Industrial law principles drive decisions


Industrial law principles drive decisions

Five cases noted here point to some underlying principles that guide courts and tribunals in deciding employment-related litigation.


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Five cases noted here point to some underlying principles that guide courts and tribunals in deciding employment-related litigation.

Trust and confidence - underpinning contracts?

The issues of whether there is a principle of trust and confidence between employers and employees underpinning all employment contracts remains a contentious issue in Australian law.

A NSW Supreme Court judge has doubted whether the duty of trust and confidence has a place in Australian employment law despite English court rulings to the opposite effect.

Justice Hoeben said that it was unclear whether a trust and confidence implied term in the contract of employment forms part of the law of Australia:

'The background to the implication of such a term in the United Kingdom is important. It contrasts with the situation in Australia. In Australia the same result has been brought about by the tort of negligence.

... there has been no need in Australia to rely upon a “trust and confidence” implied term in the contract of employment to enable employees to succeed in claims against employers for purely psychiatric injury suffered in the course of employment. ....

The implication of such a term in employment contracts in Australia remains controversial and awaits clarification by an appellate court.'

Heptonstall v Gaskin & Ors (No 2) [2005] NSWSC 30 - Hoeben J - 9 February 2005  

Unreasonable loss of trust and confidence in employee

The 'trust and confidence' debate

How important is trust and confidence?

Oppressive and onerous application rejected

The NSW IRC has provided some guidelines on what is an acceptable request for documentation.

Deputy President Sams, in responding to a summons for documents, noted:

'Relevance alone is insufficient. The test is whether the material sought is necessary for the disposition of the proceedings: Arhill Pty Ltd and others v General Terminal Company Pty Ltd and others (1991) 23 NSWLR 545

There must be a legitimate forensic purpose to obtain the documents and it must at least be on the cards that such documents will be relevant to the issues in the proceedings: Attorney-General for New South Wales v Stuart (1994) 34 NSWLR 667; WorkCover Authority of New South Wales v The Crown in the Right of the State of New South Wales (Police Service of New South Wales) [2000] NSWIRComm 234.

The Commission must weigh the burden involved in complying with the summonses against the probative value of the documents in question: Bengalla Mining Co Pty Ltd v Barclay Mowlem Construction Ltd [2001] NSWSC 93.'

Clerical and Administrative Employees (State) Award [2005] NSWIRComm 18 - Sams DP -02/05
Summons to produce documents

What documents can be accessed?

Consent award assisted by preparation

The President of the NSW IRC emphasised that the parties in award matters can save the Commission and themselves considerable time and energy by presenting well-prepared documentation:

'Having been assisted in great detail by the advocates of the parties, ... for which I thank them, I have concluded that the award to be made does set fair and reasonable conditions of employment for this important sector of the State's workforce, that it complies with the relevant requirements of the Industrial Relations Act and is consistent with the wage fixing principles.

… The parties are to be congratulated and commended on the significant efforts that have been made which should lead to a proper basis to grapple with the future challenges in this important area of the public sector.'

Nurses' (Department of Ageing, Disability and Home Care) (State) Award, Re [2005] NSWIRComm 19 - Wright P - 28/01/05
Consent application rejected

No resort to extrinsic material for interpretation

A Full Bench of the NSW IRC restated some key points of award interpretation in rejecting a call for extrinsic evidence to be considered as an aid to interpretation.

The employer argued that there was an error at first instance in not having regard to certain extrinsic material where there was ambiguity within the terms of the award.

The Full Bench noted:

'There is a considerable body of jurisprudence developed by this Commission concerning the relevant principles of construction to be applied when interpreting awards.

In Zoological Parks Board of New South Wales, at [43], the Full Bench emphasised, as the primary consideration when interpreting industrial instruments, the actual words used, which should be given their plain, ordinary meaning, and, the context in which the words are used.

In Construction, Forestry Mining and Energy Union (New South Wales Branch) and Delta Electricity (2003) NSWIRComm 135, the Full Bench of this Commission, (at [44]), found errors of principle in the interpretation of industrial instruments at first instance because of a failure: ... to have sufficient regard to the actual terms of the instruments being construed, namely the terms of the award and the agreement. Nor was the Commissioner's approach consistent with the normal approach to interpretation, including interpretation of awards, which requires the particular words or phrases under consideration to be considered in their context….'

Eraring Energy v Construction, Forestry Mining and Energy Union (NSW) [2005] NSWIRComm 13
Guidance for employers from courts and tribunals

Interim award continues until rescinded

NSW IRC President, Justice Wright, has interpreted an interim award as continuing until rescinded by the IRC - although his Honour noted that the relevant legislation was not clear on this point.

The case involved severance pay entitlement for certain employees and the application of an interim award was relevant in deciding the matter.


Section 16 of the Industrial Relations Act 1996 was in issue:

'16 Term of award -
(1) An award applies for the period specified in it as its nominal term and, after that period, until rescinded by the Commission.
(2) The nominal term of an award must not be less than 12 months nor more than 3 years. ...
(4) An award may in special circumstances be made on an interim basis.
Any such award is to be expressed to be an interim award and applies only for the period (not exceeding 12 months) specified in it.'

Interim award continued

The President noted:

'In normal speech the expression "nominal" also has a meaning akin to the notion of something which is nominated.

Applying these definitions to the construction of s 16, while accepting that the construction of the section is far from clear, nevertheless I consider that the preferable construction is one which, notwithstanding that an interim award does not specifically have a term which is called a "nominal term", involves the terms of s 16(1) of the Act applying to interim awards, so that after the term specified or nominated in the interim award (that is, its "nominal term") the award still has legal effect until it is rescinded by the Commission.

… while there remains a doubt as to the proper construction of s 16 of the Industrial Relations Act, a very important provision of the statute, the relevant authorities should consider amending the statute to remove the doubt. The Industrial Registrar will be directed to bring a copy of this decision to the attention of the relevant Minister so that an appropriate statutory amendment may be considered.'

Unilever Australia Ltd, AP Foods (Sydney) Pty Ltd, AWU and TWU - various proceedings re Proposed Sale of Marrickville Site, Re [2005] NSWIRComm 3
Short-term agreement permitted even though below standard


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