants" constituted the agreed eligibility and process requirements to give substance to the progression scheme which the respondent agreed to put in place under the payroll agreement.
The "Information Guide for Applicants" provides under the heading "Eligibility" the following:
"This progression scheme allows permanent payroll officers to move from Payroll Officer 2 (AO3) to Senior Payroll Specialist (AO4). To be eligible to apply for progression, employees must have a minimum of two years' Queensland Health payroll experience."[19]
[19] Attachment 1 to the affidavit of Maria Alice Wingrove affirmed 26.08.13 (Exhibit 1).
The Information Guide goes on to specifically provide:
"Submitting your application does not guarantee progression to the role of Senior Payroll Specialist."[20]
[20] Attachment 1 to the affidavit of Maria Alice Wingrove affirmed 26.08.13 (Exhibit 1).
The agreed assessment process is also set out in the Information Guide in the following terms:
"In order to be successful the panel must be satisfied that the Applicant has demonstrated competence against each of the nine elements based on the evidence provided.
Applicants deemed competent by the panel and who are approved for progression by the delegate will be notified and appointed."[21]
[21] Attachment 1 to the affidavit of Maria Alice Wingrove affirmed 26.08.13 (Exhibit 1).
The words of the Information Guide are clear and unambiguous. It is not sufficient that a person satisfies the competency requirement, they must also be approved for progression by the delegate before an appointment is made.
It is the submission of the respondent that that invitation was not an offer and did not and could not affect a variation to the contract of any employee. It is the contention of the respondent that this was nothing more than an invitation to a large group of employees to consider whether they wished to submit an application to be appointed to a higher classification (AO4). Invitees were at liberty to accept or reject that invitation and those who accept the invitation to apply could have no expectation that by the mere fact of requesting that they be considered for reclassification, their respective contracts of employment would thereby be irrevocably altered to include the terms of the payroll agreement.
It is contended by the applicant that in accordance with the agreement reached between the applicant and the respondent, the respondent invited employees to participate in a payroll progression scheme, the email from the respondent set out a promise that if they met the attached criteria their classification would be varied from AO3 to AO4.
It was argued that the offer was accepted by the submission of the application for reclassification which, in turn, varied the employee's contract of employment. However, it is important to note that the Information Guide clearly states that "Submitting your application does not guarantee progression to the role of Senior Payroll Specialist."
Even if it could be found that the email of 26 June and the attached documents amounted to an offer, the offer was conditional. The applicant for reclassification was required to be deemed competent by the panel and have their progression from AO3 to AO4 approved by the delegate.
In order to secure appointment to an AO4 position, as described in the Information Guide, applicants were required:
(a)to be deemed competent by the panel; and
(b)to have been approved for progression by "a delegate".
We accept the submission of the respondent that the invitees were at liberty to accept or reject the invitation. More particularly, those who returned the expression of interest form could not have expected that by submitting an application to be considered for reclassification that their respective contracts of employment would be irrevocably altered to include the terms of the payroll agreement.
In cross-examination, Ms Wingrove was asked:
"[Q:] Could I take you to page 3 in the middle of the page under the heading "Assessment", the third unnumbered paragraph there starts: "Applicants being competent by the panel and who are approved for progression by the delegate will be notified and appointed" Do you understand that?
[A:] Yes.
[Q:] So the process that was being outlined here was that the classification set out on page 7 or commencing on page 7, that role there was a classification to which persons would be appointed?
[A:] Yes.
[Q:] And that was to happen, did you not - did you understand that was to happen by a process, firstly, you would be deemed competent by the panel?
[A:] That’s right.
[Q:] And, secondly, you would be approved for progression by the delegate?
[A:] Yes.
[Q:] And approval for progression by the delegate you understood was the delegate of the director-general?
[A:] Yes.
[Q:] And that was your understanding of what was happening here when you ticked box and said, "I wish to apply for all of this to happen to me"?
[A:] I believe so. I - yes."[22]
[22] T. 4-8, L. 45 to 4-9, L. 10.
It must be accepted that Ms Rowland as the delegate of the Director-General is confined by regulatory and statutory constraints in the exercise of the delegated authority. Accordingly, it must be taken to have been intended that before any person could be appointed to an AO4 classification under this process, or under any other process, it would be necessary for a delegate to give their approval and to make such an appointment according to law and within any applicable budget constraints at the time.
In the affidavit of Ms Lyn Rowland[23] she states:
"After consulting with Mr Hood I reaffirmed my earlier determination that it would have been financially irresponsible to proceed to appoint the 85 applicants assessed as having met the determined criteria to a personal AO4 classification, service delivery requirements at QH did not support a workforce mix including an additional 85 employees classified at the AO4 classification.
Further, as those 85 appointments to AO4 positions (that were not required) would also carry an obligation under the proposal to pay back page to one July 2011 in respect of AO4 positions that had not been performed, I decided that there was a significant element of financial irresponsibility by incurring very substantial additional costs for a service that was not directed towards effective, efficient and responsive services to the community."[24]
[23] Affidavit of Lyn Rowland (Exhibit 15).
[24] Affidavit of Lyn Rowland at [23] and [24] (Exhibit 15).
We accept that Ms Rowland as the delegate was required to exercise her discretion in the manner that she did. There is no evidence before the Commission to suggest that Ms Rowland did not have the delegated authority to do what she did nor is there any suggestion that her discretion somehow miscarried.
In her affidavit, Ms Rowland deposes that:
"Before making such an appointment, I was required by the Public Service Act 2008, Public Service Regulations and Directives, and the Hospital and Health Boards Act 2011 to consider all of the matter that the Chief Executive was required to consider before appointing any person to a position or classification. In particular, I was required to consider (at least) the provisions of:-
(a)Sections 25 and 138 of the Public Service Act;
(b)Commission Chief Executive Directive No. 05/12: Workplace Establishment Management Framework; and the
(c)Human Resources (HR) Delegations Manual (November 2009) applied as at 29 of September 2011."[25]
[25] Affidavit of Lyn Rowland at [13] (Exhibit 15).
Ms Rowland explained the effect of Directive 05/12 on the exercise of her discretion in the following terms:
"… under Commission Chief Executive Directive No. 05/12 Workplace Establishment Management Framework, I am obliged when exercising my delegations to apply workforce management practices that supports the Government's commitment to a public service that delivers effective, efficient services to the community. Those management practices are set out in a number of areas, but are principally to be found in s. 25 of the Public Service Act ("The Management and Employment Principles") and s. 138 of that Act. Those sections are required to be applied to Health Services employment by s. 5B and schedule of the Public Service Regulation 2008."[26]
[26] Affidavit of Lyn Rowland at [19] (Exhibit 15).
The contention of the applicant that the role of the delegate was non-discretionary cannot be accepted.
The submission of the applicant misconstrues the progression process and the role of the delegate. The delegate did not, as it was submitted, substitute their view for that of the panel.
The guidelines provided for two distinct steps. The first involved an assessment of the applicant measured against agreed criteria; and the second involved the approval by the delegate of the progression. As noted above, Ms Rowland as the delegate was obliged, in exercising her discretion to take into consideration a number of legislative and regulatory factors. Her role was not to rubber stamp the panel assessment but to fulfil her role as a delegate of the Director General.
The applicant's submissions ignore the second of the two prescribed steps contained in the Information Guide. The deeming by the panel of those applicants who are considered competent does not of itself guarantee automatic progression. Unless and until progression is approved by the delegate, no appointment can be made.
Was the agreement imported into the contract of employment?
The contention of the applicant was that the common law agreement between the applicant and respondent was imported in its totality into the contract of employment. In the alternative, the progression scheme was imported into the employee's contract of employment.[27]
[27] T. 8-5, Ll. 27-30.
The test to be applied in determining whether a written policy, other document or statement is incorporated by reference into a contract of employment is an objective one.
In Goldman Sachs JB Were Services Pty Ltd v Nikolich[28], Black CJ wrote:
"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.'"[29]
[28] Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120.
[29] Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120 at [23].
Some of the relevant principles to consider, in determining if a reasonable person in the position of an employee would conclude that an employer intended to be contractually bound by a policy, document or statement are:
· all the facts and circumstances surrounding the making of the contract in question, including the content of the documents in question;[30]
· the terms of the policy or document, including if it was beneficial in nature to the employee;[31]
· the words used in the contract that referred to the policy or document, including if the words used indicated an intention that the employer would comply with the policy to the extent it conferred benefits on the employee;[32]
· what was known by the employer and the employees of the employer of any policy or document at the time the contract was made;[33]
· what documents were provided to the employee at the time the contract was made;[34] and
· the fact that a policy or document may change from time to time does not of itself mean that the policy or document cannot be a term of a contract of employment.
[30] Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 at [89] per North J and Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120 at [285] to [287] per Jessup J.
[31] Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 at [89] per North J and [151] per Mansfield J and Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120[32] Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 at [107] per North J and [146] per Mansfield J and Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120[33] Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 at [147] – [149] per Mansfield J.
[34] Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120 at [283] per Jessup J.
On the evidence before the Commission, and having regard to the principles enunciated in the cases, we cannot accept that a reasonable person in the position of the employee would have understood the email of 26 June 2012 (including the attached documents) to have contractual effect and that the parties would be contractually bound.
Conclusions
The Full Bench is of the opinion, for the reasons above, that the "Queensland Health Payroll Staff Proposal" was not a contract that was binding in law and the agreement had industrial as opposed to legal consequences.
The respondent undertook to implement a progression scheme for the purpose of facilitating (subject to meeting the agreed criteria) the ability to progress from AO3 to the Senior Payroll Specialist classification (AO4).
The progression system put in place under the proposal implemented a scheme whereby eligibility requirements and determined criteria were developed with the objective of identifying who were eligible for progression from an AO3 classification to the role of Senior Payroll Specialist classified as an AO4 position.
The evidence supports the conclusion that the respondent fully complied with its obligations under the proposal.
The invitation contained in the email of 26 June 2012 was not an offer but an invitation to be considered for appointment to a higher classification.
It follows therefore that we do not accept the contention of the applicant, that the submission of an application from each individual employee was an acceptance of an offer.
In our view, the invitation did not or could not effect a variation to the employee's contract of employment.
The 85 employees identified under the progression scheme did not satisfy both of the principal criteria necessary for appointment; namely, to be deemed competent by the panel; and to have been approved for progression by "a delegate". The person who had the authority to make the appointment exercised her discretion under the proposal and declined to make the appointments.
Whilst s 274A gives the Commission a discretion to either declare existing rights or to create something in the nature of a new right, we are not persuaded on the evidence before the Commission that the discretion ought to be exercised to grant the declarations sought.[35]
[35] Ibeneweka v Egbuna [1964] 1 WLR 219 at 224-5 (PC) approved in Australia in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564.
Orders
The application is dismissed.
at [22] per Black CJ and [285] to [287] per Jessup J.
at [285] per Jessup J.
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