Preference clauses in agreements ‘almost meaningless’, AIRC rules


Preference clauses in agreements ‘almost meaningless’, AIRC rules

A preference clause in a certified agreement that guarantees a part-time worker the next permanent position ‘all other things being equal’ has been ruled to be unenforceable if it has not been established that all things are, in fact, ‘equal’.


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A preference clause in a certified agreement that guarantees a part-time worker the next permanent position ‘all other things being equal’ has been ruled to be unenforceable if it has not been established that all things are, in fact, ‘equal’.

The ruling was made on appeal by an AIRC Full Bench in a case where a Catholic school was ordered by a Comissioner to give a female teacher on a series of fixed term contracts the next available permanent position based on the certified agreement preference clause.

Section 4.1 of the certified agreement relating to St Simon’s Primary School in Victoria states: ‘On application, after three school years in one school on fixed term appointments an employee will be given preference for any appropriate vacancy in that school, all other things being equal.’


The teacher was engaged in 2000 by St Simon’s on a 12 month fixed term contract, and for some 5 years prior to 2000 she had performed part-time and emergency teaching work for the school.

She had been engaged on a series of fixed term contracts each year since 2000 as a maternity replacement teacher for Grade 1-2. In November 2004 a permanent position became available for which she applied. She was unsuccessful.

Her union, the Independent Education Union of Australia (IEUA), notified a dispute over the application of the agreement pursuant to the dispute settling procedure in cl.12 of the agreement. The dispute was said to be over the application of cl.14 of the agreement

The original application was dealt with by Commissioner Dominica Whelan who issued a decision on 1 June 2005. She found that cl.14 was not properly applied.

She further found that it was ‘an appropriate solution of this dispute to determine that [the teacher] be appointed to the next available vacancy.’ She issued an order requiring the school to offer any vacant ongoing position as a full-time teacher that arises to [the teacher] first until she accepts a position.


The school then appealed this judgement to a Full Bench of the Commission.

In its appeal the school contended the only relevant dispute before the Commissioner was whether the school was obliged to follow a particular procedure in the selection of members of the school staff.

It was submitted that the Commissioner made an error in finding that the school was obliged to adopt a ‘fair’ procedure and that there were no grounds to disturb the school’s selection.

The Full Bench said it was common ground that the school did not advertise the vacancy but notified principals and deputy principals of Catholic schools in the region. [The teacher] was also notified and invited to apply.

While a set of criteria was developed for the position and incorporated in a document, the Commissioner found that the applicants were not advised of the contents of the document and that the criteria did not appear to have been addressed in any systematic way in the interviews. The Commissioner found that [the teacher] was unaware that she should supply a curriculum vitae and supporting documentation, although the need to do so was apparently referred to in the selection document.

Full Bench ruling

The Full Bench said the Commissioner’s initial finding of fact was that the selection procedure was unfair because one or more of the applicants was disadvantaged by the process adopted.

Because the selection criteria were not fairly applied, she concluded that the selectors could not have come to a valid conclusion that all things were not equal for the purposes of cl.14.

In its ruling the Full Bench said that ‘it may be that there is a relevant contractual obligation to treat an employee fairly’.

‘But assuming that was so, that is not a matter dealt with in the agreement. We do not accept that if the procedure appears unfair it must follow that the successful applicant is not the best one. Procedural issues ought not be given priority over matters of substance.

‘The matter of substance here was whether [the teacher] had been denied the preference to which she would have been entitled if all things were equal as between the applicants.

‘The Commissioner made no finding on that matter, as she thought it was a matter for the teachers responsible for selection. That approach admits of the possibility that so long as the procedure is fair, the school’s decision is beyond challenge. We do not think that proposition should be accepted either.

‘We agree that the requirement to give preference to [the teacher], all other things being equal, could be rendered meaningless if the selection procedure did not provide a proper basis for assessing whether in fact all things were equal as between the applicants.

‘The right conferred by the clause would be a hollow one if selection was biased, random or improper. But the agreement does not prescribe the procedure to be followed in the selection of applicants to fill a vacancy on the teaching staff. It only provides for the operation of a preference in the event that all things are equal.

‘The IEUA did not deal with the preference question directly, mounting an attack on the procedure. That was unfortunate. It is not surprising that in the circumstances the Commissioner’s decision also focussed on the procedure. The Commissioner’s decision does not pay sufficient regard to the evidence about the actual reasons for selection.

‘In order to decide whether [the teacher] had wrongly been denied preference a finding was required one way or the other as to whether all things were equal. In our view, in the absence of a finding that the school had not properly applied the preference provision the IEUA’s application should have been dismissed.’


The Full Bench said evidence given by those on the school’s selection panel made it clear that they had concluded that [the teacher] was not the best applicant.

‘Taking into account flaws in the process identified by the Commissioner, and making allowances for them, we cannot find that conclusion to be wrong,’ it ruled.

‘The task of demonstrating that all things were equal as between the rival applicants was never accepted by the IEUA, perhaps for good reason. It is an inherently difficult thing to demonstrate. A preference based on all other things being equal has been described as ‘a preference almost negligible.’ The likelihood of two applicants being assessed as equal in all respects is very low.

‘In our view the school’s failure to appoint [the teacher] to the staff did not involve a non-observance or misapplication of clause 14.1 of the agreement. We uphold the appeal and quash the Commissioner’s decision and order.’

The full ruling can be found here.


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