Industrial Relations Commission New South Wales Medium Neutral Citation: Secretary, Ministry of Health v Australian Paramedics Association (NSW) [2021] NSWIRComm 1077 Hearing dates: 15 October 2020 Date of orders: 8 October 2021 Decision date: 08 October 2021 Jurisdiction: Industrial Relations Commission Before: Chief Commissioner Constant, Commissioner Murphy and Commissioner Webster Decision: Leave to appeal is refused Catchwords: APPEAL – Leave to Appeal not granted - Industrial dispute – Category of employees in receipt of "on call allowance" for more than 30 years – Employees not entitled to "on call allowance" under the Award – Payment of "on call allowance" not authorised by the employer - Whether "on call allowance" a contractual entitlement on the basis of usage – Whether authority of the employer to pay the allowance is relevant – Whether the employer's intention to enter into the arrangement is relevant – Whether over award payment is inconsistent with express terms of contract providing for terms and conditions to be in accordance with the Award – Whether the contract of employment subject to the Health Services Act 1997 where employment pre-dates the commencement of the legislation - Whether an implied term of a contract of employment is "fixed" by a law pursuant to s116A(1) – Arguments raised late in proceedings and not fully addressed – Issues affecting a small number of employees and not sufficiently important to warrant leave - Practical resolution of dispute through making of an award more appropriate Legislation Cited: Ambulance Services Act 1990 (NSW) s 15 Area Health Services Act 1986 (NSW) s 26 Health Administration Act 1982 (NSW) s 21 Health Services Act 1997 (NSW) ss 33, 37, 115, 116A(1) Industrial Relations Act 1996 (NSW) ss 3, 146C, 163(1),187, 188 Public Hospitals Act 1929 (NSW) s40BA Cases Cited: Australian Fertilizers Ltd v Australian Workers' Union New South Wales Branch (1983) AR 237 Australian Paramedics Association (NSW) v Health Secretary in respect of NSW Ambulance (On Call Allowance for Aeromedical Control Centre Officers) (No 2) [2020] NSWIRComm 1028 Bale v Crown in Right of the State of New South Wales (Attorney-General's Department) (2000) 106 IR 354 Bossak v Health Secretary in respect of Murrumbidgee Local Health District [2020] NSWIRComm 1009 Collective Responsibility Case (1972) AR 80 Federated Ironworkers' Association of Australia, New South Wales Division v Australian Fertilizers Ltd re Overtime (1977) AR 17 Gillies and Ors v Health Administration Corporation and Anor [2003] NSWIRComm 243 Health Administration Corporation and others v Crocker and others [2004] NSWIRComm 163 New South Wales Nurses' Association v Sydney Local Health District [2013] NSWIRComm 28 NSW Nurses' Association & Ors v South Western Sydney Area Health Service [1994] NSWIRComm 147 NSW Nurses' Association v Sydney Local Health District [2012] NSWIRComm 52 Nurses and Midwives' Association v Justice Health and Forensic Mental Health Network (a Division of NSW Health) (No 2) [2013] NSWIRComm 29 Re Security Officers (Waterfront) Award (1988) 26 IR 1 Category: Principal judgment Parties: Secretary, Ministry of Health (Appellant) Australian Paramedics Association (NSW) (First Respondent) Health Services Union New South Wales (Second Respondent) Representation: Counsel: Ms E Raper SC and Mr D Fuller, Secretary, Ministry of Health (Appellant) Mr M Baroni, Australian Paramedics Association (NSW) (First Respondent) Mr T Slevin, Health Services Union (Second Respondent) Solicitors: Mr T Kiat, Australian Paramedics Association (NSW) (First Respondent) Ms O Forsyth-Sells, Health Services Union NSW (Second Respondent) File Number(s): 2020/140271 Publication restriction: Nil Decision under appeal Court or tribunal: Industrial Relations Commission of New South Wales Jurisdiction: Industrial Relations Commission Citation: [2020] NSWIRComm 1028 Date of Decision: 20 April 2020 Before: Commissioner Sloan File Number(s): 2019/00348333 decision 1. On 11 May 2020 the Secretary, Ministry of Health (the Health Secretary) filed an Application for Leave to Appeal and Appeal (the Appeal) with the Industrial Registry, pursuant to s 187 of the Industrial Relations Act 1996 (NSW) (the IR Act) from the decision of Commissioner Sloan in Australian Paramedics Association (NSW) v Health Secretary in respect of NSW Ambulance (On Call Allowance for Aeromedical Control Centre Officers) (No 2) [2020] NSWIRComm 1028 (the Decision). 2. The Decision, made on 20 April 2020, concerned an industrial dispute that was notified to the Industrial Registrar by the Australian Paramedics Association (NSW) (the APA). The Health Services Union New South Wales (the HSU) was an intervenor in the dispute. 3. The APA filed a Notice of Contention on 21 May 2020 in response to the Appeal, contending that the Decision should be affirmed. 4. For the reasons contained in this decision, the Full Bench has decided to refuse to grant leave to appeal. The Decision below 1. The industrial dispute the subject of the Decision concerned the decision of NSW Ambulance to cease paying an 'on call' allowance (the Allowance) to Aeromedical Control Centre Officers (ACCOs), which had been paid to ACCOs for over 30 years. 2. At the time of the Decision, the Allowance payable under the Paramedics and Control Centre Officers (State) Award 2019 (the Award) was $97.40 per week. 3. The matter was allocated to Commissioner Sloan (the Commissioner) for arbitration. Pursuant to directions issued by the Commissioner, the APA filed a document entitled "Application for Award Variation and Recommendations" with the Industrial Registry, which sought to vary the Award and sought that the Commission make two recommendations. 4. At the outset of the hearing of the matter on 30 and 31 January 2020 the APA confirmed that it would confine its case to the following recommendation sought by the Application for Award Variation and Recommendations: "1. Recommendation: a. That the Respondent continue to pay ACCOs the weekly on call allowance per Item 4 of Table 2A - Allowances, of Part B, Monetary rates of the Award, for as long as ACCOs continue to work under the existing on call arrangements. b. That any proposal to change the existing ACCO on call arrangements be subject to genuine consultation between the parties to the Award in accordance with cl 6 of the Award. c. That the on call arrangements should not be replaced by arrangements for filling short term vacancies that would, in the circumstances, require or pressure ACCOs to work de facto on ­call arrangements without entitlement to the on call allowance." 1. The Decision describes the role of an ACCO at [21] and notes that while some ACCOs are also trained as Rapid Launch Trauma Coordinators (RLTCs) (in respect of which they undisputedly are entitled to receive the Allowance), the dispute concerns solely ACCOs who do not also perform RLTC duties. 2. While cl 23 of the Award provides for the payment of the Allowance to ACCOs in certain circumstances, the key issues in dispute were; 1. whether the ACCOs could properly be considered to be 'on call' within the meaning of cl 23 and were in fact entitled to receive the Allowance; or 2. whether a term providing for the payment of the Allowance was implied into the ACCOs' contracts of employment. 1. In determining the proceedings the Commissioner relevantly made the following recommendation at [119]: "I recommend that NSW Ambulance continue to pay to each ACCO employed as at the date of this decision a weekly allowance equal to that set out in Item 4 of Table 2A - Allowances of Part B, Monetary rates of the Award, provided that: (1) the ACCO is on Whispir and is required to take telephone calls from their manager to ascertain if they are available to fill shift vacancies at short notice; and (2) this recommendation will not apply to ACCOs performing the duties of an RLTC who, the parties agree, are entitled to receive an on call allowance in accordance with cl 23 of the Award." 1. The Commissioner accepted the Health Secretary's submission that ACCOs are not 'on call' within the traditional meaning of that term and, after considering the APA's contention that the term has a specialised meaning in cl 23 of the Award, determined at [67] that there is no entitlement arising under the Award to the Allowance. 2. While the parties agreed that there is no express entitlement to the Allowance in the ACCOs' employment contracts, the APA and HSU submitted that the entitlement had been implied as a matter of usage and had become a term of their contract of employment by virtue of the Allowance having been paid to the ACCOs for over 30 years. After canvassing a series of authorities on the concept of 'usage', the Commissioner noted at [80] that the entitlement need not necessarily arise expressly under the Award for it to apply to the ACCOs. 3. Referring to evidence as to the extent to which the payment of the Allowance was accepted as an inherent entitlement owing to ACCOs, including the historical purpose of the Allowance, the Commissioner determined at [91] of the Decision that the Allowance satisfied the requirements established in the authorities at [70]-[72] such that it could be imported into the ACCOs' contracts of employment as an entitlement by usage. At [109] it was held: "109. … I have found that the entitlement of the ACCOs to receive the Allowance derives from usage, not from the Award. By its very nature that finding reflects the particular circumstances of the ACCOs and the way that they have been treated over many years." 1. The Health Secretary submitted that any representations as to the payment of the Allowance were not made by persons with the required delegation to fix terms or conditions of employment, as required by s 116A of the Health Services Act 1997 (NSW) (the Health Services Act) which relevantly provides: "116A Salary, conditions etc of staff employed in the NSW Health Service (other than senior executives) (1) The Health Secretary may fix the salary, wages and conditions of employment of staff employed under this Part in so far as they are not fixed by or under any other law. …" 1. The Commissioner determined that s 116A(1) could not operate to preclude the payment of the Allowance being implied as a 'fixed' term or condition of the ACCOs' contracts of employment by way of usage, and that implying a term based on usage does not require that the representations being relied upon were made by people who had the relevant authority or delegation to make them. It was found to be irrelevant whether the payment of the Allowance should have been formally approved by the Health Secretary, as the mere fact that it had been paid to the ACCOs for over 30 years was sufficient. Parties' Submissions on Appeal 1. The Health Secretary relies on the following grounds of appeal, described in its Appeal: "Ground relating to s 116A 1. The Commissioner erred in construing the words 'conditions of employment ... , fixed by or under any other law' in s 116A of the Health Services Act to include a term implied into an employment contract on the basis of custom or usage. The Commissioner's construction: (a) undermines the statutory scheme of s 116A and the delegation power in s 21 of the Health Administration Act, by permitting a person other than the Appellant or a person with a delegation in accordance with s 21 to fix the conditions of relevant staff by engaging in a long-standing practice of acting outside conditions fixed by the Appellant (in the Award); (b) is inconsistent with the Nurses' case in that it admits an alternative source of authority to set conditions of employment for relevant staff to the authority given by s 116A of the Health Services Act and s 21 of the Health Administration Act, which was rejected in the Nurses' case; (c) erroneously identified the 'common law principle of usage' as a mechanism that 'fixes' a condition of employment (at [102]), when it is the employment contract that 'fixes' the relevant condition of employment in the case of a term implied by custom or usage; and (d) erroneously identified the common law principle of usage as fixing a condition of employment 'by or under ... law' (at (102]), when the implication of a contractual term on the basis of custom or usage is an implication of fact, not law. Grounds relating to the implication of the on-call allowance term 2. The Commissioner erred in his consideration of whether a relevant custom or usage existed, by: (a) erroneously concluding that '[by] its very nature the issue of delegation is irrelevant to the enquiry into the presence and nature of a usage' (at [99]); (b) failing to consider whether the practice he relied upon to find a custom or usage on the part of the Appellant was the practice of a contracting party or a person with authority to bind the contracting party; and (c) failing to consider whether the individuals whose conduct was relied upon (at [85]) as establishing a custom or usage on the part of the Appellant engaged in that conduct within the scope of an actual or ostensible authority to bind the Appellant to employment conditions. 3. The Commissioner erred in: (a) failing to consider whether the on-call allowance term was inconsistent with the express terms of the ACCOs' employment contracts; and (b) failing to find that the on-call allowance term was inconsistent with the term of the ACCOs' employment contracts that 'The conditions of employment for this position are embodied in the Operational Ambulance Officers (State) Award'. 4. The Commissioner erred in failing to find that the on-call allowance term was inconsistent with clause 23 of the Award, on the basis that: (a) clause 23(1)(i) sets out an exhaustive list of circumstances in which the allowances in Item 4 of Table 2A - Allowances, of Part B, Monetary rates, would apply, and the effect of the Commissioner's decision is to add to that list; (b) further or alternatively, clause 23 of the Award covered the field of circumstances in which on-call allowances would be paid, and the effect of the Commissioner's decision is to add to those circumstances." 1. In relation to Ground 1, the Health Secretary submits at [20] of its outline of appeal submissions filed 3 September 2020 that there is no power under the Health Services Act nor any of its predecessors (in particular the Ambulance Services Act 1990 (NSW) (the Ambulance Services Act)) for anyone other than the Secretary (or the Health Administration Corporation (the HAC), by which NSW Ambulance employees were previously employed) to fix terms and conditions of employment, including by implying a term providing for the payment of the Allowance. Section 15 of the former Ambulance Services Act 1990 (NSW) was similar to sub-s 116A(1) of the Health Services Act, and permitted only the HAC to determine terms and conditions of employment, except as otherwise provided by law. It is submitted that there is no evidence that the power to determine the ACCOs' terms and conditions of employment had been delegated to managers and other staff who paid the Allowance to ACCOs, and that the requirement for a formal delegation to individuals other than the Health Secretary remained in place. The Health Secretary submits at [28]-[34]: "28. Contrary to Commissioner Sloan's conclusion, the need for a formal delegation could not be circumvented by reference to the qualification in s 116A(1) 'in so far as they are not fixed by or under any other law'. 29. First, if ACCOs had a contractual entitlement to the amount of the on-call allowance, that entitlement would not be 'fixed by or under' any law. It would be fixed by or under the on-call allowance term, a contractual provision which on any view is not a law. The on-call allowance term would be an implied term, but not a term implied by law. The first principle set out in the passage from Con-Stan quoted by Commissioner Sloan is that '[t]he existence of a custom or usage that will justify the implication of a term into a contract is a question of fact'. As set out in paragraph 16 above, the ultimate question is always a factual one: is it reasonable to assume the parties contracted with reference to the custom or usage so that it, in fact, formed part of their bargain? 30. The fact that judicial authorities have identified characteristics of a custom or usage that will be necessary to make that assumption reasonable does not mean the implied term or the entitlement it embodies are in any sense 'fixed' by or under the common law. If that were so, every contractual entitlement would be, because it is the common law that provides the principles for determining the terms of a contract (express and implied) and for their enforceability. The common law provides a framework for determining whether particular matters form part of an enforceable contract between the parties, but the source of those matters remains the parties' agreement (express or implied). 31. The conclusion that the common law does not 'fix' any term or condition of employment is supported by the legislative history. As set out in paragraph 24 above, s 15(1) of the Ambulance Act, which was the predecessor to s 116A(1) for NSW Ambulance employees, used the language 'except in so far as provision is otherwise made by law'. The common law principles concerning custom or usage cannot be said to make 'provision' that the conditions of employment of NSW Ambulance employees are to be 'otherwise' than as determined by the HAC. For the reasons in paragraph 25 above, the 2006 amendments were evidently intended to transfer the HAC's powers in respect of those employees to the Secretary, not to change their scope. 32. Second, if contractual terms implied by custom or usage were covered by the 'any other law' qualification, it would undermine the statutory scheme described in paragraphs 21 to 27 above. It would mean that someone other than the Secretary or an authorised delegate would have the power to fix the terms and conditions of employment of NSW Ambulance employees, by a long-standing practice of acting outside the framework of terms and conditions established by the Secretary (for example, in the Award) and without the Secretary's knowledge. The dispersion of that function would produce uncertainty and instability in employment conditions, contrary to the long-standing purpose of the statutory scheme as set out in paragraph 25 above. As Boland P observed in New South Wales Nurses' Association v Sydney Local Health District, as in reference to s 116A(1) coupled with s 21 of the Health Administration Act: 'A purpose of such a scheme must be to ensure a high measure of consistency in a large and diverse public sector organisation.' 33. Third, there is no basis to distinguish this case from New South Wales Nurses' Association v Sydney Local Health District (Nurses' case). The Nurses' case concerned representations about the continuation of a night shift made by managers in the Nursing Unit of the Local Health District. The Full Bench held that, in the absence of a delegation under s 21 of the Health Administration Act, those managers had no power under s 116A to 'enter into contracts of employment and negotiate terms and conditions of employment'. When the function of the common law of contract is properly understood as set out in paragraph 30 above, there is no reason to treat express representations by unauthorised persons differently from customs or usages derived from the practices of unauthorised persons. In either case, the Commission is being asked to draw an inference as to what the contracting parties intended to be the terms of their bargain from the conduct of a person without authority to fix them. 34. It follows that s 116A(1), and s 15(1) of the Ambulance Act before it, did not permit ACCOs' terms and conditions of employment being fixed by an implied on-call allowance term. That term could not prevail against those provisions." 1. The Health Secretary's submissions in relation to the remaining grounds may be summarised as follows: 1. In relation to Ground 2 (at [35]-[42]) it is submitted that there was no evidence that the individuals who paid the Allowance had actual or apparent authority of the Health Secretary to do so. These individuals were not contracting parties to the contractual arrangements governing the terms and conditions of employment, and only the practices of the NSW Government (or, previously the Ambulance Corporation and the HAC) could be relied upon in establishing a custom or usage. It is submitted that there is no evidence of delegation that would provide the managers and staff who paid the Allowance with actual authority, nor any representation by the NSW Government or its predecessors that they had such authority, to pay the Allowance. 2. In relation to Ground 3 (at [43]-[47]): the payment of the Allowance is argued to be inconsistent with the ACCOs' employment contracts. The letters of offer to ACCOs constituted the entirety of the ACCOs' employment contracts and stated that the Award embodied the terms and conditions of employment such that an additional term for the payment of the Allowance could not be implied. 3. In relation to Ground 4 (at [48]-[52]): the payment of the Allowance is inconsistent with the Award. Clause 23, in particular, identifies an exhaustive list of circumstances where the Allowance is payable and 'covers the field'. 1. The APA's outline of appeal submissions filed 21 September 2020 resists each of the grounds of appeal and can be summarised as follows: 1. Contrary to the argument advanced by the Health Secretary in Ground 1 of the Appeal, neither s 116A of the Health Services Act nor s 15 of the Ambulance Services Act operate retrospectively to displace terms or conditions that existed at the relevant time merely because there was no evidence of a delegation of authority beyond the Health Secretary. The payment of the Allowance to ACCOs for over 30 years demonstrates that the Allowance was known and accepted, evincing clear evidence of usage over an extended period. 2. In relation to Ground 2 of the Appeal, whether managers or other staff who implemented the Allowance had the authority to do so and to make representations about the Allowance is not relevant. 3. Ground 3, which relies on the proposition that the payment of the Allowance cannot be implied because it is inconsistent with express terms of the ACCOs' contracts of employment, fails because the letters of offer did not constitute all terms of the ACCOs' employment. 4. The Health Secretary's contention in Ground 4 that implying the Allowance was inconsistent with the terms of the Award should be rejected on the basis that the Allowance is entirely different to the circumstances in which an on-call allowance may be paid under cl 23 of the Award, and cl 23 is not intended to cover the field in the matter. 1. The HSU filed submissions on 17 September 2020, expressing arguments broadly consistent with those presented by the APA. 2. The APA's Notice of Contention asserted that the Decision should be affirmed on alternate grounds to those determined by the Commissioner, submitting that: "1. The Commissioner was entitled to find that Section 116A of the Health Services Act 1997 (NSW), or its predecessor, did not operate retrospectively so as to remove, alter or otherwise interfere with terms and conditions of employment of the relevant employees which existed prior to the section coming into force." 1. In its outline of submissions on its contention, the APA extensively canvasses the legislative principles concerning the retrospectivity of legislation. 2. The Health Secretary rejects the APA's submission on its Notice of Contention that s 116A of the Health Services Act has no retrospective operation, for reasons contained at [3]-[5] and [8]-[10] of its submissions in reply filed 1 October 2020: "3. First, before s 116A came into force on 17 March 2006, s 15(1) of the Ambulance Act had the same effect in relation to NSW Ambulance employees: see Secretary's primary submissions, [24]-[25]. That provision had been in force since 1 July 1990, well before the ACCOs, who were the subject of the primary decision, were first appointed as ACCOs. 4. Accordingly, it makes no difference to the Secretary's submissions whether s 116A operated retrospectively. There is no need for the Full Bench to determine that issue. 5. Second, the relevant question is not when the custom or usage in question first arose (cf APA's Notice of Contention submissions at [10]), but when the relevant employment contract was made. No contractual condition can be 'fixed' before the contract comes into existence. A historical custom or usage may form the basis for a contractual term to be implied, but that does not occur until the contract is formed. This was acknowledged by the High Court in Con-Stan. ... 8. Third, the submission attempts to avoid the inescapable: the effect of s 116A is such that only the Health Secretary or her delegate can fix the salary, wages and conditions of employment. As set out in paragraphs 36 and 37 of the Secretary's primary submissions, it was not open to conclude that the purported custom or usage arising from the conduct of the ACC managers could form a basis for implying a contractual term given there was no evidence that those managers had actual or apparent authority of the Secretary (or HAC). Such authority would be inconsistent with the fact that these individuals had no power to bind the Secretary to a contract that fixed employees' salary, wages and conditions of employment contrary to the Award, and such a contract if made would be illegal, void and unenforceable. 9. It follows that s 116A(1) had the effect of excluding any on-call allowance term from any contract formed on or after 17 March 2006, and s 15(1) of the Ambulance Act had the same effect in relation to any contract formed between 1 July 1990 and 17 March 2006, regardless of when the underlying custom or usage arose. All of the contracts in issue in this case were formed after 1 July 1990. 10. In any event, the evidence before Commissioner Sloan did not identify when the practice of paying the on-call allowance to ACCOs who were not on call first commenced. It was not and could not be found that it commenced before 1 July 1990, when s 15(1) of the Ambulance Act came into effect. Accordingly, the contention does not assist the APA." 1. In response to the submissions of the HSU, the Health Secretary submits at [22]-[25] of its submissions in reply: "22. The Secretary does not dispute that custom or usage is identified based on a large number of individual acts: cf HSU's primary submissions, [17]-[18]. That says nothing about whose acts are relevant. The cases in which the principles concerning custom or usage have been considered typically involve practices that are alleged to have formed among many different sets of contracting parties in a particular industry or market. Neither the HSU nor the APA have identified any case in which a court has found an implied term based on the practices of individuals who are not contracting parties or agents for contracting parties. Such an implication would be antithetical to the underlying rationale for implying a contractual term based on custom or usage, which is that it raises an inference about what the contracting parties intended: see Secretary's primary submissions, [16] as well as at [6] to [8] of these submissions above. 23. The HSU's assertion that '[t]erms of the contract are a set of private laws' (HSU's primary submissions, [22]) is a fundamental misunderstanding of the nature of a contract. However 'law' might be defined, it does not include a term of a private bargain, developed and agreed upon only by the parties to it. The proposition that 'any other law' includes the common law or the law of contract (HSU's primary submissions, [23]) does not resolve the issue for the reasons in [29] to [31] of the Secretary's primary submissions. 24. As to the issue of inconsistency with the ACCOs' employment contracts, it does not assist the HSU to make the abstract submission that '[t]here is no reason why' the on­call allowance term could not sit alongside conditions of employment in the relevant award: HSU's primary submissions, [28]. The question is whether the on-call allowance term is inconsistent with the actual terms of the relevant ACCOs' employment contracts. It is, for the reasons in [43] to [47] of the Secretary's primary submissions. 25. As to the issue of inconsistency with the Award, the Secretary does not suggest that the primary decision involved any term being implied into the Award: cf HSU's submissions, [31]-[36]. The submission is that the on-call allowance term could not be implied into ACCOs' employment contracts because it was inconsistent in substance with the scheme of the Award providing for the on-call allowance. This meant the implication would offend the principle that custom or usage cannot prevail over statutory provisions, because awards have statutory force in New South Wales: see Secretary's primary submissions, [18]. The HSU does not address this submission." 1. We have carefully considered the parties' written submissions, as well as those delivered orally before the Commission at the hearing of the Appeal before the Full Bench. Leave to Appeal – principles to apply 1. Section 188 of the IR Act is in the following terms: 188 Appeals to Full Bench by leave only (1) An appeal to a Full Bench of the Commission under this Part may be made only with the leave of the Full Bench. (2) The Full Bench is to grant leave to appeal if, in its opinion, the matter is of such importance that, in the public interest, leave should be granted. (3) The Full Bench may deal with an application for leave to appeal separately and without conducting a hearing into the merits of the appeal. (4) This section does not apply to an appeal made by the Minister. 1. The principles governing the grant of leave to appeal in this jurisdiction are well known. These principles were recently restated by a Full Bench of the Commission (Chief Commissioner Kite SC, Commissioner Sloan, Commissioner Webster) in Bossak v Health Secretary in respect of Murrumbidgee Local Health District [2020] NSWIRComm 1009 in the following terms: "Legal principles to apply 27 An appeal to a Full Bench of the Commission may be made only with the leave of the Full Bench: s 188(1) of the Act. The Full Bench is to grant leave to appeal if, in its opinion, the matter is of such importance that, in the public interest, leave should be granted: s 188(2) of the Act. 28 The principles in relation to the grant of leave to appeal a decision of the Commission were summarised in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Roads and Maritime Services [2015] NSWIRComm 16. In that matter the Full Bench stated: '10. It is well settled that an appeal under the IR Act is an appeal in the strict sense: see s 191 of the IR Act and King v State Bank of New South Wales (No 2) [2002] NSWIRComm 353; (2002) 126 IR 407. In such an appeal the appellate tribunal will only intervene to correct error: Aboud v State of New South Wales (Department of School Education) [1999] NSWIRComm 449; (1999) 92 IR 32. In the case of discretionary decisions it is not enough that the appellate tribunal would have come to a different view. It must be shown that the primary judge had failed to properly exercise the discretion committed to him [sic]: Mace v Murray [1955] HCA 2; (1955) 92 CLR 370 and House v The King [1936] HCA 40; (1936) 55 CLR 499. It is important to bear these principles in mind in approaching the question of leave to appeal. 11. The principles guiding the determination of leave were clearly set out in this often cited passage from Hosemans v Commissioner of Police (No 4) (2005) 150 IR 263: [5] The law and practice governing leave to appeal is well settled and does not require restatement: see Knowles v Anglican Church Property Trust (No. 2) (1999) 95 IR 380. However, two principles warrant particular mention: first, leave will not be lightly or automatically granted (see King v State Bank of New South Wales (No 2) (2002) 126 IR 407 at [52]-[55] and Knowles at 381 - 382) and, subject to the requirements of s188(2) of the Act, will not, generally, be granted unless the appellant demonstrates that the appeal 'raises substantial issues of principle or law or has wider implications for the jurisprudence of this Commission, including whether the decision has widespread practical application' (see Knowles at 382) or raises issues going to the proper administration of justice. Secondly, leave will rarely be granted where an appeal primarily seeks to challenge findings of fact which are otherwise reasonably open on the evidence: Box Valley Pty Ltd v Price (2000) 97 IR 484; Austin v NF Importers Pty Limited [2005] NSWIRComm 353 at [5].' 29 In Industrial Relations Secretary v Wattie [2017] NSWIRComm 1007 the Full Bench stated at [12]-[13]: "12. We note that the Full Bench in Antonakopoulos v State Bank of NSW (1999) 91 IR 385 also held…that an appeal bench should not substitute its own views as to a decision that was reasonably open at first instance. We endorse and apply that approach. 13. Lastly, we add, as the Full Bench said in Fire Brigade Employees' Union of NSW (o/b Challinor) v Fire and Rescue NSW [2016] NSWIRComm 1050, that it will rarely be appropriate to grant leave to appeal unless an appellant can mount at least an arguable case pointing to appellable error. This is by no means a new element of the Commission's jurisprudence; it has long been held that an appellate body in an appeal of this nature will only substitute its own judgment where the first-instance decision maker has fallen into error of law, or made a finding of relevant determinative fact that is demonstrably wrong: Drake Personnel Ltd v Workcover Authority of NSW (1999) 90 IR 432 at 440. There will rarely be utility in granting leave to appeal where that degree of error cannot at least arguably be agitated on appeal." 30 The principles outlined in the cases cited above have since been approved in numerous decisions of the Full Bench. It is not necessary to list them all. We will apply these principles." 1. We will also apply these principles. The Health Secretary's submissions on leave to appeal 1. The Health Secretary relied upon submissions filed on 3 September 2020 in respect of the question of leave to appeal in the following terms (footnotes omitted): "1. This matter is of such importance that, in the public interest, the Secretary should be granted leave to appeal. It raises issues of principle and law with wider implications for the jurisprudence of the Commission and with widespread practical application. 2. First, the appeal raises important questions about the construction of s 116A of the Health Services Act 1997 (NSW) (Health Services Act) and the role and application of common law principles concerning custom or usage in the industrial context. 3. The first question is important because its answer affects the limits of the Secretary's power to fix the salary, wages and conditions of employment of staff employed across the Ministry. If the primary decision stands, it will dilute that power by opening those matters to variation by practices unknown to and unauthorised by the Secretary. That effect will extend beyond the Ministry: provisions similar to s 116A appear in other public sector legislation covering many New South Wales Government employees. 4. The remaining questions, relating to custom or usage, are important because it is common for practices to form between managers and employees outside the scope of employment agreements. By the primary decision those informal practices can bind the employer regardless of the managers' authority to do so. The implications of that decision also extend beyond the present industrial dispute. 5. Second, the questions on appeal are novel. 6. The Commission has not previously considered the interaction between s 116A of the Health Services Act and the principles concerning the implication of terms by custom or usage. The Industrial Court's consideration of s 116A in NSW Nurses' Association v Sydney Local Health District (Nurses' case) was in the context of express representations, which Commissioner Sloan held distinguished it from the present case. Whether that was a proper distinction is one of the issues on appeal. 7. There is little Australian authority in any context on the application of the common law principles concerning custom or usage in the industrial context, or in relation to the authority needed to bind a contracting party to a custom or usage. 8. Third, the primary decision is attended by sufficient doubt to warrant a grant of leave for the reasons in the substantive submissions accompanying this narrative. 9. Fourth, the Secretary is not advancing a substantially different case on appeal. The Secretary's case below included that s116A of the Health Services Act precluded the implication of a contractual term based on custom or usage and that, in any event, the requirements for doing so were not shown to be met including because the term would undermine the Award. The 'any other law' exception relied upon by Commissioner Sloan was not raised by any party below or by the Commissioner until his judgment, so the Secretary is entitled to respond to it now. 10. Fifth, the fact that the outcome of the primary decision was the making of recommendations rather than binding orders is not a reason to deny leave to appeal. A decision that results only in recommendations remains a decision within the meaning of s 187(1) of the IR Act and can be appealed on the same basis as any other. The questions raised by the primary decision remain important and novel for the reasons set out above." 1. In its written submissions filed on 21 September 2020, the APA referred the Commission to the relevant principles applying to the discretion to grant leave to appeal. However, the APA did not oppose or support the granting of leave in the written submissions. In its oral submissions, the APA appeared to adopt the submissions of the HSU stating (Tcpt, 15 October 2020, p 40(24)-(41)): BARONI: I'll take this opportunity to make a couple of points. The first is that ultimately this is a recommendation and it does raise the question about whether in those circumstances leave to appeal should be granted. That's the first thing. And what follows from that is the proposition I advanced right at the very beginning that it would then be a position whereby if leave were granted and the appeal upheld, you would then have an unresolved dispute. We say that those two factors in combination influence what the Full Bench should do in relation to leave. This is not a case as for example the nurse's case where binding orders were made or sought by way of declaratory relief. This is quite something different. The Commission has to, that's it's job, resolve disputes. But absent making any particular awards, et cetera, then it's powers are limited to making recommendations, et cetera, pursuant to s 136(1)(b) or (a) from memory. In my submission that particular issue does raise for consideration whether leave to appeal should be granted in these particular circumstances. I think Mr Slevin will elaborate on that. He has a particular view about this which I have discussed with him. And to the extent I need to I will adopt his submissions any further. That's our position in relation to leave, Chief Commissioner. 1. The HSU opposed leave to appeal in written submissions filed on 17 September 2020 and oral submissions before the Full Bench. In its written submissions, the HSU stated (footnotes omitted): 1. Leave to appeal should not be granted in this matter. 2. The question of law before the Full Bench is not novel and rather is a well-established and fundamental principle of contract law. 3. Section 116A(1) of the Health Services Act 1997 (HS Act) provides: The Health Secretary may fix the salary, wages and conditions of employment of staff employed under this Part in so far as they are not fixed by or under any other law. 4. The word 'may' in an Act to confer power indicates that the power may be exercised or not,1 at discretion (and in this case, insofar as the conditions wages are not already or otherwise fixed by or under any other law). 5. The words of s116A does not isolate the facility to fix wages and conditions of health employees only to the Health Secretary. The express words of the text provide that the Health Secretary may set wages and conditions, and simultaneously those wages and conditions may set wages and conditions, and simultaneously those wages and conditions may be fixed by or under any other law, including but not limited, to the common law. 6. There is nothing in the text of the original decision that limits or otherwise undermines the powers of the Health Secretary to continue to fix the salary, wages, or conditions of employment. The primary decision merely identifies that this legislation permits wages and conditions to be fixed under the common law os well os at the direction of the Health Secretary. 7. Sloan C correctly identifies in the primary decision that there is, no reason why the words "in so far as they are not fixed by or under any other law" appearing ins 116A of the Health Services Act could not extend to terms and conditions "fixed" by reference to the common law principle of usage.2 8. To deviate from the clear and plain language used in the legislation there must be ambiguity established, for which there is not. 9. Second, there is nothing novel about the question of implied terms of contract by way of custom or usage. This is a well-established legal principle with significant authority much of which relates to implied terms of contract by custom in the context of industrial relations and industrial awards. 10. There is little Australian authority in relation to the authority needed to bind a contracting party to custom or usage because authorisation is irrelevant to whether a custom or practice exists in a fashion sufficient to give rise to an implied term. 11. Third, it was the Appellant who, in the proceedings below, raised the question of the interaction of s116A (1) with the continued payment of the ACCO on-call allowance. If the Appellant failed to make adequate submissions on the question of that provision at that time, it is not appropriate for the Appellant to then use an appeal to correct that shortfall. 12. Therefore, there is nothing either novel in the questions for the Full Bench, of a sufficient public interest or in error in the primary decision which could give rise to allow leave to appeal. 1. Mr Slevin appearing for the HSU made further submissions with respect to the issue of whether leave to appeal should be granted at the hearing. 2. In reply, to the APA and HSU submission on leave to appeal, the Health Secretary submitted in its written submissions filed on 1 October 2020: 12. The APA makes no positive submission against the grant of leave. 13. The HSU's leave submissions at [4] and [5] go beyond the reasoning of Commissioner Sloan and highlight that there is a significant point of principle in dispute requiring the Full Bench's consideration. 14. The HSU's leave submissions at [10] recognise the novelty of the issue about whether a term can be implied based on the custom or usage of an unauthorised person. There is a serious question to be determined about that issue for the reasons in the Secretary's primary submissions on ground 2. The bare assertion that 'authorisation is irrelevant' does not advance the HSU's position. The Australian authorities dealing with the general principles of custom or usage have not dealt with the issue of authority because they have not considered a situation in which a party is attempting to establish an implied term based on the custom or usage of a person who is not a contracting party or someone with their authority. 15. The fact that the Secretary raised s 116A(1) below says nothing about whether leave should be granted: cf HSU's leave submissions, [11]. The Secretary made submissions about that issue which Commissioner Sloan did not accept. The Secretary is entitled to seek leave to appeal from that decision. 1. We have also considered the oral submissions of the Health Secretary in reply as to why leave should be granted and specifically the responses to the oral submission of the HSU with respect to why leave should not be granted. 2. We have considered and addressed the parties written and oral submissions with respect to whether the Full Bench should grant leave to appeal in this matter below. Should leave to appeal be granted? 1. We have decided that there is not a sufficient basis upon which the Full Bench should grant leave to appeal in this matter for reasons including that it is not of such importance that leave to appeal should be granted and the issues raised in the appeal were not fully ventilated at first instance and were not sufficiently addressed in the Appeal. Finally, we have also formed the view that the resolution of the dispute is best dealt with by consideration of the making of an award and any appeal in this matter is unlikely to have a practical consequence in terms of resolving the underlying dispute. 2. On the evidence before the Commissioner, there were approximately 25 ACCOs being paid the Allowance who, according to the Health Secretary, were not entitled to it. At the hearing of the Appeal, it was suggested that the number of ACCO's receiving the Allowance who were not entitled to it was 13. The quantum of the Allowance at the time of the hearing was approximately $100 per week. Whist this amount is not insignificant to the individuals who received it, in the context of the overall spending of the Health Secretary in New South Wales, the amount in dispute (about $1,300 per week) is not significant. Further, the Decision resulted in the Commission making a recommendation as set out above at [11]. It has no binding effect on the parties and is ultimately unenforceable. 3. In the appeal, the Health Secretary challenges the Commissioner's findings as they relate to the determination that the Allowance was an implied term by operation of the concept of usage. Furthermore, the Health Secretary argued that the Commissioner's interpretation of s 116A of the Health Services Act was wrong and that this has implications beyond the matter before the Commission. 4. There is no evidence to support the point raised by the Health Secretary that there may be broader implications from allowing the first instance decision to stand. To the extent the issue of unauthorised arrangements does exist and is discovered in the future, it is incumbent upon the Health Secretary to put in place appropriate systems of management to mitigate the likelihood of this occurring, rather than seeking a legal avenue effectively to insure any of its system failures. 5. Although there are aspects of the Appeal which raise novel issues relating to the interpretation of s 116A and the concept of usage in the particular industrial context arising, we are of the view that this matter is not the appropriate vehicle to consider these issues as these were not fully argued before the Commissioner at first instance or in this Appeal. In the proceedings at first instance, in its initial written submissions dated 20 December 2019, the APA submitted (in the alternative to its claim based on cl 23 of the Award) that the entitlement for ACCOs to be paid the Allowance was a term of their contracts of employment implied by usage. The APA cited in support the Collective Responsibility Case (1972) AR 80 at p 98 and Re Security Officers (Waterfront) Award (1988) 26 IR 1 at pp 8-9. 6. In its written submissions dated 10 January 2020, the Health Secretary focussed on the APA's claim based on its interpretation of the Award and on an "implied term of the contract of employment… implied because the employee has an expectation that the allowance be paid…" (at [24]-[28]). The Health Secretary did not address the claim based on usage and did not refer to s 116A of the Health Services Act. 7. The HSU's supplementary submissions dated 28 January 2020 asserted that a term may be implied into a contract based on custom, practice and usage. The HSU made no reference to s 116A which, up until that point, had not been raised by the Health Secretary. Among the authorities relied upon, the HSU cited Federated Ironworkers' Association of Australia, New South Wales Division v Australian Fertilizers Ltd re Overtime (1977) AR 17 at p 22, Bale v Crown in Right of the State of New South Wales (Attorney-General's Department) (2000) 106 IR 354 at [69] and NSW Nurses' Association & Ors v South Western Sydney Area Health Service [1994] NSWIRComm 147 in which a Full Bench of the Commission (Bauer A-VP, Schmidt J, McKenna CC) expressly adopted the remarks of Watson J in Australian Fertilizers Ltd v Australian Workers' Union New South Wales Branch (1983) AR 237. The relevant passage from the decision of the Full Bench is reproduced in the Decision at [71]. 8. The issue of s 116A of the Health Services Act was not raised in the proceedings at first instance until the end of the second day of the two day hearing, 31 January 2020, in the following exchanges between Mr Nagle, counsel for the Health Secretary, and Mr Baroni, counsel for the APA: NAGLE …The other thing is I can meet the contract case in all of 10 minutes. There's a very simple answer and it's found in s 116A of the Health Services Act. It's been considered by the full bench here already. Mr Whitwell (Manager, Aeromedical Control Centre) doesn't have the authority to bind the Ambulance Service. It's very simple. So either be it express or implied, it cannot be a condition and term of the contract… … BARONI …I'll say one thing, that I'd have to have a look at this section 116A and now it operates and I understand my friend, what he said. That may or may not be the end of the matter because it depends how the section is cast and what impact it has on the context of the dispute because ultimately, all you can do is make a recommendation and you can still make a recommendation, irrespective of what 116A of the Health Services Act says because what the primary task you look at is a fairness issue. They're one of the principles under the Act… … The second point to make is that it's always been the applicant's case and certainly, from the time that the primary submissions were filed, that there was a reliance on a custom practice, that is a usage argument. So even if, and I must say one, to some extent, must really concede that the way that the on-call provision in this service operates, is not strictly in accordance with the award, but that does not make it inconsistent with the award and that will be something that I need to develop in due course and the third prong of the attack was the, if I can call it contractual entitlement, which the Commission, whether it finds ultimately that 116A, as my friend says, is a complete answer, the Commission would, in my submission, be quite disturbed that you have a public authority on its own evidence, entices people and makes promises, from which it then resiles from, because that's the effect of that submission. So Mr Whitmore makes promises, they're accepted and now my friend says, well he's got no authority to make it, tough. And I'll have something to say about that. …And again, this is in the context of dealing with an industrial dispute, because the commission is entitled to say, "Well let's assume Mr Nagle's submission is correct and the 116A is a complete answer to the contractual issue, that doesn't stop the Commission from expressing a recommendation why it's unfair and you should keep giving the promises you've made. There's nothing stopping you from doing that. 1. When Mr Nagle first raised s 116A, it was in the context of Mr Whitwell's lack of "authority" (delegation) to contractually bind NSW Ambulance. Although it was not a fact in issue that the relevant managers who sought to authorise the Allowance did not have the relevant authority, the evidence before the Commission did not include any of the relevant delegations made for the purposes of s 116A. There is a lack of evidence in these proceedings generally with respect to the issue of the delegations and authorities of individuals to enter into arrangements with those engaged in the service of NSW Health. 2. After the conclusion of the hearing, the APA filed further written submissions dated 10 February 2020. The APA conceded that there was no evidence that any of the "managers" had a delegation under s 21 of the Health Administration Act 1982 such that they could contractually bind the Health Secretary by making the representations which were made by Mr Whitwell and others to the effect that ACCOs would receive the Allowance even though they were not required to be on call. Nevertheless, it was argued that s 116A did not displace the implication of a term in a contract of employment arising from usage, where the well-established tests of "reasonable", "certain", "unambiguous", "so well known" and "notorious" had been met. The HSU supported these submissions. 3. In written submissions filed on 17 February 2020, the Health Secretary noted at [3] that "no declaration as to entitlement has been sought nor has an application been made to vary the Award to provide for the payment which the APA seeks a recommendation for". It was also submitted at [6]-[8] that "it is not necessary to address the issue of 'usage' in this matter as the payment clearly offends the Award". 4. Reliance was placed by the Health Secretary on the decision of Boland J, President, in NSW Nurses' Association v Sydney Local Health District [2012] NSWIRComm 52 and on the decision of the Full Bench (Walton J, Vice-President, Staff J, Backman J) on appeal from the decision of Boland J in New South Wales Nurses' Association v Sydney Local Health District [2013] NSWIRComm 28. The Health Secretary's written submissions contained the following: 22 …Section 116A limits the power of persons to offer terms and conditions of employment. There can be no contract nor any right to payment where there is no entitlement under the Award or under the contract. Mr Whitwell did not have authority to set terms and conditions as conceded by the applicant. It is therefore not open to the Commission to recommend the payment continue to be made when there is no Award or contractual entitlement to ground such a payment. 23. … There is no utility in attempting to distinguish this case to Nurses case or New South Wales Nurses' Association v Sydney Local Health District [2013] NSWIRComm 28 for that matter (where the Full Bench agreed with Boland J's ultimate conclusion) simply because the relief sought in the case at first instance was a declaration versus a recommendation. As Boland J, President at first instance noted at [84] an instrument of delegation would need to be evidenced before the Commission would find that a binding representation was made. In this case there is no such delegation. It follows therefore that there is no contract which provides for the payment and thus the recommendation as sought would not be made. 24. It is not the case that the implication of a term in this contract as asserted by the applicant would lead to the contract becoming 'workable'. Nor is it the case that the implication of a term to be paid the on call for not actually being on call was so obvious that the parties would have intended it to operate despite not being in a written contract. That must lead to the obvious conclusion that the payment is only to be made if an employee is actually on call. 25. …The test is not whether s 116A explicitly excludes the payment of an amount being ordered due to usage. Such a approach would make the drafting of law impossible (that is where a closed list of matters is excluded because the statute says so). Section 116A vests a power to set terms and conditions in a person or class of persons. Mr Whitwell (or others who preceded him) have not been demonstrated to have had the power to set terms and conditions. It is commonly the case that the Secretary of a government department is vested with power to exercise functions under the State. If it were the case that pay and conditions were able to be agreed to by persons well down the management hierarchy then the setting of terms and conditions would become fraught with inconsistency. That point was expressly acknowledged by Boland P at [102] in the Nurses' case where his Honour noted that the purpose of s 116A of the Health Services Act is to provide consistency in employment across the organisation as a whole. 26. Additionally of course, the Commission has a power make and vary Awards. Ultimately this case turns on whether the ACCOs are entitled to receive the on call allowance as per Award. The argument that the payment as found in the Award is somehow imported into the contract of employment by implication in circumstances where the employees are not on call undermines both the Award and the manner in which public sector employment terms and conditions are set. 1. In its written submissions in reply dated 22 February 2020, the APA put: 19. …Usage does not require anyone's authorization… It follows therefore that it is irrelevant whether Mr Whitwell had the authority or not and it is irrelevant whether the Health Secretary was aware of the usage. The assumption is that the parties contracted on the basis of the existing custom. 1. We are also of the view that the parties in these proceedings did not address in sufficient detail the authorities of this Commission as they relate to the concept of usage within the industrial relations context in the matter below. 2. In particular, the Health Secretary has failed to grapple with the historical recognition of the principle of usage in this jurisdiction, despite the existence of statutory provisions such as sub-s 116A(1) of the Health Services Act or sub-s 15(1) of the Ambulance Services Act or with similar statutory provisions such as those set out below: Health Services Act 1997 (as originally enacted and prior to the insertion of s 116A into the Act in 2006) 115 Determination of conditions of employment of staff (cf AHS Act s 26, PH Act s 40BA) … (2) Conditions of employment Except in so far as provision is otherwise made by law, the conditions of employment (including salaries, wages or remuneration) of the employees in the NSW Health Service are to be as may be determined from time to time by the Health Administration Corporation. Area Health Services Act 1986 (NSW) 26 Determination of conditions of employment of staff … (2) Except in so far as provision is otherwise made by law, the conditions of employment, including salaries, wages or remuneration, of the employees of area health services shall be as may be determined from time to time by the Health Administration Corporation. (See also section 40BA of the Public Hospitals Act 1929 (NSW)) 1. In so far as the Health Secretary submits that sub-s 116A(1) of the Health Services Act operates to exclude a condition of employment based on usage from the employment contracts of ACCOs, we are unable to see any relevant distinction between the phrase "in so far as they are not fixed by or under any other law" as used in sub-s 116A(1) and the phrase "except in so far as provision is otherwise made by law" as used in earlier statutory provisions which the Health Secretary accepted "had the same effect" as sub-s 116A (Tcpt, 15 october 2020, p 15 (2)-(3)). These provisions have not been found by this Commission and its predecessors in past cases to operate in the way contended for by the Health Secretary in this matter. 2. In NSW Nurses' Association & Ors v South Western Sydney Area Health Service [1994] NSWIRComm 147, a Full Bench of the Commission (Bauer A-VP, Schmidt J and McKenna CC) heard an appeal from a decision of French CC in which the Commissioner had concluded, in relation to employees at Liverpool Hospital, "that the right to free car parking was not an express or implied term of the contracts of employment of the employees concerned, but it was a benefit that the employees had enjoyed for a number of years without a clear promise or understanding that it would continue indefinitely". The Full Bench stated: The conclusions of fact reached by the Commissioner were not seriously challenged. It was clear that free car parking had been available at the hospital for many years. In 1989 reference was made to this by the Hospital in literature directed to nurses in a recruitment campaign. The challenge was whether in the circumstances it could be concluded that a custom and practice or usage in relation to car parking existed, the SWSAHS submitting it was rather a 'long-standing concession', which would not readily be included in an award by the Commission. 1. The Full Bench then cited the judgment of Watson J in In re Australian Fertilizers Ltd v Australian Workers Union, New South Wales Branch where his Honour concluded with the observation (at 244) that a practice, if found to be a usage alterable by agreement only "even so remains subject to any order or award made by the Commission pursuant to s.25 in settlement of the present dispute. Whether or not the practice should continue beyond a reasonable period in the present circumstances is, therefore, the more cogent issue". The Full Bench then stated: We agree with that observation. Any practice, even one that forms a term or condition of employment, is ultimately subject to any order or award made by the Commission. When a dispute arises about a practice which falls to the Commission to determine in arbitration, whether any alteration to the practice is appropriate and if so, what the change should be, are the questions which must be determined on the particular facts of the case. One of the factors in such a consideration, although not decisive of itself, is whether a particular practice is a 'usage', as the term is properly understood. 1. Ultimately, the Full Bench upheld the appeal by the NSW Nurses' Association and determined that arrangements be made to provide the affected employees with free car parking until 31 December 1995. The parties were directed to confer on appropriate terms to reflect the Full Bench's decision. In so doing, the Full Bench was not constrained by any notion that the legal principle of usage was, in some way, statute barred by, for example, sub-s 26(2) of the Area Health Services Act 1986 (see [51] above). 2. Gillies and Ors v Health Administration Corporation and Anor [2003] NSWIRComm 243 was an unfair contract claim heard by Schmidt J. The applicants in that matter contended that the conditions which attached to the private use of their employer provided motor vehicles constituted a term of their contracts of employment which could not be unilaterally altered by their employer in accordance with a policy promulgated by the HAC in 1998 (the 1998 policy). 3. In her judgment, Schmidt J, at [171] noted that respondents also relied upon s 115 of the Health Services Act (as the provision appeared in the Act at that time, prior to the insertion of s 116A into the Act in 2006) to support various of their submissions as to the fairness of the applicants' contracts. Her Honour set s 115 in full (sub-s 115(2) is reproduced at [51] above) and then stated: 173 There was no suggestion in these proceedings that s115 detracts from common law notions that those whom the respondents employ, are employed pursuant to a contract of employment. To the contrary, s33 of the Health Services Act 1997 empowers Area Health Services to appoint and employ employees such as the applicants. Section 37 empowers them to enter into contracts or agreements with any person for the performance of services. In doing so, an Area Health Service is undoubtedly obliged to have regard to conditions of employment determined by the HAC for its employees from time to time to, as well as agreements HAC has entered into with a union (see s115 (7)). Nothing in s115, however, suggests that the fairness of any contract which is entered into with an employee may not arise for consideration under s106 of the Act. (See s404 of the Act.) This is what is sought to be addressed in these proceedings - the alleged unfairness of each applicants' contract of employment. 174 The HAC is empowered to 'determine' the conditions of employment of employees such as the applicants (s115(2)). The evidence did not show that the 1998 policy had resulted from any HAC determination. Even if it had, such conditions may be fixed 'except in so far as provision is otherwise made by law'. It follows that a determination could not be made inconsistently with the various requirements of the Act, or of an order or award made by the Commission under the Act, or of an order made by the Court, in proceedings such as this. … 180 While it was submitted for the respondents that those who made the representations to the various applicants had no authority to do so, the evidence showed that the ability to offer private use of a motor vehicle was successfully being used by the respondents as a recruiting tool. On the evidence this was well known to the HAC. It seems to me that the respondents cannot now, as a matter of fairness, successfully argue that those making the representations had not authority to do so. On Mr Barker's evidence, the whole purpose of developing the 1990 policy was to regulate, on a new basis, the way in which different Area Health Services made these offers, because the HAC was aware of the different approaches being pursued. 181 That decision cannot make completely irrelevant the promises being made to potential employees like the applicants, in order to attract them to the respondents' employ. Nor is it sufficient to simply dismiss the fact that in 1997, Mr Crocker, for example, responded to an advertisement for a position, the remuneration for which included free private use of a car, which he was later offered and accepted, as having simply involved a mistake, which was soon rectified. It was a mistake which on the evidence has cost Mr Crocker some $19,000 in the interim, of which the respondents have had the benefit. 182 It was also submitted for the respondents that they had the right to unilaterally vary the 1990 policy, so long as sufficient notice was given. The policy itself does not contain such a provision. Nor does it permit the respondents to remove the benefit of provision of a car to which the applicants were entitled. The respondents also argued that the HAC was free to vary the 1990 policy, entirely as a matter of its discretion. 183 There is little doubt as to the common law position in relation to variation of a contract. Parties are free to agree to vary their contracts. Neither party has the right to unilaterally vary any contractual term, unless that be a right which the contract confers. An attempt to force a unilateral variation upon the other contracting party, for example where an employer seeks to reduce an employee's remuneration, involves a breach of the contract, likely to amount to repudiation. It also gives the other party the right to regard the contract at an end and to sue for damages. (See for example, the discussion in Law of Employment, Fifth Edition, Macken, O'Grady, Sappideen and Warburton at 249.) 1. Her Honour did not find that sub-s 115(2) of the Health Services Act had the effect of rendering unenforceable terms of the applicants' employment contracts which were inconsistent with the 1998 policy which was subsequently promulgated by the HAC. Her Honour ultimately made the following order: 230 For all of the reasons given, I find the applicants' contracts of employment unfair and direct the parties to confer on the appropriate terms of the variation to each contract and the resulting money orders, including in relation to the claim for interest, which I am satisfied must, as a matter of justice between the parties, also be encompassed in the orders made, as from the date of commencement of the 1998 policy. These orders should be filed within 28 days. 1. An appeal against her Honour's judgment was unsuccessful (Health Administration Corporation and others v Crocker and others [2004] NSWIRComm 163). If it is the case that a variation to the contracts of employment with respect to private use of motor vehicles, which is ordered by the former Industrial Court in unfair contract proceedings, constitutes a condition of employment that "is otherwise made by law" and, therefore, not inconsistent with sub-s 115(2) of the Health Services Act as it then was, then it follows that a condition of employment, which is implied into a contract of employment on the basis of custom and usage, is also a condition of employment which is "fixed by or under any other law", namely, the common law of contract, and is, therefore, not inconsistent with sub-s 116A(1) of the Health Services Act as that provision has appeared in the statute since 2006. 2. In Nurses and Midwives' Association v Justice Health and Forensic Mental Health Network (a Division of NSW Health) (No 2) [2013] NSWIRComm 29, a Full Bench of the Commission (Boland J, President, Walton J, Vice-President, Staff J) considered the practice whereby nurses employed in NSW gaols had been paid for meal breaks. On the issue of usage, the Full Bench stated: 27 We do not know whether, at the relevant time, the nurses were party to formal written employment contracts, or whether the contracts were partly written and partly oral, or whether the contracts were wholly oral, or whether there was any contract of employment at all given the possibility that employment may have been regulated wholly by statute or partly by statute and partly by industrial instrument. There was no evidence in this respect. But what we are asked to accept is that paid meal breaks became the custom, which evolved into an implied contractual term. 28 We note that prior to 1988 nurses in the Prison Medical Service were subject to the terms of the Public Service Act 1979 and its predecessors, which gave power to the Public Service Board to regulate employment conditions for such nurses. It was accepted that the status of the nurses was that of "public servant". It may well have been the case that the nurses' employment conditions were determined by the Board under the Public Service Act or a regulation made under that Act. This was commonly the case. … 70 The factual circumstances of this appeal are different to those considered by Watson J In re Federated Ironworkers' Association of Australia, New South Wales Division and Australian Fertilizers Ltd Re Ove(r)time [1977] AR (NSW) 17. There his Honour considered a dispute that arose following a claim on behalf of production workers for concessions similar to those allowed for maintenance workers, which involved the employer, as an overaward arrangement, providing a taxi to return home after overtime. The employer responded by withdrawing the benefit for maintenance workers, a benefit that had applied for 20 or more years. 71 Watson J decided that the provision of a taxi amounted to a "usage" and should not be discontinued. There was no discussion in the decision regarding the existence or terms of any contracts of employment other than his Honour apparently accepting that the "usage" was to be regarded as an implied contractual term. But, in any event, there had been no change in circumstances in respect of maintenance workers that would have justified removing a benefit that had been applied for 20-odd years. In the present appeal, circumstances have changed such that other than those nurses who may be designated to be available to respond during meal breaks, there will be no requirement to work during meal breaks as a matter of routine practice. 1. There was no suggestion in this decision of the Full Bench that a condition of employment for the relevant employees could not be found to exist on the basis of usage or that such a finding was, in some way, statute barred. 2. We are of the view that the parties submissions did not address these authorities adequately before the Commissioner or before the Full Bench. 3. Whilst consideration was given to recalling the parties to address these authorities further, we have decided that there are broader issues of industrial fairness in this matter that warrant a different approach being taken to the resolution of the substance of the dispute in these proceedings. Section 163(1) of the IR Act provides: (1) The Commission— (a) is not bound to act in a formal manner, and (b) is not bound by the rules of evidence and may inform itself on any matter in any way that it considers to be just, and (c) is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. 1. Furthermore, s 3 relevantly provides that the Objects of the IR Act include: "Objects The objects of this Act are as follows— (a) to provide a framework for the conduct of industrial relations that is fair and just, ….. (g) to provide for the resolution of industrial disputes by conciliation and, if necessary, by arbitration in a prompt and fair manner and with a minimum of legal technicality" 1. In observing the objects of the IR Act of this Commission strives for outcomes that strike a fair and balanced approach to industrial relations between workforce participants. To the extent that it was argued by the Health Secretary that these principles are not relevant to the Commission's discretion to grant leave to appeal, we disagree. 2. Irrespective of the legal arguments put before the Commission, we are concerned that the Health Secretary did not have in place appropriate processes and systems to ensure that the ACCOs were being paid in accordance with the Award. It is remarkable that the Allowance was paid for such a significant period of time without proper authorisation. This situation was a consequence of the Health Secretary's failure to ensure the adequacy of the systems of compliance. That this situation was able to continue, and irrespective of the legal position, the Health Secretary is responsible for the impact this has had on the ACCOs. Given the period of time over which the representations were made to the ACCOs about their entitlement to the Allowance, it is unsurprising they feel aggrieved by the decision to remove the Allowance. 3. The circumstances of the ACCOs are distinctive and warrant consideration being given to the making of an award taking all of the relevant factual matters into account. We are of the view that this is the most appropriate course because an application based upon the factual circumstances, which are largely undisputed, may warrant the making of an award. The parties may seek the making of such an award, even if the legal issues raised by the Health Secretary had been made out in this Appeal. From a practical perspective any award will usurp the recommendation made at first instance and accordingly diminish any public interest in the appeal being determined. In this respect the granting of leave and determination of the appeal may not finally settle the industrial dispute before the Commission. We consider this to be another reason why leave to appeal should not be granted. 4. During the hearing of the Appeal, a member of the Full Bench raised with counsel for the Health Secretary the question whether it was within the power of the Commission to make an award which would preserve the entitlement to be paid the Allowance for those ACCOs currently receiving it (Tcpt, 15 October 2020, p 4 (39)-(46); p 6 (41)-(46)). Counsel ultimately responded as follow (Tcpt, 15 October 2020, p 19 (1)-(13)): RAPER: Firstly, in relation to the issue that you raised, Chief Commissioner, just before the adjournment, we accept that the Commission has the power by its own motion pursuant to section ..(not transcribable).. to consider making an award. But, that is separate from the resolution of the appeal and it couldn't be a resolution arising from the appeal. What the Commission could do ‑ and I appreciate that the Commission's powers are broad ‑ is that it could by summons to show cause in the way that it ordinarily does, for example, in other circumstances, propose an award; and that necessarily would involve different questions of fact and law and additional issues from those raised in this very narrow appeal, for which then it would be for the parties to put on evidence and submissions with respect to it. But, we do say that yes, it's separate from the resolution of this appeal. 1. We put the parties on notice that the Commission intends to shortly issue a summons to show cause why the Commission should not, of its own motion, make or vary an award which would achieve any of the following outcomes: 1. preservation of the Allowance for ACCOs on an ongoing basis; 2. preservation of the Allowance for ACCOs on a "present occupant only" basis; 3. preservation of the Allowance for ACCOs on a "present occupant only" basis but frozen at its present amount; 4. preservation of the Allowance for ACCOs on a "present occupant only" basis with it being faded out over time; 5. immediate removal of the Allowance for all current and future ACCOs; or 6. any other outcome either party or the intervenor wishes to propose. 1. The parties and intervenor will be given full opportunity to address the Commission on the proposals that we will set out in the summons, including the application of s 146C of the IR Act. 2. We dispose of the Appeal by making the order set out below. Orders 1. The Commission orders: 1. Leave to appeal is refused. ********** Amendments 12 October 2021 - Amendment made to the coversheet. 26 July 2022 - Spelling correction in paragraphs [54], [57] and [59]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 July 2022