McGowan v Abc [2001] NSWIRComm 49 (30 March 2001)

Last Updated: 9 May 2001

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : McGowan v ABC [2001] NSWIRComm 49

FILE NUMBER(S): IRC3842

HEARING DATE(S): 13/11/2000

DECISION DATE: 30/03/2001

PARTIES:

APPLICANT/RESPONDENT ON THE MOTION

Hugh McGowan

RESPONDENT/APPLICANT ON THE MOTION

Australian Broadcasting Corporation

JUDGMENT OF: Peterson J

LEGAL REPRESENTATIVES

APPLICANT/RESPONDENT ON THE MOTION

Mr A R Moses of counsel

SOLICITOR

Toomey Pegg Drevikovsky

SYDNEY.

RESPONDENT/APPLICANT ON THE MOTION

Mr H J Dixon SC

SOLICITOR

Blake Dawson Waldron

SYDNEY

CASES CITED: Nagle v Tilburg (1993) 51 IR 8

Stevenson v Barham (1976-77) 136 CLR 190 at 201

Metrocall Inc v Electronic Tracking Systems Pty Limited [2000] NSWIRComm 136, 31 August 2000

Younan-Sedrak v State of New South Wales (Department of Public Works and Services) (Unreported, Hungerford J, 19 August 1999)

Hudson v Qantas Airways Limited (1985) 10 IR 331

Victoria v the Commonwealth (1937) 58 CLR 618

The Employment Protection Case (1983) 4 IR 284 at 293

Dawson v Telstra Corporation Limited (Unreported, 29 May 1998 - IRC96/5521)

Australian Broadcasting Commission v The Industrial Court of South Australia and Anor (1977-78) 138 CLR 399

Reich v Client Server Professionals of Australia Pty Ltd (Administrator Appointed) (2000) 99 IR 69

LEGISLATION CITED: Industrial Relations Act 1996

Australian Broadcasting Corporation Act 1983 (Cth)

Workplace Relations Act 1996 (Cth)

Judiciary Act 1903 (Cth)

International Arbitration Act 1974 (Cth)

Broadcasting and Television Act 1942 (Cth)

Telecommunications Corporation Act 1989 (Cth)

Australian Telecommunications Corporation Act 1989 (Cth)

JUDGMENT:

- 1 -

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

IN COURT SESSION

CORAM: PETERSON J

DATE: 30 MARCH 2001

Matter No. IRC3842 of 2000

HUGH McGOWAN AND AUSTRALIAN BROADCASTING CORPORATION

Application under s106 of the Industrial Relations Act 1996.

INTERLOCUTORY JUDGMENT

1    Hugh McGowan has commenced proceedings under s106 of the Industrial Relations Act 1996 against his former employer, the Australian Broadcasting Corporation ("the ABC"). The summons for relief claims:

1. A declaration that the contract of employment whereby Mr. McGowan worked as Network Programmer in the television broadcasting industry:

(a) was unfair;

(b) was harsh and unconscionable; and/or

(c) was against the public interest.

2. An order that the contract of employment whereby Mr. McGowan worked as Network Programmer be varied from its commencement or a later time to include the terms and conditions set out in Schedule A and to delete any and all terms and conditions inconsistent therewith.

3. A declaration that the ABC repudiated the Mr. McGowan's contract of employment as Network Programmer.

4. A declaration that Mr. McGowan brought the contract of employment whereby he worked as Network Programmer to an end in consequence of such repudiation with effect from 26 May 2000.

5. An order that the ABC compensates Mr. McGowan for the loss of opportunity which he has suffered as a result of the ABC's failure to allow him to work in the position of Director of Television contrary to the contract of employment which was entered into between the parties on or about 12 April 2000.

6. An order that the ABC pay to Mr. McGowan an amount by way of compensation which the Commission in Court Session considers just in the circumstances in the case including:

(a) the amount of $296,960.00 being in compensation for the loss of 24 months salary in lieu of notice;

(b) in the alternative to (a), an amount representing the balance of the term of the contract of employment as Network Programmer had it not been repudiated by the ABC;

(c) the amount of $24,746.66 being in compensation for the loss of the payment of annual leave for the notice period;

(d) the amount of $23,756.80 being in compensation for superannuation for the notice period;

(e) an amount by way of compensation for the loss of opportunity suffered by Mr. McGowan when the ABC repudiated his employment contract as Director of Television. The amount of compensation will be quantified upon discovery being provided by the ABC of its documents concerning the position of Director of Television; and

(f) an amount by way of compensation for the disappointment, distress, frustration, humiliation and upset Mr. McGowan has suffered as a result of the ABC's conduct.

7. An order that the ABC otherwise pay Mr. McGowan such amount of compensation as the Commission in Court Session deems just in the circumstances of the case.

8. Interest and costs.

2    Schedule A to the summons, the provisions to be inserted into the contract of employment is as follows:

1. The employer will act in a manner which is consistent with its implied duty of trust and confidence.

2. The employer will not conduct itself in a manner which is designed to or has the effect of undermining the employee's position and/or putting the employee in an untenable position as to his continued employment with the employer.

3. The employer will not make any offers of alternative employment without disclosing all matters which may affect the employee's decision to accept such employment.

4. The employer will not request the employee to undertake any psychological examination as a precondition to employment without:

(a) there being a real connection between the skills and aptitudes required for the position and the ability of the test to identify such skills and aptitudes;

(b) providing adequate notice of the examination to the employee;

(c) explaining to the employee the consequences of the results of the examination and of all components of the examination;

(d) providing guidelines to the employee in respect of the function and nature of the examination;

(e) provide a copy of the examination results to the employee;

(f) providing an opportunity to the employee to re-sit the examination or have the examination remarked; and

(g) providing an opportunity to the employee to make submissions in respect of the relevance of the examination and/or results for the purposes of the position to be taken up.

5. The employer will not act in any way to embarrass the employee or cause hurt, humiliation or distress.

6. That the employee's employment will incorporate such practice and procedures as are required to ensure that procedural fairness is at all times provided to the employee in respect of the following:

(i) any changes to the contract of employment;

(ii) any changes to the employee's role, responsibilities, duties, functions or areas of responsibility;

(iii) any changes to the employee's status;

(iv) any review of the employee's performance; and

(v) any review of the employee's salary package and/or remuneration.

7. That there shall be no change in the role, duties, responsibilities, functions or areas of responsibility of the employee without prior written notice and without the employee being provided with a reasonable opportunity to address any matters concerning such alteration of such duties, after having been provided with all relevant information to consider the changes proposed.

8. That on termination of the employee's employment as a result of any repudiation by the employer, the employer shall pay to the employee a lump sum representing reasonable compensation for the repudiatory conduct and termination of employment.

9. That the exercise of any discretion permitted to the employer under the employment contract or otherwise will be exercised towards the employee in a manner that is at all times fair, just and conscionable, and in this regard the employer will afford to the employee natural justice and procedural fairness.

10. That the employer will not make a decision to terminate the employment of the employee from any position, including the Director of Television without:

(i) identifying in writing to the employee each and every issue being considered in deliberations over the employee's continued employment together with the practical matters upon which each issue is based;

(ii) allowing the employee 14 days to consider the issues and facts; and

(iii) allowing the employee to meet the employer to question the employer on the issues and fact and to deliver his response.

3    The ABC has, by motion, sought orders that the summons be struck out with costs on the following grounds and reasons:

1. The Commission is without jurisdiction to grant the relief claimed by Mr. McGowan in his Summons for Relief pursuant to section 106 of the Industrial Relations Act 1996 (NSW), such jurisdiction being excluded by operation of section 109 of the Constitution.

2. Each of the orders sought by Mr. McGowan in his Summons for Relief requires of the Commission the exercise of powers under a State law inconsistent and/or in conflict with and/or which impair or detract from the operation of the rights and obligations contained in section 32 of the Australian Broadcasting Corporation Act 1983 (Cth - "the ABC Act").

3. Alternatively, upon a proper interpretation, the provisions of Chapter 2 Part 6 of the Industrial Relations Act 1996 (NSW) do not, and were not intended by the New South Wales Parliament to, extend to employees whose terms and conditions of employment are governed by an award or certified agreement of the Australian Industrial Relations Commission made pursuant to the Workplace Relations Act 1996 (or its predecessor).

4    This judgment determines the issues raised on the hearing of the motion. Notices pursuant to s78B of the Judiciary Act 1903 (Cth) were sent by the solicitors for the ABC to the Attorneys General of the Commonwealth, States and Territories. All expressed an intention not to intervene in these proceedings.

5    Before dealing with the ABC's points going to jurisdiction it is convenient to rule upon the submission made on behalf of Mr McGowan that the determination of the motion at this stage is premature. The submission included the proposition that the summons, being of the new style required by the Commission's rules, does not depend upon or involve the filing of substantial evidence. In substance Mr. McGowan has not put on its evidence. The court is therefore without the benefit of Mr. McGowan's evidence which, it was submitted in effect, exacerbates the difficulties in the Commission attempting to deal with a matter of this kind at such an early stage.

6    The ABC's submissions on this point were that any evidence to be introduced on the substantive application will not assist Mr. McGowan to bring the claim within jurisdiction given the nature of the preliminary objections which are taken, the substance of which is that the jurisdiction of the Commission is limited as a result of an inconsistency of laws point.

7    I apprehend that the new style of pleading which has been adopted by this court has not been designed to produce a deficiency of factual material at an early stage in the proceedings and in particular for conciliation. The summons for relief is required to set out a summary of matters of fact and law which is required to be verified by affidavit. That approach is designed to provide the respondent with information adequate to permit it to make a reply and to facilitate the matter proceeding to conciliation without incurring the traditional expense of the preparation of evidentiary material which, so often, is unnecessary at the conciliation stage. My experience with conciliations undertaken in respect of matters commenced under the new procedure has been that the absence of evidentiary material does not operate, in the general run of case, to limit the prospects of settlement. On the contrary, the absence of expenditure of considerable legal costs in the preparation of formal evidence is conducive to settlement rather than, again as it often has been in the past, a hindrance. Similarly, I do not consider that the new procedure has any automatic effect upon the ability of the court to deal with a motion brought to dismiss a matter at an early stage on jurisdictional grounds. That issue was dealt with by the Full Court of the Industrial Court of New South Wales in Nagle v Tilburg (1993) 51 IR 8. In that matter the principle applied, which obviously applies in the present circumstances, is that timing of the resolution of the jurisdictional issue will be a matter to be determined in the circumstances of the case. That judgment is sometimes referred to by counsel as authority for the proposition that points of this kind should only br dealt with in the light of all of the evidence; this was not the principle there adopted. Reference was there made to the judgment of Mason and Jacobs JJ (with whom Barwick CJ and Stephen J agreed) in Stevenson v Barham (1976-7) 136 CLR 190 at 201:

"We have been told that the Commission follows the practice of permitting questions of jurisdiction to be argued without requiring a party to elect not to call evidence. There is much to commend this approach. As a general rule it is desirable that an objection to jurisdiction be determined as early as circumstances will conveniently admit so that the tribunal does not embark on a hearing which it lacks authority to conduct.

. . . The discretion of a court to determine a case at an early stage, when appropriate, has been repeatedly asserted (see Young v Rank [1950] 2 KB 510; Ramsden v Ramsden [1954] 2 All ER 623 at 624; Union Bank of Australia Limited v Puddy [1949] VLR 242; Sampson v Edwards [1949] VLR 6)."

After referring to another judgment the Full Industrial Court said (at p.11):

We would draw from those authorities the proposition that whilst it is desirable for a case to be determined at an early stage it is only open to do so at the appropriate stage of the proceedings, that is, where the facts, either established by evidence or plainly agreed in terms, enable the Court to determine what the contract or arrangement is or, at least, the parameters of the contract or arrangement. In other words, it seems to us, unless the facts are sufficiently established to enable the Court to be satisfied it has the necessary material to reach a clear and final decision on the question then the appropriate stage has not been reached for such a determination to be made.

8    Mr Moses referred me to the decision of the Full Bench in Metrocall Inc v Electronic Tracking Systems Pty Limited [2000] NSWIRComm 136, 31 August 2000. In that matter the objection to jurisdiction depended upon a claimed inconsistency between the provisions of s.106 of the Act and the provisions of the International Arbitration Act 1974 (Cth), which inconsistency, it was argued, had the effect by virtue of s.109 of the Australian Constitution that the Commission had no jurisdiction to hear the matter. At first instance, Schmidt J dismissed the motion, and on appeal, consistently with her Honour's views, the Full Bench dismissed the appeal from the primary judgment.

9    As the Full Bench observed (par. 6), the International Arbitration Act seeks to enforce certain agreements under which the parties undertake to submit to arbitration all or any differences which have arisen between them in respect of a defined legal relationship. The parties to the proceedings were also parties to such an agreement which provided by clause, 13.8, Arbitration, that any controversy or claim arising out of or relating to the Agreement or the breach thereof, shall be settled by arbitration in the State of Texas, in the United States of America. It was expressly agreed by the parties that the governing law was that of Texas and that cl.13.8 was an "arbitration agreement" as described in s.3 of the International Arbitration Act.

10    Section 7, Enforcement of Foreign Arbitration Agreements, subs.(2) provided that:

(2) Subject to this Part, where:

(a) proceedings instituted by a party to an arbitration agreement to which this section applies against another party to the agreement are pending in a court; and

(b) the proceedings involve the determination of a matter that, in pursuance of the agreement, is capable of settlement by arbitration;

on the application of a party to the agreement, the court shall, by order, upon such conditions (if any) as it thinks fit, stay the proceedings or so much of the proceedings as involves the determination of that matter, as the case may be, and refer the parties to arbitration in respect of that matter.

11    The Full Bench discussed the ways in which inconsistency between state and federal laws has been recognised at paragraphs 38 to 41 of the judgment; I refer to that discussion but it need not be repeated here. For completeness I mention that the Full Bench, again as did her Honour, came to the view that the matter raised issues which were not "capable of settlement by arbitration" and so no constitutional inconsistency arose. However, I set out the observations of the Full Bench under the heading "Conciliation under s.109". There the Full Bench said this:

The judgment of Schmidt J concluded with these observations:

To my mind of further relevance to these questions are the requirements of s109 of the Act, which provides:

(1) The Commission must endeavour, by all means it considers proper and necessary, to settle a matter under this Division by conciliation.

(2) When, in the opinion of the Commission, all reasonable attempts to settle the matter by conciliation have been made but have been unsuccessful, the Commission is to determine the matter in accordance with this Act.

(3) Nothing in this section prevents further conciliation from being attempted at any time before the Commission makes such an order.

(4) Any member of the Commission (whether or not a judicial member) may undertake the conciliation of a matter under this Division.

Savage v Digital Equipment Corporation (Australia) Pty Ltd, (Unreported, Glynn, Hungerford and Schmidt JJ, 17 May 1999), is the latest authority in a series in which the s106 jurisdiction has been considered by Full Benches of the Court. In Chrysler Jeep Automotive Distributors Australia Pty Limited v Canberra Star Motors Pty Limited (1997) 79 IR 452 the view was taken that the agreement of the parties, in relation to choice of law, cannot either confer or deprive the Commission of jurisdiction under the section. This approach was followed Xcellenet and later in Savage.

A similar conclusion, by way of analogy, must result in respect of the parties' agreement as to arbitration, in so far as the provisions of s109 of the Act are concerned. The obligation falling upon the Commission under s109 of the Act, in respect of a claim brought under s106, to `endeavour, by all means it considers proper and necessary', to settle the matter by conciliation, is one which in my view parties may not by their agreement confer upon an arbitrator, so as to remove this statutory obligation from the Commission.

Further, it is also of relevance that it is only if that conciliation exercise fails, that the matter may proceed to determination by the Court (s109(3)). Such conciliations may be conducted by any member of the Commission, whether or not a judicial member of the Commission in Court Session (s109(4)). No stay was sought in respect of that obligation and in my view, the question of a stay of the proceedings before the Court could not, in any event, arise until after the Commission had itself complied with the statutory obligation to conciliate under s109. If the matter was settled in the conciliation proceedings, there would after all be no `matter for determination' in the proceedings before the Court, to use the words of s7 of the International Arbitration Act, which could be the subject of any stay and reference to an arbitrator.

We consider that these observations are correct: cf Younan-Sedrak v State of New South Wales (Department of Public Works and Services) (Unreported, Hungerford J, 19 August 1999).

12    The failure of the objection to jurisdiction based upon the incapability of the issues to be settled by arbitration meant that there was no constitutional barrier to the Commission exercising its jurisdiction. But, as Schmidt J's observations made clear, a stay of the proceedings could not operate or arise until after the statutory obligation to conciliate had been complied with. Put another way, the nature of the conflict between the federal and state law was confined, if it arose at all, by virtue of the terms of the International Arbitration Act to a later stage in proceedings which were otherwise before this Court.

13    I refer also to the concluding words of the Full Bench which expressed the view that Schmidt J's observations were correct and compared them with the judgment of Hungerford J in Younan-Sedrak v State of New South Wales (Department of Public Works and Services) (Unreported, Hungerford J, 19 August 1999). That decision was an extempore judgment given in s.106 proceedings where the motion filed by the respondent sought orders that certain aspects of the summons be struck out, the grounds of which included that the claims related generally to anti-discrimination matters. After referring to s.109 his Honour said:

Having in mind those sub-sections, and as the heading of the section makes clear, it is my view that before a matter is determined the process of conciliation must first be attempted to the point where it may reasonably be said it has been unsuccessful. If it were otherwise, then, it seems to me to be clear, the whole statutory purpose and intent of s.109 would be lost.

The point may be illustrated in this way: if the present Motion were argued successfully then the claims to which it was directed would be determined by being effectively dismissed, and that would occur without there first being attention to conciliation as required by the section. I emphasize, in expressing this view, that at this point of time the claims are properly before the Court and there has been no determination one way or the other as to whether they are within or outside jurisdiction. As such, being before a superior court of record, they properly stand for consideration with no assumption they are beyond power so as to remove them, but as the respondent suggested was the case, from the scope of the requirement for conciliation before determination.

Against conciliation being attempted prior to the Notice of Motion being heard, a large part of the opposition was based upon the proposition that conciliation would require additional expense being incurred by the parties in preparing for it, expense which otherwise may not be necessary. I disagree. The whole purpose of conciliation, in my view, is an alternative cost effective and efficient way in which parties may have their dispute dealt with; indeed, so much is clear from the terms of s.109 which require conciliation to be attempted first.

. . .

For the reasons given, I am of the view that it is appropriate, indeed it is a requirement of s.109, for the whole of this matter to proceed to conciliation first in order to see if it may be resolved.

14    It may be seen that the facts in Younan-Sedrak were very different to those arising in the Metrocall case before Schmidt J. The objection to jurisdiction in the former case was confined to only parts of the matter and it followed that conciliation was necessarily to occur in relation to those matters to which objection was not taken. In those circumstances, there is no lack of logic in the proposition that the matter should first proceed to conciliation. I do not understand Hungerford J to have been expressing, nor indeed the Full Bench to have adopted, the view that s.109 imposes a duty to conciliate all matters which come before the Commission purporting to be matters raised under the unfair contract provisions of the Act. It would, in my view, be quite illogical to construe s.109 as though it were intended to operate in relation to all matters whether they are within the Commission's jurisdiction or outside it. The phrase "settle a matter under this Division" in s.109(3) must be taken to refer to claims properly arising under the Division. While, as Hungerford J said in Younan-Sedrak, matters are not to be assumed to be beyond power, once a jurisdictional objection is taken there is equally no warrant to assume power in the face of the objection. Another well-recognised principle then operates: a court has an duty, particularly where an issue is raised, to satisfy itself that its proceedings do involve a proper exercise of jurisdiction. This is not to preclude the possibility that conciliation may be accepted, even in the presence of a jurisdiction point, to be the most efficient and least expensive way to resolve a claim, whether within or without power. However, there can be no proper purpose in the Court seeking to bring to settlement parties who are not properly before it. It goes without saying that a respondent who objects on a strong basis to the jurisdiction of the Commission to deal with a claim brought under s106 is likely to be an unwilling party to conciliation and obviously is under no obligation to conciliate as an act of generosity.

15    Therefore, I conclude that s.109 does not compel conciliation of a matter which is contended to be beyond the Commission's jurisdiction. This means that whether a matter goes to conciliation or not first will be a matter for the Court at first instance to determine in the exercise of its judicial discretion, on the facts of the particular case.

16    That course will not visit upon applicants under s.106 a necessarily unfair procedural regime. If the objection to jurisdiction is taken first and found to be without substance, the matter will proceed to conciliation with the applicant in the substantive proceedings presumably having the benefit of an order for costs of the motion. If, on the other hand, the objection to jurisdiction is valid and complete, then it is in the interests of justice that finality be attained at the earliest opportunity.

17    I propose to treat the question of the suitability of the timing not as an obstacle to the hearing of the motion as a threshold question but as an issue of substance in the motion itself. In so doing, I am satisfied the Court has before it sufficient by way of evidence to permit the determination of the motion at this stage.

18    The evidence before the Commission consists of three affidavits by Helen McKenzie, a solicitor, acting on behalf of the ABC, three of which annexe material relevant to the relationship between Mr. McGowan and the ABC; the nature of the ABC, being a statutory corporation constituted under the ABC Act; a copy of an agreement certified by the Australian Industrial Relations Commission under s.170MC of the Workplace Relations Act 1996 (Cth) (known as the ABC's Senior Executives (Point 5-19) Agreement) which the ABC contends applied to Mr. McGowan; and a copy of a determination made pursuant to ss.32(2) and 10(3) of the ABC Act.

19    In addition, the material filed on behalf of Mr. McGowan is, in the usual way, to be treated as evidence to be taken at its highest in Mr. McGowan's interest. The following facts are taken thus from the summons of facts and law in the summons for relief.

The Facts

20    Mr McGowan was first employed by the ABC on or about 6 September 1995, in the position of Network Programmer. His duties included responsibility for the purchase of television shows from suppliers for presentation on the network, although all acquisitions were approved by either a person with authority to do so or the Contract Review Committee or the Board of the ABC.

21    In about February 2000 Mr McGowan became ill and although under medical care the cause of his illness was not diagnosed until early May 2000 when he was discovered to have shingles. The condition had caused him to suffer significant, continuing and consistent pain.

22    On or about 17 March 2000 Mr Jonathon Shier was appointed Managing Director of the ABC. At an 8.30am meeting on or about Tuesday, 11 April 2000 Mr Shier offered the position of Director of Television to Mr McGowan, who was given 48 hours to consider the offer. This was a new position in the Reviewed Management Structure of the ABC.

23    Mr McGowan telephoned Mr Shier within 24 hours and accepted the position. He was then informed that he would be required to take a psychologist's analyst's test. Mr McGowan was not informed that his appointment to the position of Director of Television was conditional upon satisfactory performance in the test or any part of it.

24    On 20 April 2000 Mr McGowan undertook the test, one segment of which was mathematically oriented. It appears that he failed the mathematical component of the test and, on Friday, 28 April 2000 Mr Shier informed Mr McGowan that he did not have the position of Director of Television because of that failure.

25    The test undertaken by Mr McGowan bore no resemblance to the skills and abilities utilised by Mr McGowan in the performance of his duties or those required, in Mr McGowan's experience, in the broadcasting industry generally.

26    During Mr McGowan's employment and before February 2000, recommendations were made within the ABC that, when negotiating the purchase of product for the network, Mr McGowan ought to be accompanied by another employee of the ABC. This, in particular, included Mr McGowan's attendance at the Cannes Television Markets. These initiatives and recommendations were strongly opposed by Mr McGowan who was of the view that the recommendations questioned his level of integrity, honesty and independence.

27    On 28 April 2000 Mr McGowan was also informed by Mr Shier that he would be accompanied by another employee of the ABC during his negotiations for product including his attendance at the Cannes TV Markets MIP & MIPCOM. The reason advanced was to avoid corruption or the appearance of it.

28    The new duties purportedly given to Mr McGowan amounted to a substantial variation of duties made without consultation and without consent. Mr McGowan did not accept the ABC's attempt to unilaterally vary his duties.

29    On Friday, 28 April 2000 Mr McGowan telephoned Mr Shier and resigned from his position as Network Programmer giving four weeks' notice. At this time he was deeply shocked and upset at the treatment he had received at the hands of Mr Shier including the aspersion cast upon his character, honesty and integrity.

30    Mr McGowan contends that his resignation was in consequence of the ABC's repudiatory conduct, such that the resignation was, in law, a constructive dismissal.

The ABC

31    The Australian Broadcasting Corporation is a body corporate in existence by virtue of s.30 of the Broadcasting and Television Act 1942 and continued in existence by s.5 of the ABC Act.

32    Section 6 of the ABC Act provides for its charter which describes its functions and duties in wide terms. The general powers of the ABC are set out in s.5 of the ABC Act. Provision is also made in the Act for the establishment of a Board and the description of its duties and powers (ss.7 and 8) and the appointment of a Managing Director (s.9). The duties of the position are set out in s.10 which provides as follows:

10 Duties of the Managing Director

(1) The affairs of the Corporation shall, subject to subsection (2), be managed by the Managing Director.

(2) The Managing Director shall, in managing any of the affairs of the Corporation and in exercising any powers conferred on him or her by this Act, act in accordance with any policies determined, and any directions given to him or her, by the Board.

(3) All acts and things done in the name of, or on behalf of, the Corporation by the Managing Director shall be taken to have been done by the Corporation.

33    Part V, Employees, of the ABC Act provides by cl.32, Staff of Corporation:

(1) The Corporation may engage such employees as are necessary for the performance of its functions and exercise of its powers.

(2) The terms and conditions of employment shall be determined by the Corporation.

34    The reference in s.32 to terms and conditions of employment being "determined" by the ABC is significant for present purposes. The evidence advanced on behalf of the ABC included the terms of a document recognisable as a formal determination. Its terms were as follows:

I, David Hill, Managing Director of the Australian Broadcasting Corporation, hereby make the following determination on behalf of the Corporation pursuant to sub-sections 32(2) and 10(3) of the Australian Broadcasting Corporation Act 1983 ("the ABC Act"):

All Staff Rules, General Orders, Managing Director's determinations and other terms and conditions of employment made under the sections of the Act repealed by the commencement of section 8 of the Broadcasting Legislation Amendment Act 1988, and in force immediately before the date of commencement shall continue in force for the purposes of Part V of the ABC Act as if they had been made under sub-section 32(2) of Part V of the ABC Act.

35    It will be noted that the preamble to that determination refers to the statutory foundations in ss.32(2) and 10(3) of the ABC Act.

36    I mention that s.33 requires the ABC to "endeavour to achieve and maintain high standards as an employer in relation to terms and conditions of employment . . .". Although this section was referred to in argument it does appear to me to have only limited effect for present purposes.

37    It was also suggested in the ABC's submissions that an industrial instrument constituting a determination of the kind empowered by s.32 was the ABC Senior Executives (Point 5-19) Agreement. This proposition was not disputed by Mr. McGowan.

38    In addition, Mr. McGowan had written contracts of employment applicable to his service at all relevant times. The question in the present arises whether the written contracts of employment entered into by Mr McGowan with the ABC, those contracts being formally signed by the Managing Director, constitute determinations pursuant to those statutory provisions.

39    An example of such contracts of employment in evidence is the correspondence directed to Mr. McGowan dated 21 September 1995 setting out the terms of his engagement in the position of Network Programmer at the level of Senior Executive Point 14 which was said to be:

"based in Sydney on terms equivalent to those set out in the ABC Senior Executives (Point 5 - 19) Agreement 1995 and the ABC Staff Rules except as varied by this agreement"

The engagement was to be for three years subject to the application of Part 5 of the Senior Executives Agreement concerning resignation by reason of inefficiency, misconduct and non-renewal benefit, the terms of which were to apply except where inconsistent with the agreement itself.

40    The agreement conferred on the ABC an option to extend the engagement for a further fixed period of three years. The agreement also provided for salary and salary additions described as "a market rate salary loading" and "an additional salary loading". These salary loadings appear to have been outside the scope of the Senior Executives Agreement. Clause 3 dealt with the duties to be performed and Mr. McGowan's responsibility in the performance of those duties to the Head of ABC Television. It also provided in cl.3(c) that Mr. McGowan accepted transfer to another position within the ABC should the Managing Director determine that Mr. McGowan's services should be so employed in the best interests of the ABC. The agreement also contained a confidentiality undertaking and a term requiring that Mr. McGowan's services be exclusive to the ABC during the term of the agreement. Clause 13 of the agreement provided:

This agreement will be read and construed in accordance with the laws of New South Wales and the parties agree to submit to the jurisdiction of the Courts of New South Wales.

41    The agreement was signed by Mr. McGowan under the note "Engagement accepted on above terms".

42    On 20 May 1998 pursuant to the option provision of the 1995 Agreement the ABC wrote to Mr. McGowan in these terms:

This is to advise that, in accordance with clause 1(b) of the employment agreement between the ABC and yourself dated 21 September 1995, the ABC hereby exercises its option on your services for a further fixed period of three (3) years, that is until 5 September 2001.

43    On 20 May 1998 a further written agreement was executed between Mr. McGowan and the ABC in like terms to that executed on 25 September 1995 with the only variations appearing to relate to increased money allowance.

44    On 21 April 1999 the ABC again wrote to Mr. McGowan in terms analogous to those contained in the September 1995 agreement with updated matters such as salary and loadings. Clause 13 remained in the same form and on 1 May 1999 engagement was again accepted on those terms by Mr. McGowan.

45    Accordingly, it was submitted by the ABC that the terms and conditions of employment determined for Mr. McGowan were those contained in the three written agreements made between the parties on 25 September 1995, 20 May 1998 and 1 May 1999, as they were affected by the terms of the Agreement certified by the Australian Industrial Relations Commission on 27 June 1995 and 3 May 1997.

Conclusions

46    The forms of relief sought, if granted, clearly would interfere with the contract between the parties by varying its terms to include those set out in Schedule A to the summons for relief. Also sought are declarations relating to the ABC's repudiation of the contract of employment as Network Programmer and that the contract was brought to an end by Mr. McGowan as the result of that repudiation with effect from 26 May 2000. The money orders sought also impinge obviously upon the operation of that contractual arrangement.

47    Having regard to the way in which the parties have approached the substantive issues on the motion, there is an acceptance that a direct conflict with any determination made pursuant to the federal Act may raise a constitutional conflict, but, on the other hand, there remains for determination the questions whether there is evidence of such a determination and whether peripheral matters not dealt with expressly by the contract and compensatory issues relating to any unfairness found in connection therewith, may be justiciable under s.106 of the Act.

48    Issues of this kind have arisen frequently in this Commission and its predecessor bodies. In Hudson v Qantas Airways Limited (1985) 10 IR 331 the Industrial Commission in Court Session (Cahill, Watson and Glynn JJ) were concerned in appeal proceedings with the jurisdiction to deal with claims for monetary compensation in relation to issues such as salary and travelling allowances which were the subject matter of a federal award which applied to the applicant's employment. After referring to the judgment of Dixon J in Victoria v the Commonwealth (1937) 58 CLR 618 at 630 and the observations of Mason, Brennan and Deane JJ in The Employment Protection Case (1983) 4 IR 284 at 293, concerning the scope of the relevant conflicting state and federal laws, the Commission in Court Session said:

In the context of this case, however, the order which is sought under s88F(2), to the extent that it relates to restitution of salary lost during the period of leave without pay, is based on what is prescribed by the award, not some contracted amount. On that basis, an order under s.88F(2) would, in effect, impose an obligation to pay the award salary in respect of a period during which, because of the particular circumstances of the case, there was no obligation under the award to pay such salary. Furthermore, such an order could be said to involve the prescription of an additional and distinct mode of recovery beyond the Conciliation and Arbitration Act.

The exclusivity of the award, read with s.65 of the Conciliation and Arbitration Act, is more apparent with respect to travelling allowances than it is in regard to salary. Nevertheless, having regard to what we have said, we think that that exclusivity can also be said to extend to the salary matter, and that it excludes any scope for an order under s88F(2) which purports to deal, in effect, with the same matter. Both aspects relate to the very type of situation which, in our view, s109 of the Constitution is directed.

49    On the matter of superannuation the Commission in Court Session took a different view:

So far as superannuation is concerned, different considerations arise. This is part of the contractual relationship between the respondent and the appellant which cannot be said to be the subject of regulation by the relevant federal award or otherwise be capable of giving rise to inconsistency on the material before us.

The same difficulties as can be said to arise concerning salary and travelling allowances accordingly do not, in our view, affect the power of the Commission to proceed with so much of the application under s88F as relates to superannuation.

50    That judgment is a useful analogy to the extent that the claim in the present matter might be said to conflict with the provisions of a federal award or enterprise agreement. However, a significant aspect of this case concerns the effect, as an obstacle to jurisdiction, of conditions of employment determined by the ABC pursuant to the express statutory power contained in s32 of the ABC Act. A case of similarity in that context is Robert Alan Dawson v Telstra Corporation Limited (Unreported 29 May 1998 - IRC96/5521). In that matter the applicant sought relief under s106 in the form of orders bearing upon a contract of employment entered into by him with Telstra. In essence the relief sought was a review in salary to ensue its conformity with market rates. The relevant statute for present purposes was the Australian Telecommunications Corporation Act 1989 (Cth), s85 of which provided:

(1) Telecom may engage such employees as are necessary for the performance of its functions.

(2) The terms and conditions of employment shall be as determined by Telecom.

51    The similarity between s.85(2) there and s.32(2) of the ABC Act is patent. An additional factor of relevance in Dawson was the applicability to the applicant of a salary referable to a classification, Administrative Officer 5, within the terms of a structure determined by Telstra In that matter, after concluding that the motion against the existence of jurisdiction should be upheld, I said:

The first, but less significant, basis is that the rates of pay or salary applicable to persons in the position of the applicant in the employ of Telstra are prescribed either by award or by a determination made under the relevant Commonwealth statute. It is certainly the fact that some conditions of employment will continue to be extended to the applicant at the relevant time whether or not his salary was that prescribed by the award or increased by determination. The history of award and/or determination coverage shows that the awarding of increases including national wage increases by determination has been effected quickly, it is said ahead of the pace of the award response, but the terms of the consent awards made provide for the primacy of the award over the determination to the extent of any inconsistency.

In my view in this context it must follow that were the Commission to purport to make an order under s.106 varying a contract of employment to alter salary and to make a consequential order in favour of the applicant for the payment of money, there would be a direct conflict between the order and the imposition of a rate by award or determination under the Commonwealth legislation.

However, as I have said, Mr West's argument is that the primary conflict in this matter occurs as between the plenary power conveyed by s.85 and the effects of any order made under s.106 of the state Act.

I feel compelled to find that there is no area left for an order under s.106 in these proceedings to operate viz a viz the terms of employment of an employee of Telstra.

52    Support was also gained in Dawson from the judgment of the High Court in Australian Broadcasting Commission v The Industrial Court of South Australia and Anor (1977-78) 138 CLR 399. That matter concerned the question of conflict arising between a state law with respect to reinstatement in employment after an unfair termination and a federal law which permitted the ABC to determine the terms and conditions of employment of officers and temporary employees, with the approval of the Public Service Board. Stephen J referred to that statutory power this way:

Sub-section (6) is a common form provision found in many Commonwealth Acts establishing statutory authorities possessing their own staffs. I would regard it as contemplating no particular act of determination of some standard terms and conditions for the employment of temporary employees of the Commission. On the contrary its effect, when read together with sub-section (2), is, I think, rather to invest the Commission with unfettered powers to engage such temporary employees as it thinks necessary, engaging them upon such terms and conditions as (subject to Public Service Board approval) it thinks fit.

. . . .

The terms of s.43(2) and (6) do to my mind disclose a legislative intent that the subject matter comprising the engagement of temporary employees of the Commission and their terms and conditions of employment should be exclusively within the province of the Commonwealth Act.

53    In the face of this line of authority, it is necessary to consider whether there is any element of this case which could distinguish it, or aspects of it, from the matters disposed of thereby.

54    The first issue in this context is whether there is evidence of a determination by the ABC of the terms and conditions of employment of Mr McGowan, or any relevant industrial instrument, with which an inconsistency arises.

55    The written employment agreement operating at the time of termination is in evidence. There is nothing on its face which suggests the agreement is a "determination", but s.32(2) of the ABC Act merely provides the terms and conditions of employment "shall be determined by the Corporation". While Mr Moses submitted that the evidence is not conclusive on this point, I consider that there can be no doubting the written employment agreement conforms with that requirement. Further, the agreement imports relevant features of the ABC Senior Executives (5-19) Agreement.

56    In these circumstances, the conclusion is inevitable that aspects of the relief sought would raise a direct inconsistency with the power exercised pursuant to s.32 of the ABC Act and, possibly, but less obviously to me, the Senior Executives Agreement.

57    It seems to me that the authorities are clear that an attempt to invoke the Commission's jurisdiction to vary a contract which constitutes a determination of the kind provided for by s.32 of the ABC Act directly impinges upon and is inconsistent with a law of the Commonwealth (See Dawson). Those parts of the relief sought in these proceedings which seek to amend the contractual terms and so the obligations arising under the contract of employment, I consider must be viewed as beyond jurisdiction.

58    However, there remains a question whether such a contract which may not in terms be variable at the instance of the litigant under s.106, may nevertheless be made relevantly unfair by the conduct of one party. The statutory power which gives rise to the agreement and thus the conflict appears not to be expressly concerned with the conduct of the ABC in its relations, in this case, with Mr. McGowan. It may be that s.33 of the ABC Act is satisfied by the express terms of the agreements both individual and collective applicable to Mr. McGowan. That section requires that having achieved the appropriate standard, the ABC should "maintain" it. It would appear curious if, the statutory power having been satisfied, the ABC was free to act in a way which could amount to unfair conduct of a kind that would make the contract itself unfair in accordance with the terms of s.106. Further, it would be perhaps even more curious if such unfair conduct would be beyond the reach of a New South Wales court with jurisdiction to remedy such conduct. Clause 13 of the employment agreement appears to evince an intention that any issue under it requiring the attention of a court should be the subject of the laws of New South Wales. It would not be inconsistent with either the terms of the agreement or the provisions of s.32(2) of the ABC Act that the consequences of conduct held to be unfair which did not impact upon the express terms of the employment agreement be dealt with here, providing there is a statutory power so to do provided by s.106.

59    This question involves the issue whether there is any room left for s.106 to operate not in relation to an amendment of the terms of employment but solely in relation to the alleged repudiatory conduct of the ABC and other, consequential matters such as compensation for loss of opportunity, disappointment, distress, frustration, humiliation and upset. The cases in the line of authority referred to in the paragraphs preceding par. 54 hereof were decided prior to the amendment to s.106(2) prescribing that a contract (as defined) may become unfair by conduct. In considering that subject matter, repudiatory conduct was referred to by the Full Bench in Reich v Client Server Professionals of Australia Pty Ltd. (Administrator Appointed) (2000) 99 IR 69 at p.77 as follows:

We are well satisfied that the word "arrangement", including if necessary the extended words in the definition as covering "any related condition or collateral arrangement", is sufficiently wide to encompass aspects of the employment relationship which are said to offend the concept of fairness, including as alleged here the conduct of the respondent in repudiating the contract of employment.

It follows that, should the evidence establish repudiation, as it appears to do on its face in this uncontested evidentiary stage, the case would arguably come within the scope of what I might call `conduct unfairness'.

60    However, as I understand s.106, there remains an obstacle which must defeat the summons. That is, by s.106(5), the power to make an order for the payment of money depends upon an underpinning order which affects "any contract declared wholly or partly void, or varied . . .". If the Court is unable, as the result of the constitutional protection afforded to a determination of the ABC, to make an order voiding in whole or in part or varying the contract, no order for a money payment can be made (See Reich at 83.1). Accordingly, conduct unfairness can, in a case such as this, give rise to no remedy.

61    The onus on the ABC in these interlocutory proceedings is to establish that the substantive proceedings are such that no order could be made within jurisdiction. For the reasons I have given, this is such a case; it must be dismissed on the motion. I so order.

LAST UPDATED: 03/04/2001