FEDERAL COURT OF AUSTRALIA The University of Western Australia v The National Tertiary Education Industry Union [2003] FCA 1264 INDUSTRIAL LAW – interpretation of certified agreement – whether appropriate to exercise power to interpret clause in agreement – existing dispute between the parties about possible termination of a professor's employment – dispute also as to meaning of clause in agreement – whether relevant clause confined in operation to termination of employment at the initiative of the employer – whether clause only deals with such termination on the four grounds specified in it – whether the clause deals exhaustively with the grounds for termination at the initiative of the employer – whether appropriate to grant declarations of the extent sought. Workplace Relations Act 1996 (Cth), s 413A CFMEU v Mount Thorley Operations Pty Ltd (1997) 79 FCR 96 applied Finance Sector Union of Australia v Commonwealth Bank of Australia (2000) 106 FCR 16 applied Forestview Nominees Pty Ltd v Perpetual Trustees WA Ltd (1998) 193 CLR 154 applied THE UNIVERSITY OF WESTERN AUSTRALIA v THE NATIONAL TERTIARY EDUCATION INDUSTRY UNION W24 of 2003 CARR J 6 NOVEMBER 2003 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W24 OF 2003 BETWEEN: THE UNIVERSITY OF WESTERN AUSTRALIA APPLICANT AND: THE NATIONAL TERTIARY EDUCATION INDUSTRY UNION RESPONDENT JUDGE: CARR J DATE OF ORDER: 6 NOVEMBER 2003 WHERE MADE: PERTH THE COURT ORDERS AND DECLARES THAT: 1. On a proper interpretation of clause 16 of an agreement known as the University of Western Australia Academic Staff Agreement 2000, that clause: (a) applies only to a termination of employment at the initiative of the employer, and does not apply to the termination of a contract of employment by frustration or other means not at the initiative of the employer; and (b) when read with clauses 17 and 18 and Schedules D, E and F of that agreement (including all references therein to the operation of Commonwealth, State and other laws), governs exhaustively the procedures to be followed in relation to termination of employment at the initiative of the employer. 2. The application be otherwise dismissed. 3. There be no order as to costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W24 OF 2003 BETWEEN: THE UNIVERSITY OF WESTERN AUSTRALIA APPLICANT AND: THE NATIONAL TERTIARY EDUCATION INDUSTRY UNION RESPONDENT JUDGE: CARR J DATE: 6 NOVEMBER 2003 PLACE: PERTH REASONS FOR JUDGMENT introduction 1 The applicant seeks an interpretation, under s 413A of the Workplace Relations Act 1996 (Cth) ("the Act"), of clause 16 of an agreement known as the University of Western Australia Academic Staff Agreement 2000 ("the Agreement"). The Agreement is a certified agreement as defined in s 4 of the Act. It was certified under s 170LJ of the Act on 23 May 2003. The applicant and the respondent are parties bound by the Agreement. I shall occasionally also refer to the parties as "the University" and "the Union". section 413A 2 Section 413A provides as follows: '413A Interpretation of certified agreements (1) The Court may give an interpretation of a certified agreement on application by: (a) the Minister; or (b) an organisation or person bound by the certified agreement; or (c) an employee whose employment is subject to the agreement. (2) The decision of the Court is final and conclusive and is binding on: (a) the organisations and persons bound by the agreement; and (b) the employees whose employment is subject to the agreement; who have been given an opportunity of being heard by the Court.' factual and procedural background 3 Professor William Reed has been employed by the applicant since 1971. He started as a Temporary Lecturer in Medicine whilst working as a relieving clinical assistant physician at the Royal Perth Hospital. 4 In 1974 Professor Reed was employed as a Senior Lecturer in Medicine by the applicant, holding at the same time the position of Physician and Hepatologist at Sir Charles Gardner Hospital ("the Hospital"). By an agreement with the applicant, the Board of Management of the Hospital granted Professor Reed clinical staff status and all attendant clinical privileges for the period of his appointment with the University. When that agreement was made and what were its terms are not in evidence. 5 From 1983 to 1986, Professor Reed held the position of Head of the Gastroenterology/Liver Unit of the Hospital. In 1988 he was appointed Associate Professor in Medicine at the University and became the Head of the Department of Medicine. 6 On 1 April 1991, Professor Reed was appointed as Professor of Medicine, holding the Eric Saint Chair in the University. On his appointment to that Chair, Professor Reed's clinical status and privileges at the Hospital continued uninterrupted. 7 Until 18 September 2000, Professor Reed's main duties were: · teaching undergraduate and postgraduate students at the University's Faculty of Medicine and Dentistry which is located at the Hospital (in doing so, he carried out clinical responsibilities with patients); and · engaging in research at the professorial level, using laboratory facilities provided by the Hospital. 8 On 18 September 2000 the Metropolitan Health Services Board ("the Board") revoked Professor Reed's clinical privileges at the Hospital. In reaching its decision, the Board concluded that Professor Reed had used certain trust accounts on twelve occasions for improper purposes, being purposes other than those for which he requested the Hospital to open the accounts. 9 On 23 January 2001 the Board notified the University that the effect of its decision to revoke Professor Reed's clinical privileges was that he could not undertake any clinical practice at "… any of the Metropolitan Health Services hospitals". 10 Professor Reed applied to the Supreme Court of Western Australia for an order quashing the Board's decision. He obtained an order nisi for certiorari on 9 April 2001 but, on 18 June 2003 a Full Court of the Supreme Court of Western Australia discharged that order nisi for reasons which it then published. 11 In the meantime, two of the withdrawals and use by Professor Reed of trust funds referred to in paragraph [8] above had been the subject of disciplinary procedures within the University, culminating in a letter dated 12 May 1999 from the Vice-Chancellor to Professor Reed informing him that those matters constituted misconduct and that he was suspended without pay for a period of three months. 12 There was correspondence in late 2001 and in 2002 between the University and Professor Reed which, so I infer, has given rise to a dispute between them. The dispute is about the possible termination by the University of Professor Reed's employment. 13 The Agreement contains procedural provisions for settling disputes – see clause 38(a)(ii). A dispute arose between the applicant and the respondent about whether the applicant could terminate Professor Reed's employment, or treat it as terminated, without complying with the procedure set out in clause 16 of the Agreement. A Disputes Committee, comprising two representatives of the applicant and two representatives of the respondent, was convened. The Disputes Committee could not resolve the dispute between the parties as to the meaning of clause 16 of the Agreement. Whether the court should exercise its power to interpret clause 16 14 The University's position in relation to the question whether the Court should [acting within the jurisdiction conferred by s 412(1)(a) of the Act] exercise its power under s 413A to give an interpretation of clause 16, is as follows: 1. The effect of the Board's decision is that Professor Reed cannot undertake any clinical duties at any public teaching hospital in Western Australia. 2. In such circumstances his contract of employment has been frustrated. Alternatively Professor Reed has repudiated the contract because he is unable to perform its fundamental conditions, or his incapacity gives rise to a right on the part of the University to terminate his employment. 3. In such circumstances, it may lawfully terminate Professor Reed's contract of employment, or treat it as terminated, due to his inability to perform his duties, without complying with the procedure set out in clause 16 of the Agreement. The respondent maintains (and has told the University) that the University may not lawfully terminate or treat as terminated Professor Reed's employment, or the employment of any academic staff, under any circumstances, unless it complies with the procedure set out in clause 16 of the Agreement; and 4. There is accordingly a "live and genuine dispute" between the parties which may be properly resolved by the Court. 15 The respondent raises no objection to the University's application for an interpretation of clause 16. Of course, that still places an obligation on the Court to decide whether it is appropriate for it to exercise that power. my reasoning on whether the court should interpret clause 16 16 In this application the Court is not required to make findings of fact relating to the merits or demerits of the dispute between the University and Professor Reed. Nor does the Court have to decide the degree to which Professor Reed may or may not be able to carry out his duties. That is not an issue raised for decision in this application. The issues in this application have been defined by the pleadings. 17 The applicant filed a statement of claim with its application. I think it is fair to say that the statement of claim pleads facts of a background and procedural nature designed to demonstrate the existence of an industrial dispute which may be more readily resolved by an interpretation given under s 413A. For example, in paragraph 13 (which is expressly admitted in the defence), the applicant pleads as a fact that the respondent maintains that the applicant may not lawfully terminate or treat as terminated Professor Reed's employment, or the employment of any academic staff under any circumstances unless it complies with the procedure set out in clause 16 of the Agreement. 18 In paragraph 14 the applicant pleads that it maintains that it may lawfully terminate or treat as terminated Professor Reed's employment due to his inability to perform his duties, without complying with the procedure set out in clause 16. The respondent, in its defence, formally denies this (i.e. formally denies the applicant's stated position on the point). However, it is quite clear on the evidence, and I so find, that the parties are in disagreement as to whether: (a) assuming (without deciding) that the doctrine of frustration has brought Professor Reed's employment contract to an end, the applicant may lawfully treat Professor Reed's employment as terminated without complying with the procedure set out in clause 16 of the Agreement; and (b) the applicant may terminate Professor's Reed's employment (or, for that matter, the employment of any other member of its academic staff) on grounds which fall outside the four grounds referred to in clause 16. 19 In its defence, the respondent formally pleads (in response to the relevant factual allegations in the statement of claim) that it does not admit that the Disputes Committee convened. It also formally denies that that Committee could not resolve the dispute as to the meaning of clause 16. 20 On the evidence before the Court, I find that there was a meeting of the Disputes Committee and that it could not resolve the meaning of clause 16 of the Agreement. 21 In those circumstances, in my view, the Court should exercise its power under s 413A. The questions raised are not hypothetical. There is plainly a controversy between the applicant and the respondent about the meaning of clause 16. That controversy is set in the context of a dispute about whether Professor Reed's contract of employment with the University has automatically come to an end under the doctrine of frustration, a dispute which this Court is not required to determine. There is also the dispute about the possible termination by the University of that contract, which falls into the same category (i.e. one which this Court is not required to determine). 22 There is another practical reason for exercising the discretion in favour of interpreting clause 16. The evidence is that the parties are in the course of negotiating a new certified agreement. Mr R L Le Miere QC, senior counsel for the applicant, told me from the bar table, without objection, that those negotiations were impeded by the parties having different views about their rights and obligations under the present Agreement. I infer, as Mr Le Miere suggested, that each party may well be reluctant to give ground on what they believe to be their existing rights. The evidence is that the meaning of clause 16 has been put on the agenda for the next round of negotiations. To give the interpretation sought would be consistent with one of the principal objects of the Act; see s 3(c) which refers to enabling employers and employees to choose the most appropriate form of agreement for their particular circumstances. 23 Interpreting clause 16 does not, in my view, depend upon resolving any disputed questions of fact relating to the employment of Professor Reed, or any other employee of the applicant. Accordingly, on the authorities, I consider that it is proper for me to exercise the power conferred by s 413A of the Act – see, for example, CFMEU v Mount Thorley Operations Pty Ltd (1997) 79 FCR 96; Finance Sector Union of Australia v Commonwealth Bank of Australia (2000) 106 FCR 16 at 29. clause 16 of the agreement 24 Clause 16 is in the following terms: '16. Termination of Employment and Disciplinary Action (a) Termination of employment at the initiative of the employer is governed exhaustively by Schedule D Unsatisfactory Performance, Schedule E Misconduct, Schedule F Redundancy Provisions and Clause 18 Termination of Employment on the Grounds of Ill Health. (b) All decisions to discipline or terminate the employment of an academic for reasons of unsatisfactory performance, misconduct, redundancy, termination on the grounds of ill health must be in accordance with this clause. Disciplinary action may take one of several forms as defined in Schedules D and E and will be determined by the Deputy Vice-Chancellor or the Vice-Chancellor as prescribed by these schedules. (c) Except as specifically provided herein to the contrary the terms of this Agreement shall cover exhaustively the subject matter concerned, and are to the exclusion of: (i) State and Territory law in respect of any matter subject to this Agreement; and (ii) any law of the Commonwealth or an internal Territory of the Commonwealth, in respect of which the Australian Industrial Relations Commission has power to make an award which is not consistent with that law by reason of section 121 of the Act in respect of any matter subject to this Agreement to the extent that this Agreement is not consistent with that law. Provided that the provisions in this Agreement shall be subject to and shall not affect the operation of: (1) any law empowering a State or Commonwealth industrial tribunal to order re-instatement of or compensation to an employee or to otherwise deal with the dismissal of that employee; (2) any other law empowering any court or tribunal external to an employer which has jurisdiction to deal with any causes of action or claims arising from actions taken by the University pursuant to this Agreement. (d) Any procedural requirements imposed by laws referred to in subclause (ii) above are entirely displaced and extinguished by force of this Agreement. (e) The University must not terminate the employment of an employee unless the academic has been given notice and/or compensation as required by 170CM of the Act provided that: (i) the University may terminate without notice the employment of an academic found to have engaged in conduct of a kind envisaged in section 170CM(1)(c) of the Act such that it would be unreasonable to require the University to continue employment during a period of notice; and (ii) greater notice and/or compensation specified in the employee's contract of employment or in this Agreement shall prevail over section 170CM of the Act. (f) This Agreement is to be read in conjunction with Division 3 of Part VIA of the Act provided that an employee shall be entitled to the benefit of: (i) any provision in this Agreement which is more favourable to the academic than any corresponding provision in the Act; or (ii) any procedural step required by the Agreement in addition to the required procedural steps of the Act. (g) Nothing in this clause shall be construed as excluding the jurisdiction of any external court or tribunal which, but for this clause, would be competent to deal with the matter.' the construction of clause 16 THE APPLICANT'S SUBMISSIONS 25 The applicant has two principal submissions on the construction of clause 16. I shall refer to them as "the applicant's first point" and "the applicant's second point". The Applicant's First Point 26 The applicant argues that the words "at the initiative of the employer" restrict the scope of clause 16 to apply only to termination of employment in those particular circumstances. Clause 16 does not apply, so the applicant submits, where the contract automatically terminates by frustration, whether such frustration be by illness, death, war, imprisonment or any other unforeseen and unprovided for events which prevent the performance of the contract and which do not involve the default of either party. The applicant contends that if it were to treat Professor Reed's contract of employment as being terminated as a result of the withdrawal of his clinical privileges by the Board, then that would not be termination at the initiative of the employer. The Applicant's Second Point 27 The applicant's second point is a submission that clause 16 does not deal exhaustively with the grounds for termination of employment at the initiative of the employer. 28 The words "governed exhaustively by" in clause 16, so the applicant submits, confirm that the separate procedures referred to in the clause are the complete set of procedures that apply to those four circumstances of termination listed in the clause. 29 The University refers to the fact that clause 16 of the Agreement sets out four different circumstances in which an employee's employment may come to an end, and provides for separate procedures which must be applied in each of those four different circumstances. The University says that clauses 16, 18 and the three schedules cover only termination on the four grounds with which they deal, namely, unsatisfactory performance, misconduct, redundancy and ill-health. 30 The applicant submits that an academic staff member's employment may, as in the case of Professor Reed, be terminated or may come to an end in circumstances outside the four different circumstances of termination of employment set out in clause 16. In such circumstances (i.e. those falling outside the four), so the applicant contends, it is not required to comply with the procedures set out in that clause. 31 The University's point is that although the Agreement specifically deals with termination on the grounds of ill health, Professor Reed's case gives rise to another example of incapacity, that is, incapacity (due to cancellation of his clinical privileges) to carry out his duties, an incapacity which is not dealt with by the Agreement. It says that if its assertion that the contract of employment has been frustrated is incorrect then, in the alternative, it has a right to terminate that contract at common law, by reason of Professor Reed's ongoing incapacity to carry out his duties. The question is whether that common law right has been excluded. The University argues that it has not, neither expressly nor by implication. 32 One major part of the applicant's argument is as follows. Until 31 March 1999 the applicant and the respondent were parties to the University of Western Australia Academic, Academic Research and Related Staff Agreement 1997 ("the 1997 Agreement"), which had come into force on 20 June 1997. The underlying award was the Universities and Post Compulsory Academic Conditions Award 1995 ("the 1995 Award"). 33 Although the 1997 Agreement superseded the 1995 Award to the extent of any inconsistency, it incorporated to a large extent, the terms and conditions of that award. 34 The applicant contends that the Agreement incorporated all of the provisions in the 1995 Award relating to the contract of service, disciplinary action, unsatisfactory performance and termination of employment into the terms of the Agreement itself. The applicant says that, in essence, clauses 16, 17 and 18 and Schedules D, E and F contained the provisions previously found in both the 1997 Agreement and the 1995 Award. Schedule B to the Agreement, so it is submitted, records the changes negotiated by the parties. That Schedule does not record any change in the provisions relating to disciplinary action, unsatisfactory performance and termination of employment. That is, the Agreement adopted in substance the 1995 Award provisions dealing with termination of employment. 35 The applicant says that clause 16(a) of the Agreement is a new clause, not previously found in the 1997 Agreement or the 1995 Award. The purpose of the words "governed exhaustively by" in clause 16(a), so the applicant contends, is to provide that the procedures for discipline and termination are all to be found in clause 16 of the Agreement, and not in the 1995 Award or any other instrument. This, so the applicant says, is in contrast to the 1997 Agreement where the procedures were to be found in various parts of the incorporated Award. In an area where the same subject matter may be dealt with in other industrial instruments, the purpose of those words was to make it clear that one did not need to look at any other such instruments. the respondent's submissions and my reasoning The Applicant's First Point 36 The basic thrust of the respondent's submissions is that the subject matter of clause 16 is not limited to termination of employment at the initiative of the employer. 37 The respondent says that the subject matter of clause 16(a) should be construed as being the same as the subject matter identified in clause 16(b). To that extent the parties are in agreement. I am of the same view. But the respondent says that the subject matter identified in clause (b) "(in so far as it relates to termination of employment)" is: 'All decisions to terminate the employment of an academic.' 38 It says that this construction is consistent with the heading to the clause, whereby, so the respondent contends, the parties have characterised the general subject matter of clause 16, namely, "Termination of Employment and Disciplinary Action'. 39 I reject this submission. In my view, as a matter of proper construction, the heading of the clause should, as the respondent contends, be taken as reflecting the general subject matter. But it cannot prevail over the express words of the clause. The express words of clause 16(a) state that: 'Termination of employment at the initiative of the employer is governed exhaustively by …' 40 So far as clause 16(b) is concerned, the respondent's submissions distort that sub-clause by removing the reference to discipline, and by not setting out the whole of the first sentence which reads: 'All decisions to discipline or to terminate the employment of an academic for reasons of unsatisfactory performance, misconduct, redundancy, termination on the grounds of ill health must be in accordance with this clause.' 41 Contrary to the submission contained in paragraph 18 of the respondent's written submissions, this sentence shows that clause 16(b) does not apply to "all decisions" but expressly refers to all decisions of the type specified in the above sentence. 42 At paragraph 13 of the respondent's written submissions it contends that by a change in the drafting between the 1995 Award and the Agreement, the parties have no longer confined the concept of "termination of employment" to the specific sub-category of "termination at the initiative of the employer". This is said to arise because clause 5(b) of the 1995 Award defined "termination of employment" to mean "termination of employment at the initiative of the employer institution" and no such definition of the term "termination of employment" is contained within the Agreement. 43 In my view, that submission is misconceived. There is no need for a definition of the term "termination of employment" in clause 16, because the type of termination with which the clause is concerned is expressly and specifically spelled out in that clause itself i.e. "termination of employment at the initiative of the employer …". 44 Then (see paragraph 14 of its written submissions) the respondent submits that by including in clauses 16(a) and 18 provisions for termination of employment on the grounds of ill health, the parties have provided an instance of termination of employment which is not at the initiative of the employer. The respondent argues that at common law, termination of employment on the grounds of ill-health is properly considered an instance of frustration of contract. The reference to termination on the grounds of ill-health in clauses 16(a) and 18 shows, so the respondent contends, that the parties did not intend clause 16(a) to be confined to the notion of termination of employment at the initiative of the employer. 45 I do not accept that submission. In my view, it is quite clear from the terms of clause 18 that it deals with termination of employment at the initiative of the employer on the grounds of ill-health of the relevant employee. That is the extent of its subject matter. 46 There may be circumstances, (perhaps these days in very limited cases) in which ill health, through the common law doctrine of frustration, automatically brings an employment contract to an end. There may be other circumstances which give rise to the operation of that doctrine. Such circumstances do not amount to termination of employment at the initiative of the employer. The employment ends automatically by operation of law. 47 The respondent submits that a literal construction of clause 16(a), confining the concept of termination of employment to termination at the initiative of the employer, would be inconsistent with the terms of clause 16(b) which is expressed to be in respect of "all decisions to discipline or terminate the employment of an academic". The Union says that this is in no way confined to termination at the initiative of the employer. It says that the words "all decisions" give clause 16(b) a wider scope and application. Given the overlap, so it submits, between clauses 16(a) and 16(b) it would be anomalous to confine clause 16(a) to termination of employment at the initiative of the employer. 48 I reject this submission also. It ignores the word "decisions". The relevant decisions i.e. to discipline or terminate the employment of an academic must be those of the University. A decision to terminate the employment of an academic would thus clearly be at the initiative of the employer. 49 The respondent next turns to clause 16(c), which provides that the terms of the Agreement "shall cover exhaustively the subject matter concerned". It says that by its terms, the subject matter of clause 16 is "termination of employment and disciplinary action". Clause 16(c) is said to articulate the parties' intention that, to the exclusion of all the other laws identified in sub-paragraph 16(c)(i) and (ii), the terms of the Agreement are to be an exhaustive and exclusive code in respect of the subject matter of termination of employment. 50 In my view, that begs the question of what is the subject matter of clause 16. I think that its subject matter is explained by its opening words, i.e. "Termination of employment at the initiative of the employer…". 51 The respondent points to clause 39 of the Agreement as being in support of its argument against the applicant's first point. Clause 39 provides: 'Performance of Duties The Vice-Chancellor or nominee may direct an employee to carry out such duties as are reasonable and within the limits of the employee's skill, competence and training.' 52 The respondent submits that in view of the right conferred upon the University by clause 39, "… it is inherently unlikely that the parties also intended that the University could terminate the employment of staff on the grounds of frustration by reason of an employee's inability to perform duties for reasons other than ill-health". 53 The problem with this, and other like submissions, is that they fail to recognise that the application of the doctrine of frustration does not involve the University in terminating the employment of staff. Under the doctrine of frustration that happens automatically. It is not a question of the University "retaining a right to act unilaterally" or "terminating the employment of staff". 54 Basic to all the other submissions of the respondent is that the subject matter of clause 16 extends beyond termination of employment at the initiative of the employer so as to include automatic termination of the employment contract under the doctrine of frustration. 55 In my view, such a construction is not open. In my opinion, the subject matter of clause 16 is very clear. That is, it is concerned only with termination of employment at the initiative of the employer. If the circumstances of a particular case do not constitute termination of employment at the initiative of the University, then the clause does not apply to those circumstances. The Applicant's Second Point 56 On the applicant's second point, the respondent says, in effect, that clauses 16, 17 and 18 and the three schedules deal with termination on any grounds whatsoever. 57 It argues that the inability of an employee to perform his or her duties for reasons other than ill-health could be addressed as an instance of unsatisfactory performance within the provisions of Schedule D. my reasoning on the applicant's second point 58 The task in hand is objectively to determine the intention of the parties from the words of the Agreement considered in the light of the surrounding circumstances i.e. the context: see Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Skilled Engineering Ltd [2003] FCA 260 at [21] per Finkelstein J. Part of that context, in my opinion, is the evolution of the relevant industrial instruments referred to at paragraphs [32] to [34] above. 59 A reasonable overview is that clauses 16, 17 and 18 and the three schedules in the Agreement contain in substance the provisions previously found in the 1997 Agreement and the 1995 Award. Mr Le Miere acknowledged that. When one turns to clause 9(a) of the 1995 Award one sees that it read as follows: 'All decisions to discipline or terminate the employment of an academic must be in accordance with this clause.' 60 Mr Le Miere relied on that fact that Schedule B to the Agreement, which sets out a summary of changes and commitments given in the course of reaching the terms of the Agreement, contains no references to changes in relation to termination of employment. 61 But, in my view, there are three answers to that point. First, there were not many different sources of obligations and rights spread out in the 1997 Agreement and the 1995 Award. They were all to be found in the 1995 Award (admittedly in several clauses) and simply incorporated by reference into the 1997 Agreement by clause 6 of that document. Secondly, clause 6 of the Agreement deals with the application of Awards and the matter of inconsistency. Thirdly, it is self evident that Schedule B to the Agreement is not exhaustive. Mr S J Moore, counsel for the respondent, took me to four relatively significant differences between the 1995 Award and the Agreement. 62 Mr Le Miere submitted that clause 9 of the 1995 Award was concerned with procedural steps, i.e. the "principal purpose" of clause 9 was to provide the procedural steps to terminate employment or discipline an academic. But he had to concede that those procedures were now essentially reflected in the three schedules to the Agreement. 63 I have already held that clause 16 is only concerned with termination of employment at the initiative of the employer. In my opinion, a literal construction of the clause requires that that subject be governed exhaustively by the three schedules and clause 18 of the Agreement. Furthermore, in my view, such a construction is supported by the context to which I have referred immediately above, subject to clause 17 also being applied to confirm the relevant procedures. 64 I think that those words, "governed exhaustively", expressly exclude the application of what might otherwise have been the applicant's common law rights of termination. Clause 16(c), in my view, confirms that. The long and the short of it is that if the applicant wishes to terminate an academic's employment (otherwise than by mutual agreement) it must do so in accordance with clause 16. 65 Mr Le Miere argued that inability to perform did not fit into the circumstances addressed by Schedule D under the heading "Unsatisfactory Performance". The context, so it was put, was of unsatisfactory performance which was amenable to guidance, counselling and the like. 66 I do not accept that. In my view, there is some substance in the respondent's submission that an employee's inability or incapacity to perform his or her duties is within the notion of "unsatisfactory performance". It also needs to be borne in mind that the University may give directions to the particular employee in question to carry out such other duties as are reasonable and within the limits of his or her skill competence and training – see clause 39. 67 It would be quite understandable for the negotiators and the draftspersons not to have contemplated the somewhat unusual circumstances of Professor Reed's case. But it is, in my view, more likely that they did. 68 The evidence shows that as early as 30 November 1998 the Executive Director of Medical Services at the Hospital had notified the applicant that she had "found what appear to be significant irregularities" in the expenditure of funds from certain trust accounts. By letter dated 15 December 1998 she temporarily suspended Professor Reed's clinical privileges at the Hospital. The evidence is that the parties negotiated the terms of the Agreement throughout 1999 and until March 2000. The temporary suspension of Professor Reed's clinical privileges continued until about June 2000. 69 There is room for an inference, which I make, that the parties had in mind Professor Reed's case when the following definition sub-clauses were introduced into Schedule E of the Agreement ("Misconduct") which came into effect on 23 May 1999: '(c) "Serious misconduct" shall mean: . . . (iv) serious misbehaviour or dereliction of duty in a performance of a role within an institution which has recognised formal links to the University where such a role is undertaken as a result of the employee's appointment to the staff of the University. (d) Examples of "serious misconduct" include theft, fraud, misappropriation of funds, assault, serious harassment (including sexual harassment); wilfully disobeying a regulation, order, or lawful instruction made or given, or repeated actions of misconduct.' 70 But even if the circumstances of Professor Reed's case do not fit any of the thus far agreed categories for termination of employment, that is not a basis, in my view, for not giving literal effect to the words of clause 16. I accept Mr Moore's submission to the effect that it was quite reasonable for the parties essentially to codify and prescribe the particular grounds upon which termination on initiative of the employer could occur, even if those grounds did not embrace and touch upon every conceivable instance of termination at the initiative of the employer. It was not so long ago that the bases upon which a member of the university academic staff could be dismissed were very limited indeed. 71 In my opinion, the intent, objectively determined, of the parties was to confine termination of employment at the initiative of the employer to being governed exhaustively by the provisions referred to in clause 16(a). If there are deficiencies in draftsmanship, that may have to be something to be dealt with at a later date. what declaratory relief is appropriate? 72 The University seeks declarations in the following terms. '1. On a proper interpretation of clause 16 of the University of Western Australia Academic Staff Agreement 2000 (the "Agreement"), the Applicant may terminate the employment of its academic staff employees for reasons other than those mentioned in clause 16. 2. On a proper interpretation of clause 16 of the Agreement, the Applicant may terminate the employment of an academic staff member where that staff member is unable to perform his or her duties for reasons outside the four categories listed in clause 16. 3. On a proper interpretation of clause 16 of the Agreement, clause 16 applies only to a termination of employment at the initiative of the employer, and does not apply to the termination of a contract of employment by frustration or other means not at the initiative of the employer. 4. On a proper interpretation of clause 16 of the Agreement, the words "governed exhaustively by" have the meaning that the procedures described in clause 16 are exhaustive of the procedures that the University must follow if it disciplines or terminates the employment of its employees for unsatisfactory performance, misconduct, redundancy or ill heath. 5. On a proper interpretation of clause 16 of the Agreement, the Applicant is not bound to comply with the procedures set out in the Agreement where the Applicant terminates the employment of a staff member where a staff member is unable to perform his or her duties for reasons outside the four categories listed in clause 16.' 73 I think that it would be appropriate to grant a declaration substantially in terms of the third declaration. 74 To grant declarations in the form of the four other declarations sought would, in my view, be either to trespass into the area of hypothetical questions in relation to circumstances that have not occurred and may not happen (see, for example, Forestview Nominees Pty Ltd v Perpetual Trustees WA Ltd (1998) 193 CLR 154 at 172) or would be inconsistent with the conclusion which I have reached in relation to the applicant's second point. Conclusion 75 There will be a declaration substantially in terms of paragraph 3 of the declarations sought. There will also be a declaration to reflect my rejection of the applicant's second point, but the application will be otherwise dismissed. I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment herein of Justice Carr. Associate: Dated: 6 November 2003 Counsel for the Applicant: Mr R L Le Miere QC Solicitors for the Applicant: Messrs Blake Dawson Waldron Counsel for the Respondent: Mr S J Moore Solicitors for the Respondent: Messrs Maurice Blackburn Cashman Date of Hearing: 28 October 2003 Date of Judgment: 6 November 2003