WorkPac Pty Ltd v Rossato & Ors
[2021] HCATrans 83
[2021] HCATrans 083
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Brisbane No B73 of 2020
B e t w e e n -
WORKPAC PTY LTD ACN 111 076 012
Appellant
and
ROBERT ROSSATO
First Respondent
MINISTER FOR JOBS AND INDUSTRIAL RELATIONS
Second Respondent
CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION
Third Respondent
MATTHEW PETERSEN
Fourth Respondent
KIEFEL CJ
GAGELER J
KEANE J
GORDON J
EDELMAN J
STEWARD J
GLEESON J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON WEDNESDAY, 12 MAY 2021, AT 10.05 AM
Copyright in the High Court of Australia
____________________
MR B.W. WALKER, SC: May it please the Court, I appear with my learned friends, MR I.M. NEIL, SC, MR D.W.M. CHIN, SC and MR C. PARKIN, for the appellant. (instructed by Ashurst)
MR C.J. MURDOCH, QC: May it please the Court, I appear with my learned friend, MR C.G.C. CURTIS, for the first respondent. (instructed by Franklin Athanasellis Cullen)
MR J.D. McKENNA, QC: May it please the Court, I appear with my learned friend, MS B.J. O’BRIEN, for the second respondent. (instructed by MinterEllison)
MR S. CRAWSHAW, SC: If the Court pleases, I appear with my learned friend, MR R.E. REED, for the third respondent. (instructed by Slater and Gordon Lawyers)
MS K.P. HANSCOMBE, QC: Your Honours, in these proceedings I appear with MR J. FETTER for the fourth respondent. (instructed by Adero Law)
KIEFEL CJ: Yes, Mr Walker.
MR WALKER: May it please your Honours. At the heart of the case and, as your Honours have seen from our outline, the issue with which we start, is a question of characterisation of the nature of the undoubted employment of Mr Rossato by our client.
KIEFEL CJ: Mr Walker, could I interrupt you at an early point just to enquire, since the grant of special leave there have been statutory amendments.
MR WALKER: Yes.
KIEFEL CJ: The relevance and utility of this, the orders that might be made in these proceedings is then somewhat more limited than was the case at the grant of special leave.
MR WALKER: The matter has changed but perhaps more by way of a shift than a limit. As your Honours are aware, the amendment under the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 in question includes what I will call a definition of casual employment but it is in terms which bears very close relation on comparison with the arguments of principle that we advanced below and would seek to advance here. So that the consideration by this Court of those arguments will not be of historical irrelevance to a regime in which that definition operates, to the contrary. So, it has shifted it rather than confined it is the way we put it.
GORDON J: Is it the position that that definition applies retrospectively, except to those whose employees have had their rights determined ‑ ‑ ‑
MR WALKER: Such as this case, yes.
GORDON J: How many people are in that category?
MR WALKER: I cannot say that there are many, your Honour, because obviously appeal periods expiring brings an end – it is the natural way in which such classes close. Justice Gordon’s question, I gather, is directed to the question of how many ‑ ‑ ‑
GORDON J: How many people are ‑ ‑ ‑
MR WALKER: How many of those people for whom that may be live.
GORDON J: ‑ ‑ ‑ in the position of your client, really, in other words? Their rights have been determined by a court and therefore fall outside the new definition.
MR WALKER: So, employees’ rights determined.
GORDON J: Yes.
MR WALKER: I think there would be a very small number – I am quite unable to say whether it is of any material size at all outside this case. The class of person whose rights have been so determined is, of course, no doubt very large over the years. For none of them would the effect of a retrospective amendment have now any influence at all. Indeed, in a true appeal – as the transitional provisions plainly contemplate – there will be no effect, in any event, on a subsequent change of law.
GAGELER J: What about the principle in Dunmunkle? Does that have any bearing on the construction of the term as it existed before the amendment?
MR WALKER: No. I was about to say, it certainly will not have any effect on what I will call the number of persons affected in light of the amendment. Your Honour, as I stand here, I think the answer is no, it will not have any effect on the arguments we have advanced. It certainly does not change any of the issues of principle. In this case, that may be because of the striking similarity of the statutory amendment and the argument which we advanced unsuccessfully below and seek to advance here.
KIEFEL CJ: But, in any event, the outcome of this case has ramifications for the class action of which Mr Peterson is the plaintiff.
MR WALKER: On any view of it, then the formal constitution of these proceedings makes that clear.
KIEFEL CJ: Yes, yes.
MR WALKER: But, I do stress beyond that not insignificant effect on more than the relations between our client and Mr Rossato, there is also, almost certainly, an effect of the Court’s determination and reasoning – whichever way it goes – with respect to the understanding of what I will call the subsequent amendment, given its terms.
GORDON J: May I ask about one other amendment, and that is this amendment which extended the notice of conversion of casual to a permanent after 12 months, which as I understand did not apply to your client but now does. Is that right? Is it at all relevant?
MR WALKER: We think not.
GORDON J: Okay.
MR WALKER: Mr Rossato’s position is, of course, one requiring to be determined after the termination of his employment.
GORDON J: Yes.
MR WALKER: So that a question of conversion does not arise. That is an important new amendment but we, with respect, do not think one that affects any of the issues to be argued between the parties here.
GORDON J: Thank you.
MR WALKER: Conversion will be part of our argument, that is, what conversion says about the character of the employment converted from. To put it another way, does the character of employment change before conversion. Surely not, bearing in mind the nature of the statutory concept of conversion. But that is only a peripheral involvement of the question of conversion and certainly does not involve the new amendments, which make important provision for a statutory – I will call it right to be considered for conversion.
GORDON J: After 12 months.
MR WALKER: After 12 months.
GORDON J: Thank you.
MR WALKER: It is contingent not only as to when it becomes available but also as to what may happen pursuant to the statutory terms. Your Honours, at the heart of the matter, as I say, concerns the character of employment ‑ the employment being undoubted in this case ‑ required to be determined by reason of sections 86 and 95 of the Fair Work Act, which respectively exclude casual employees from two of the important so‑called National Employment Standards, namely annual leave and personal and carer’s leave.
As it happens, in this case, by reason of section 90(2) and section 99 respectively, annual leave is raised in this case by reference to the statutory right to be paid for accrued but untaken leave upon termination and the claim for paid personal or carer’s leave comes about because the leave was taken but was not paid.
So in each case, there is a statutory claim advanced in each of the claims under section 545 of the Act. As your Honours know, under section 545(1), the court’s power is to grant an appropriate remedy, when it comes to financial remedies, illustrations or examples non‑exhaustively of such an appropriate remedy given in subsection (2) by use of the word “compensation”.
It is by that means that what I will call the monetary or financial reflex of what would have been paid if Mr Rossato’s premises are made out, by reference to annual leave not taken but accrued under section 90(2), and carer’s/personal leave taken but not paid under section 99 was the way in which the issues were joined between the parties.
“Casual employment”, for the issues in this case, is an expression left to be understood according to relevant considerations concerning its usage, as a matter of language, and in context and in accordance with uncontroversial principles of statutory interpretation.
Those understandings of casual employment involve a life for the concepts and the linguistic usage outside the statute, which is no doubt why the phrase is used at the time, pertaining to our case, without a statutory definition. That life outside the statute includes, we would respectfully submit by way of background, an understanding that the kind of employment to which the epithet “casual” applies, is characterised by some distinctive trade‑offs understood by the participants in the labour market on both sides of such an employment.
For the employer, casual employment is understood to be a form of relation under which an advantage accrues in terms of what is commonly called “flexibility” – the capacity to surge or shrink labour force at very short notice, presumably by references to exigencies in the other market in question which is the market for the employers’ goods and services, and no doubt by other relevant markets such as financial markets.
That has a trade‑off because it lacks the assurance given by longer term or permanent duration employment under which the availability of a workforce can be, so to speak, guaranteed for a longer period. That is an obvious trade‑off. There are correlative, or converse, trade‑offs for the employee under such an arrangement and it includes, of course, another form of flexibility, namely, the right to leave what once upon a time would have been called “one master” in order to go, rapidly, to another who has a better offer. It has, of course, also, aspects of freedom or liberty with respect to personal movement and disposition of time which is capable of being seen and has been seen as an advantage in a trade‑off understanding of casual employment from the point of view of an employee.
The other side of the trade‑off for the employee, of course, is that the benefits which come with permanency, so‑called, or indefinite duration – which both, in market terms, and now in legislated protected terms – certainly include such obvious matters as so‑called “holidays” or “annual leave” and, particularly, “paid annual leave”, cease to be available because of the lack of the expected permanent duration.
Those are matters which – to come to one particularly pointed matter of a colloquial understanding outside the statute, relevant to an understanding within the statute – has given rise to what in the ordinary English of the matter in our community is reflected in financial recognition by so‑called “loadings”, the word “loadings” referring to the addition to a sum.
The “loading” – which, again, in colloquial English outside the statute – also to be found within the statute – is described as a “casual loading” because it is attracted in order to recognise that casual employment does not carry, either as a matter of market experience or, as it happens here, by way of statutory entitlement, benefits such as paid annual leave or paid carer’s personal leave. This case involves, in its second limb in particular, as your Honours know, the question that arises were we to be wrong concerning the truly casual nature of this employment.
What happens to the fact, as we would submit, that Mr Rossato was paid a casual loading ‑ without that epithet being, as it were, an irrelevant and meaningless label, but rather as a label that carried the understanding jointly shared by the parties to the contract of the character of the employment. If that had been wrong, hence the second part of the case being a fallback position, the question arises what, if any, account can be taken of the amounts paid under the heading of “casual loading” under, on that premise of our failure on the first part of the case, the mistaken view by the parties that the character of the employment was casual.
KIEFEL CJ: Now, the question whether he was in fact paid what is called casual loading is a matter in issue.
MR WALKER: I have to establish ‑ I was about to say, the anterior question of course is was he paid a casual loading? And there is another question involved in the nature of taking account or set‑off, can one identify amounts sufficiently in order to conduct that kind of adjustment upon the assessment of compensation for a failure to have paid the statutory entitlements.
EDELMAN J: I do not want to take you out of order, but does not the restitution question logically come before that question of set‑off? In other words, before one could ask whether anything gets set off, one would need to determine whether or not the employer was entitled to restitution of the amounts that were paid as allegedly casual loading.
MR WALKER: If one is taking account of the amount paid under the loading, if there are amounts paid under the loading, by way of restitution, and that is one of the arguments we have advanced, then yes, but that is not the only way in which it can be taken account of. There is, of course, the statutory requirement that the remedy be appropriate, and that relevantly, as it was claimed in this case, it would be by way of compensation.
That is why, as we have put it, the words “set off” might be used both more loosely and also technically correctly in variant forms of the arguments that we advance all to the same end. But yes, if restitution be the preferred way of thinking about it, one starts with questions about what is the position brought about by the dealings between the parties concerning getting back money. Of course, it is not we do not seek payment, we seek the accounts to be settled against a statutory claim against us.
EDELMAN J: The alternative then being the set‑off of ‑ “set‑off” in inverted commas ‑ of a statutory claim.
MR WALKER: That is right.
EDELMAN J: Yes, I see.
MR WALKER: Your Honours, in this case it is, in our submission, clear that the parties have proceeded, the court below ruled on the basis that the periods of employment in question are created by and governed by contracts. There is no need to consider quasi‑contracted employment in this case.
It is also clear, by the way in which the parties have conducted the case and the holdings made below, that the contracts ‑ and they are, relevantly, six ‑ that the contracts fall to be considered by reference to a suite of documents linked both by cross‑reference and by the conduct of the parties, and by a statutory setting. That suite of documents starts with the kind of document to which I will be coming soon, but not immediately, that your Honours will have seen at the heart of the findings below, and variously headed “notice of offer of casual employment”, sometimes with and sometimes without the addition “flat rate”, and I will be coming to those documents.
They are not documents that are perfect in their clerical completion, but no point arises between the parties or, in this case, concerning any of what might be called the glitches to be seen from time to time. As it happens, some of those glitches refer to the designation in a place where you might expect it to have been accurately conveyed, of the relevant industrial instrument, namely an enterprise agreement, to which we will be coming in some detail. That, in our submission, is a document, the incorporation of which, to use a contractual parlance, can be seen as common ground, at least to the extent that nobody says the enterprise agreement has no application. There are obviously statutory reasons why it does.
And finally, in the suite of documents that matter, there is a document that is evocatively headed “terms and conditions of employment”, applying to what are called casual or maximum‑term employees, to which we will make considerable reference in particular in order to address some reasoning of Justice White, to which reference has been made in our written submissions. And so we, having named those documents, where one finds relevant terms setting up the occasion for interpretation as part of the process of characterisation of the employment as casual or not, we start with the proposition numbered [1] in our outline, namely that the correct focus is on the terms of the contracts.
It is tempting to describe these contracts as being wholly in writing, but the adverb does not really matter. There is not suggested to be any spoken intercourse which produces any terms, let alone alters what might otherwise have been the holding of a term from the documents. Neither, except by way of so‑called acceptance of offer, has conduct played any part in this dispute concerning the terms of the contract. Let me explain that last reference. As you will see, in a not‑unfamiliar form, but not entirely gracefully, there are written stipulations for the acceptance of the written offer by the conduct of turning up on what is called an “assignment”, to which I will be coming in just one moment. That seems to be the only conduct in question, creating, or by subsequent agreement or dealing, altering the terms of the contracts.
Then, as your Honours have seen in particular paragraph [13] of our written submissions, we simply, and we hope plainly, rely on the proposition that post‑contractual conduct outside well‑known categories, the principal one of which would be variation, does not affect the terms of a contract. We have cited from quite a different commercial setting ARF v Gardiner 238 CLR 570 in its paragraph 35 for that proposition that I need not elaborate.
We stress that this is a case where they were no other of the understood repertoire of ways in which post‑contract conduct might affect the way or the question whether the terms of a contract will be enforced. No waivers, no estoppels, et cetera.
EDELMAN J: There is no issue, in this Court, is there, that the contracts were other than wholly in writing?
MR WALKER: No one says there is to be found outside the writing what I will call a substantive term. On our scrutiny of the issues, I cannot say that is entirely straightforward but, within the record, the only conduct they ever relied upon has been the acceptance by turning up.
Of course, this is a case uncomplicated by what might be called representations, collateral or otherwise, that might compete in order to establish what the terms of the contract were or to produce, for example, other tortious or similar claims. This is a contract claim where there is a question of interpretation of documents in order to produce a characterisation of the relation of employment focusing on the question whether it was casual or not.
There are, as your Honours know, not least from the considerable deal of judicial and other materials assembled in the exchange written submissions a plethora of adjectives and other descriptions by which employment has been characterised in different contexts and in other cases as casual or not.
We draw to attention that the expression used in the Act being understood in the immediate context of other parts of the text of the Act produces what we have collected or extracted in our proposition [2], and that we have elaborated in paragraph [16] of our written submissions.
In particular, in paragraphs [14] of our written submissions we have drawn to attention provisions I do not need to take you to but those are paragraphs 65(2)(b), subsection 67(2) and paragraph 384(2)(a), to which I would add the definition in section 12, where it is clear, including in a context of a change now suffering from the religio description conversion, there are descriptions of an employment actually bearing the character of being casual, which includes the possibility, while you are still casual, of being – and there we have collected some of the phrases – “long term”, “regular and systematic”, and “continuing”.
And to step back so as to avoid suggestions that that is a counterintuitive or anomalous argument, bearing in mind the traditional, conventional understanding of casual employment upon which we are going to base our argument, let me point this out; part of the flexibility in the trade‑offs represented on both sides of the relationship of the casual employment is that there may be, from time to time, from, in this case, assignment to assignment, the experience of days, weeks, months, of the same kind of work on what might be called a pattern. What from a mining company’s point of view, might be called a roster.
Though there is no exact number that will produce the difference between short‑term and long-term or anything in between, the repeated exercise of the right of an employer not met by the correlative right of the putative employee to say no, may produce, by accretion, with experience, viewed retrospectively, things which are long‑term, can be seen after the event of the exercise of those repeated prerogatives as being regular and systematic, and thus may be seen in a retrospective calendar sense as being continuing. And the statute and the provisions that we have there specified plainly accepts that one can be casual and exhibit those characteristics and selects aspects of them in order to render such a casual employee eligible for processes that may lead to what is now called conversion. But, of course, the whole point of conversion is that it alters a character.
GLEESON J: And full‑time?
MR WALKER: I am sorry, your Honour?
GLEESON J: Could the employment be long‑term, regular and systematic, continuing, and full‑time?
MR WALKER: It could, indeed. When one says “full‑time”, the question is then raised, your Honour, as to whether you are talking about during the day, during the week, et cetera, et cetera, so long as the ‑ ‑ ‑
GLEESON J: The kind of full‑time work that would eventually justify annual leave.
MR WALKER: If the actual experience of the casual hours worked is that you are, say, working as many hours and on a pattern comparable to those who have been employed full‑time, then you will remain casual until converted, but you will not, as it were, incrementally, by some kind of ink blot approach, be altering your character as an employee, that is, casual or full‑time, while that experience is unfolding. If, on the other hand, the stipulation at the outset was for what, to use Justice Gleeson’s question to me as to what could be seen as full‑time, then that would be a very familiar case of falsa demonstratio, any other expressions in that contract calling it “casual” would simply be wrong.
In other words, you look to the substance of what was called for, and if it was full‑time it was called for, the stray label “casual” elsewhere would be to no avail. This is not that case. We have drawn to attention the statutory usages for this purpose. Under the statute, which is the text which calls for the characterisation of casual employment or not to be determined case by case, it is accepted, expressly, in the provisions to which I have referred, that there may be features, not defining features, of a casual employment, which do not prevent that employment being casual. They are, of course, features which suggest there might be ‑ it might be appropriate for so‑called conversion, but our point is the statute does not say, and the notion of conversion does not permit, that the character of “casual” has disappeared some time before you become eligible to be considered for conversion, let alone before you have actually converted.
It is not a central point, but it is a point concerning the meaning of the word “casual” employment, in a statute which contemplates ways in which that may change, and it does not change, in our submission, simply by the continued exercise of the right of an employer or the exercise of the corresponding right of the putative employee not to become so, or not to work a shift, or not to accept a roster, et cetera, et cetera. I have to come very soon to the way in which that is manifested in the relations before this Court in this case which concern what has been called “labour hire”, sometimes called, perhaps misleadingly, tripartite arrangements, to which I am about to come.
EDELMAN J: Does the essence of your approach to the undefined term “casual employment” then really come down to the extent of the firm advance commitment, so that one would easily, perhaps, characterise someone as “casual” if the advance commitment were for a day or for a week?
MR WALKER: Precisely.
EDELMAN J: But where does one then draw the line? Perhaps for a year, or for two years, one might immediately move over to a permanent category. What about six months?
MR WALKER: May I add, to complicate my life, what about six months with an option to terminate after one month on two weeks’ notice? I introduce that because of so‑called maximum term or maximum employment. The short answer is, neither the statute nor colloquial usage, nor case law, permits the drawing of lines that use numbers. So we do not have hours, days, weeks, months, et cetera.
Neither on an examination does the case law, nor could it, given the idiosyncrasies of individual cases, promulgate anything in the nature of a test, let alone a bright line test, by reference to periods of notice for termination or what is a different aspect of the same form of the relation, notices of option or election either to institute or to cease an assignment.
GLEESON J: Mr Walker, is the “firm advance commitment” mutual?
MR WALKER: Yes. That is, it is an advance commitment on one side. I am loosely using the word “employer” and “employee”, not always remembering to put “putative” in, because of the kind of relation to which I am going to come in this actual case. But using those words for convenience, the employer characteristically makes no advance commitment beyond what might be called a modest extent.
Now, when I say a modest extent, I mean appropriate to the fact that work is to be done. It would not be sensible to talk about casual employment of a minute’s duration, in that one would expect more than a very few highly specialised metier. And it may be that there will be some forms of work where unless you are there for the completion of what I call the task, it is no use having them at all – harvesting certain crops would be a classic example of that.
Those are reasons why, case by case, there are idiosyncrasies, factual in nature, which prevent the use of arithmetic or bright lines. The shortness of notice by an employer to terminate the relationship, classically measured in one or only a few hours, is colloquially understood as being one of the hallmarks of casual employment. It is mutual because it is also, as one might expect, the fact that the worker does not promise that he or she will be available six months from now, and continuously in between.
Now, that does not say that you cannot be employed hour by hour, day by day, for what turns out to be in retrospect six months or even more. If that six months has been a period characterised by the flexibility of the lack of firm advance commitment on both sides, then by definition there cannot have been a departure from the character, let alone some gradual, difficult to detect change in that character, as the experience unfolded from casual to something that is not casual. So yes, it is mutual. Each has what I have been calling the flexibility.
And we have drawn to your Honour’s attention what we submit, with respect, are conventional and useful descriptions of that informing characteristic in paragraph [15] of our written submissions in‑chief, where we have given the reference to Hamzy (2001) 115 FCR 78 – I do not need to take you to it.
Now, one has to be careful about whether those are phrases that supply something that is truly called some kind of legal test or whether, as we there draw to attention per Justice White below, it is a description of the general nature of casual employment, including by reference to its consequences. That may be six of one, half a dozen of the other. They are, in our submission, ultimately defining characteristics, or to use another familiar formula, indicia of casual employment.
GAGELER J: Does that mean that you need the three characteristics that you identify to have casual employment?
MR WALKER: I hesitate to say that these are criteria that operate by a checklist approach. It is after consideration of the facts of each case that are relevant to answering questions about those characteristics – those features ‑ that one will make, then, the characterisation decision. So, it is not a checklist approach, but it is a search for answers, affirmatively, about there being either enough of those features or those features appearing clearly enough to render the character of the employment, casual or not.
We think, with respect, this is an area of which it is strictly dichotomous, it is casual or not. There is no middle uncertain zone. There are simply hard cases which still have to be decided one way or the other. That being an indication, with respect, though might expect where there are not arithmetic limits, it does not depend upon whether it is one hour’s notice or five hours’ notice or 24 hours’ notice. In the nature of that kind of an approach, it will not be possible to say in advance what the bright‑line tests are, and it has to be a consideration of all of these matters.
There may be cases, for example, where the explicitness of the mutual flexibility – by which I mean, I cannot look to you to give me work next week but you cannot look to me to work for you tomorrow – stands so clearly that the expressed expectation that the project for which you are hired will run for six months – will not do anything to detract from the essential character of that relationship as casual employment.
Indeed, in our submission, that last example is an important one because, historically – and probably still currently – much casual employment will be for either permanent, or ongoing, or indefinitely required tasks. One only has to think of work, for example, by way of roadwork, where the fact that it will always be necessary to repair roads, it does not prevent the common resort to casual employment to do the potholes after the rain, for example.
The fact that you might expect – if you are satisfactory to your employer – that you will be offered further casual employment in the future for the same task, that does not alter the casual nature of that employment which is plainly characterised by the high desirability of flexibility, at least from the point of view of the employer, bearing in mind the unpredictability of rain and the like.
Your Honours, that then brings me to proposition [3], which is extremely brief, in the outline, but which contains, as it were, the factual detail. Could I start with the “general conditions” – my expression – that is, the terms and conditions of employment document that is to be found in volume 1 of the appellant’s further materials, starting at 132, being the document that Mr Rossato acknowledged reading, understanding and agreeing to, at page 130 of the same volume.
Now, in this document, one starts by seeing in the second sentence of clause 1 a reference to “specific entitlements” being “determined by the award or agreement” – your Honours should proceed on the basis that means a modern award or an enterprise agreement – and a reference to the fact that they may vary depending upon the type of work, and then an offer of assistance to make sure that there can be access to those terms.
In the next paragraph, something that might be the subject of a seminar but will not get any further attention from us, is this proposition that this document once signed has the “force of law”. It does not in fact involve any promise to employ or any promise to be employed, or to do any particular work, sometimes the figure of speech “umbrella” is used for such terms – it is familiar in sale of goods and other trading relations to have as it were standard terms on the shelf ready to be invoked when, upon orders or offers being accepted, a contract is actually formed.
There is an assertion concerning the National Employment Standard and so one can see how this is a document intended quite explicitly to fit within this suite of terms, starting with the statute, moving to either a modern award or an enterprise agreement, and then going to particular terms of an offer.
One sees a definition of “Employer” – and this is not a case where your Honours will be concerned to distinguish between different members of the WorkPac Group. Then in the third line of that definition, an important concept introduces the third party so to speak, but not a contractual party. You will see there that the employment is on a “Casual or Maximum” – I can drop “or Maximum”, that is not this case – on a casual term basis to “perform work assignments for its clients”. In this case, one can think of the clients as being the mining companies.
“Assignments” is so to speak a homemade term of art in these documents and it refers to the making available under a contract, not in question in these proceedings, between WorkPac and its clients, a skilled workforce of which Mr Rossato was an example. That skilled workforce, as your Honours will see, has its own nomenclature but they are in law, and this is not in dispute, employees of WorkPac, not of WorkPac’s clients. The employee is generically described as:
The individual employed on a Casual . . . basis by WorkPac as per the terms and conditions set out in this document, and the notice –
The notice is the next of the documents to which I will be coming of the so‑called offer:
to carry out work assignments under the direction of WorkPac’s clients.
Again, there is no doubt in this case, no dispute in this case, that the employment relation remained emphatically between WorkPac and Mr Rossato. “Client” is then spelled out in a definition, someone:
that WorkPac does business with and where the employee will carry out duties as requested on behalf of WorkPac.
So the familiar labour hire model, whereby the employee, at the employer’s bidding, does work for the employer’s client. There is a reference then to the relevant industrial instrument, and we will be taking your Honours to the enterprise agreement in question, and one sees that, by reference to what I am going to call classification of “work” or “position”, each assignment, of course, may carry in its train the application of different workplace agreements.
The duration of the agreement is referred to in clause 4. That has to be distinguished from being the duration of employment. There is no employment under this agreement. These are terms which will apply as and when there is employment, unless, of course, as 4.1 rather amusingly puts, unless it is revoked by either side, so these terms are a bit like a bubble. They will disappear as soon as either party touches it. Happily for everyone, that never happened in this case, so these terms and conditions endured to provide content to the subsequent bouts or periods of employment. That is what is referred to, of course, in the last sentence, oddly, under the heading “location” in clause 3:
These terms and conditions are to be read in conjunction with WorkPac’s Notice of Offer –
to which I am going to come, the notice of offer of casual‑term employment. They say things about duration of employment as opposed to a duration of the agreement as to terms and conditions, to which clause 4 speaks. One sees the notion that it will be umbrella or standard in the second sentence of 4.2. Then clause 5, which is an important one, in turn, and not in the most coherent or copybook fashion, sets out concepts to govern the employment using this important concept of an assignment. It starts in 5.1:
Employment with WorkPac is on an assignment‑by‑assignment basis, with each assignment –
being that which is accepted upon an offer, to which I am coming:
representing a discrete period of employment on –
and in this case it will always be:
a Casual . . . hourly basis.
Then 5.2 steps back to the commercial setting in which that may happen:
WorkPac will bid for and will contract to provide Labour . . . In the event that you are engaged to work on a construction site you hereby acknowledge that you will be bound –
This is if you are going to be doing construction work - and so another, as it were, umbrella requirement. In 5.3, an important aspect of what I have been calling the flexibility, the lack of firm advance commitment on either side:
The employee may accept or reject any offer of an assignment.
Now, it could bear a little unpacking, that sentence, and it has, as it were, some oddities in it, none of which defeats its evident purpose between these parties and its effect. You are not an employee by reason of your signature of or agreeing to these terms and conditions until assignment by assignment you accept an assignment, you respond to an offer. Nonetheless, it is clear to whom an employee refers and obviously every person, in our society at least, may accept or reject any offer of employment, and I say employment because that is what occurs upon accepting an assignment. But it is an emphatic, if perhaps tautologous way of saying you are not bound to take work we offer you.
STEWARD J: Mr Walker, I take it that the way in which you look at this is that until an assignment is accepted there is no contractual relationship between Mr Rossato and WorkPac, but when an assignment is accepted these terms then bite?
MR WALKER: The short answer is yes, without really elaborating on what some writers have referred to as contracts about making contracts. So, this may be a contract about making a contract, but it does not matter; yes, is the answer. Clause 5.4 is an important matter where, as your Honours have seen in our written submissions, we criticise an approach taken in particular by Justice White to it. It starts:
The employee agrees to complete an assignment once the employee has accepted it.
In a sense that may also be tautologous. It depends upon assignment by assignment, of course. Once one sees what has been accepted, and for that one looks to the content of an offer, then, as a simple matter of contract – unless and until the statute alters it, that is what both parties are bound to observe, relevantly by the employee doing the work as stipulated and the employer paying for and providing other relevant conditions as stipulated.
GORDON J: How does that sit with clause 5 – well, I assume you will come to them – and 6 ‑ ‑ ‑
MR WALKER: Clause 5.12.
GORDON J: Clause 5.6 being the vary power, and 5.12 being the termination power. Will you come to that?
MR WALKER: Yes, I will, very soon.
GORDON J: Thank you.
MR WALKER: As your Honours will have noticed I am not here to gracefulness of the drafting, but it has not produced any infirmity of agreement in any of the arguments between the parties, and nor should it. These are documents that have been used and the parties ‑ ‑ ‑
GORDON J: Does it go to the question of duration, though?
MR WALKER: Yes. Unquestionably, 5.4’s first sentence, which is, as it were, a general obligation, sits alongside and is therefore qualified by the quite specific provisions, really important to the relations between employer and employee concerning duration and the like, to be found in 5.6 and 5.12, and I am happy to come to them directly.
Under 5.6, the operative concept is the assignment. That is why it is WorkPac or the client that has the whip hand with respect to the variation of period. When one considers the market in question for labour hire, there is another notion of flexibility. Clients come to WorkPac wanting work done on their projects; their projects of course naturally being themselves subject to their own market conditions, downturns and the like, or upticks – so wanting more labour on or not wanting the expense of as much labour.
So the assignment period, particularly if one thinks about what happens to be the year in this case, which is mining, may well be affected by matters which are capable of rendering flexibility a valuable aspect of relations both between WorkPac and its clients for the assignment so‑called, and thus of course between WorkPac and its prospective employer, employees and also its actual employees.
Thus, under 5.6 it simply says “vary”, which presumably means that could be reduced, perhaps very considerably. There has been a downstream blockage of the export port. We do not want any more mining for the next six weeks. We vary the assignment period, on one hour’s notice to “You can all pack up tonight”.
Now, that is understood between WorkPac and someone who becomes an employee under these terms and conditions to be part of the flexibility which may operate in that case in favour of WorkPac. But it might also be that they hit a great load and the prices are going up in the market and so the client says to WorkPac, “I really need these people, and they are good people, not for six months but for 12 months”. At that point, of course, the notion of the whip hand being given to WorkPac or the client suddenly to impose on somebody who thought he had accepted say a six‑month assignment, but it is now going to be a 12‑months assignment, and he had other plans for his life in the second six months of those 12, that is where 5.12 comes in. So:
A casual assignment with WorkPac –
can be walked away by the employee. No whip hand is given to the client there at all - they are not present – and no whip hand is given to WorkPac; in other words, it is mutual. We will come to other provisions which emphasise the mutuality of the shortness of notice necessary to bring the employment to an end.
Now, it is “assignment” that is used in each of 5.6 - “assignment period” - and 5.12, “casual assignment with WorkPac”. But it is clear that the structure of these terms means that it is by acceptance of assignment that one becomes employed, and then these are terms therefore that govern the duration of the employment and thus, of course, the continued existence of obligations mutually.
KIEFEL CJ: So, Mr Walker, how does 5.12 fit with the possible claim for costs incurred by WorkPac under 5.4?
MR WALKER: The examples that have occurred to us are that there may be – classically in remote sites – prepaid provision which may – and this is speculative, there are no facts in this case – involve expenditure, as it were, front‑end loaded for which there could not be, as it were, recovery by work being provided by the person for whom that provision was paid upfront if they elect not to complete an assignment.
The two sentences at 5.4 are required to be read together. The idea of completing an assignment has to be read, obviously, by reference both to 5.6 and 5.12 about which I have already addressed. The notion of reserving a right to recover costs incurred suggests that one looks perhaps elsewhere under arrangements with respect, probably, to remote working or travelling. We do not have any facts concerning that. Neither do we have any example of how such a claim has ever been exerted.
KIEFEL CJ: Can one read this as extending to damages in the nature of damages for breach of contract, costs, in that nature?
MR WALKER: It is very doubtful, with respect, that ‑ ‑ ‑
KIEFEL CJ: It follows upon an acceptance which has been repudiated, does it not?
MR WALKER: It is difficult to know, for this reason. The language of electing not to complete is a bit different from not completing.
KIEFEL CJ: Or refusing, I suppose, yes.
MR WALKER: We are going to come to the word “refuse” in another context fairly soon – where I am going to argue to your Honours that it certainly does not mean repudiatory or unlawful conduct, far from it. Electing not to complete would appear to recognise what might happen under 5.6 and 5.12. There is flexibility. I might as well throw in 5.11. I hope none of your Honours will ask me what a six months’ minimum qualifying period means. Neither minimum nor qualifying is very easy to understand. There does not appear to be any enjoyment of status or right after six months, let alone after ‑ ‑ ‑
KIEFEL CJ: A suitability provision, is it?
MR WALKER: But it is not as if you are working for nothing meantime and it is not as if you do not have the status which includes being competent, in Mr Rossato’s case, by classification. My point is that these are provisions – not all of which are perfectly carpentered doing what one must do as a matter of commercial understanding given ‑ ‑ ‑
KIEFEL CJ: But a provision such as 5.11, we would expect to find more in a contract for permanent employment in the nature of a probationary period, would you not?
MR WALKER: Yes, it may be that it might have more sense for a so‑called maximum term employee, but could it be read as meaning that there will be no casual employee on less than six months’ duration? Now, that cannot fit with all the other references to variable duration.
EDELMAN J: The Chief Justice’s earlier question to you about the second half of 5.4, it does seem to start to look like a damages‑type provision when one reads it in light of the provisions for maximum term employees.
MR WALKER: Yes.
EDELMAN J: Because a maximum term employee, who does not seem to have the power under 5.12 to terminate at any time ‑ ‑ ‑
MR WALKER: That is right.
EDELMAN J: Only has the power to terminate in accordance with the industrial agreement under 5.13.
MR WALKER: Yes. That is why my argument finally says that reserving a right means you look elsewhere, and if there is no right, because there is no breach for which damages are payable, then, in the case of a casual, which will be the case, I mean, presumably no one goes looking for costs incurred over 59 minutes 59 seconds, so in our submission this is an example of terms which are trying to do quite a few different things at once.
We know that this covers both casual and maximum term employees, they are not the same thing, and it is for those reasons that when you see the specific provision about a casual assignment being terminated on one hour’s notice in 5.12 that there is put paid any notion, in our submission, pace Justice White, that the second sentence of 5.4, or the whole of 5.4, characterises the employment, avowedly casual and with the variability to which I have already addressed some comments and will address some more, of duration, from being casual to not being casual.
GORDON J: Is there a provision in here for minimum pay? You would expect the consistency for casual employment, i.e. minimum hours.
MR WALKER: No, that comes from other means, to which I am coming. Can I start first of all with 7. Clause 7.1 directs one to these other documents, that is, the notice of offer of employment, and then expands the suite of documents you will need to look at:
The hours of work will be defined in the –
for our purposes, enterprise agreement:
and your Notice of Offer.
So you could read them together, I am coming to them. Then there is a generalisation of:
35 – 38 hours per week over a 6 month period -
with a possibility of some flexible extension. Then one sees a reference, perhaps redundantly, but nonetheless usefully to stand‑down possibilities.
EDELMAN J: What does the generalisation mean? Is that per week? Because here there were some weeks, I think, where there were 70 hours worked and then the next week, there would be no hours worked.
MR WALKER: It does not mean that there is any binding stipulation between the parties preventing the flexibility of the ebb and flow of presumably the client’s demand producing requests for shifts as they are called. Two other words I should introduce into the nomenclature of this case are both “shift” and “roster”, to which I will be coming. In fact, one sees this in 7.4, there is a reference to “shifts”, being “required to work shifts and or rosters”, again as prescribed in the notice of offer. When I come to the offers, you will see that prescription perhaps is too grand a word for what is done, it is referred to.
Then there is again a reference by way of possibility – the flexibility in question – of so-called “additional or replacement shifts or rosters”. Then, just to make everything totally non‑prescriptive, they will be “as agreed to during the engagement”, so subject to future agreement – again perhaps redundantly, people can always agree other things. Then there is a reference again back to what in this case will be the enterprise agreement.
Then you see in 7.5 again the paramountcy of the notice of employment as to particulars concerning “hours of work” and then in 7.6, we have the important guarantee, if I can call it that, of a minimum of four hours. Now, 7.6 makes a reference to variation or interruption of the period of assignment and that probably picks up at least, if not more, of 5.6 and 5.12 to which I have earlier referred. One sees that that flexibility comes at a price of a minimum of four hours even if there can be a termination of assignment on only one hour’s notice.
KIEFEL CJ: That might be a convenient time, Mr Walker?
MR WALKER: If it please the Court.
AT 11.14 AM SHORT ADJOURNMENT
UPON RESUMING AT 11:28 AM:
KIEFEL CJ: Yes, Mr Walker.
MR WALKER: Your Honours, in volume 1 of the appellant’s further materials – we are still at 136 – can I draw to attention that the combination under the heading of “Payment of Wages” and “Timesheets”, in particular of the provisions of 7.10, is that one is ‑ the employee is paid – contemplated, going to be paid by reference to hours worked. On the next page – bearing in mind, these are terms and conditions that apply both to casual and maximum term employees, I draw to attention that, explicitly, at 8.1, “Annual Leave” – that is one of the claims in question in this case – is restricted to “maximum term employees”. I interpolate, of course. That is not a matter only of private bargain. That is regulated by the – now the FairWork Act and the NES.
That last reference is important because under 8.2, “Personal/Carer’s Leave”, notwithstanding the language “All employees”, the phrase:
in accordance with the Relevant Industrial Instrument and the Standard –
means, of course, that it excludes casual employees. I think that is common ground. That completes what I wanted to take you to in those general terms.
Now we come to what is called, the notice of offer that has been foreshadowed as, perhaps, appearing from time to time for consideration by persons in the position of Mr Rossato from time to time when made available by my client. Picking it up in volume one of the appellant’s further materials at page 232, the first of the six in question, it is dated 17 July 2014. One of its venial imperfections can be seen in its second paragraph. We do not have to guess, there is no doubt about what the parties understood to be the relevant instrument under which the employment was occurring.
The reference to “Level 3 (Mineworker)”, is what I might call a word processor fugitive or artefact that refers to a classification to which I will come and “2014” refers to – is a vestigial reference to the EA, which the parties agree is intended to be understood as being that under which employment during this assignment was governed.
The reference in Schedule 1 takes you to the list that you will find at page 235 and, as it happens, for this assignment, it is the one at about line 29 or so, the:
WorkPac Pty Ltd Mining (Coal) Industry Enterprise Agreement 2012.
Which is probably to be understood, and again, no issue about that. Going back then to the terms of the offer, one sees that the assignment is for Glencore Collinsville Mining Operations, which is not necessarily a corporate name. You will find other non‑corporate names in that place in other forms to which I am coming. The certain details of that assignment are then set out, including commencement date and start time; “28 July” at “06:00”. And then under daily working hours there is the immediate endorsement:
(This may vary and is a guide only.)
And the employee is required to notify any significant changes to WorkPac, that obviously has its own relations with the Glencore Operations.
GLEESON J: That must be changes identified by Glencore?
MR WALKER: It will probably emanate from requests on the part of Glencore, your Honour, but one would hesitate to refer to it as being one of Glencore’s rights, because Glencore is not the employer. But yes, it would almost certainly emanate from the desires of the client, which, after all, our client WorkPac is seeking, obviously, to oblige. It could, however, vary by reference, for example, to relations between WorkPac and Glencore being such that hours need to be changed perhaps to represent market conditions generally, in the employment market that is.
GORDON J: I thought ‑ I understood it referred back to the variation power in 5.6.
MR WALKER: It will certainly be cognate with that. It is not exactly the same. This is varying of daily working hours, which is – again it is certainly cognate with, and it could be worked the same way. But you will notice the very next sentence under that heading is a reference to “prior authorisation from WorkPac”, concerning hours that will be “recognised or paid for”.
So WorkPac calls the tune with respect to hours paid for, and your Honours would not, we think, with respect, read this as being a contract for unpaid hours of work. So in further answer to Justice Gleeson, no doubt it would require arrangements between WorkPac and, in this case, the client Glencore, in order effectively to make arrangements for the variation of hours.
There is a reference then to what the “ordinary hours” and the “standard work week” will be, and then the possibility of “Additional reasonable hours”. And then under “Length of Assignment”, although it stipulates “6 Months”, that is in the same breath possibly to be varied and is what is called “a guide only”. And it is in that context that you will recall that assignment period is the subject of the power on the part of WorkPac and, in this case, Glencore to vary upon one hour’s notice in 5.6 of those general terms.
STEWARD J: Mr Walker, is the arrangement between Glencore and WorkPac before the Court, or was it before the court below?
MR WALKER: No. It is talked about – that is, everyone knows about it – but its terms are not before the Court.
STEWARD J: Thank you.
MR WALKER: That they are a client is clear. Beyond that, we do not go. At 233, you will see the stipulation for what are called “Alternating Shift”, the content of which does not matter for present purposes, but particularly as those are matters that are subject to variation. The pay is then described importantly. It is a flat rate, there is a figure, and your flat rate of pay includes the payment of things. So within that $49.00 per hour there is paid, if this offer be accepted by agreement of the parties:
overtime, weekend penalties, public holiday loadings, shift penalties, casual loading (refer to Schedule 2 for more information on your casual loading) –
and I will defer that for just a moment or two:
and any industry and special allowances that may apply.
Now, they are not being ignored, or not honoured, that list of matters, they are being paid. So the $49.00 is a payment that is payment so the parties agree upon acceptance of this offer for all those things.
There are then, bearing in mind that this is, alas, a standard form to be filled in, references to things that, in this case, add nil content, so reference to “no applicable allowances”, et cetera, et cetera. I do not need to dwell on them at the moment. There are then stipulations, again of no great moment for the argument, concerning settlement arrangements, timesheet and banking, et cetera. Then finally, on page 234 one sees a reference to the stipulated mode of offer, which is not as clear as it might be. Certainly “Commencement of duties” is to be taken as acceptance. One can only read that as meaning commencement of duties in accordance with the time and place referred to on page 232:
whether or not they are signed.
We then turn over ‑ I have already shown you at 235 Schedule 1. At 236 there is Schedule 2, which was heralded as where Mr Rossato would find his casual loading, and in the embedded document’s approach to the drafting of this, you are referred off to the appropriate agreement in Schedule 1 to determine your casual loading, and we are going to do that in a moment, and then there is a condition expressed:
Where your casual loading is 25%, it is made up of the following components –
And, of course, in a familiar error of expression, the list then talks about:
11% of your loading –
It does not mean that at all, it means eleven twenty‑fifths of the loading, but that is a familiar error of no moment, and you see that the 25 is constructed by four payments described in terms as being “in lieu of”, and relevantly, they include:
in lieu of Annual Leave –
entitlements as to the first 11 per cent. Personal leave, five per cent, in lieu of. And then the only departure from that formula is in d, where two and a half per cent is paid, and all of these are paid, so there is nothing notional about this, the money in the $49.00 an hour is paid for this, it:
is paid in recognition of –
what is called:
the itinerant nature of casual work –
which no doubt in particular refers to the notion of what you will see referred to as field team members being sent out into the field for the assignments of clients of WorkPac.
Then you see that this is at least drawn on the contemplation that it will not be more than 25 per cent casual loading; if it is less than 25 per cent, there are still payments but they are payments which, in monetary terms, are produced by a pro‑rated component of the 25 per cent for what is called the “breakdown”.
Now, I am not going to dwell on the next two offers except to note that there are some differences as to the particulars. For example, at 276 in the second offer of 29 May 2015, there are different particulars with respect to what appears to be the name of a client and other details vary, but you see the same endorsements about daily working hours may vary and the guide, length of assignment may vary and is a guide. Page 277, “Pay rate is a Flat rate”, it “includes the payment” et cetera, see Schedule 2 for the casual loading. There are other allowances referred to in a way that does not affect the argument in this case.
“Acceptance of Offer” on page 278, about line 42, a similar “Schedule 1” on 279, and the same “Configuration” so‑called “of Casual Loading” in Schedule 2, page 280. The same can be said with some changes in a way that do not matter for the third offer, found starting at 294 in the book of further materials. And that brings me then to the second bracket, the fourth, fifth and six offers, they start at 302 ‑ ‑ ‑
KIEFEL CJ: Are you coming back to the 2012 enterprise agreement for the 25 per cent loading?
MR WALKER: I am going to, after working through all the offers.
KIEFEL CJ: Thank you.
MR WALKER: I am going to come to the 2012 enterprise agreement as the third of the really important elements of the suite of documents.
KIEFEL CJ: Yes, thank you.
MR WALKER: I am not suggesting there are not other things in suites of documents, for example, some may propose that rosters have something to do with it, but that is not my present purpose in terms of characterising the nature of the employment.
At page 302, in the further materials, the format has changed – some may say it is an improvement. It is now a “Notice of Offer of Casual Employment – Flat Rate”. Attention is invited to the details of what is called “your assignment”. It is there said ‑ and that is pretty certainly not a corporate name, that is “Glencore Collinsville Mining A Crew” – so that is, as it were, a shift query rostering reference.
There is a reference to the enterprise agreement in terms. There is a reference to the terms and conditions to being determined, as it is put, by the “Notice of Offer”. Then you need not concern your Honours’ considerations we think at all with the next two and the Fair Work Act which, I suppose, is a useful reminder, although unnecessary, particularly with respect to the national employment standards. There is a reference in a contractual document to standards which, as I opened, start by excluding from relevant benefits - employee benefits, casual employees.
There is then, also, at the end of that first section – oddly, in what seems to be a definition section – a reference to:
the Terms and Conditions of Employment which are applicable to your assignment.
It is, we think, common ground in accordance with the holdings below that that is the document with which I started.
One then sees similar expressions concerning the employer – which is a selection from the group – the WorkPac Group. There is an odd designation of a client as extending to the “A Crew”. Then, under “Daily Working Hours”, it is put a bit differently:
As you are a casual, the hours you will be required to work may vary from day to day, week to week. Additionally, as this is a casual assignment, you have the ability to refuse –
That does not appear to be used in the sense of doing something wrongful under a contract. That seems to - an “ability to refuse” as this is a casual assignment, adds up, we submit, to an entitlement or right. So, you have the ability to refuse and cancel shifts. We think “cancel” is different from “refuse”. “Refuse” is, as it were, no when asked and “cancel” is no, having said yes, but before the shift starts – we think, for reasons to which I am about to come.
Then, with respect to number of hours worked – which is one aspect of duration – certainly, is one aspect of what might be called a commitment to provide work – that depends upon that broad range of competing or conflicting pressures – availability:
your availability, WorkPac’s business needs, the Client’s needs and safety considerations –
Then, the prediction that:
There may be some regularity . . . does not change the fact that you are a casual employee.
That, in my interpolation, we submit, is in accordance with both common sense, the statute and the cases. Then there is a repetition from the earlier version of stipulations concerning what might be called lengths of shifts and patterns of shifts. Then, under the rubric “Where You” – meaning Mr Rossato – “terminate your Assignment or Refuse a Shift”:
As this is a casual assignment, you have the ability to refuse and cancel shifts (as per the Daily Hours/Indicative shifts required) –
The language is not pellucid or elegant but plainly does mean that the notification, probably from the client, given force of employment obligation by a promise to WorkPac with respect to shifts, is not something that can be imposed upon the worker, as it were, willy‑nilly. Because it is a casual assignment, the worker is entitled to refuse a shift. Furthermore, to terminate an assignment – and that appears to be another reference off to other terms:
You may terminate your employment in accordance with the terms of the Industrial Instrument and applicable law.
So, we are going to have to go to the enterprise agreement for that.
Cancellation, as I say, next to the perhaps not entirely appropriate or complete heading “If you cannot attend a shift”, which would be one reason, I suppose, to cancel, seems to be something that you do before it starts:
If you wish to cancel a shift –
Now, that is not the language of a breach, but rather of the right:
you must contact WorkPac –
your employer:
AND the Client Supervisor –
your employer’s client:
as soon as possible before the start –
and again, referred off to either the modern award, if there is one, not here, or the enterprise agreement, which there is. That point in this second iteration of this standard term is an arrangement with respect to mutual obligations and thus correlative rights, which is quite devoid of anything that would answer the requisite description of a firm advance commitment, so as not to be casual. Of course, though the use of terms cannot be binding in the face of substantial contradiction, that is, contradiction in substance, of course this is a document which throughout, and dovetailed into both the statute and the enterprise agreement, chooses to use the word “casual”.
Then one comes, of course, to significant features with respect to “casual” in the EA, to which I am about to come. There is a pay rate on page 304, there are inapplicable references to the possibility of allowances, et cetera, again, payment by timesheet. On page 306 there is again the possibility of faculty, of facility of accepting by turning up for work.
I do not need to draw to your attention any difference in the fifth or sixth offers, which you will find respectively starting at 328 and 336, there are differences in particulars only. Could I come then to the third component in the suite, which you will find starting at page 43 of volume 1 of the appellant’s further materials. It is the WorkPac Pty Ltd Mining (Coal) Industry Enterprise Agreement 2012. It has its own terminology, at 46, in 1.2.2 what are called:
All WorkPac On‑hire employees –
That may collapse down to simply “employees”, relevantly:
covered by this Agreement are referred to as Field Team Members (FTMs).
In 1.4.1, your Honours see the terms of application, which make this the one relevant for Mr Rossato’s periods of employment mining coal. In 1.5, I need not dwell on them. There is a reference to other aspects, to the possible suite of documents that employer and employee need to be aware of. You will see a reference to hours at the foot of 47, the expression:
Ordinary hours of work –
meaning:
a maximum of 35 hours per week –
“Pay rate”, that means pay rate – that is, you find it somewhere else, to which I am coming. We then come to page 50. Under clause 6.1, some explanation for what without the puzzling word “minimum” you saw in the general terms, namely a “six (6) months qualifying period” is given. It means nothing more than monitoring. The:
employment status will be confirmed following completion –
needs to be understood, of course, next to the fact that employment only occurs assignment by assignment. One mischievously wonders whether after six months your performance will not be monitored – but passing on from that, it does not seem to have any significance at all in the relations between the parties and it certainly does not guarantee, for example, six months at least of employment.
The tripartite nature of the commercial arrangement is touched on in 6.2, in a way that is unexceptionable and unexceptional, and has no relevance to the question of casual employment. But one sees in 6.2.2 that dissatisfaction of the client may of course lead to such dissatisfaction by the employer as to lead to termination of employment.
EDELMAN J: Is a roster a direction?
MR WALKER: There is no material that would enable us to know that and the right to refuse would appear to suggest it is not. So that even if the client wanted to consider it so, as between employer and employee, no. Of course, such rosters as are in evidence are, as it were, generic, by which I mean, for example, they are supplied for periods that have elapsed, that have already happened, obviously do not apply to the employee in question, for example. I am not aware of any material whereby, as it were, there is a direction in mandatory terms, assertive terms, about the obligation of an employee to attend in accordance with a roster.
Now, under the first three offers you will not see any allocation to a crew. Under the next three – second three offers there is allocation to crews. You can see reference to crews in rosters, but there is no other material, I think, that responds to Justice Edelman’s question.
Now, under 6.4, where one finds perhaps the most important provisions in this suite of documents from which the character of the employment should be understood, one sees that there are, within what I will call the lexicon or world of this enterprise agreement, and using its designations, five categories and these are categories of field team members. They are categories concerning prospective or future employment. It is employment in one or more of the categories, and I do not need to dwell on the permutations. Some of these do lend themselves to being simultaneously applicable to the one person at the one time, and some do not.
KIEFEL CJ: What is the distinction between “casual” and “assignment FTMs”?
MR WALKER: It may well be that you can be both casual and assignment, so that in a particular case ‑ ‑ ‑
KIEFEL CJ: Except that assignment seems to be of the same ilk as limited term, which seems to be for a fixed period, which, in a way is the structure of the notices of offer.
MR WALKER: The notices of offer always involve an assignment. You will not be employed unless there is an assignment. We do not think, and maybe I will be disabused of this over the next day or so, but we do not think anyone has argued that this is a suite of documents which contains an internal radical contradiction, namely, you can never be employed as a casual if it is assignment by assignment.
If we are right in that then it may be that there is no distinction, at least for cases such as the present, between a casual FTM and an assignment FTM, although an assignment FTM need not be casual, but a casual FTM taken on assignment by assignment, as they all are, is not thereby rendered non‑casual. It may even be that is true with respect to (e), that is:
FTMs employed for a specific project/site or workplace related task -
which would seem to lend itself to full‑time, part‑time or casual, bearing in mind, no doubt, the scale and nature and flexibility of requirements to work with respect to a site or task. So, there is this categorisation question, and to jump ahead in 6.4.7, the employer will designate. Now, that is perhaps rather peremptorily announced when one puts that together with the offer document. It is a question for the acceptance of the FTM, whether he or she is content with the category in this case. The category of the casual FTM is always accepted.
Then, under 6.4.2, the world divides into two. For each of those categories there will be either a “base rate” or “flat rate” and one way, as your Honours are familiar, to understand one view of the difference between base rate and flat rate is something for which one builds up, and something which can be deconstructed so as to see included components, flat rate being the latter, as you have already seen from provisions to which I have taken you. It refers after 9.1.1, which is important – but I will come back to that rather than go there now.
Then one sees portentously the terminologies at 6.4.3 and 6.4.4, then 6.4.5, for “casual FTMs”, again, there are two possibilities, base rate and casual. They will all be for a minimum of four hours – that picks up what I have shown your Honours before – and then:
(a)A person engaged as a base rate casual –
that is within the category “casual FTM”:
will be paid a casual loading of 25% . . . in lieu of all paid leave entitlements (with the exception of long service leave).
(b)A person engaged as a flat rate casual . . . will not be paid an additional amount as the casual loading –
that is a reference back to “a casual loading of 25%”:
has been incorporated into the flat rate of pay.
Then, 6.4.6 plainly addressed to casual FTMs:
As your casual loading –
and both base rate and flat rate casuals get casual loading:
is 25%, it is made up of the following components -
and your Honours will recall the reference elsewhere in the suite to that breakdown.
One then comes to termination – this is the instrument under which termination may be accomplished by the employee. It is mutual. The company relevantly is my client, the employer. The period of notice is “no notice required” – so, as peremptory as peremptory can be.
The distinction between casual FTMs and everyone else is very marked, bearing in mind the sliding scale of notice by reference to what I will call duration of service. That is not a table that says a casual FTM may not have ended up working for WorkPac by an aggregate of assignments for more than a year, or indeed for more than five years. Rather it is an indication of the importance of the choice made and accepted to be a casual FTM, with the casual loading that that attracts under 6.4.5, and the “no notice” required for being within one’s rights no longer to work for WorkPac, or for my client to be within their rights no longer to offer work and to pay. Then there are references, which cease to have any significance for casual FTMs, concerning failure to give notice. Under 6.5.4 the category of:
limited term or assignment FTM –
And the category of:
FTM employed for a project, site or workplace specific task –
those were the 6.4.1(d) and (e) categories, you can see that employment “may be terminated by”, as it were, the exigencies of the task:
completion of the specified time –
that is the term:
completion of the assignment, project, site or workplace specific task –
some elements of flexibility, but not the same. And then there is a reference, obviously, to the notice provision outlined in 6.5.1 so that if a casual FTM had been employed for a workplace specific task, for example, the employment may be terminated not only by the task coming to an end but before then, peremptorily, that is, no notice required. There is a reference, that we think is not particularly contextually informative, to abandonment, in 6.5.5 and 6.6. It may be these are overlapping notions. 6.6.1 on page 54 contemplates:
The absence of an FTM from work for a continuous period exceeding two (2) rostered –
I draw to attention the word “rostered”:
working days without –
the leave, as it were, of the employer. That is not the client, that is the employer, but no doubt the employer would be assiduous for the interests of its client. There is then this notion of abandoned employment, and the correlative right to try and find lost sheep under 6.6.2. It does not seem to have any final importance for the nature of the relationship, that is, questions of duration and assurance of longevity, except under 6.5.5, and that has only to do with the unremarkable proposition that you are not entitled to payment after your last work.
We then can turn to 58, briefly I draw to attention “8 Classifications”, your Honours saw the reference to level 3, I think, which applies to Mr Rossato, not particularly clearly, on page 87 of the papers. You will find at about line 35 or so, Level 3 Mineworker is what that blurry column on the left reads, and then there is a description that is applicable to Mr Rossato, you see the word “competent” appears, and that is shorthand you will find in other references, “assessed . . . as competent to perform”, et cetera. And then we come to the quite important section 9, “Wage Rates”. As I say, the world divides into two, base rate and flat rate, that is 9.1.1. That is:
At the election of the Company –
That misses out the obvious thing for contractual efficacy, namely, that it is accepted by the prospective employee. The choice in the offer, accepted by the worker produces payment either as a “Base Rate FTM” or as a “Flat Rate FTM”, and the Schedule 2 for base rate, and 3, 4, 5, 6 and 7 for flat rate are the schedules that you will see commencing on page 88 and continuing thereafter with what I will call weekly hours, and pattern of shifts, being reflected in varying, that is, different, amounts. And as your Honours are well familiar, not only from this case, just on page 88 alone one sees, at a glance, that casual rates exceed base rates. These are hourly rates of pay.
So, this case concerns a flat rate FTM. Whatever else is done to the characterisation of Mr Rossato’s employment, he does not change from being a flat rate FTM. Under 9.1.1(b) his rate of pay ‑ and you will remember the suite of documents all say you will be paid as prescribed, et cetera ‑ is the prescription. It is prescribed as in those schedules: 3, 4, 5, 6 and 7. And you will see the reference to classification so you can pick up his classification, which I remind your Honours is level 3.
And in those schedules there is a distinction between “permanent” and “casual”, you will see that, for example, at page 89 on the left‑hand side. And then there is this stipulation in these incorporated terms to regulate the relation, and we submit to indicate that the label chosen within the EA, “casual”, is, as labels often are, correct in law as well by reference to what the statute requires in substance:
Flat rates are provided as compensation for all work (including overtime, weekend penalties, public holiday loadings, shift penalties, annual leave loading (where applicable), casual loading (where applicable), any industry and special allowances that apply to all FTMs covered by this Agreement and any industry and special allowances specifically incorporated that may not apply to all FTMs covered by this Agreement. Flat Rate FTMs shall also be entitled to any applicable allowances (which have not already been specifically incorporated) provided for by this Agreement unless such allowance is identified as applying only to Base Rate FTMs.
One needs an ice pack to hang on to what is in and out as one goes through, but you can see the evident intent to be comprehensive without putting a foot wrong by saying you cannot get something else we have agreed you can have. But so far as these words ‑ no doubt negotiated between industrial parties ‑ can provide, they very clearly said that there is compensation for everything other than that which is elsewhere said to be extra for the flat rates which, of course, is the very notion of the colloquial or idiomatic term “flat rate”.
The inclusion of casual loading there obviously picks up the matters to which I have already taken you. There are then some detailed provisions that I need not trouble your Honours with in the rest of 9.1. Clause 10 refers to an industrially important subject matter of allowances, but as it happens we need not be concerned with any of those. We then come on page 71 to the hours of work, section 14, “Flat Rate FTM”. They refer to there being “a standard work week” and we know the schedules contemplate some of these people being casuals. Then in 14.3, the role of the roster:
shall be employed on either day work or shift work and work hours as rostered by the Company to meet business operational needs.
A phrase that bespeaks, we would have submitted, the kind of flexibilities to which I have earlier referred. So a maximum is provided for ordinary hours of work under 14.4. Then there is a reference to the available patterns of work which concludes with more flexibility:
any other reasonable combination as determined by the Company.
Under 14.6 there is a rate of pay, irrespective of when they are worked. Then contemplating of a case, not compulsory:
where a Flat rate TFM works, over a roster period, in excess of the flat rate hours ‑
You see there is reward for that. That is the kind of eventuality that bespeaks again the kind of flexibility that one would expect to be recognised here, including for casual workers. Clause 14.9, the matter is made doubly clear. There is no additional payment, that is, over your flat rate for the matters then again familiarly listed, including casual loading where applicable:
as these have been incorporated into the flat rate.
That is, they have been paid by that money. You do not get extra money on the account of any of them. One may notice, for example, the distinction between casual and non‑casual then picked up at page 78 and following, section 19, “Leave Entitlement”, 19.1, “Annual Leave (Permanent FTMs)”. This is, as it were, a designation that through the statutory argument upheld against us below that Mr Rossato has found himself in. Clause 19.2, “An FTM is entitled to annual leave”, et cetera, and it accrues at the rates in 19.3, which picks up what the statute says, “other than casual employees” it is accrued. There is no accrual, in other words, for casual employees in accordance with the NES.
In that fashion one can see that upon the acceptance of an offer by these suite of documents there is no assurance by reason of the flexibility available on both sides to vary or truncate an assignment, to refuse or to cancel shifts, of an obligation on the worker’s part to work, or an obligation on the employer’s part to offer work. And, in our submission, bearing in mind that there looms in the offering of all of this the employer’s client, who has their own business exigencies.
That is exactly as one would expect it to be with that body of the workforce, labour hired, which is designated casual. That is, there are sound commercial reasons arising from the circumstances obtaining for each of the three kinds of parties: labour hire company, my client; labour, Mr Rossato; the client of the labour hire company, the mining company. The circumstances of each of their intersecting interests is such that there is nothing merely in the nature of a label misleading as to substance in the designation of Mr Rossato as casual upon acceptance of each of the offers.
Now, I stress the flexibility in question is particularly and explicitly provided for in the suite of documents to which I have taken you, by the undoubted capacity on both sides for the assignment – which constitutes the occasion for the employment – to be truncated. That is the hallmark, in our submission, of the lack of firm commitment, because it makes no sense to say, I am committed unless I decide otherwise.
Your Honours, could I now take your Honours please in the reasons below to page 143 of the core appeal book. I should have picked it up, I am sorry, at the foot of page 142, in Justice White’s paragraph 444, where his Honour engages in the exercise of digest‑style, I suppose, singing in the various cases, on their particular facts, what might emerge by way of a principle or pattern, in order to make this characterisation casual or not. (a) through (h) refers in a relatively open‑ended fashion, as with respect is in accordance with the nature of the task, to what I will call indicia.
His Honour calls them that in 445. Although his Honour refers to “an inference” in 445, in truth this is a familiar judicial task of characterising what fully‑found facts present to be characterised as the law requires from time to time. Then, in 446, his Honour turns, via Professor Freedland’s work, to consideration of the particular decision in this case, notwithstanding that the terms of the suite of documents in question, constituting and containing the terms of the employment contract are as I have taken you.
GORDON J: Before you go to that, could I just ask about paragraph 444?
MR WALKER: Yes.
GORDON J: You do not accept, or you do accept, each of the paragraphs (a) to (h)? Or does it not matter? What are we to do with (a) to (h)? I did not understand, from your submissions, that you would accept all of those.
MR WALKER: No, I do not think there is anything in 444 that sends us to the barricades at all, your Honour.
GORDON J: Paragraph (h)?
MR WALKER: That is – sorry. If changes in an employment relationship include variation, then, of course, you take that into account.
GORDON J: But you do not ‑ ‑ ‑
MR WALKER: That is a very familiar thing in employment.
GORDON J: I am more concerned with post‑contractual conduct, absent variation.
MR WALKER: Our point is a logically anterior point.
GORDON J: Yes.
MR WALKER: They do not change the relationship.
GORDON J: Thank you.
MR WALKER: True changes in relationship happen very frequently in employment. Promotion and pay raises are a great example, but other things as well. What we do not accept is that you change a relationship in a way that does not alter a contract. Then we go back to ARF v Gardiner and there are ways of altering a contract by subsequent conduct, none of which has applied in this case.
Your Honours, however one expresses it, the phrases are various. You see in 447, his Honour takes out the notion, from the quoted passage, of an underlying mutual undertaking:
commonly not express . . . In an informal contract, they may, like any other term, be inferred from the parties’ conduct.
What your Honours have before you are really the antithesis of informal contracts. Then, very tentatively, in 448, his Honour, in a sentence which we submit contains the seeds of its own lack of cogency, talks about a:
requisite commitment –
involving:
something more than an expectation.
Well, yes, one would have thought, commitment and expectation have a radical difference between them. In our respectful submission – without pursuing every one of the references to which we have given citation in our paragraph 22 in‑chief – there is no explanation by his Honour in this passage, or in his reasons, generally, of what mode of explication of the terms of a contract is being engaged in by his Honour. Or, to put it bluntly, if it is not a term, it does not matter because this is not a waiver or estoppel case.
Variation may alter terms, but it is not a variation case. And the notion that with respect to the casual character of the employment against the setting of a contract that does not permit people to contract out of statutory NES, such as annual leave and personal/carer’s leave, it is, in our submission, unanswered by any part of his Honour’s reasoning here or elsewhere as to why the free choice of these parties to designate Mr Rossato as a casual flat rate FTM, not entitled to anything on account of annual leave or personal/carer’s leave, is not accompanied by any circumstance, let alone words between the parties of a promissory kind, that would mean the substance of their relationship is other than as they called it.
Now, that is not to say the label determines. It is to say the label was accurate. As you might expect, bearing in mind that the label was used in a context where there was, in any event, statutory guarantee of the NES, and if you were not casual, you did have statutory rights. If you were not, you did not. Parties who agreed that Mr Rossato would be paid more money because he did not have those rights, part of the casual loading, part of the 25 per cent, 11 per cent, are parties who on the face of things, unless and until one found other facts, parties who have created in substance exactly that relation.
When one looks at the flexibility – another word would be precariousness – of the guaranteed work, coming from the provisions to which we have referred, there is simply no room for the kind of matters that we have quoted from Justice White’s reasons and our paragraph 44, hence the significance of our proposition that if it is not a term, it does not matter.
Could I just take briefly, by way of elaboration, the notion of an expectation. Expectations are often engendered by experience, but neither experience nor expectation, of themselves, produce an alteration in the terms of a contract in relation to which the experience has been had, or the expectation engendered.
When a party has a right to refuse a shift, the fact that the desire to save money means he cannot remember the last time he refused a shift, obviously does not mean that that experience has rendered his right obsolete, no longer able to be resorted to, nor does the expectation of the employer that Mr Rossato has never been known to knock back a shift, solidify into a right by the employer to require Mr Rossato on pain of otherwise him being in breach of his contract, not to refuse a shift which has just been offered.
And it for those reasons, in our submission, that there are fundamentally important questions about the coherence of introducing into an analysis which is ultimately contractual, the notion of any relation to the promises mutually comprising the contract of anything which is not promissory. Expectations and experience may, of course, be subjective. They do not wear the appearance of something which, for example, would assist a Moorcock implied term, and Moorcock implied terms are not things which grow into existence after a contract has been made, but which descend, as it were, from heaven, given the circumstances upon the contract being made.
Neither is there any suggestion, nor could there be, that this is a case of a term implied by law. Again, in principle, that would occur upon the making of the contract by reference to the nature of the contract. And it is for those reasons, in our submission, that at the heart of the reasoning against us is an unstable and incoherent resort to matters ‑ and I just pick two of the words, experience and expectation ‑ that cannot alter the terms of the contract, that cannot deprive a worker of flexibility, and cannot deprive an employer of flexibility.
Now, briefly, can I move to a focus, which is not a competing focus, but which is slightly more confined, as we have put it in our heading in our outline, to casual employment under the enterprise agreement. We stress this is a suite of documents, it is in the context of the statute, there are some things the documents cannot do if they contradict the statute, all parties have covered that in their submissions, I do not need to dwell on it.
But within the enterprise agreement itself, there can be little doubt about the agreement between the parties ‑ and that is leaving aside whether casual is a mere label or not – the agreement between the parties that there is included in the flat rate money paid on account of the annual leave and personal carer’s leave not available to the person who has been labelled a casual and by the very common idiom of calling that a casual loading.
So plainly that it has been divided up in a way that is to provide pro rata understanding once one has the arithmetic of the flat rate paid of what it is within the flat rate paid that has been allocated, or as it is sometimes put, “appropriated”, by the parties to the claim. Now, your Honours appreciate that I am there foreshadowing the foundation of an argument for the second part of the case about so‑called “set‑off” to put it in over‑simplified form.
That brings me to what we have tendentiously called “double dipping” in our outline, starting with proposition [9]. I have already taken your Honours to the material in the suite of documents for the contract which surely puts beyond doubt that there was in truth in fact payment made and received on account of the categorisation as a casual FTM flat rate, including using numbers which permit arithmetic to be performed, components within the so‑called casual loading.
GAGELER J: Do you say that one fifth of the flat rate was attributable to the casual loading? I mean, is it as simple as that?
MR WALKER: Yes. That is what 25 per cent must mean.
GAGELER J: Well, it depends on what it means by incorporated, perhaps?
MR WALKER: Yes, it absolutely does. The combination of flat and incorporated means that the amount, whether you define it from the schedule or in the body of the offer, the amount is an amount that includes within it so as not to increase it, everything on account of those items in the designated components which aggregate what is called 25 per cent.
Now, your Honour asked a question which leads to some detailed disputes that are not at the heart of our argument of principle of arithmetic, that is, 25 per cent are of a base rate, with certain allowances that do not get taken into account. But, yes, in principle, flat and incorporated means that an incorporated, or included or paid 25 per cent loading means that give or take the adjustments for allowances that are necessary to be taken away in order to reach a so‑called base, the flat rate comprises, if you like, a base, perhaps small “b” base, and 25 per cent of it, so you have got fifths. It is a fifth of the amount that is paid, as opposed to what happens in the other case, which is that you have a designated amount to which is added 25 per cent of it. That is the way in which, in our submission, it works.
So 25 per cent of the base is added to the amount and that produces your flat rate. You can, therefore, deconstruct your flat rate to know what was there, other than the casual loading. I do stress, there is some, as it were, rats and mice accounting to be done but the principle is still clear. It is 25 per cent of something. It is 25 per cent of something is included within the flat rate, from which it must mean that there is, as it were, 125 per cent of that thing constituting, or included within, the flat rate.
GAGELER J: I understand that to be your submission, yes.
MR WALKER: Now, once that is so, it is our submission that there cannot be any difficulty of identification – that is, it is simply a matter of doing arithmetic. Just as it is a matter of doing arithmetic against us, claiming that there is a certain amount owing, for example, under subsection (2) of section 90 for annual leave not taken – paid annual leave not taken. Just as it is a matter of arithmetic to calculate – again, by reference to pay rates under section 99 – the amount of pay that should have been made on occasions of personal carer’s leave that was taken.
KIEFEL CJ: Mr Walker, is there a formal document by which Mr Rossato particularises his claim for unpaid leave and allowances?
MR WALKER: Can I take that on notice?
KIEFEL CJ: Thank you.
MR WALKER: I do not know that there is one formal document – and, perhaps, “formal” is putting too highly – but, yes. Can I take you to those references perhaps after the adjournment?
KIEFEL CJ: Yes, thank you.
MR WALKER: Now, it is at that point that, in our submission, one obvious way to examine the state of affairs if we are wrong as to casual employment is stark with the notion that that gives a remedy for the statutory rights. That is the statutory obligations that we are referring to in proposition [10] in our outline. So the hypothesis that informs this second part of the case is one where we have failed to persuade your Honours concerning this being casual employment. If not, then those statutory entitlements were available, and if they were not honoured, then remedy can be sought.
Whether one uses the word “appropriate” in 5.4.5(1) or “compensation” in 5.4.5(2)(b), one way or the other one asks the question about the difference between the position the claimant is in, the right having been granted, honoured, and the position, the right not having been granted. In this case, it turns upon the stipulation of the parties that the employment was casual being wrong, in law. Of course, it is only if it was truly casual that stipulating for no annual leave and instead a casual loading in lieu could ever have been true. It is, as it were, a package.
The premise of being a casual is inseparable from the consequence, namely, that you get a casual loading and it is integral to that that it includes a payment of money in lieu of that which you do not have, an annual leave entitlement. It is for those reasons, that at its most basic level, that which is appropriate by way of relief says but for the failure to observe the annual leave and personal carer’s leave right you would have had it, you could only have had it if you are not casual, if you are not casual you would not have had the casual loading.
The casual loading explicitly by the agreement between the parties contained payment for something that they wrongly thought was not available to the wrongly understood casual worker and when all of that is considered and it is commonsense and, in our submission, just to consider the removal of the premise which produces the wrongful denial of the statutory right then one has, of course, the fact that there has been payment on account of those rights.
It is not to the point that it may not be as much as the statute provides and that is why we talk about on account or a set‑off. What is to the point is that more has been paid than would have been paid to somebody who was not casual. We can see that from the enterprise agreement, consistently more is paid for the casual. If you are not casual, consistently you would be paid less. That is because you would have, by law, the statutory rights which by the mistaken designation as casual you have been denied.
EDELMAN J: Does that work for aspects like category (c), (d) and (e), the itinerant nature of casual work, the redundancy entitlements and the notice of termination requirements in circumstances where the contract has entirely already played out?
MR WALKER: I think the answer is no. It is the statutory ones – or there are two statutory ones in this case. It is the statutory ones with the phrase “in lieu of” that this argument works for. There is no right to sue for a payment in recognition of the itinerant nature of casual employment and it would be passing strange for somebody who protests they are not a casual employee to sue for it so the occasion for a set‑off would not arise.
EDELMAN J: Also, your claim for restitution would have to be limited then to sixteen twenty‑fifths of the loading.
MR WALKER: Yes, it is only for those amounts that are in question. Now, in our proposition [10] we then move to what we have called the unallocated amount of the contractual overpayment. Now, I stress, by that we mean outside the 25 per cent. So, we are not talking about matters allocated within the 25 per cent. That is an amount that can be seen by reference to the comparison with what I will call “base rate”. You see them, among other things, in the comparison of schedules and what has actually been agreed to be paid over and above the stipulated amounts to Mr Rossato.
KIEFEL CJ: That might be a convenient time, Mr Walker.
MR WALKER: If it please your Honour.
AT 12.44 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.13 PM:
KIEFEL CJ: Yes, Mr Walker.
MR WALKER: Your Honour the Chief Justice asked whether there might be found a formal claim. I think something that approaches that description is to be found in volume 2 of the book of further materials, commencing at page 799. It is Mr Rossato’s solicitor’s letter before action of 2 October 2018. At page 800, particularly in section 5 of the letter, there is a claim that is calculated with respect to say there to the unpaid annual leave.
KIEFEL CJ: That would not be sufficient of itself to bring into play section 545.
MR WALKER: A claim under 545.
KIEFEL CJ: Is a claim for compensation, is it not?
MR WALKER: It is a claim for ‑ ‑ ‑
KIEFEL CJ: For breach.
MR WALKER: It is an appropriate remedy. The word “appropriate” is a statutory word. An illustration of what is appropriate for a financial claim is compensation and it is compensation claimed here to be by way of what would have been paid, had the statutory right been observed.
KIEFEL CJ: Well, it involves a calculation of loss consequent upon the breach of failure to make the payments.
MR WALKER: Yes, that is right.
KIEFEL CJ: I understand your argument in paragraph [14] of your outline to be that in that context the calculation of loss ‑ ‑ ‑
MR WALKER: It is necessarily met.
KIEFEL CJ: It would take into account what has already been received.
MR WALKER: Quite.
KIEFEL CJ: In the same way one would assess damages.
MR WALKER: Yes.
KIEFEL CJ: But a difficulty perhaps for you, and no doubt you will be addressing that, is that the remedies – it is not amongst the remedies that are open, given that the employer has brought these proceedings. We cannot really make a declaration about what would happen if there were a claim for compensation under section 545.
MR WALKER: Section 545 is the reflex of the position about which we brought proceedings, that is, it is - the extent of any liability by us under 545, we say nil, is ‑ ‑ ‑
KIEFEL CJ: But does there not have to be a claim for compensation is really what I am asking. I am not sure how - the mechanics of how 545 is brought into play but I had thought it, at the moment, is something of a hypothetical – I could be wrong about that.
MR WALKER: No, with respect, there is a sense in which it is hypothetical but none the worse for that because, as I say, it provides the reflex of the position for which we contend.
KIEFEL CJ: In a way it is the clearer and more readily – I mean one would have thought – it more readily deals with this kind of question than set‑off. The only question is how to bring it into play.
MR WALKER: I do not, with respect, seek to resist that seeing it through – the converse of our claim and position, namely the workers’ – the employees’ claim under 545 – is more straightforward than talking in terms of set‑off, yes.
KIEFEL CJ: Yes.
MR WALKER: They are related because under the concept of set‑off, there are, in our submission, for the reasons we have written and I do not need to elaborate, encompassed matters of the justice, fairness, balance or appropriateness of the position which plainly are also called up under the statutory rubric, say, of appropriateness or compensation.
KIEFEL CJ: I think loss and damage is sometimes described as analogous to a kind of set‑off, but in truth it is not. Loss and damage explains itself, really.
MR WALKER: That is only because in most cases, in order to ascertain whether somebody is worse off, which is often the core concept of assessing either the existence and extent of a loss, and thus the measure of damages to compensate for it, there will be unders and overs, or a netting, or a taking into account of the benefits received which would not have been received but for the wrong. That is not an exhaustive catalogue, but it is a familiar list of ways in which there is encompassed the same kind of adjustment to take account of both sides of the ledger, which is also involved in set‑off.
Your Honours, I do not wish greatly to elaborate further on what we have written about this. We draw to attention that the expression “set‑off” is not to be understood in all the places you find it in our written submissions as being technically the doctrine of set‑off, although, to the extent that it is obviously something in the nature of equitable set‑off in the hypothetical position, covered by my answers to the Chief Justice, is what would be in question.
We wanted to focus on one matter in Justice Wheelahan’s reasons, which your Honours will find in the core appeal book at page 284 in paragraph 1020. His Honour is focusing on that approach which looks for a close correlation in order to achieve this adjustment by way of so‑called set‑off. The critical part of the reasoning is to assert that the payments in question obviously were not intended to pay for, say, annual leave obligations because they would have been paid in lieu of them. Thus, for example, at about line 30:
The remuneration was calculated . . . on the basis that entitlements such as those that are now claimed were not available. For the reasons given by White J, the flat hourly rates of pay . . . might be said to include an identifiable casual loading of 25% . . . which included percentages allocated to annual leave . . . However, the contractual significance . . . is another question. That is because the employment relationship that was created –
That means truly or correctly created after the finding against us on the first part of our argument:
was not one under which Mr Rossato was a casual FTM for the purposes of the Enterprise Agreement.
That is offered by his Honour as the reason why the contractual significance is another question. He also seems to have introduced a conclusion by which there is to be no adjustment for the money paid in lieu. His Honour continues:
I do not consider that the weekly wages paid to Mr Rossato and the entitlements that he claims in this proceeding had a close correlation in purpose.
But if they are wages paid for not casual employment then they have this close correlation that they must go together by statute. His Honour continues:
That is because the wages were not paid on account of any such entitlements -
Well, quite:
and any loadings that were incorporated were ostensibly paid on account of the absence of those entitlements.
But that of course is the correlation. Because of this premise, mistakenly, because the parties said he was a casual, he does not get those statutory entitlements not available to casuals, and he gets, as he must under the enterprise agreement given statutory force by section 50, he must have instead a casual loading with the breakup of that casual loading.
EDELMAN J: Is there a different reason, though, why the correlations are not precise, and that may be that the calculation, say, of 5 per cent, or what is called 5 per cent of the loading for personal leave entitlement, is a calculation to be done at the time the contract is made as an estimate of perhaps the amount of personal leave that might be expected to have been taken. That will not correlate with the amount that is actually taken.
MR WALKER: There may be no personal or carer’s leave, yes, in fact taken. That does not mean there is not close correlation in relation to payment, with respect. It may mean that there is not a complete discharge – that is, it is not a 100 per cent set‑off that we accept that the correlation could not be closer than saying you were paid this money on account of the mistaken belief, on our parts, that you were casual and therefore could not be paid, were not entitled to be paid, for personal or carer’s leave under section 99, and now that mistake having been revealed, you are, hypothetically. Question: are you entitled to those section 99 entitlements; answer, yes. Have you ever received anything closely correlated with that – well, yes. That is the reasoning, it does not bear perhaps ‑ ‑ ‑
GORDON J: So is the correlation substantive in that sense?
MR WALKER: As to what I will call subject matter, topic or purpose – yes, very much substantive. It may not be quantifiably the same; need not be. At the foot of his Honour’s paragraph 1020 on page 284 he refers back to the passage quoted from Chief Justice Doyle in the TransAdelaide decision (1998) 71 SASR 413. That is found at pages 273 and 274 in Justice Wheelahan’s paragraph 993.
We would simply say, without reading the passages, that those particularly found at about line – well, the first half of page 274, do not, in our submission, show the Chief Justice refusing to regard there as being any of what we would call, borrowing the phrase, a “close correlation” between money paid in lieu of entitlement understood not to be had, and later money sought or hypothetically in question under that entitlement, when that has now been revealed to be one that was in truth enjoyed. It is for those reasons, as well as those in paragraph [19] of our reply submissions, that this is, in our submission, a wrong approach by Justice Wheelahan.
Could I then briefly turn to what we have called, under failure of consideration, a notional money had and received restitutionary claim. It is, as your Honours appreciate, very much based upon a Roxborough approach, namely that in principle, where the basis or premise for the payment in question, here the incorporated casual loading, is reversed, overturned – or as we have put it in our outline proposition [16], has been “obliterated” – then the question arises as to whether that produces conceptually the necessarily unjust effect of being able to keep the money, notwithstanding the basis for its payment has been removed.
Now, the basis for the payment is the lack of an entitlement, the existence of which is the finding that obliterates the basis of the payment, or to put it another way, it was paid because something did not exist. It has now been held that that thing did exist. Question, does that give rise to the possibility of any unjustness in keeping the payment on the basis that has now been destroyed?
It probably does not bear a lot of elaboration. Being able to keep money after the basis for it being paid is, in our submission, a basal or rudimentary contribution, sometimes a sufficient demonstration, nowadays, of a common money count being made out. It is for those reasons, in our submission, that the payment of an identified casual loading on these accounts is one which, at least notionally, produces the anterior, if you like, or primary right of restitution – which right ought, in the imagined contest of rights between employer and employee for payments one way or the other, be brought into account by way of a set‑off amount.
GAGELER J: Mr Walker, what relief would you seek if you were successful on this argument? Is it a declaration to the effect that you could bring a common law claim if you chose to?
MR WALKER: Your Honour is asking, I think, particularly about the fallback part of the case?
GAGELER J: The argument that you have just been presenting on failure of consideration, common money count.
MR WALKER: Yes.
GAGELER J: You have not brought a common money count, but you have ‑ ‑ ‑
MR WALKER: No, it is a kind of Mexican standoff, I do not suggest that it has any recognisable legal term. So, on the fallback part of the argument, so that – the relief for the first part of the argument is plain enough. On the fallback part of the argument, if we are wrong on the first part of the case, and it was not casual employment, then, in our submission, the proper relief, whether it would need to be shaped by this Court or not, is a matter for this Court, would be a declaration concerning the availability of those amounts to be brought into account, in the event of any such claim.
GAGELER J: In relation to restitution, Mr Walker, that would be a common money count that you would bring in a court of common law jurisdiction.
MR WALKER: Yes.
GAGELER J: So you are a couple of steps down the track to – but before you would get to any set‑off, you would have to have a judgment and an award. I mean ‑ ‑ ‑
MR WALKER: Yes, you would have to have it within – in some courts’ language, you would need a claim and cross‑claim.
GAGELER J: So it is pretty contingent, and almost speculative.
MR WALKER: Yes, yes.
GAGELER J: All right.
MR WALKER: Yes, and the other words that might follow in its train.
GAGELER J: All right.
MR WALKER: I cannot do anything about that, your Honour, that is as it is.
GORDON J: Am I right to say that your application, which was an application brought for declaration at first instance, was the only relief sought by any party?
MR WALKER: Yes, your Honour.
GORDON J: I do not think we have the original application, or any amended application before us - I just want to make sure that is the right relief.
MR WALKER: Could I just check one thing? Obviously, before this Court, but notionally only, is the process which was before the Full Federal Court upon the referral by the Chief Justice. I was just checking in the Chief Justice’s reasons to see whether I could add a bit more information from them, and I cannot, but I can assure your Honours, and we will ensure that the papers are supplemented, because it is part of the record before you with that process, as amended before the Full Court, the only relief sought was the declaratory relief.
KIEFEL CJ: Mr Walker, if the only relief sought was declaratory relief in relation to the characterisation of the employment and the entitlements, how did the Full Court come to make orders 3, 4, and 5 on page 290, which were as to what Mr Rossato was entitled to by way of money? From what you say, this would not have been before the court unless either the parties adopted that course or the court was proceeding on the basis of something like the claim that you have taken us to in relation to 800, which might bring into account ‑ ‑ ‑
MR WALKER: Your Honour, the ‑ ‑ ‑
KIEFEL CJ: ‑ ‑ ‑ the kind of dealing with the claim, foreshadowed claim for compensation.
MR WALKER: The answer is – and I was not there, but from what I have read and have been told – it is the course the hearing took in the Full Court.
KIEFEL CJ: I take it that the letter that you have referred us to at further materials page 800 was before the Court.
MR WALKER: Yes. So, the course – I am conscious that this answer does not accord with everything that might conventionally be seen in money claims to and fro. It no doubt reflects what I will call the test case nature of the matter but that does not necessarily excuse things. But the course that was taken was that those matters which were the consequences of the central controversy between the parties being determined, were regarded as appropriately to be ruled on as well and they included what I am going to call neutrally the financial adjustment, if any, by reference to the payment of casual loading, if any, in the event that there was not, in fact, casual employment. That is the best I can answer. It was the course of proceedings – there is not formal process.
KIEFEL CJ: But the parties both adopted this course which was by way of trying to achieve a final determination on claims for a declaration on one hand and compensation, effectively, on the other. That would have been the only route by which – if your client had refused to acknowledge the claims.
MR WALKER: That is right.
KIEFEL CJ: Mr Rossato would have been forced to bring a claim for compensation.
MR WALKER: That is right. So, there is no doubt that upon declining to accede to his letter before action that you have seen, there is a justiciable dispute. But there is one thing between being justiciable and was it tried. I have answered what I can concerning that course. One is reminded of the Judicature Act ideals of terminologies between parties but, also, of the means normally adopted to do so. In any event, that is my answer as to how the Full Court came – it being the only court below – to be determining issues that the parties before it – parties and so‑called interveners, I suppose, before it – regarded as appropriate to be determined.
KIEFEL CJ: I take it that there was some argument about the nature of the entitlements and the ‑ ‑ ‑
MR WALKER: Yes.
KIEFEL CJ: And the parties settled the forms of the orders.
MR WALKER: Yes.
KIEFEL CJ: Yes.
MR WALKER: There is no question of how the matter concluded ‑ ‑ ‑
KIEFEL CJ: Yes.
MR WALKER: ‑ ‑ ‑was in accordance with the parties with their opposite intentions. Commonly agreed, it would be concluded depending upon the outcome. I am grateful to Mr Neil. You will find a pretty close paraphrase of the amended originating application concerning our declaratory relief sought at page 97 of the core appeal book, in paragraph 272. Your Honours, all I want then to add in‑chief was, as you have seen in our proposition [19] ‑ ‑ ‑
GORDON J: Sorry, Mr Walker, I am just going to labour this point once more. That paragraph 272 – in your notice of appeal, you seek certain orders by reference to that amended originating application.
MR WALKER: Yes.
GORDON J: Do they match? I am sorry to interrupt – I just want to make sure I am clear about it.
MR WALKER: They match subject to the fact that there is paraphrasing in 272. You should have that application and we will ensure with the Registry that – because that is in the appeal papers, it just happens not to be physically in them. I do not know why.
Your Honours, could I just return to this, as it were, hypothetical claim construct with respect to financial account being taken – monetary account being taken of the payments made in lieu. Now, that is adopting the language of the enterprise agreement, but as your Honours know, those are words that are also found, maybe not coincidentally, in the regulation to which I turn finally.
That is the regulation that you will find in volume 2, Part B of the book of authorities at page 417. It is 2.03A of the Fair Work Regulations 2009 and it applies, so to speak, hypothetically because it applies – see (1)(d) – when a person is employed or who has been employed:
makes a claim to be paid –
and one sees that the expression is:
an amount in lieu of one or more of the relevant NES entitlements.
Now, “in lieu” is there not being used the same way as it is when it describes an allocation within a casual loading. “In lieu”, as we put, simply means here “instead”, it means “in place of”, it means, because it turns out – see premises (1)(b) and (c) – it turns out that there has been a wrong basis understood for the regulation of payments. It starts out as “employed on the basis” and your Honours can read that, given the context that follows, of the ostensible or purported:
basis that the person is a casual employee; and
(b)the employer pays the person an amount (the loading amount) that is clearly identifiable as an amount paid to compensate the person for not having one or more relevant NES entitlements –
not having the entitlements, and then during the period:
the person was in fact –
So, the “in fact” is falsifying (a):
was in fact an employee other than a casual employee –
and that has, as your Honours know, an effect on the, in truth, availability of those entitlements, and:
the person makes a claim to be paid an amount –
In other words, makes a claim to be paid an amount to which they had been entitled. So, “in lieu” does not there stand for a state of affairs where you do not have and you never did have and you still do not have the entitlement, and in recognition of that something is being given, that is the casual loading use of the phrase “in lieu of”. Here it is being given, as it were, in a compensatory fashion.
In regulation 2.03A one sees, again hypothetically in these proceedings, a claim to have the loading amount taken into account in determining the amount payable by the employer in lieu of the entitlements. That really means to discharge an entitlement which was in fact enjoyed by the employee, contrary to the basis upon which the employment was constructed. Subclause (3) makes it clear that this is part of an approach which overall is to proceed on what we would submit are bases of general justice. that is:
the matters to which a court may otherwise have regard, at law or in equity, in determining an employer’s claim to have the loading amount taken into account.
It is crystal clear, of course, that this is a regulation aimed at a case such as that before the Court, namely, a case where the entitlement or not under the - in relation to an NES is determined by whether you are casual or not. In our submission, understanding, of course, “in lieu of”, meaning what it does in that regulation, different from what it means in other contexts before the Court in this case, it is made to measure for the situation that we sought to have determined.
EDELMAN J: Does this regulation have any substantive effect of its own force, or does it just provide, on your submission, for the way that a common law claim for failure of basis will operate or clarify that such a claim will operate.
MR WALKER: Your Honours will have noticed that sub‑regulation (2), in terms, permits an employer to make a claim and literally, of course, that is a bit like saying you can send me a letter. It does not mean anything will happen. However, it must surely mean, and a court should make an appropriate response to a claim, or that it is proper to take into account the loading amount in determining any amount payable. So, it goes by at least three steps of reasoning. It thus has, we submit, substantive effect. That is not to say the language is as tight as it might be. That is my answer.
GORDON J: That is not how the court below dealt with it.
MR WALKER: No.
GORDON J: It saw it as merely just declaratory of the existing state of the law, as I read paragraphs 262 and 1022‑ ‑ ‑
MR WALKER: That is correct. It is very odd – sub‑regulation (2), of course, is not declaratory of any substantive law.
GORDON J: So, there are two questions. Is it declaratory or does it have force and effect, as Justice Edelman just put to you, and, secondly, does it apply to the facts of this case?
MR WALKER: As a regulation, being declaratory would mean it has force or effect, in other words ‑ ‑ ‑
GORDON J: Sorry, I meant to say independent force and effect, giving rise to a right.
MR WALKER: We submit it has force or effect if it parallels, which sub‑regulation (3) contemplates as one of the possibilities, then it may turn out to have been supererogatory – but that does not deprive it of force or effect. It at least has the clarity, such as it is, of it own wording, rather than looking to case law in order to understand rights of so‑called set‑off, restitution, et cetera. Sub‑regulation (3), as I say, makes it clear that this is not intended to detract from the breadth of matters to which a court can have regard in favour or adversely to:
an employer’s claim to have the loading amount taken into account.
We simply submit that the existence of the regulation, the focus of its language is in order to ensure that where there is a final figure, an adjustment figure arising out of the precise position put, namely a mistaken basis of casual employment exposed as being mistaken, payments by way of loading amounts, and a claim to the entitlements mistakenly understood not to be available, that is this kind of case.
EDELMAN J: Do you really mean mistaken in the sense of a subjective mistake?
MR WALKER: No. No. But you need to be able to say that there is a basis which turns out to be wrong. It has nothing to do with psychology of parties, no. It is a basis that is wrong.
GAGELER J: When was 2.03A inserted, do you know?
MR WALKER: Could I find out the answer to that, your Honour.
GORDON J: There is a lot of paper in this case, Mr Walker, but I had thought that there was an explanatory statement that accompanied the introduction of this regulation that may be contrary to what - or, on one view, take a different view of the regulation. Is that right?
MR WALKER: There are statements that are, shall I say, equivocal and not helpful about its relation to the what I will call pre‑existing state of affairs.
GAGELER J: I mean, there is a big difference between a regulation that provides for a procedural right and a regulation that on one view might affect vested entitlements.
MR WALKER: Without any doubt. Without any doubt. I will not speculate. Yes, there is a very large difference between those states of affairs. I do not think it has ever been a live issue in this argument, in these proceedings, that there is any such possibility being raised by our argument. We submit that the most striking thing about the wording of the regulation is that at the heart its operative terms, if I can call them that, introduced by that slightly annoying phrase “To avoid doubt”, is that :
the employer may make a claim –
Well, it must mean more than the barest literal understanding of those words. It must mean, in a regulation about proceedings and the adjustment of rights, that there can be an adjustment.
GORDON J: The explanatory statement I was thinking about I think is at tab 69, which relates to amendments – sorry, the regulations. I do not know whether it is – I think it is these regulations.
MR WALKER: Yes, it is, yes.
GORDON J: Where it talks about it being declaratory in nature.
MR WALKER: Yes. Well, that begs the question, however, as to what that means ‑ ‑ ‑
EDELMAN J: Does it not mean that the way that 2.03A works, because it does not work as an independent claim, but it works to adjust to the extent necessary the common law restitutionary claim to ensure that any particular obstacles that might exist on the basis of severability or issues like that are removed, but not to adjust the claim in any other way?
MR WALKER: Well, that might run into the problem about vested rights to retain money on the part of an employee, which has not been canvassed in these proceedings - that is the first proposition. The second is this. What Justice Edelman has put to me goes beyond most understandings of what merely declaratory would be, because it is a clearing away of obstacles and the pre‑existing state of affairs may not be free of obstacles. I do not think we can put anything beyond the proposition that you are still required to be able to identify clearly, so the regulation says, a loading amount, and when you do that, as it happens, we say the general law would permit it, but the regulation makes it crystal clear you can.
EDELMAN J: It would be subject to the same defences as the general law recognised.
MR WALKER: Answers or defences, yes. That must follow from the immediately succeeding sub‑regulation, we think. May it please your Honours.
KIEFEL CJ: Yes, thank you. I think Mr McKenna is next in the order of addresses, for the Minister, the second respondent. Yes, Mr McKenna.
MR McKENNA: Thank you, your Honour. In our oral address we are only proposing to deal with one issue, the issue of principle of when statutory obligations arising pursuant to the Fair Work Act can be regarded as being satisfied by payments made under a contract.
Your Honours, as you will have seen from the authorities in this area, this topic has generated quite a substantial body of authority, all in the employment context, and all of which draws upon a number of common law influences, including the laws of appropriation, although, should I say, not the law of set‑off simpliciter.
Before descending into those cases, however, we think it is helpful to begin by standing back from the detail and consider this kind of issue more generally. The more general question is how do courts ordinarily determine whether a legal obligation has been satisfied by some act that is said to be sufficient performance and the answer is ordinarily one starts by looking at the legal source of the obligation, being the terms of the relevant statute or contract, and then the question really is, as a matter of construction, what kind of acts of performance are sufficient to count as satisfaction of that particular obligation?
That principle applies whether it is an obligation to build a house or make a payment. The analysis is always primarily a question of construction of the particular obligation involved. In some cases, the question can be simply answered by the explicit terms of a statute of contract. In other cases where the terms are less explicit, it is necessary to have regard to context and purpose to determine what kind of performance is truly required. Having set that framework, one can recognise that related problems can arise. In particular, a related problem arises where one party owes a number of different obligations to another party and those obligations, as a matter of construction, are mutually exclusive so that the performance of one cannot count as performance of the other. For example, a borrower who has to repay principal and pay interest where there are mutually exclusive obligations.
In that category of case where a party makes a payment that is legally incapable of satisfying any of those obligations, the common law principles of appropriation exist in determining which of the obligations has been satisfied. As we all know, ordinarily the payer has the first right to elect at the time of payment how their payment is to be appropriated and failing such appropriation, the payee can do so.
A key point to note, however, is that the principles of appropriation work upon the premise that these various obligations are mutually exclusive and they assist in determining which of these alternative obligations has been discharged. The principles of appropriation do not assist in determining the logically prior question of whether the obligations are in fact mutually exclusive or whether the performance of one obligation can be sufficient to satisfy the other. That is a matter that can only be determined by the true construction of the relevant obligations.
Can I illustrate the point by two very simple examples? In the first example, let us assume that I agree to borrow money from my children to fund a business venture and then, on the following Christmas Day, I give them all a cash gift. In these circumstances, if a question arises as to whether the gift satisfies the debt, the answer is primarily to be found as a matter of construction in the borrowing agreement.
Ordinarily, the terms of the borrowing agreement may not explicitly answer the question but, as a matter of construction, an obligation to repay a debt is unlikely to be satisfied by the payment of a gift. In that context, the law of appropriation is really of no assistance. The gift has the legal character it has at the time it is made. The contract tells us, as a matter of construction, what is sufficient to satisfy the relevant debt and if the contract does not permit discharge by gift, then the law of appropriation cannot change that.
The second example involves a variation of the facts. Assume I have made a contractual promise to my children to support them to a certain monetary value each year and the following Christmas I, again, give them cash gifts. In this example, again, it is the terms of the contract which are determinative, and, in this case, the terms would appear to contemplate that my gifts will have legal effect in two ways: firstly, as a gift; and, secondly, as contractual performance of my obligation. Again, the law of appropriation does not assist.
Your Honours, I have taken that discursus into my relationship with my children to deal with the nature of the problem in the present case, which, in some respects, is confusing the authorities by reference to the law of appropriation. The nature of the problem in the present case again involves identifying what kinds of payments sufficient to count towards satisfaction of particular obligations. In this case, the obligations arise pursuant to the Fair Work Act. The root of the problem can be found in three key features of the legislative framework.
The first feature is that this legislative framework is based fundamentally upon a detailed system of classification of employment relationships. The classification system works at numerous levels. At the highest level, the Act defines those relationships which are governed by the Act and those which are not. It then divides that genus of relevant employment relationships into a number of broad categories – including between casual and non‑casual employment. The Act then contemplates that a range of more detailed instruments, including enterprise agreements, will come into existence, each of which has their own coverage.
Then within the terms of that coverage, a matrix of more specific categories are created to accommodate all appropriate distinctions between different categories of employment. And the enterprise agreement we have been looking at is a good example of that. The second feature of the legislative framework is that having created this matrix of categories of employees, the Act then creates a number of categories of minimum statutory entitlements, and matches those categories of entitlements to the categories of employees and again contemplates that more detailed instruments will define, with all the necessary particularity, the specific minimum entitlements which are linked to each specific category of employee.
It is the third point that is most significant. Having created this statutory framework of rights and entitlements and categorisation, the Act then contemplates that it will be carried in practical effect by individual employers and employees across Australia who will use this framework themselves to categorise each relevant employment arrangement, and then enter into individual employment agreements which confer contractual rights which, at the very least, are to be in conformity with these minimum statutory entitlements. The key point to draw from all this is it is a statutory framework that orindarily contemplates alignment between contractual obligations and statutory obligations.
So that, all going well, any given payment by a relevant employer to their employees will not merely satisfy the contractual obligations under the employment agreement but also any relevant statutory payment obligations. In practice, however, no one expects things to always go well. So, it is an inherent feature in any framework of this kind that classification errors will be made. And as you will see in the case law, errors of this kind are commonly made, because even relatively or seemingly simple concepts like casual employment have an element of uncertainty at the boundaries of their meaning, so they require judgments to be made and judgments to be made in real time, by real people, in a wide variety of different workplaces.
One example of that, perhaps an extreme example, is the Transpetrol Case, that is referred to in our authorities, where the employer did not even know that their employees, who were maritime employees, were in the jurisdiction, so had no idea that they were subject to Australian employment law but had made contractual arrangements to pay them. That is the kind of practical problems that can arise in the implementation of this legislation.
And the problem is that if classification errors are made the likely consequence is a misalignment between the particular entitlements that the parties have agreed to provide under their contact and pursuant to which payments are likely to be made and the particular entitlements which a court may later find to have accrued under the statutory framework. And so, questions of the present kind arise, as to which payments of this kind are to be regarded as satisfying both the contractual obligations and the statutory obligations.
What is the answer as a matter of principle? In our submission, consistently with general principle, the answer is to be found primarily in construing the relevant statutory framework, and if the statutory framework does not address the problem in clear and explicit terms, then one has to construe the more general words which are used.
Turning for a moment to the statutory entitlements in respect of paid annual leave, which have not been taken up, there are two relevant statutory provisions to consider. First, there is the source of the obligation to make the payment, which is created by section 90(2), and that is an obligation simply expressed as being one to pay the relevant amount, so the ambiguity there is as to what counts as payment for the purposes of that provision; and secondly, there is the source of the legal remedy for contravention of that obligation, which is section 545. As you have heard, that gives the court power to make such order as it considers appropriate, including compensation orders.
Whether that provision is the solution to this problem or whether the nature of that remedy reflects back on the meaning of the word payment are questions that fall to be resolved. In seeking an answer to it, your Honours, you do have the benefit of a substantial body of previous authority in this area. Most of the authorities are not concerned with the Fair Work Act, they are concerned with statutes that are predecessors of the Fair Work Act but what one can see of them is that they all adopt a similar general framework of the kind I have just described and they are all expressed in similarly general language.
EDELMAN J: Mr McKenna, I realise that the point about regulation 2.03A was put as part of a restitutionary argument, but is there any reason why regulation 2.03A cannot be read as providing some of the more specific detail for the allocation of payments under a provision such as section 90?
MR McKENNA: The difficulty created by that provision, your Honour, is that, on my instructions, it is to be read as not changing the law but really clarifying the existing state of the law. So, it may be that it can be found as a procedural – provide procedural assistance but, in our respectful submission, it does not change the substantive law. I think that it is to be found in the explanatory note that introduced it.
EDELMAN J: It does still beg the question of what the pre‑existing law was ‑ ‑ ‑
MR McKENNA: Yes.
EDELMAN J: ‑ ‑ ‑ that is assumed not to have been changed.
MR McKENNA: Your Honour, I think that really derives from this extensive line of authority that, on the face of it, is a little hard to analyse because it begins with a case Ray v Radano that says that the answer is commonsense and every other case sort of builds upon the answer, the answer that it is commonsense, and the reason I am taking some time with your Honours is to try and find a principle basis to locate the solution to this so‑called set‑off approach to the provisions.
EDELMAN J: A number of counsel might suggest that the sense is not as common as expected.
MR McKENNA: What you can derive from that line of authority, I suppose, is that the courts have consistently taken an approach that focuses on the substance of the matter, rather than on the form of the particular payments that are being made. What you can see from those cases is that payments that have been made pursuant to completely wrong classification of the statutory position have not just been ignored; they have not been ignored even in cases where the contravention warranted penalties being imposed upon the employer.
What you will see from the authorities is they fall into a very wide spectrum of cases. At one end, cases where the parties were explicitly seeking to disavow any employment relationship, examples of that are cases like Lynch v Buckley, James Turner Roofing v Peters, and Linkhill. Second category of case, the cases of ignorance or indifference, where no attempt was made by the parties to focus upon the statutory obligations, cases like Ray v Radano and Poletti, Transpetrol.
And other cases where the parties were focusing hard upon the statutory framework, but misclassified, their contractual arrangements just did not fit, because of their own misclassification, with the statutory arrangement, but made a payment explicitly on the basis of their understanding of the position, and an example of that is the ANZ v Finance Sector Union case.
And the important point to make, your Honours, is that in all these cases, to at least some extent, credit was given for the contractual payment towards the statutory obligation. I will go to the detail in a moment of the logic that led them to that conclusion, but the point to be made at the moment is that this whole line of authority has rejected the approach that one takes a formalistic approach to this problem, the problem of misalignment between contractual and substantive obligations, and have taken a substantive approach to it. In our respectful submission, there are four main considerations that support that approach.
The first is that it would seem to be consistent with the purpose of Chapter 2 of the Fair Work Act. That purpose, in our respectful submission, is an intensely practical one, to ensure that employees actually receive payments or other entitlements which are intended to serve specific legislative purposes. One could describe that as a compensatory or remedial purpose, but it is not a purpose served by taking an unduly formalistic approach to this problem, or by an approach which might lead, in practice, to double recovery.
Secondly, to the extent that an employer should be penalised for contravening the statute, there are specific provisions in the Act to achieve that end, and they allow for all of the circumstances of the contravention to be taken into account, circumstances of aggravation, circumstances of mitigation, and an appropriate penalty struck. So, in our respectful submission, penalisation or discouragement would not seem to be a purpose, a statutory purpose, that governs this particular problem, because of the existence of the penal provisions.
And the third point is that the overarching purpose of the legislation would seem to be to create a framework that is workable and fair in practice, which one can draw from section 3 of the Act. And that purpose would not seem to be served if the parties, the real parties who are actually allocated the task, by statute of dealing with these difficult issues of categorisation, can find themselves with legal consequences which are not in line with the substantive merits of the case. The fourth point to make is that taking a substantive approach is readily accommodated within the general words of the statute.
So moving from that general proposition to the more specific, one can see from the authorities that they have sought to take a more specific, principled approach to this problem, and I can try and summarise the approach they have taken in these propositions. First, an assessment is made of the purpose sought to be achieved by the statutory obligation. Secondly, an assessment is sought to be made of the objective purpose of the payment and that exercise is done at an appropriate level of abstraction so that you can make an appropriate comparison between the purpose of the obligation and the purpose of the payment.
So it does not involve an inquiry about whether the purpose of the payment is to discharge a particular contractual obligation. It is a question of, what is the deeper purpose of the payment, is it to meet a particular need of an employee, for example? Then the third step in the exercise, having identified the relevant level of abstraction, those two purposes, is to look for an appropriate nexus between those two.
And it is that last step that has been a source of difficulty. As you read through the authorities you will see a wide variety of different nexus tests that have been used. For example, in our earliest case, Ray v Radano, you will see that the nexus test was whether the payment was properly attributable to the obligation or, alternatively, whether it was extraneous to it.
More recently in ANZ v Finance Sector, you will see that the test being framed as whether both the payment and the statutory obligation arose out of the same purpose, such that there is a close correlation in nature between them. And then more recently in Linkhill, you will see concern being expressed that even that test may have its limitations in some categories of case.
The difficulty with all of this analysis is that nexus tests, by their nature, are only usable unless you have a clear idea of the purpose of the nexus you are seeking to apply, and a clear idea of the relevant connecting factors that might assist in determining that nexus. Merely asking the abstract question of whether there is a close connection between two subjects just does not provide the analytical tools required to make that assessment and the main difficulty, in our respectful submission, with the authorities to date is that those analytical tools are not really provided.
GAGELER J: Mr McKenna, can I just inquire, are these submissions directed to section 545(1), that is, determining whether there has been a contravention at all, or are they directed to 545(2)(b), the award of compensation?
MR McKENNA: They are directed to both, your Honour. They are directed to both because the first ambiguity is that when one goes back to the source of obligation, it is an obligation to make a payment. Now, it is true it is a payment at a particular time, and in a particular form but a question arises whether it counts as a payment to have made a payment that is directed to a similar purpose ‑ ‑ ‑
GAGELER J: You are saying that all of these factors that you are telling us about bear upon both of those questions?
MR McKENNA: Yes. And the difficulty, your Honour, is that the authorities do not explain what statutory provisions they are actually interpreting. They all start from the Ray v Radano approach, which is that it is a commonsense approach that is to be taken. They draw on doctrines of appropriation and the like, but they do not spell out this connection between the words of the statute and the commonsense result that is being sought.
What they do establish is that you take a substantive approach, they do establish that you look for commonality of purpose, but in our respectful submission, that approach can be justified by either construing the word payment or alternatively looking at section 545 and approaching it from a remedial end and that is really a question for your Honours about which of those two approaches is the appropriate approach to take.
GAGELER J: You would have to go through both, would you not? I mean, you have to find a contravention first before you can get to compensation.
MR McKENNA: Yes, and can I say, they are not discrete questions because your analysis of both those questions impacts upon each other. If one sees, for example, in 545 that it is a remedial compensatory approach that the statute takes, that reflects upon the meaning of what payment might mean in earlier provisions, section 90(2), for example. But the approach your Honours were inviting me to take in terms of solving this problem really involves taking, adopting, the approach the authorities have taken but the missing link, really, is seeking a nexus that actually achieves the statutory purposes that I have just described. So, you will find, for example, that a payment has been made like this that has a difference in timing from the statutory obligation.
It has a difference in calculation from the statutory obligation, it has a difference in legal form from the statutory obligation, but if in substance you can conclude that the purpose of the payment sufficiently meets the underlying statutory purpose of the payment obligation, then in principle it should be counted as satisfaction of that obligation. It is an approach that serves the purpose of protecting the position of employees. It is an approach that does not result in employers being unduly penalised, and it facilitates the practical working of the legislation.
So, finally, may I turn to the particular problem we have in this case which is the problem of payments by way of casual loading and the question of whether they can be treated as satisfying an obligation to pay an amount of unpaid leave under section 92. In all the judgments of the Full Court a key consideration appears to have been that a loading of this kind is to be understood as a payment in substitution for paid annual leave, or perhaps in compensation for the absence of paid annual leave, and in those judgments that seems to be regarded as being favourable to this close connection that we are looking for.
In our respectful submission, though, even accepting that one can characterise it as a payment in substitution for annual leave, it is difficult to see how that factor can be determinative of this question, because the relevant question is not whether the objective purpose of the payment is to discharge the statutory obligation, it is whether both the payment and the obligation have a sufficiently common purpose. It is a question whether payment and obligation have a common purpose, not whether the payment is intended to discharge the statutory obligation.
So looking at the purpose question, firstly at the statutory obligation, the relevant purpose of conferring rights to paid leave would seem to be to ensure that employees not only have a right to leave, but also a source of funds in respect of the period in which they are not working, and after the termination of their employment, the purpose of section 90(2) is to have an accounting for any unpaid leave, so that the termination of the employment involves the employee leaving with an appropriate accumulation, an accumulated payment of their outstanding amounts.
Turning then to the payment of a casual loading, one sees immediate similarities. Because of the casual nature of employment, it is difficult to build into that arrangement a formalised requirement for leave of the kind that exists for permanent employees, but whether you are casual or permanent, one still needs time away from work, and one still needs funding to make that possible. So the purpose of the casual loading would again appear to be to provide casual employees, by instalments, with a source of funding to make it financially viable not to attend work and to take recreation time. If that is right, then the statutory purpose of requiring payment under section 90(2) would appear to be sufficiently satisfied by the instalments in fact paid by way of a casual loading.
A point raised against this in the judgments is a problem arising under section 92 of the Fair Work Act, a provision that prevents “cashing out” of an entitlement to paid annual leave, but in our respectful submission, that submission, or that approach, would seem to miss the point, because a cashing out of paid annual leave would seem to involve a transaction in which the payment is made in exchange for abandoning an entitlement to paid leave, and that is just not the present case.
In the present case, the loading was a payment made on the assumption that there was no entitlement to paid leave, and the question that your Honours are considering is whether, after that assumption has been shown to be incorrect, and it is a time for an accounting of outstanding leave, should the payment be credited or not?
EDELMAN J: The reason why the assumption becomes important, is that because of the word “appropriate” in 545(1)?
MR McKENNA: On this part of the analysis, your Honour, it is because of the prohibition against cashing out. So there is a prohibition, and the point that is put that concerned the judges below was that there was some - the cutting across the public policy of the statute by giving credit to payments of…..casual loading.
EDELMAN J: Yes, but to take one of the examples that you began with in the opening of your submissions, if the employer had been aware, for example, and had made these payments purportedly in lieu but with the intention of defeating section 92, that would not be an appropriate subject for an order under 545(1), would it?
MR McKENNA: I accept that, your Honour, yes. They are our submissions, your Honours.
KIEFEL CJ: Thank you, Mr McKenna. Yes, Mr Murdoch.
MR MURDOCH: Yes, may it please the Court. The first respondent, at the outset, wants to focus its submissions on the fact that this case is about whether Mr Rossato was due entitlements that are provided under, and protected by, statute, that being the Fair Work Act. The relevant entitlements that are in question are untaken paid annual leave under section 90(2) of the Act, paid personal leave and paid compassionate leave under sections 99 and 104 and 106 respectively of the Act, and also payments for public holidays pursuant to clause 20.6 of the WorkPac enterprise agreement.
Accrued annual leave, paid compassionate leave and paid personal leave are legislated minimum standards for employees which, by section 61 of the Fair Work Act, cannot be displaced – relevantly, by either enterprise agreement or by contract. An exception is that they do not apply to casual employees. Thus, they will only not apply to persons who are true casual employees for the purposes of the Act.
Further, in respect of the public holiday payments, a contract cannot be relied upon to exclude entitlements under an enterprise agreement as to do so would contravene the enterprise agreement. Therefore, each of the entitlements that are the subject of the proceeding are either provided under or protected by statute. We say that this is a key matter which impacts both the exercise of considering the status of Mr Rossato’s employment and once accepted that he was employed other than as a casual, how to treat the remuneration paid to him.
We wanted to first deal with what is casual employment for the purposes of the Fair Work Act. As we see, or cannot see from our research, neither the Fair Work Act or any of its predecessors contain any definition of “casual employment”. However, the term, “casual employee”, and the concept of casual employment are of longstanding employment law and have been referred to in industrial legislation, and cases relating to employment, for many years. In the Hamzy v Tricon International Restaurants Case, the Full Court held that:
The essence of casualness is the absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work.
That, in our respectful submission, is a forward‑looking definition. As was noted in Hamzy at paragraph 38, casual employment – in the concept of someone being a true casual employee:
is not inconsistent with the possibility of the employee’s work pattern turning out to be regular and systematic.
Put another way, one can look backwards and see that, in retrospect, there has been some systematic aspects or some regularity of the work. Rather, the question is not looking back, the question is looking forward. Is there the firm advance commitment? Of course, the concept of a firm advance commitment was further explained and followed by the Full Court in WorkPac v Skene after an extensive review of the authorities.
If I could ask your Honours please to go to volume 6, at tab 67? If we could take you to, at this point, the Skene decision? If I could ask your Honours please to turn up paragraphs 170 to 173. It is observed relevantly by the Full Court at 170 that:
What needs to be recognised is that the expression “casual employee” describes a type of employment that, at least in part, takes its meaning from other recognised types of employment.
If I could then ask your Honours to note what was said at paragraph 171:
A “type” of anything is usually distinguished by a characteristic or perhaps several characteristics not present in other categories of a like nature. The characteristic that distinguishes full‑time and part‑time employment is that those employments are on‑going (sometimes called “permanent”) employments.
We note the reference there in terms of distinguishing casual to full‑time and part‑time is that those employments were noted as being “on‑going”. If your Honours could then go please to what was said in paragraphs 172 and 173, where the Full Court there turns to consider “In contrast” what is, or who is a casual employee. Such an:
employee has no firm advance commitment from the employer to continuing and indefinite work according to an agreed pattern of work.
Now again, we would highlight there, in addition to the reference to “on‑going” that we have taken you to earlier, the issue or the matter of:
firm advance commitment from the employer to continuing and indefinite work according to an agreed pattern of work.
Then the Full Court goes on to say that:
what is referred to in Hamzy as the “essence of casualness”, captures well what typifies casual employment and distinguishes it from either full‑time or part‑time employment.
Then in 173, one sees a reference to what are referred to as:
The indicia of casual employment referred to in the authorities -
the oft‑referred‑to concepts of:
irregular work patterns, uncertainty, discontinuity, intermittency of work and unpredictability – are the usual manifestations –
et cetera. Can I just ask, and I will not read it into the record, but just ask your Honours to note that their Honours then went on in paragraphs 174 and 175 to provide some examples and each example was concluded to not demonstrate employment other than casual.
The reason why I just particularly wanted to take your Honours to the examples was to go back to a question that Justice Edelman asked this morning of my learned friend in respect of time – six months, two months, et cetera. What we would say is that it is not so much a question of time, it is a question of looking at all of the circumstances, looking at the indicia, to see whether or not there is this concept of looking forward, ongoing employment.
EDELMAN J: It would not on your submission make a difference then, would it, if the relief teacher were engaged for a period of six months from the start rather than a period of initially just one month? The relief teacher would still be casual.
MR MURDOCH: I beg your pardon?
EDELMAN J: The relief teacher would still be working casually.
MR MURDOCH: Well, if the relief teacher was stripped of all of the circumstance in paragraph 174, engaged for a period of six months, we would say the relief teacher is not working casually because the relief teacher has, at best, a firm, ongoing commitment of six months’ work, whereas, in the example here, that is provided by the Full Court there is - I am putting this very loosely - an intermingling of a whole range of different discrete work arrangements, that when looked at overall ‑ ‑ ‑
KIEFEL CJ: Would not permanent employment suggest an indefinite – commitment to an indefinite term of employment subject to good behaviour?
MR MURDOCH: Indeed.
KIEFEL CJ: So, six months would not satisfy that? It would go beyond.
MR MURDOCH: Looking at it from a different – not disagreeing with your Honour, but looking at it from a different perspective, permanent employment can be ongoing. But it could also be employment for a discrete set period.
KIEFEL CJ: Well, that would just be a contractual arrangement for a discrete period.
MR MURDOCH: That is right. But for that discrete period, the person has ‑ ‑ ‑
KIEFEL CJ: Would the person be an employee under that arrangement, or would they be a contractor?
MR MURDOCH: A person can be an employee for a discrete period and not be a casual. That is the point that I was getting at – trying to get at.
EDELMAN J: So, what, on your submission, makes the relief teacher who is engaged for, at least initially, a discrete two‑month‑long period, regular hours and so on, what makes that teacher a casual employee rather than a permanent employee?
MR MURDOCH: What makes that teacher a casual employee on the example that is given here?
EDELMAN J: On your submission.
MR MURDOCH: I beg your pardon.
EDELMAN J: I understand you to accept the example ‑ ‑ ‑
MR MURDOCH: Yes, yes.
EDELMAN J: On your submission, what is it that makes the teacher taking a two‑month appointment with regular hours and so on a casual employee, whereas I understand you to say that if it had been a six‑month period the teacher would be a permanent employee?
MR MURDOCH: No, I put that badly. I was not suggesting that – I started this by saying that it is not the timing or the length of time that is important, it is rather is there an ongoing commitment ‑ ‑ ‑
KIEFEL CJ: That is – yes, can I take you up on that?
MR MURDOCH: Of course.
KIEFEL CJ: So, the commitment would be a contractual obligation, would it not?
MR MURDOCH: That is so.
KIEFEL CJ: An enforceable obligation, as distinct from a mere expectation on the part of the employee, that because things keep rolling on it will continue. There would have to be a contractual obligation on the part of the employer. Would that be right?
MR MURDOCH: That is so. Going back to the principles that ought to be or, we say are applied, in terms of the concept of firm advance commitment we have taken you to the fact that it was further explained in Skene. What we also wish to say about that is that we do not submit that the concept of firm advance commitment is a hard and fast criterion, but what we do say is that it is a statement of principle that guides the determination of whether an employee’s employment is casual or otherwise. Now, analysis of the authorities that have considered and applied the concept of absence of a firm advance commitment, that was done by Justice White from paragraphs 421 to ‑ ‑ ‑
KIEFEL CJ: What is the point of these terms, if we are talking about a contractual obligation? These expressions, “advance commitment”, which have sort of appeared have degrees embedded in them. There is either an enforceable contractual obligation to provide employment or there is not, according to the terms of the contract, is there not?
MR MURDOCH: Well, these are the matters that one can look to, or consider, in construing the terms of the contract to see if the firm advance commitment ‑ ‑ ‑
KIEFEL CJ: Is that slightly back to front? Do you not construe the contract to determine the extent of the obligation?
MR MURDOCH: One construes the contract to determine the extent of the obligation, but when one is considering whether the relationship that is provided under the contract is one of casual employment or permanent employment, the matters that have been set out in the cases are matters that one can take into account – I beg your pardon, that one takes into account as part of an exercise. So it is not so much a matter of construction, but a matter of characterising whether the relationship, under the contract, or produced by the contract, is one of casual employment or one of permanent employment, or casual employment or other than casual employment.
KIEFEL CJ: But essentially that must involve what the nature of the promise on behalf of the employer is, which the employee has accepted. If the promise is indefinite continuing employment, that is the answer to the question, is it not? If the promise is work from time to time, and both parties can, on the part of the employer, not provide it and the employee does not have to undertake it, then you are not in the area of permanency. Is that a good starting point?
MR MURDOCH: We accept that.
KIEFEL CJ: Was there anything more to – I mean, there are going to be problems in particular contracts, but they will arise usually because of the ambiguity in the terms of the contract, not in some kind of overarching idea of whether the relationship is one of permanency or casualness, rather the terms of the contract as – does that accord with your approach?
MR MURDOCH: It does, but the point that we make is that in order to ascertain what side of the ledger, for want of a better word, the terms, the promises under the contract sit, one analyses what is provided under the contract by reference to these principles. You see, these principles do not change the contract, but they are the lens through which one considers the terms. And therefore if – and your Honour the Chief Justice and I may well be not at cross‑purposes, but ‑ ‑ ‑
KIEFEL CJ: Well, by what you say then, though, that one construes by reference to accepted terminologies, indicia set up by the case law, is that an approach to the construction of an ordinary contract which is different from that in any other commercial setting? I would just like to know whether or not, in the employment sphere, we are engaged in a different exercise than the courts would normally engage in, in reading a contract, because you would not usually, I do not think, have some criteria set down by which you assess what the parties have themselves promised each other.
MR MURDOCH: In my respectful submission, we are involved in a slightly different exercise and it is because – and I suppose I come back to where I started. In a case such as this, certainly there is a contract that has to be construed and considered but it is being construed and considered to see where that contract fits within the statutory rights and obligations that are provided.
So the question, the overarching question is in terms of this contractual relationship, is it one that is for the purposes of the Fair Work Act an agreement for casual employment, or an agreement for other than casual employment? So what we say is that because one is seeing or attempting to discern where the contract fits in terms of the statutory obligations, one construes the contract by reference to what has been accepted by cases such as Hamzy, cases such as Skene, is meant by the term “causal employment”
EDELMAN J: Mr Murdoch, I am not sure if it is me, but I do not understand that submission. Every contract, in almost every imaginable context, whether it be employment, fishing, maritime, skydiving, every contract is governed or regulated by a myriad of statutes that will affect the terms of the contract.
I am not sure it has ever been suggested before that the rules for interpretation of the contracts are different, of every type of contract is different, because of the particular statutes that affect that contract. The rules for interpretation remain the same, do they not? But one then, when you interpret the contract, you then ask whether that interpretation is consistent with the particular legislative regime.
MR MURDOCH: Your Honour has put it more eloquently that I ever could, that was in effect what I was trying to say. It is that one is searching to see whether this contract construed is a contract for casual employment or a contract for other than casual employment. These are the guiding principles that one is not using to construe the contract, but these are the guiding principles that one, when one construes the contract, is construing it to see if it is consistent with these principles. We do not suggest that one uses different constructional or interpretive approach, but rather the constructional approach is being undertaken to see whether properly this contract meets those tests.
KIEFEL CJ: When one looks at the relevant statutory framework and terms, and also the relevant industrial agreement, looking at the statutory terms, you would be – when you are looking at the contract as construed, whether or not it reflects aspects, or is consistent with aspects of the statute, you would be looking for indicia in the statute which help identify what is either permanent or casual, are you? Or are you just looking at what the courts have determined to be what is casual?
MR MURDOCH: It is primarily the latter.
KIEFEL CJ: I thought it might be, and that is an area for large discussion, I think, because what you are saying is that the statute is to be construed by reference to what the courts have determined the word “casual” to mean, and that must depend upon the statute as a whole and the particular provisions which might feed into that meaning. So, we cannot just take a court‑based definition of casualness as what the word generally might be understood to be, rather we would need to understand how the courts have come to their meaning of casualness by reference to indicia within the statute.
MR MURDOCH: Dealing with that in parts, the first point that we would make as to why it is appropriate to apply the court‑based definition of casual for the purposes of the Fair Work Act is firstly, the Fair Work Act, as is plain, does not – at the relevant time, did not contain a definition ‑ ‑ ‑
KIEFEL CJ: Yes.
MR MURDOCH: ‑ ‑ ‑ of the word “casual”, and the decision of the Full Court in Hamzy was made shortly before the Fair Work Act was enacted which, we say, is perhaps not the entire answer but is certainly, we would submit, a compelling point, that there had been a decision of a Full Court of a superior court as to what the guiding principles are in terms of identifying who is, or who is not, a casual.
KIEFEL CJ: That informed the statute.
MR MURDOCH: Indeed.
KIEFEL CJ: Which did not make a definition.
MR MURDOCH: That is so.
KIEFEL CJ: So, how did it inform the notion of “casualness” if a definition was taken from the case?
MR MURDOCH: Undefined, but the legislation was enacted shortly after the Full Court in Hamzy had provided a definition of what was described by it as being “the essence of casualness”. That definition was given for the purposes of the Workplace Relations Act which also did not define “casual”. So, we do not submit that it goes the entire way, but it is, we say, a relatively firm indicator that, for the purposes of the Fair Work Act, that is the definition that one ought to utilise. Of course, that was accepted by the Full Court below.
KEANE J: But Mr Walker and you are in furious agreement about this. Mr Walker cites Hamzy, at paragraph 38, and he says, that the question is, is there a commitment by the employer and the worker to ongoing employment? He says that is the question. Do you disagree with that?
MR MURDOCH: No, we do not.
KEANE J: He says, you find the answer to that question by looking at the contract.
MR MURDOCH: Yes.
KEANE J: You do not disagree with that? You tell us that it is a forward‑looking question – a forward‑looking test – which means, by which I take you to mean, that one can take the contract and looking forward from the contract, say, what proceeds from the performance of this contract is either casual employment or not.
MR MURDOCH: Yes.
KEANE J: So, we are answering the question by reading the contract without needing to know anything about how it has performed and what happens after it is over?
MR MURDOCH: On our first proposition, that is so. We also have the second proposition that we will come to in due course – that, as a matter of principle, in respect of determining for the purposes of the statute – whether a person is a casual or not, it is legitimate to look at post‑contractual conduct. But that is a separate and distinct proposition to the construction exercise.
KEANE J: We can accept that is a separate proposition but what I think we are trying to get to at the moment is an understanding of where you differ from Mr Walker in relation to these questions of approach.
MR MURDOCH: In respect of the first proposition, we differ in two respects. Firstly, and self‑evidently, in my submission, we differ in terms of how, in terms of this contract, the employment ought to be characterised.
KEANE J: That is the conclusion.
MR MURDOCH: Quite. But we also differ in terms of how one gets there, because, in our respectful submission, there is, in terms of the contract, ambiguity, and therefore one is entitled to, and one ought to look at the objective background circumstances that were applicable to assist in ‑ ‑ ‑
GORDON J: Can I just take you to your outline of oral argument.
MR MURDOCH: Yes.
GORDON J: In paragraph [5] you are approaching a question of characterisation of the contract.
MR MURDOCH: Yes.
GORDON J: That is consistent ‑ the conclusion you ‑ so the application of the principles are agreed, the application of the principles you differ from Mr Walker, and that is set out at [5](a) and (b).
MR MURDOCH: That is so, your Honour.
GORDON J: So that is the only difference there. That is, you have a different take on the way in which the contract should be construed.
MR MURDOCH: That is so.
GAGELER J: Just to be clear in my mind, Mr Walker says that taking Hamzy, the expression “firm advance commitment” as used in Hamzy, equals an enforceable promise, do you accept that?
MR MURDOCH: Yes.
GAGELER J: Thank you.
GORDON J: So I will just come back to Hamzy.
MR MURDOCH: I am sorry, your Honour.
GORDON J: That is all right. So that is the first ‑ as I understand your argument, the first way in which you put your case.
MR MURDOCH: That is so, your Honour, yes.
GORDON J: Where do we go from that? Is that the end of it? In other words, that is your primary argument?
MR MURDOCH: That is so, yes.
GORDON J: Right, as a question of construction.
MR MURDOCH: That is so.
STEWARD J: Do you set out the ambiguities in your written submissions, somewhere convenient?
MR MURDOCH: I will just check that.
STEWARD J: Yes, of course. You carry on in the meantime.
MR MURDOCH: I was going to come to the ambiguities in a little while, can I ‑ ‑ ‑
STEWARD J: Yes, of course.
MR MURDOCH: ‑ ‑ ‑ develop that when I come to that? Thank you. So, if we can move now to deal with the contractual construction issue, Justice White and Justice Wheelahan approached the matter from an acceptance that the existence or otherwise of the firm advance commitment was subject to the possibility of later variation, to be assessed at the time of commencement of the employment. Justice Bromberg took a similar approach, and his Honour’s reasoning was similar to that of Justice White.
We were primarily going to focus on Justice White’s analysis, because, as I have said, it was with Justice White that Justice Wheelahan agreed. Justice White’s analysis goes from paragraphs 530 to 620, however at paragraphs 513 to 529 his Honour set out the approach that he was to take to contractual construction and the parole evidence rule. And we say that analysis of those paragraphs reveals that his Honour approached the matter of construction in an orthodox way. If your Honours can note what his Honour said at paragraph 519. His Honour there referred to the approach:
which WorkPac urged on the Court –
and referred to:
The propositions stated by the plurality . . . in Mount Bruce –
et cetera. So we say, at the outset, his Honour applied orthodox principles to the construction exercise. Along that line, if your Honours could also note at paragraph 524, his Honour referred to the issue of ambiguity, and that where that arises:
Regard may also be had to the commercial purpose or objects –
et cetera. And at paragraph 526 his Honour noted:
At the very least in the present case there is uncertainty about the nature of the commitment to the future employment in each contract which makes it appropriate to have regard to the factual matrix in which each contract was made. Both parties made reference to aspects of the factual matrix.
Then from paragraph 530 to 620, his Honour considered each of the employment contracts seriatim and concluded, as is evident, that Mr Rossato was engaged other than as a casual. Dealing with the first contract, the summary of his Honour’s reasoning is contained in paragraph 588 and his Honour there set out the matters that indicated – or that his Honour considered indicated that the postulated firm advance commitment was evident in respect of Mr Rossato’s employment pursuant to the first contract. His Honour referred in paragraph 588 to a range of clauses within the terms and conditions which he considered:
suggested a well organised and stable structure of work according to a known pattern conveying a firm advance commitment of the postulated kind.
Now, my learned friend has taken your Honours to many, if not all, of the matters that Justice White referred to, but if I could just take you back please to the terms and conditions document from page 132 of the book of further materials.
The first point that his Honour made was that by agreeing to clause 5.4 of the terms and conditions, Mr Rossato gave WorkPac a commitment that was a firm advance commitment and of course clause 5.4 states:
The employee agrees to complete an assignment once the employee has accepted it.
Granted, it goes on to say:
Should the employee elect not to complete the assignment for whatever reason, WorkPac reserves the right to recover any costs incurred relating to the employee’s assignment.
Granted, clause 5.6 states:
WorkPac or the client may vary the assignment period –
and granted that clause 5.12 refers to:
A casual assignment with WorkPac may be terminated at any time by the giving of one (1) hours notice.
However, whilst there is the capacity under clause 5.6 to “vary the assignment” on the part of WorkPac, and whilst there is the capacity to terminate the assignment under clause 5.12, the overarching and we say primary provision, and that which is agreed, is the employee agrees to complete an assignment once the employee has accepted it.
KIEFEL CJ: And is liable for damages for breach of it?
MR MURDOCH: That is so.
KIEFEL CJ: It is not something that would always be argued for the employee in relation to the interpretation of such a term, but you say that that is what this means.
MR MURDOCH: It is indicative.
KIEFEL CJ: Is one resolution of 5.4 with 5.12 that 5.4 is intended to refer to maximum term employees which I think was put in argument by Mr Walker, at least implicitly?
MR MURDOCH: Well, we say that it, we say that it can be. It could be looked at in that way, but the difficulty is that 5.4 itself does not seek to limit it in that way.
EDELMAN J: But would damages - assuming there were damages for breach of clause 5.4, could they ever exceed 59 minutes of failure to give notice? In other words, why would not the employee, confronted with a claim for damages, simply say, well, I had a right to terminate with an hour’s notice?
MR MURDOCH: Well, the difficulty we say with that - the ultimate difficulty with that analysis is that the second sentence:
Should the employee elect to not complete the assignment for whatever reason –
accepting, on your Honour’s question, that the employee can herald or signify that election by 5.12:
WorkPac reserves the right to recover any costs incurred relating to the employee’s assignment.
GORDON J: Mr Walker put it to us that may be costs incurred, for example, for arranging for his movement there or ‑ ‑ ‑
MR MURDOCH: Well - I am sorry, your Honour.
GORDON J: I am just asking whether or not you accept the construction put by Mr Walker.
MR MURDOCH: We accept that it could include such things, but we do not necessarily accept that it would be limited to such things.
EDELMAN J: Well, it might not for a maximum term employee, but why would it not for a casual employee?
MR MURDOCH: Well, the employee has agreed to complete an assignment. The assignment, as one sees here, is a six‑month assignment.
STEWARD J: Mr Murdoch, we are looking for a firm commitment from the employer, are we not, in the contract, not one from the employee? If that is so, what is one to do with clause 5.5?
MR MURDOCH: Well, clause 5.5, your Honour, deals with the situation on the “completion of an assignment”, as opposed to what one makes of the employment whilst an assignment is on foot.
STEWARD J: But where are we to find clauses showing commitment, firm commitment going forward from WorkPac? I have seen the ones that Justice White refers to in 588.
MR MURDOCH: Yes.
STEWARD J: Are there more express ones, or is it simply one to be implied or inferred, or what?
MR MURDOCH: In terms of the terms and conditions document, the ones that have been referred to by Justice White are the principal ones.
STEWARD J: All right.
GORDON J: Could I ask a different question about clause 5.4, upon which you of course place considerable emphasis. How does it assist at all with the duration in terms of his employment by reference to this firm advance commitment? It says nothing about that, does it?
MR MURDOCH: It assists with duration, in that the employee agrees to complete the assignment once it has been accepted. So, it assists with duration in that sense.
GORDON J: But it does not assist in terms of a firm advance commitment as to the duration of his employment for six months because we have the power to vary and terminate on one hour’s notice by WorkPac, as well as the ability of your client to do so, subject to the matters that the Chief Justice put to you. But if we deal just with the first aspect, it does not help at all, does it?
MR MURDOCH: In our submission, it does assist because 5.4 provides for the default position, as it were, in terms of:
The employee agrees to complete an assignment once the employee has accepted it.
That is what is to occur and that is what will occur unless a second step is taken, such as under 5.12 of ‑ ‑ ‑
EDELMAN J: How is the situation different? Apart from perhaps providing more flexibility, how is it different from the relief teacher who agrees to complete a two‑month assignment for a fixed period of time and, presumably, would also be liable, in the same way, if the relief teacher walked off halfway through the assignment but without the flexibility of the ability of giving one hour’s notice?
MR MURDOCH: This document – I need to note – is not the entire agreement. This document here provides the overarching, or umbrella terms. One has to read this document with each of the notices that are subsequently given.
EDELMAN J: But the notices just introduce more flexibility not less, do they not? What is it that is more rigid or more of an advanced commitment that comes out of either the notices or general terms than the relief teacher that you started with?
MR MURDOCH: Well, just by way of example, in terms of – I was going to come to each of the notices in due course, but your Honours asked the question so I will deal with it now. If one goes to the first one, that is at page 232. In addition to the terms and conditions of employment there is the length of assignment - “6 Months”:
(This may vary and is a guide -
only. Now, what we say in respect of that is that not only is there a reference to the length being six months but there is also the reference to that it may vary and is a guide only. So, it is, we would say, at least potentially six months and unless brought to an end earlier one can infer it is to be ongoing ‑ ‑ ‑
KIEFEL CJ: You are construing it in the way that his Honour did which is to read this as an implicit raising of expectations that there might be more, because you could not say it was a promise of further work beyond the six months. At most, on his Honours view, it would be raising some expectations, perhaps. Would you agree with that?
MR MURDOCH: Well, we would say it goes further than that because rather than drawing a bright line as to a finishing point, it provides for a period which may vary as a guide only, which we say feeds back into the concept of something which is ongoing ‑ ‑ ‑
KIEFEL CJ: It could also mean less. A guide could mean more or less.
MR MURDOCH: Then, one comes back to 5.4, the employee has agreed to complete it.
KIEFEL CJ: Could I just ask you to refresh my memory?
MR MURDOCH: Yes, your Honour.
KIEFEL CJ: What is a maximum term employee? Is that someone who is promised to complete a definite term of employment?
MR MURDOCH: Bear with me, your Honour. That is defined ‑ ‑ ‑
KIEFEL CJ: Is it? That is helpful.
MR MURDOCH: I am just going to turn up – I believe, your Honour – just bear with me whilst I check. Your Honour, I had a recollection that that was defined somewhere but can I check that overnight?
KIEFEL CJ: Do not let me hold you up now – perhaps tomorrow morning if you could let me know, that would be helpful, thank you.
MR MURDOCH: Yes. So, we would point to clause 5.4. As I have just taken in response to Justice Edelman’s - taken the Court to in response to Justice Edelman’s question, the first NOCE and the length of six months. We would also rely upon the other matters that are listed in paragraph 588.
Now, we have dealt with clause 5.4. We have made the submission that the reference to a six‑month length is something that we say heralds an indefinite duration. The other point that we would just note that were referred to by Justice White is that 5.11, which refers to:
a 6 month minimum qualifying period -
the need for a qualifying period, that brings up concepts of probation and the like. That is not something that would be applicable to a person who was to be employed on an irregular or as required basis, because the qualifying period would have no work. Clause 7.14 provides for “stand down” requirements. In terms of a person who was a casual employee employed on an irregular basis, et cetera, there would be no need for stand‑down provisions. Then if one goes back to clause 7.4:
The employee will be required to work shifts and or rosters as prescribed –
or any agreed:
replacement shifts or rosters –
The fact that there is that prescription there that the employee is required to work shifts or rosters as prescribed in the notice of offer, again we say counts against the concept of irregularity on Mr Rossato or an employee employed under these terms and conditions being able to decline work as he or she may please. Clause 6.15 ‑ ‑ ‑
STEWARD J: Just going back to clause 7.4, I am sorry to trouble you ‑ ‑ ‑
MR MURDOCH: Not at all.
STEWARD J: ‑ ‑ ‑ but again, how is that evidence of the employer, WorkPac, offering a firm commitment? It is an obligation on the employee.
MR MURDOCH: Well, it is an obligation on the employee to work the shifts or rosters that are prescribed in the notice of offer of employment, so
the employee, under the terms and conditions of employment, is obliged to perform that work.
EDELMAN J: Do you say that there were shifts or rosters prescribed in the notice of offer of employment?
MR MURDOCH: What we say, at least in respect of the first and second notices of employment, is that as part of the offer there was also provided with the offer long‑term rosters in that the way in which this process worked was that in respect of both the first and the second notices of offer the employee was sent an email which attached the notice but also referred to in the email and attached to the email were rosters, long‑term rosters that we say were applicable to the employment.
So, the NOCE did not in terms prescribe a roster but the employment was offered and, we say, accepted on starting of employment by the employee on the basis that the employee would be working on long‑term rosters.
EDELMAN J: So, the roster becomes part of the contract or the suite of contractual documents ‑ ‑ ‑
MR MURDOCH: That is our contention.
EDELMAN J: ‑ ‑ ‑ by being incorporated by 7.4?
MR MURDOCH: Either incorporated by 7.4 or being part of the suite of documents that was contained in the package, as it were, that was offered to the employee via the email.
KIEFEL CJ: That might be a convenient time to adjourn, Mr Murdoch. The Court will adjourn to 9.30 am tomorrow for pronouncement of orders and otherwise to 10.00 am.
AT 4.16 PM THE MATTER WAS ADJOURNED
UNTIL THURSDAY, 13 MAY 2021
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