Whooley v Shire of Denmark

[2019] WASCA 28

JURISDICTION     :   WESTERN AUSTRALIAN INDUSTRIAL APPEAL COURT

CITATION:   WHOOLEY -v- SHIRE OF DENMARK [2019] WASCA 28

CORAM:   BUSS J

LE MIERE J

MURPHY J

HEARD:   11 SEPTEMBER 2018

DELIVERED          :   13 FEBRUARY 2019

FILE NO/S:   IAC 1 of 2018

BETWEEN:   ROBERT WHOOLEY

Appellant

AND

SHIRE OF DENMARK

Respondent

ON APPEAL FROM:

Jurisdiction              :   WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Coram:   J H SMITH ACTING PRESIDENT

S J KENNER ACTING SENIOR COMMISSIONER

T EMMANUEL COMMISSIONER

Citation:   SHIRE OF DENMARK v WHOOLEY [2017] WAIRC 01010

File Number             :   FBA 8 OF 2017 & FBA 9 OF 2017

Catchwords:

Industrial law - Appeal against decision of the Full Bench of Western Australia Industrial Relations Commission - Claim for benefits denied under employment contract - Statutory construction

Legislation:

Australian Broadcasting Corporation Act 1983 (Cth), s 25(1)(a), s 70, s 70(1)
Industrial Relations Act 1979 (WA), s 7, s 90(1), s 90(3a)
Local Government Act 1995 (WA), s 2.7, s 5.36, s 5.37, s 5.37(1), s 5.37(2), s 5.39(1a), s 5.41, s 5.41(g)

Result:

Appeal dismissed

Category:    B

Representation:

Counsel:

Appellant	:	In person
Respondent	:	Mr J Darams

Solicitors:

Appellant	:	In person
Respondent	:	Clyde & Co

Case(s) referred to in decision(s):

Australian Broadcasting Corporation v Redmore Pty Ltd [1989] HCA 15; (1989) 166 CLR 454

Galloway v Galloway (1914) 30 TLR 531

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355

Suttor v Gundowda Pty Ltd [1950] HCA 35; (1950) 81 CLR 418

University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481

Water Board (NSW) v Moustakas [1988] HCA 12; (1988) 180 CLR 491

Whooley v Shire of Denmark [2017] WAIRC 00001

JUDGMENT OF THE COURT:

Summary

1. The appellant, Mr Whooley, was employed by the respondent Shire as Director of Infrastructure Services under a written contract of employment.  By a letter of 5 June 2015 the Shire's Chief Executive Officer (CEO) informed Mr Whooley that the Shire was summarily terminating Mr Whooley's employment.

2. Mr Whooley commenced proceedings in the Western Australian Industrial Relations Commission claiming contractual benefits to which he had been denied.  Mr Whooley claimed that the termination of his employment was invalid and ineffective because the Shire had not complied with s 5.37(2) of the Local Government Act 1995 (WA) (LGA).  The Shire denied that the termination of Mr Whooley's employment was invalid and ineffective and further claimed that he was barred from bringing the claim because of a settlement agreement made between the Shire and Mr Whooley in the course of proceedings in the Fair Work Commission.  The Commissioner found that the termination of employment of Mr Whooley was invalid and ineffective and the settlement agreement was void.  The Commissioner ordered the Shire to pay Mr Whooley $43,893.71.

3. The Shire appealed to the Full Bench of the Western Australia Industrial Relations Commission on the grounds that the termination of Mr Whooley's employment was not invalid and ineffective and that the settlement agreement was a bar to Mr Whooley's claim.  The Full Bench, by majority, upheld both grounds of appeal, set aside the Commissioner's decision and ordered that Mr Whooley's claim be dismissed.

4. Mr Whooley has appealed to this court on two grounds.  Ground 1 is that the Full Bench erred in finding that the termination of his employment was not invalid and ineffective.  Ground 2 is that the Full Bench erred in finding that the settlement agreement bars his claim.  For the reasons which follow we find that ground 1 of the appeal is made out and ground 2 of the appeal is not made out.  We would confirm the decision of the Full Bench allowing the appeal from the decision of the Commissioner and dismissing Mr Whooley's claim to the Commission.

Mr Whooley brings proceedings in Fair Work Commission

1. After he received the letter of 5 June 2015 purporting to terminate his employment, Mr Whooley commenced proceedings in the Fair Work Commission alleging that the Shire had unfairly dismissed him from his employment.  A conciliation conference was held on 15 July 2015.  Mr Whooley and his representative, Ms Nyariel, an industrial officer with the Australian Services Union (ASU), participated in the conference.  The CEO and a representative from the Western Australian Local Government Association participated on behalf of the Shire.  The Shire says that an agreement was reached at the conference by which, among other things, Mr Whooley agreed to discontinue the Fair Work proceedings and bring no other proceedings against the Shire in respect of his employment.  We will refer to this agreement, or alleged agreement, as the settlement agreement.

2. On 16 July 2015, Ms Nyariel informed the Fair Work Commission and the Shire's representatives that Mr Whooley had contacted the ASU and advised that he withdrew his agreement to the terms of the settlement that were reached at the conference on 15 July 2015.

Mr Whooley resigns

1. On 19 October 2015, after he had been elected as a councillor of the Shire, Mr Whooley sent an email to all councillors, councillors elect and the CEO in which he stated that he considered his dismissal by the CEO was unlawful.  He went on to say that, so there would be no ambiguity, or conflict, with legislation relating to being both an employee and a councillor, he resigned as Director of Infrastructure in accordance with his contract.

Mr Whooley claims denied contractual benefits

1. Mr Whooley made a claim to the Western Australian Industrial Relations Commission that he had not been allowed a benefit to which he was entitled under his contract of employment.  His claim was heard by Commissioner Matthews on 14 and 15 November 2016.

2. On 3 January 2017, the Commissioner found that the termination of employment of Mr Whooley was invalid and ineffective because LGA s 5.37(2) was not complied with before Mr Whooley received the purported letter of termination, and therefore the purported termination was wholly invalid and ineffective.  LGA s 5.37(2) requires the CEO to inform the Shire council of a proposal to dismiss a senior employee and provides that the council may accept or reject the CEO's recommendation.

3. The Commissioner found that Mr Whooley and the Shire made the settlement agreement at the conference and the parties intended to be bound by it, but the settlement agreement was void because the subject matter of the agreement, the termination of Mr Whooley's employment, was non-existent.

4. The Commissioner found that Mr Whooley should be compensated for the remuneration that he would have earned between 5 June 2015 and 19 October 2015, the date of his resignation, less the amount of one month's salary he was paid upon termination on 5 June 2015 and any amount he earned from work during that period.  The Commissioner ordered the Shire to pay to Mr Whooley the sum of $43,893.71.

Shire appeals to Full Bench

1. The Shire appealed to the Full Bench of the Commission on two grounds:

   1.The Commissioner erred in holding that the termination of the employment of Mr Whooley was invalid and ineffective because LGA s 5.37(2) was not complied with before notice of termination was provided on 5 June 2015 because, on the proper construction of the LGA, it is not a purpose of the legislation to render such decisions invalid.

   2.The Commissioner erred in holding that the agreement reached between the Shire and Mr Whooley on 15 July 2015 was void in that:

   a.the decision relied upon by the Commissioner in finding the agreement void, Galloway v Galloway,[1] does not represent the current position of the law in Australia; and/or

   b.the subject matter of the agreement reached between the Shire and Mr Whooley on 15 July 2015 was not entirely non‑existent.

   [1] Galloway v Galloway (1914) 30 TLR 531.

2. The majority, Smith AP and Emmanuel C, found that both grounds of appeal were made out.  The majority found:

   (a)the decision by the CEO to terminate the employment of Mr Whooley on 5 June 2015 was not invalid and ineffective; and

   (b)if, contrary to their opinion, the CEO's decision to terminate Mr Whooley's employment was invalid and ineffective, the compromise agreement made between Mr Whooley and the Shire in the Fair Work Commission on 15 July 2015 was valid and enforceable, and barred Mr Whooley's claim for contractual benefits.

   Kenner ASC found that neither ground of appeal was made out.

3. The Full Bench ordered that the decision of the Commissioner be quashed and Mr Whooley's claim for denied contractual benefits be dismissed.

This appeal

1. Mr Whooley now appeals to this court from the decision of the Full Bench.  There are two grounds of appeal.  The first is that the majority erred in upholding ground 1 of the appeal to the Full Bench and holding that a breach of LGA s 5.37(2) did not render the termination of his employment invalid because of six specified matters.  The second ground is that the majority erred in upholding ground 2 of the appeal to the Full Bench and holding that a compromise agreement had been reached and there was a bar to his claim because of 22 matters, which are specified in the notice of appeal.

Appeal ground 1

1. The Shire is established as a body corporate with the legal capacity of a natural person by the LGA.  Its governing body is its elected council.  LGA s 2.7 provides that the council governs the local government's affairs and is responsible for the performance of the local government's functions.  LGA pt 5, amongst other things, deals with the employment of persons by local governments and matters relating to local government employees.  Division 4 deals with local government employees.  Section 5.36 deals with the employment of employees.  Section 5.41 deals with the functions of the CEO.  They include:

   (g)[to] be responsible for the employment, management, supervision, direction and dismissal of other employees (subject to s 5.37(2) in relation to senior employees).

   Other employees refers to employees other than the CEO.

2. LGA s 5.37 deals with senior employees.  Section 5.37(1) provides that a local government may designate employees or persons belonging to a class of employee to be senior employees.  It is common ground that Mr Whooley was a senior employee for the purposes of s 5.37(1).  Section 5.37(2) provides that:

   The CEO is to inform the council of each proposal to employ or dismiss a senior employee, other than a senior employee referred to in s 5.39(1a), and the council may accept or reject the CEO's recommendation but if the council rejects a recommendation, it is to inform the CEO of the reasons for its doing so.

   Section 5.39(1a) is not presently relevant.

3. The CEO did not inform the council of the proposal to dismiss Mr Whooley and the council did not accept a recommendation to dismiss Mr Whooley.  The Commissioner found that the termination of Mr Whooley's employment was invalid and ineffective because the CEO had not complied with LGA s 5.37(2).

4. The majority of the Full Bench reached a different decision.  Smith AP, with whom Emmanuel C agreed, referred to authorities concerning whether a failure to comply with a legislative provision that purports to impose an obligation results in action taken under it being invalid.  Her Honour referred to Australian Broadcasting Corporation v Redmore Pty Ltd[2] and Project Blue Sky Inc v Australian Broadcasting Authority.[3]

   [2] Australian Broadcasting Corporation v Redmore Pty Ltd [1989] HCA 15; (1989) 166 CLR 454.

   [3] Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355.

5. In ABC v Redmore, the ABC entered into a contract with Redmore.  The ABC claimed it was not bound by the contract because it had entered into the contract without the approval of the Minister as required by the Australian Broadcasting Corporation Act 1983 (Cth) (ABC Act). The High Court rejected the Corporation's claim that it was not bound by the contract because of this failure. Section 25(1)(a) of the ABC Act empowered the Corporation to enter into contracts for the performance of its functions. Section 70(1) provided that the Corporation shall not, without the approval of the Minister, enter into a contract under which the Corporation is to pay or receive an amount exceeding $500,000. The High Court held that a contract within s 70(1) into which the Corporation entered without the Minister's approval was not beyond the Corporation's powers. The majority held that having regard to the structure of the ABC Act and the context of s 70, the direction in s 70(1) could not be construed as concerned to confine power or invalidate the otherwise lawful expenditure of money by the Corporation.

6. In Project Blue Sky, the High Court held that the Australian Broadcasting Authority, in making a broadcasting standard, had failed to comply with a statutory directive that the Authority was obliged to take into account in making the standard.  The court held that it was not the intention of the Act that the standard should thereby be invalid.  McHugh, Gummow, Kirby and Hayne JJ observed:

   An act done in breach of the condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition [91].

7. Ground 1 raises a question of statutory construction.  The answer to most questions of statutory construction is to be found in a careful analysis of the statutory text, understood in its proper context.

8. On its proper construction the LGA confers on the CEO power to dismiss a senior employee only if the CEO has informed the council of the proposed dismissal and the council has accepted the CEO's recommendation.  That interpretation follows from the language of the LGA, its subject matter and objects and the consequences of holding that the CEO has power to dismiss a senior employee without informing the council of the proposal and the council accepting the CEO's recommendation.

9. LGA s 2.7 provides that the council governs the local government's affairs.  Section 5.41 provides for the functions, which includes powers, of the CEO.  Section 5.41(g) confers on the CEO the power to dismiss employees.  That provision distinguishes between senior employees and other employees. By s 5.37(1), the local government (not the CEO) designates employees or persons belonging to a class of employee to be senior employees.  By s 5.39, relevantly, the employment of a person who is a senior employee must be governed by a written contract in accordance with s 5.39.  The CEO may dismiss other employees, but his or her power to dismiss senior employees is subject to s 5.37(2).  The effect of s 5.37(2) is that if the CEO proposes to dismiss a senior employee, then the CEO must inform the council of the proposal and make a recommendation to the council that the senior employee be dismissed.  Further, by s 5.37(2), the council may accept or reject the CEO's recommendation.  The power and responsibility to determine whether a senior employee is to be dismissed rests with the council, not the CEO.  The CEO's power to dismiss a senior employee, pursuant to the function conferred on the CEO by s 5.41(g), is not enlivened unless the CEO has complied with s 5.37(2) and the council has accepted the CEO's recommendation that the senior employee be dismissed.

10. To interpret s 5.41(g) as rendering effective a purported dismissal of a senior employee by the CEO without the council having been informed of the proposal and accepting the recommendation is to disregard the statutory scheme, which distinguishes between the dismissal of senior employees and other employees, and to disregard the scheme in relation to the dismissal of senior employees.

11. Further, such an interpretation ignores the language of s 5.41(g) that the power of the CEO to dismiss employees is 'subject to' s 5.37(2) in relation to senior employees.

12. Furthermore, the consequence of construing s 5.41(g) such that a dismissal of a senior employee by the CEO is effective without the council having been informed of the proposal and having accepted the recommendation, is to remove from the council the power and responsibility for deciding on the dismissal of senior employees, which is expressly conferred upon it by the LGA.

13. The only power conferred on the CEO to dismiss an employee is the power conferred by s 5.41(g).  That power is expressly subject to s 5.37(2) in relation to senior employees.  The CEO has no power to dismiss a senior employee unless the CEO has informed the council of the proposal to dismiss the senior employee and the council has accepted the CEO's recommendation.  The CEO did not inform the council of his proposal to dismiss Mr Whooley and the council did not accept a recommendation of the CEO to dismiss Mr Whooley.  Therefore, the CEO had no power to dismiss Mr Whooley.  The CEO's letter of 5 June 2015 was ineffective to terminate Mr Whooley's employment.

14. Ground 1 is made out.

Appeal ground 2

1. The second ground of appeal is that the Full Bench erred in upholding ground 2 of the appeal to the Full Bench and holding that a compromise agreement had been reached and that there was a bar to Mr Whooley's claim because of 22 matters which Mr Whooley sets out in his notice of appeal.  The essence of Mr Whooley's argument is that the settlement agreement was of no force or effect because it was beyond the power of the CEO (without a resolution by council or some other conferral of authority) to make the agreement on behalf of the Shire.

2. An appeal does not lie to the Court on that ground. Section 90(1) of the Industrial Relations Act 1979 (WA) (IRA) provides that an appeal lies to the court from any decision of the Full Bench:

   (a)on the ground that the decision is in excess of jurisdiction in that the matter the subject of the decision is not an industrial matter; or

   (b)on the ground that the decision is erroneous in law in that there has been an error in the construction or interpretation of any Act, regulation, award, industrial agreement or order in the course of making the decision appealed against; or

   (c)on the ground that the appellant has been denied the right to be heard,

   but upon no other ground.

3. The second ground of appeal does not assert that the matter the subject of the decision is not an industrial matter. The matter the subject of the decision of the Full Bench is whether Mr Whooley has not been allowed by his employer a benefit to which he is entitled under his contract of employment. That is an industrial matter as defined in s 7 of the IRA.

4. The second ground of appeal does not assert that the decision is erroneous in law in that there has been an error in the construction or interpretation of any Act, regulation, award, industrial agreement or order in the course of making the decision appealed against.  The Full Bench did not construe or interpret any Act, regulation, award, industrial agreement or order in the course of deciding that the settlement agreement barred Mr Whooley's claim for contractual benefits.  Mr Whooley does not identify any Act, regulation, award, industrial agreement or order which the Full Bench misconstrued or misinterpreted in the course of making the decision that the settlement agreement barred Mr Whooley's claim for contractual benefits.

5. In the course of his oral submissions to the court Mr Whooley submitted that he had been denied the right to be heard by the Full Bench.  In his oral submissions to the Full Bench, Mr Whooley submitted that the CEO did not have authority to enter a legally binding contract on behalf of the Shire.  After some discussion the Full Bench ruled that Mr Whooley could not raise that point because it had not been raised before the Commissioner and if it had been raised it could have been met by the calling of evidence.  The Acting President said:[4]

   It wasn't a point put at first instance and if it had been a point put at first instance then it could have perhaps been addressed by some evidence which was given by, on behalf of [the CEO], or at least the ‑ of someone else from the Council to say it was so authorised by the Council to enter an agreement to settle this claim.

   [4] ts 44.

1. The finding that the point had not been raised before the Commissioner was a finding open to the Full Bench.  Mr Whooley's submission to this court, to the contrary, cannot be accepted.  Mr Whooley said that the point had been raised in his evidence before the Commissioner.[5] However, that evidence was given in the context of, and was purportedly relevant to, the legal argument advanced by Mr Whooley's counsel that the settlement agreement was not intended to be immediately binding, or was conditional. Moreover, it is evident from Mr Whooley's counsel's submissions both in opening,[6] and in closing,[7] and from the Commissioner's reasons for decision,[8] that there was no argument on Mr Whooley's behalf to the effect that the CEO lacked the requisite authority to enter into the settlement agreement.

   [5] Mr Whooley referred to his evidence on 14 November 2016 at ts 203 - 204.

   [6] ts 78 - 83, 14 November 2016.

   [7] ts 200 ‑ 208, 15 November 2016.

   [8] Whooley v Shire of Denmark [2017] WAIRC 00001 [68] ‑ [84].

2. It is a well‑established principle that, except in very exceptional cases, a party to an appeal cannot raise a point or objection on appeal not raised (whether deliberately or by inadvertence) in the primary proceedings.  Exceptional circumstances, in this context, will not exist if there were any possibility that the point could have been met by additional or different evidence.  See, for example, Suttor v Gundowda Pty Ltd;[9] University ofWollongong v Metwally (No 2);[10] Water Board (NSW) v Moustakas.[11]

   [9] Suttor v Gundowda Pty Ltd [1950] HCA 35; (1950) 81 CLR 418.

   [10] University ofWollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481.

   [11] Water Board (NSW) v Moustakas [1988] HCA 12; (1988) 180 CLR 491.

3. The Full Bench did not deny Mr Whooley the right to be heard.  The Full Bench heard Mr Whooley's argument.  It held that Mr Whooley should not be permitted to raise the point as to the scope of the CEO's authority for the first time on appeal because it could possibly have been met by calling evidence before the Commissioner.  That conclusion was open to the Full Bench on the materials before it.

Appeal does not succeed

1. On hearing an appeal from a decision of the Full Bench the court may confirm, reverse, vary, amend, rescind, set aside or quash the decision the subject of appeal or remit the matter to the Full Bench as the case requires.  The decision the subject of this appeal is the decision of the Full Bench that the decision of the Commissioner should be quashed and Mr Whooley's claim dismissed.  The Full Bench made that decision on two independent grounds.  We have found that the Full Bench erred in respect of the first ground, that the decision by the CEO to terminate the employment of Mr Whooley was not invalid and ineffective.

2. The second ground of the Full Bench's decision is independent of the first ground of its decision and is not affected by the error made by the Full Bench in the course of deciding ground 1.  Smith AP, with whom Emmanuel C agreed, considered ground 2 on the assumption that her Honour was wrong about the construction of LGA s 5.37(2) and the effect in law of the decision of the CEO to dismiss Mr Whooley was invalid and ineffective.  Smith AP decided that if her Honour was wrong on ground 1 of the appeal to the Full Bench, as we have found she was, she would uphold ground 2 of the appeal.  It is that decision which Mr Whooley challenges by ground 2 of his appeal.

3. The court does not have jurisdiction to hear Mr Whooley's appeal against the second ground of the Full Bench's decision.  That ground of the Full Bench's decision stands.  It is sufficient to found the decision of the Full Bench to quash the decision of the Commissioner and dismiss Mr Whooley's claim.

4. It is not sufficient for the court to allow an appeal and reverse, vary, or quash the decision the subject of appeal, or remit the matter to the Full Bench, that the Full Bench made an error in the course of its decision.  The appellant must further show that the error affected, or may have affected, the decision of the Full Bench.  In this case, the error of the Full Bench does not affect the second ground on which it upheld the appeal from the Commissioner.  That ground is independent of, and not affected by, the decision of the Full Bench that the decision by the CEO to terminate Mr Whooley's employment was not invalid and ineffective.  Therefore, the court should dismiss the appeal and confirm the decision of the Full Bench to quash the decision of the Commissioner and dismiss Mr Whooley's claim.

No miscarriage of justice

1. IRA s 90(3a) provides that if any ground of the appeal is made out but the court is satisfied that no injustice has been suffered by the appellant, the court shall confirm the decision the subject of appeal unless it considers there is good reason not to do so.

2. We are satisfied that no injustice has been suffered by Mr Whooley notwithstanding that ground 1 of his appeal is made out.  An error of law in construing or interpreting an Act may or may not amount to, or give rise to, an injustice.  Whether it does depends on the context of the appeal to the Full Bench, the matters in issue and the decision of the Full Bench.  Generally there will be no injustice if an error, including an error in the construction or interpretation of any Act, has not affected the ultimate decision of the Full Bench on the overall merits of the case.

3. No injustice has been suffered by Mr Whooley in this case.  The Full Bench found that the settlement agreement was valid and enforceable, and barred his claim for contractual benefits.  That finding is sufficient to quash the decision of the Commissioner and dismiss Mr Whooley's claim.  That ground of the Full Bench decision is not affected by its error in construing the LGA.  Further, and in any event, this court does not have jurisdiction to review that ground of the Full Bench's decision.

4. Section 90(3a) of the IRA requires the court to confirm the decision the subject of appeal if it is satisfied that no injustice has been suffered by the appellant, unless it considers that there is good reason not to do so. We do not consider that there is any good reason not to confirm the decision of the Full Bench.

Conclusion

1. Ground 1 of the appeal is made out.  The court does not have jurisdiction to hear ground 2.  The error disclosed by ground 1 does not affect the decision the subject of appeal because the independent ground of the Full Bench's decision, that the settlement agreement barred Mr Whooley's claim, stands, and must result in the Commissioner's decision being quashed and Mr Whooley's claim being dismissed.

2. We would dismiss the appeal and confirm the decision of the Full Bench, that is the decision of the Full Bench to quash the decision of the Commissioner and order that Mr Whooley's claim be dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Western Australian Industrial Appeal Court.

KL
Associate to the Honourable Justice Buss

13 FEBRUARY 2019