Industrial Relations Commission of New South Wales in Court Session CITATION : Costopoulos v Hansen Yuncken Pty Limited [2003] NSWIRComm 335 Applicant: Andreas Costopoulos PARTIES : Respondent: Hansen Yuncken Pty Limited FILE NUMBER: IRC3868 of 2001 CORAM: Kavanagh J CATCHWORDS : Section 106 claim - Federal Award and Certified Enterprise Partnership Agreement exist covering labourers in construction industry - Employee terminated after 23 years' service with no notice payment - employee on holiday pay when terminated - Employer asserts employee served out Notice while receiving holiday pay - question as to breach of Annual Holidays Act - Statutory entitlements of Federal Award and Agreement allow statutory relief if breached - No inconsistency between State and Federal statutory rights - Federal status of Award and Agreement but variation of some of employee's terms and conditions under his contract of employment - Contract of employment stands alone - Facts reveal employment category and notice part of employee's contract of employment therefore attract relief under s106 of the State Act- Relief under s106 allowed - Orders as to just compensation - Section 109A not applicable - Matter raises issues as to the term of and conduct of the employment contract rather than claim essentially an unfair dismissal claim - Orders made. Industrial Relations Act 1996 LEGISLATION CITED : Workplace Relations Act 1996 Annual Holidays Act 1944 Colvin v Bradley Bros Pty Ltd (1943) 68 CLR 151 Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 George Albert Byrne & George Mortimer Frew v Australian Airlines Ltd (1995) 185 CLR 410 BHP Iron Ore Pty Ltd v Australian Workers Union (2000) 102 FCR 97 Burgess & Ors v Mount Thorley Operations Pty Limited (2002) 115 IR 13 Thornthwaite v Australian National Credit Union Ltd (2002) 116 IR 438 Clyde Engineering v Cowburn (1926) 37 CLR 466 Victoria v The Commonwealth (1937) 58 CLR 618 CASES CITED : Telstra Corp Ltd v Worthing (1999) 197 CLR 61 Metal Trades Industry Association of Australia v Amalgamated Metal Workers and Shipwrights' Union (1983) 152 CLR 632 Hudson v Qantas Airways Ltd (1985) 10 IR 331 Barry v Incitec Ltd (1991) 45 IR 143 Stonham v Speaker of Legislative Assembly (2000) 97 IR 325 State of New South Wales v Health and Research Employees Association of New South Wales (unreported, Fisher CJ, Bauer and Hill JJ, 31 March 1993 Westfield v Adams (2002) 114 IR 241 Davis v General Transport Development Pty Ltd [1967] NSW AR 371 Hogan v Employment National (Administration) Pty Ltd [2000] NSWIRC Comm47 Abboud v The State of New South Wales (Department of School Education) (No 2) (2000) 99 IR 299 HEARING DATES: 05/12/2003; 05/13/2003; 05/20/2003; 05/27/2003 DATE OF JUDGMENT: 11/06/2003 Applicant: Mr J.H. Pearce of counsel Solicitor: Ms R. Mallia Construction Forestry Mining & Energy Union LEGAL REPRESENTATIVES: Respondent: Mr D. Murray Solicitor The Master Builders Association of NSW JUDGMENT: - 39 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: KAVANAGH J Date : Thur 6 November 2003 IRC3868 of 2001 ANDREAS COSTOPOULOS v HANSEN YUNCKEN PTY LIMITED Application under s106 of the Industrial Relations Act 1996 JUDGMENT [2003] NSWIRComm 335 1 This application is brought under the provisions of s106 of the Industrial Relations Act 1996 (the Act). Andreas Costopoulos (the applicant) alleges the employment contract which he entered into with Hansen Yuncken Pty Ltd (the respondent) in its terms and/or, in its performance, was unfair, harsh or unconscionable. 2 The applicant was employed for 23 years by the respondent company as a construction worker/builders' labourer. He was retrenched by his employer. On termination, the applicant received a termination payment for his years of service in the sum of $2,880.00 for outstanding entitlements from the employer company. He received a further sum of $13,916.70 from a Redundancy Trust contributed to by his employer during the employment. 3 The applicant by way of an Amended Summons pleads: 16. The contract was and is unfair and the conduct of the Respondent was and is unfair in that: (a) At all material times, the Applicant was in his dealings with the Respondent in a position of inferior and unequal bargaining power and that position was taken advantage of by the Respondent such that: (i) Although a permanent employee of 24 years standing, the Applicant was required to take annual leave as a matter of course whenever a downturn in work occurred and such that at termination, he had 3 hours annual leave outstanding; and (ii) Although the Applicant had sustained work related injuries, the Applicant was terminated in circumstances he otherwise might have had access to his considerable period of accumulated sick leave to assist with his clearly declining physical capacity for work; (b) Representations made to the Applicant by the Respondent were untrue or became untrue in respect of the Applicant returning to work on 15 January 2001; (c) The contract operated in a manner to enable the Respondent to deprive the Applicant of sick leave which the Applicant was otherwise entitled to by terminating the contract; (d) In relation to the possible termination of the contract: (i) The contract operated in a manner to deny the Applicant an opportunity of having discussions with the Respondent and negotiations relating to the conditions applicable to the Applicant in a situation of redundancy; (ii) The contract permitted termination of the contract without a period of notice which is reasonable and appropriate in the circumstances of the Applicant; (iii) The contract operated in a manner to deny the Applicant the knowledge of the intention of the Respondent concerning the future of the contract; (iv) The contract operated in a manner to defeat the Applicant's legitimate expectations to be involved in deliberations about the future of the contract; (v) The contract operated in a manner to enable the Respondent unilaterally determine the amount to be paid to the Applicant at the time of termination. 4 Arising from a finding of alleged unfairness the applicant seeks: 1. An order declaring the contract of employment between the Applicant and the Respondent is an unfair contract pursuant to s106 of the Industrial Relations Act, 1996. 2. An order declaring void in whole or in part ab initio, or at some later date (except as to moneys and other benefits allowed already or due thereunder to the Applicant, the contract between the Applicant and the Respondent under which the Applicant performed work for the Respondent as a labourer in the building and construction industry. 3. Further and in the alternative to 2, an order varying from its commencement, or at some later date, the contract by inserting the following provisions: (a) The contract shall not be terminated without the consent of the Applicant except for serious misconduct unless the Respondent gives the Applicant 12 months notice in writing or pays the Applicant and amount in lieu thereof equal to 12 months remuneration payable under the contract. (b) The contract shall not be terminated without the consent of the Applicant for reasons of redundancy unless the Respondent gives the Applicant an amount of money equal to 4 weeks remuneration for each year of employment or part thereof, calculated by reference to the total remuneration paid under the contract for the period of 12 months immediately prior to the date of termination of the contract. Such payment shall be in addition to the notice provisions set out in paragraph (a) above. (c) The contract shall not be terminated for reasons relating to the Applicant's conduct or performance unless: (i) The Respondent shall give the Applicant notice of any intention to terminate the contract and provide to the Applicant reasons for the proposed decision and adequate factual material in relation to the reasons; (ii) The Applicant has been given an opportunity to defend himself against any allegations made in relation to his conduct or performance; (iii) The Respondent has undertaken a thorough investigation of the allegations made in relation to the Applicant's conduct or performance and any matters presented by the Applicant in his defence; (iv) The Respondent shall make any decision to terminate the contract reasonably having regard to: A. the Applicant's personal circumstances; B. the satisfactory (or otherwise) performance by the Applicant of his obligations under the contract. 4. An order that the Respondent pay the Applicant such sums of money in connection with the contract as the Commission considers just in the circumstances of the case. 5. An order for payment of interest on sums of money ordered to be paid by the Commission. 6. Such further and other orders as the Commission deems fit. 7. An order that the Respondent pay the costs of the proceedings. Mr J.H. Pearce of counsel appeared for the applicant and Mr D. Murray appeared for the respondent. The Evidence 5 There is little if any factual disputation in this matter. The applicant was born on 24 December 1939 in Greece. He is 63 years of age. The applicant emigrated to Australia on 5 May 1964. He is married with two grown children. The applicant no longer needs to support his children but continues to support his wife. 6 He has generally been employed as a construction worker in the building and construction industry. I accept from the company records that between 13 February 1978 and 20 February 2001, the applicant was employed by the respondent as a labourer in the building and construction industry. The respondent referred to the applicant as a "fine" employee and a "permanent" employee. 7 The applicant at the time of termination in February 2001 was in receipt of remuneration from the respondent of $41,835.00 plus allowances of $3,258.00. The applicant also received a superannuation payment of $3,120.00 p.a. ($60 per week) which was paid to a Trust nominated in the National Building Industry and Construction Award (NBCI Award). 8 On or about 9 October 1997, the applicant suffered a work related injury to his back, shoulder and arm and was absent from work for approximately one week. In late 2000, the applicant suffered a further aggravation of the injury and had a further week off work. 9 The applicant worked on a number of projects over his 23 years of employment with the respondent always as a labourer. In the latter part of 2000, the respondent experienced a downturn in work. The applicant met with Mr Wilson, the Construction Manager of the respondent, on about 20 October 2000 at the Bondi Residential Development building site where the applicant was working at the time. Mr Wilson outlined to the applicant the work situation of the respondent and raised the possibility of not being able to provide ongoing employment to the applicant when the Bondi Residential Development project came to an end. 10 The respondent recommended to the applicant he take a period of annual leave. He began this period of annual leave towards the end of October 2000 but, shortly after, a labouring position became available on a project at North Sydney Olympic Pool. The respondent contacted the applicant to offer him this position and he resumed work. A few days later another position arose on the Wollongong Hospital Redevelopment and the applicant agreed to transfer. 11 On or about 14 December 2000, the company held a meeting with their construction employees on the Wollongong building site where the applicant was working. Mr Wilson, Mr Tom Ussia, the Project Manager, and Mr Mick Parker, the Site Manager, attended representing the company. The applicant attended the meeting. He was one of about six construction employees employed by the respondent on the site. At that meeting, the employees were informed that with the imminent completion of the major works on the Wollongong Hospital site and, given the downturn in the respondent's forward work position, it was not possible to nominate what project employees would be placed in work in the New Year. Employees were advised if the work position for the company did not improve it would be necessary for retrenchments to occur. The employees were told if there was no work they would be offered the option of taking extended annual leave after the usual Christmas break. 12 Between 22 December 2000 and 15 January 2001, the applicant took annual leave in accordance with arrangements previously made with the respondent. 13 The applicant's daughter, Ms Patricia Nicolis, gave evidence. She recalled she spoke to Mr Wilson on 18 January 2001, as to her father's return to work. This conversation occurred after the applicant's annual leave was completed. I accept Mr Wilson said to her: . . . Ring me in three or four weeks time. He will be paid whilst he is off, but when his entitlements run out we will have to consider other options. 14 Mr Wilson stayed in touch with Ms Nicolis. Each time contact was made she was advised there was no work available for her father, the applicant, Mr Costopoulos. 15 On 20 February 2001, Ms Nicolis was informed by Mr Wilson there was still no work and her father was to be made redundant. She inquired as to his entitlements including his "Redundancy" rights. She was told by Mr Wilson, her father would have to make his own inquiries of the Australian Construction Industry Redundancy Trust ("ACIRT"). 16 A document related to the applicant's termination was sent to the applicant on the same day. On 20 February 2001, the contract of employment between the applicant and the respondent was terminated by the respondent after the applicant had worked 23 years with the company. The reason for the termination was lack of work. 17 The $2,888.00 paid by the employer to the applicant covered his outstanding leave, long service leave and his rostered day off "bank". The applicant had approximately three hours annual leave outstanding as a result of using up his accumulated annual leave prior to the formal termination of his employment. The respondent paid to the applicant no monies for redundancy and no monies in lieu of notice. The applicant received, on the day of termination, namely, 20 February 2001, the following document from the respondent: HANSEN YUNCKEN PTY LTD (NSW) NOTICE OF TERMINATION: PERMANENT EMPLOYEE Trading Division: Construction Date: February 20, 2001 Job/Position: Labourer Name: A. Costopoulos Foreman/Supervisor's Signature (Signed) _______________________________________________________________________ Start Date: February 13, 1978 Termination Date: February 20, 2001 TAX HOURS TOTAL ANNUAL LEAVE 3.06 $54.90 $6.55 LEAVE LOADING $9.61 RDO PAY (Shown as lump sum C on payslip) 6.78 $121.50 $20.05 LONG SERVICE LEAVE 151.31 $2711.42 $743.00 F.I.D. $0.35 TOTAL $ 2897.78 LESS TAX $ 769.60 $769.60 NET PAY $ 2128.18 Method of Payment: BANKED Checked Office: Checked Personnel: (Signed) Long Service Form Completed YES Date: February 20, 2001 Received Above Amount - Signature ______________________________ 18 On 22 March 2001, one month later, Mr Wilson contacted the applicant to advise him a position was available on a Parramatta project. Ms Nicolis took over the telephone call. Mr Wilson asserted he offered the applicant full time work but Ms Nicolis' recollection was Mr Wilson said her father would be a new employee on a casual basis. She was cross examined as to whether Mr Wilson used the words "casual" and "new employee": Q. I put it to you Mr Wilson did not say "casual"? A. He did Q. He did not say new employee? A. He did say that. He was not going to continue following the years he had been working, he would start benefits from the beginning as if he was a new employee. That was my first question. Q. I put to you what Mr Wilson said was "A position has come up on a project." Mr Wilson was offering that position to your father? A. They were not the exact words. Q. He did not use the word "casual" at all did he? A. I recall that he did. Q. That was perhaps your interpretation, but he did not say "casual" at all? A. That is what I remember. Q. In fact Mr Wilson said, "The position is available immediately," and that your father would rejoin the company under an enterprise agreement? A. No. 19 Mr Wilson was also cross examined about the decision to terminate the applicant and how the decision was taken. He discussed the termination with the State Manager, Mr Simon Oliver, and at meetings of project managers. He was asked: Q. Do you know why Mr Costopoulos was terminated in lieu of other persons who were labourers? A. Yes, the project on which Mr Costopoulos had been working had reached a stage of completion that didn't enable us to offer him further work. Q. So there was no work on that particular project, is that why he was terminated, is it? A. That's the primary cause, yes. Q. Have a look at paragraph 10.1(f)? A. Yes Q. Where do I find the criteria that there is no work on a particular project as being the basis for termination in those two sentences? A. I believe the explanation is quite clear in that clause. Q. There was work available that Mr Costopoulos could do, wasn't there? A. Not unless other persons were terminated. Q. Yes, I understand that, but there was work available that Mr Costopoulos could do, wasn't there? A. I believe I have answered the question. Q. And you have no doubt about his suitability to that work, or some of it? A. That is correct. Q. And you didn't have any problems with his individual work performance? A. That's absolutely correct. Q. And he was a good worker, wasn't he? A. Yes. Q. And did you have regard to his seniority? A. Yes. Q. What regard did you have to it, did you give it a lot of weight or no weight? A. I think, as I added earlier, we don't have a weighting for individual units. It is one of the considerations. Q. He was easily the most senior of the builder's labourers in terms of service, wasn't he? A. Yes. Q. How much more senior than the others was he? A. I would have to check our records, but he probably had at least seven years' more service than any other builders' labourer. Q. I put this to you: that when you decided to terminate Mr Costopoulos you didn't apply the provisions of section 10.1(f), did you? A. No, I reject that claim absolutely. Q. But you do agree that there was work available that he could do? A. I have answered that question by saying other persons would have had to have been terminated. Q. And they would have been persons less senior than the applicant? A. Yes. Q. And he was terminated because the work that he was doing on a particular project ended, is that right? A. That was one of the considerations. Q. I thought you said that was the consideration, five minutes ago? A. No, I'm relying on sub-clause (f) of 10.1. The Certified Enterprise Partnership Agreement ("EA") 20 During the latter period of the applicant's employment, the respondent was party to a series of Federally Certified Enterprise Partnership Agreements ("EA") covering the employment of construction employees. The first of these was negotiated in about 1992. In late 1998 the respondent entered into negotiations with the Construction Forestry Mining and Energy Union, Construction & General Division, New South Wales Branch ("the CFMEU") for a further agreement. The CFMEU were representing the employees of the company. The employees were involved in the negotiation. They participated in a number of meetings to discuss the terms of the proposed Certified Enterprise Partnership Agreement. They were each provided with access to a copy of the final form of the Certified Enterprise Partnership Agreement and the document was explained to them by the respondent and by the Union representative. A vote then took place. The employees voted to accept the Certified Enterprise Partnership Agreement. 21 The applicant was part of this process and, in common with the other employees, he was given the opportunity, in a meeting at which Mr Wilson recalls the applicant was present, to participate in discussion and ask any questions or raise any objection. 22 The Certified Enterprise Partnership Agreement between the respondent and the Construction Forestry Mining and Energy Union (NSW Branch) known as the Hansen Yuncken Pty Ltd NSW/CFMEU Partnership Agreement 1998 ("the 1998 Agreement") was struck under the WorkPlace Relations Act 1996, Part VIB, Div 2. This Certified Enterprise Partnership Agreement was certified on 21 January 1999. This was the Certified Enterprise Partnership Agreement in force at the termination of the applicant's employment. 23 Relevantly the Certified Enterprise Partnership Agreement states: 4.1 TITLE This Agreement shall be known as the Hansen Yuncken Pty Ltd NSW/CFMEU Partnership Agreement. 4.2 PARTNERS * Hansen Yuncken Pty Ltd ("The Company") in its Building Operations in respect of its employees covered by Clause 9 in this operation in New South Wales. * The Construction Forestry, Mining, Energy Union (CFMEU) NSW construction division ("The Union"). 4.3 DURATION OF AGREEMENT 2 years from the date of signing by the partners. Certification to occur in accordance with the Workplace Relations Act 1996. 4.4 NO DISADVANTAGE It is the intention of this agreement that no employees will be disadvantaged by its operation in relation to relevant laws or legislative requirements. 4.5 RELATIONSHIP TO THE AWARD This agreement is to be read in conjunction with the parent Award: the National Building and Construction Industry Award (NBCIA) (December 1996). Where the agreement is silent on rates of pay and conditions, allowances and other matter pertaining to employment, the Award will apply. Where there is conflict between the agreement and the Award, the provisions of the agreement will apply to the extent of any inconsistency. . . . 4.7 SINGLE BARGAINING UNIT The union, which is party to this Agreement, shall constitute a single bargaining unit in all dealings relating to this Agreement with Hansen Yuncken. To this end, the union commits itself to: (a) Resolving any demarcation issues between members of the single bargaining unit internally and without recourse to industrial action, and (b) Supporting a single position in dealings with the company in respect of any claims or needs. 4.8 UNION PARTICIPATION The Company and the union will continue to work positively to continue the momentum of reform through the enterprise agreement process. The Company recognises a constructive role played by the union will have a positive impact on this agreement and the delivery on its objectives. The Company recognises the union as the accredited representatives of their members covered by this Agreement. . . . 5.0 CONSULTATIVE PROCESS The Company has in place consultative mechanisms through site based building meetings and an active Company Consultative Committee. These forums provide the opportunity for all employees to become more aware of the issues affecting their individual sites, and ensuring, on a company basis, communication from company management, through the Consultative Committee to the workforce. Records and meeting minutes are kept which are circulated to all sites and to Union representatives. . . . 6.0 DISPUTE RESOLUTION 6.2 Procedures Relating to Disputes between the Company and its Employees . . . (d) While a procedure is being followed, normal work must continue without recourse to any form of industrial action Unresolved matters shall be formally submitted to the appropriate tribunal by either party or their representatives, with the decision of that Tribunal being accepted as the full and final resolution of the dispute. . . . 10.0 EMPLOYMENT RELATED MATTERS 10.1 RECRUITMENT, PROBABTIONARY PERIODS AND TERMINATION To help minimise misunderstandings and differences of interpretation the parties agree to the following employment procedures: (a) . . . (b) . . . (c) . . . (d) . . . (e) New Employees shall be engaged on daily hire (8 hours) for a qualifying period of four weeks from the commencement of employment, after which the Employee may be offered an ongoing position with Hansen Yuncken. This offer, at the discretion of the Company, will be on weekly hire basis. (f) Employment consideration shall be determined by work availability, suitability to the task(s) and an individual work performance. Seniority shall not be the sole determining factor, but rather included as part of those considerations. 10.2 TERMINATION OF EMPLOYMENT (a) For employment periods of up to four weeks, one days notice of termination of employment shall be given on either side or one days pay shall be paid or forfeited. For employees on weekly hire (after four weeks) one week's notice of termination of employment shall be given on either side or one week's pay shall be paid or forfeited. The Company reserves the right to withhold payment for failing to follow these requirements. (b) Subject to the termination provisions of Clause 24 of the NBCIA notice given at or before the usual starting time of any ordinary working day, shall be deemed to expire at the completion of the day's work. (c) The Company shall provide to the Employee, a written statement specifying the period of his/her employment and the classification of, or the type of work performed. (d) Nothing in this clause shall effect the right of the Company to dismiss an employee without notice, for serious or wilful misconduct. (e) (i) A termination of employment by the Company shall not be harsh, unjust or unreasonable. (ii) Without limiting the above, except where a distinction, exclusion or preference is based on the inherent requirements of a particular position, termination on the ground of race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction and social origin shall constitute a harsh, unjust or unreasonable termination of employment. (iii) Any dispute, or claim arising out of sub-paragraphs (i) and (ii) above, shall be dealt with in accordance with the dispute provisions and settlement clause 6 of this Agreement. 10.3 SUPPLEMENTARY LABOUR . . . 11.1 WAGE CONSIDERATION . . . 11.2 PRODUCTIVITY ALLOWANCE . . . 11.3 SUPERANNUATION . . . 11.4 REDUNDANCY The Company will continue to meet its obligations in respect of redundancy payment as defined in Clause 38A [now clause 16.2] of the NBCIA by retaining its membership of the ACIRT Redundancy Trust, contributions shall increase to $45.00 per employee per week from 13th January 1999 and to $50.00 per employee per week 13th January 2000. ACIRT for apprentices shall be in accordance with the ACIRT Trust Deed of the Fund. 11.4 THE DRUG AND ALCOHOL FOUNDATION . . . 11.6 ACCIDENT INSURANCE . . . 11.7 FARES AND TRAVELLING ALLOWANCE . . . 11.8 ON GOING PRODUCTIVITY AND EFFICIENCY . . . 11.9 NO FURTHER CLAIMS The parties to this agreement undertake not to pursue any further claims as to wage increases or improvements to terms or conditions of employment whether they are Awarded over Award agreement, over agreement, during the life of the agreement. Appendix D to the Agreement reads: WAGE RATES APPENDIX D NBCIA/ENTERPRISE AGREEMENT CONSTRUCTION WORKER Current 13Jan 13July 13Jan 13July LEVEL 1999 1999 2000 2000 (10) (11) (12) (13) (14) CWI (BL3) Builder's Labourer Class 3 14.55 14.91 15.28 15.66 16.05 CW2 (BL2) Builder's Labourer Class 215.03 15.41 15.80 16.20 16.61 CW 3 (NT) Non-qualified Tradesman 15.54 15.93 16.33 16.74 17.16 CW 4 (T) Tradesman 15.82 16.22 16.63 17.05 17.48 CW 5 Tradesman/Special Class 16.61 17.03 17.45 17.89 18.34 CW 6 Operator Group E 17.40 17.84 18.29 18.75 19.22 CW 7 Operator Group G 18.19 18.64 19.11 19.59 20.08 CW 8 Operator Group H 18.98 19.45 19.94 20.44 20.95 CW 9 19.78 20.27 20.78 21.30 21.83 24 The history of ACIRT (see Clause 11.4 as to Redundancy) becomes relevant. The evidence of Mr Wilson reveals a relevant Award preceding the present Award required the employer to pay money to CERT (Construction Employees Redundancy Trust) from 21 March 1989 for employee redundancy payments. In 1994 the fund was revamped and called the Australian Construction Industry Redundancy Trust (ACIRT). Amendments required the fund to make payments directly to the employees. Employers who were party to the Award contributed to the fund. Mr Pearce, counsel for the applicant, submitted the length of service of an employee is not a consideration for the payment of these redundancy monies and further, the service of this worker up to 1989 is not taken into account in payments made to him. 25 Mr Wilson was specifically asked as to the redundancy provisions: Q. ... tell me what happened in relation to his service before 1989? A. I don't believe the Award was specific in terms of redundancy prior to that, save and except for entitlements - I would like to clarify exactly the wording so I can be specific that redundancy, prior to that time is encompassed within the redundancy entitlements and in turn the contributions an employer may make to the nominated fund. Mr Wilson was asked to explain. His answer was: I don't know whether the redundancy entitlements as nominated in the Award were in place. When asked for further clarification Mr Wilson said: I believe the Award does clarify how periods of service prior to 89 are to be handled. He was then asked Q. But do you agree ... that if another employee who had joined the company on 21 March 1989 if that employee was made redundant at the same time as Mr Costopoulos he could with have got the same amount of money with ACIRT? A. Yes, I agree. The Award ("A") 26 The respondent is a party to a Federal Award (now known as the National Building & Construction Industry Award 2000 - the NBCI Award) in respect of the employment of construction employees. The respondent has been a party to the Award's predecessors since 1974 (AIRC, CNo2861/74). 27 The NBCI Award became Federal Law by virtue of the Workplace Relations Act 1996 (Cth). In Colvin v Bradley Bros Pty Ltd (1943) 68 CLR 151, Williams J said of a Federal Award (at 163): The Award is not of course a law of the Commonwealth, ... but once the Award is made its provisions become part of the law of the Commonwealth by virtue of the Commonwealth Conciliation and Arbitration Act 1904-1934. 28 The following are relevant provisions of the NBCI Award: 6. COVERAGE OF AWARD 6.1 Scope The scope of this Award shall be in three parts as follows: . . . 6.1.1(a) In relation to the Tradesperson classifications in 18.1.2 and 19.3.1, subject to the exceptions and modifications contained herein, this Award applies to the employment of persons engaged on construction work (as defined) (emphasis added). . . . 6.1.2 Labourers classifications 6.1.2(a) In relation to the Labourer classifications contained in 18.1.2 and 19.3.1 of this Award, this Award applies in the States of Victoria, Tasmania, Western Australia, New South Wales, South Australia and Queensland (subject to 6.2 - Locality of this Award), in respect of the employment of persons as builders' labourers about any building. . .(emphasis added). 6.1.3 Operators classifications 7. PARTIES BOUND This Award shall apply to and be binding upon: 7.1 The Construction, Forestry, Mining and Energy Union and its officers and members employed by employers respondent to this Award; and 7.2 The Australian Workers' Union in respect of carpenters and joiners who are employed by Crown or local government authorities respondent to this Award in the States of New South Wales (excluding the County of Yancowinna), South Australia, Tasmania and Victoria only; and 7.3 The employers and organisations of employers, respondent to this Award in respect of their employees or employees of their members within the classifications contained in this Award whether members of the organisation mentioned in 7.1 hereof or not. . . . 9. RELATIONSHIP WITH OTHER AWARDS In relation to the employment of employees subject to this Award, this Award shall supersede the National Building and Construction Industry Award 1990, provided that no employee shall be reduced in status or position nor have their rate of remuneration reduced merely as a consequence of the making of this Award. . . . 10. ENTERPRISE FLEXIBILITY 10.1 Where an employer or employees wish to pursue an agreement at the enterprise or workplace about how the Award should be varied so as to make the enterprise or workplace operate more efficiently according to its particular needs the following process shall apply: 10.1.1 A consultative mechanism and procedures appropriate to the size, structure and needs of the enterprise or workplace shall be established. 10.1.2 For the purpose of the consultative process the employees may nominate the union or unions bound by this Award to represent them. Where it is known that a union party to this Award has membership in an enterprise or workplace, the employer shall notify the union prior to commencing negotiations for an agreement. 10.1.3 Where agreement is reached an application to vary the Award shall be made to the Commission. . . . 11. DISPUTE RESOLUTION PROCEDURE 11.1 Settlement of disputes 11.1.1 In the event of any dispute or claim arising between an employer and an employee such dispute or matter shall be dealt with in the following manner: 11.1.1(a) In the fist instance the dispute or claim shall be taken up with the foreperson or supervisor by the employee or employees concerned or the duly appointed union representative. 11.1.1(b) . . . 11.1.1(c) . . . 11.1.1(d) . . . 11.1.1(e) . . . 11.1.1(f) If settlement cannot be reached through the above procedures then either party may refer the matter to the locally organised Board of Reference/Disputes Board (where these have been established by agreement between the parties) and/or the Australian Industrial Relations Commission. . . . 11.1.2 11.1.3 11.1.4 Provided however, that where a separate disputes settlement procedure has been agreed between the parties as part of an on-site agreement, and this has been endorsed by the Commission, that procedure shall prevail over the above. . . . 13. EMPLOYMENT CATEGORIES 13.1 Weekly hire - operators 13.1.1 The following provisions shall apply to the Operator classifications contained in 18.1.2 and 19.3.1 of this Award: . . . 13.1.2 Casual labour . . . 13.2 Daily hire - tradespersons and labourers 13.2.1 The following provisions shall apply to the Tradesperson and Labourer classifications contained in 18.1.2 and 19.3.2 of this Award: 13.2.1(a) One day's notice of termination of employment shall be given on either side or one day's pay shall be paid or forfeited. 13.2.1(b) Subject to the termination provisions of clause 36 of this Award notice given at or before the usual starting time of any ordinary working day shall be deemed to expire at the completion of that day's work. . . . 15.2 However if the services of any employee are not required by reason of inclement weather then the provision of clause 21 - Inclement weather - tradespersons and labourers of this Award, shall apply. 16. REDUNDANCY 16.1 Definition Redundancy means a situation where an employee ceases to be employees by as employer, respondent to this Award, other than for reasons of misconduct or refusal of duty. Redundant has a corresponding meaning. 16.2 Redundancy pay 16.2.1 A redundant employee shall receive redundancy/severance payments, calculated as follows, in respect of all continuous service (as defined by this Award) with the employer: Period of continuous service with Redundancy/severance pay an employer 1 year or more but less than 2 years 2.4 weeks pay for all service in excess of 1 year, 1.75 hours pay per completed week of service up to a maximum of 4.8 weeks pay 2 years or more but less than 3 years 4.8 weeks pay plus, for all service in excess of 2 years, 1.6 hours pay per completed week of service up to a maximum of 7 weeks pay 3 years or more than but less than 7 weeks pay plus, for all service 4 years in excess of 3 years, 0.73 hours pay over completed week of service up to a maximum of 8 weeks pay 4 years or more 8 weeks pay 16.2.2 Provided that an employee employed for less than twelve months shall be entitled to a redundancy/severance payment of 1.75 hours per week of service if, and only if, redundancy is occasioned otherwise than by the employee. 16.2.3 Week's pay means the ordinary time rate of pay at the time of termination for the employee concerned. 16.2.4 If an employee dies with a period of eligible service which would have entitled that employee to redundancy pay, such redundancy pay entitlement shall be paid to the estate of the employee. . . . 18. CLASSIFICATIONS AND WAGE RATE 18.1 Wage Rates 18.2 Special allowance . . . 18.3 Hourly rate calculation 18.3.1 Tradesperson and labourer employees - follow the job loading 18.3.1(a) The calculation of the hourly rate shall take into account a factor of eight days in respect of the incidence of loss of wages for periods of unemployment between jobs. . . . 18.3.1(b) For this purpose the hourly rate, calculated to the nearest cent (less than half a cent to be disregarded) shall be calculated by multiplying the sum of the appropriate amounts prescribed in 18.1.1, 24.1, 24.2, 24.3 and 24.5.2 of this Award, by fifty-two over fifty point four (52/50.4) rounded to the nearest cent, adding to that subtotal the amount prescribed in 18.2 hereof and dividing the total by 38. Provided that in the case of a carpenter-diver, the divisor shall be 31, and for the refractory bricklayers and their assistants the allowance contained in 18.10 hereof shall be added to the hourly rate. 18.3.2 Operator employees . . . The hourly rate shall be calculated by . . . The Issues 29 The parties agreed the issues for resolution in the proceedings were: 1. Whether the contract of employment between the Applicant and the Respondent is an unfair contract pursuant to s106 of the Industrial Relations Act , 1996. 2. Whether the contract was unfair for reasons that could have been addressed in an unfair dismissal application and therefore whether the application should be dismissed under s109A. 3. Whether the contract incorporated and/or was based upon the Hansen Yuncken Pty Ltd and Construction, Forestry, Mining and Energy Union (CFMEU) Partnership Certified Agreement 1998/2000. Further, or in the alternative, whether the contract incorporated the terms of the National Building and Construction Industry Award. And if s106 of the Industrial Relations Act 1996 (NSW) is applicable: 4. Whether the contract of employment be declared void in whole or in parts (except as to money and other benefits already paid or due varied) in terms set out in the contract. 5. Further, or in the alternative to 4, whether the Contract should be varied in accordance with Clause 3 of the Summons for relief. 6. Whether the Respondent should pay the Applicant such sums of money in connection with the contract as the Commission considers just in the circumstances of the case. 7. Whether there be payment of interest on sums of money ordered to be paid by the Commission. 30 A further issue was identified, not specifically referred to in the pleadings of the respondent until amendment was granted, namely: whether the orders sought in the application under s106 of the Industrial Relations Act 1996 (NSW) would create an inconsistency under s109 of the Australian Constitution in that a relevant Federal Award and Certified Enterprise Agreement govern the set of rights as to Notice and Redundancy for this labourer in the construction industry. The Employment Contract 31 It was long assumed in the practice of industrial law the terms of a Federal Award were incorporated into the contract of employment. Such a view placed reliance on authorities such as the judgment of the High Court in Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 where Dixon J (in the majority) said (at 7): The right to payment of Award wages is really a term imported by statute into the contract of employment, and imported independently of the intention of the parties . . . The distinction between express promise and obligation imputed by statute relates only to the juristic source of the obligation. It does not touch the character of the sum sued for nor the purpose of the proceeding. However, in George Albert Byrne & George Mortimer Frew v Australian Airlines Ltd (1995) 185 CLR 410, the High Court commented (at 8) as to this view: . . . we do not understand Dixon J to be saying in that passage that "a term imported by statute into the contract of employment" loses its statutory character and becomes incorporated in the contract as one of its terms. On the contrary, he recognises the distinction between an obligation originating in a statute and an obligation arising from a contract. 32 In Byrne & Frew, the applicants had argued, because of the statutory force given to an Award and because the relationship between the parties was contractual, the provisions of the Award became terms of the employment contract, enforceable therefore "by the use of contractual remedies as well as the remedies provided by statute". The applicants submitted in Byrne & Frew if a term of the Award was inferred into the employment contract, the applicants could seek the ordinary remedies available for the breach of a term of the contract. However, the High Court held the contract could operate effectively without the relevant term being inferred. The contractual remedy was therefore unavailable. The court commented the term, however, had statutory standing and if breached there was an available statutory remedy under the Award and/or relevant legislation. 33 In BHP Iron Ore Pty Ltd v Australian Workers Union (2000) 102 FCR 97 reliance was placed on the reasoning of the High Court's determination in Byrne & Frew. It was held for an Award to be incorporated into a contract of employment, express provision to that effect is required at [81]: . . . it is now authoritatively established that if an Award is to be incorporated into a contract of employment, express provision to that effect is required (see Byrne v Australian Airlines Ltd (1995) 185 CLR 410). In Byrne it was held that the obligation to observe an Award arose by force of statute, not because the Award was imported into a contract of employment independently of the parties' intentions; and that the provisions of the Award were not an implied term of the contracts of employment, because the implication was not necessary for their reasonable and efficient operation in all the circumstances. 34 In Burgess & Ors v Mount Thorley Operations Pty Limited (2002) 115 IR 13 Schmidt J sitting in the jurisdiction of the Industrial Relations Commission of NSW (on appeal) was required to examine a contract of employment under s106 of the New South Wales Industrial Relations Act 1996 where it was asserted clauses of the Federal Award and the terms of a Federally registered Certified Enterprise Agreement were incorporated into the employment contract as terms of the contract. A remedy under s106 of the Industrial Relations Act 1996 would then have been available if an unfairness was found in the terms of or the performance of the contract. If such an unfairness was found under s106 of the New South Wales Act, the terms could be varied and be reflected in an order for compensation "just in the circumstances". 35 The claim in Burgess was a claim for orders similar to those being considered in this application, namely, for orders of just compensation which would have the effect of increasing payments to the applicant on termination in respect of notice, redundancy and, in this case, a possible order for the payment of sick leave. It was found by her Honour in Burgess the relevant clauses of the Award were not incorporated into the employment contract. Schmidt J summarised the case thus: The applicant had asserted: 173 . . . the contracts in question contained as a term the Award and EA provisions. It was claimed that such terms had been breached and that such breach, together with the respondent's unconscionable conduct in relation to representations made as to security of employment and in how it selected employees for redundancy, ignoring its obligation to give effect to the Award seniority provisions, would lead to orders requiring various payments. Those payments related to termination of employment and other matters expressly dealt with in the Award and EA and would be in addition to the payments already made by the respondent to satisfy its obligations thereunder. . . . 176 . . . The reality of the claim, so pressed, was that it was pursued because the legislative enforcement scheme which applied to any breach of the Award and the EA, did not provide for the type of relief which s106 of the Act grants in respect of unfair contracts. I am far from convinced that this would be a proper basis for a finding of unfairness in relation to these contracts, . . . . The observations of the High Court in Byrne were directly to the point in relation to this difficulty. 177 The same result flows in relation to the various claims advanced in relation to unfair conduct. The Award expressly required that dismissal not be harsh etc. It is difficult to see that the claim as to the respondent's unconscionable conduct towards the applicants in selecting them for dismissal was not, in truth, a claim that this Award requirement had been breached. The Award also made express provision as to how such disputes were to be dealt with. That was a different mechanism for dealing with such a dispute, to a claim which might be brought under the unfair dismissal provisions of the Federal legislation in relation to those same matters. Breach of that Award provision, like a claim for any other Award breach, was nevertheless, one for which provision was made in the Workplace Relations Act 1996. The Federal legislative scheme in the context of these Award and EA provisions, simply leaves no room for the exercise by this Court of the s106 jurisdiction, in the manner here sought. (Emphasis added) And at [171]: 171 While the Court is given power by s106 to deal with unfair contracts, as defined, that power is a statutory interference with the parties' right to contract as they wish. The Award making powers of the AIRC and the power to certify agreements, thus giving them the force of Award, are also statutory powers which interferes with contractual agreements parties have otherwise made or might be free to make. While the parties to a contract of employment which attracts the terms of such an Award or agreement, may still have the right to agree to more generous arrangements than those provided in such Federal instruments, this Court does not have the jurisdiction to require such parties to adhere to more favourable terms which it, not they, determine, if the end result be 'an interference with the adjustment of industrial relations established by the Award with respect to the matters formerly in dispute'. (See Metal Trades Industry Association of Australia & Ors v The Amalgamated Metal Workers Shipwrights' Union & Ors (1983)152 CLR 632 at pp642 -3.) 36 However, Haylen J, in an interlocutory application where there was a challenge to the jurisdiction of the Industrial Relations Commission of New South Wales to hear a claim under s106 similarly for orders for a variation to reflect just compensation by way of Notice and Redundancy payment on the termination of an employment contract and where there was an alleged relevant Federal Award and Enterprise Agreement (certified), expressed a different view to that of Schmidt J in Burgess. Haylen J in Thornthwaite v Australian National Credit Union Ltd (2002) 116 IR 438 stated [at 80]: 80 Nor can I ignore the effect of the judgment in Byrne v Australian Airlines Ltd. Contrary to what might have been the understanding of industrial lawyers for many years, it is now clearly established that the contract of employment operates separately from an Award or certified agreement and is not automatically subsumed into the contract of employment . Orders made under s 106, especially for the payment of money, are not in the nature of an Award or the provision of an agreement. As the discussion in Westfield v Adams discloses, while concepts from the general law and general industrial standards may be relevant in reaching a determination on what money amount is just in the circumstances of the case, the result is not to order damages, nor does it simply amount to restitution or, for that matter, can it be considered the equivalent of making an "Award" for the payment of more money. . . . As pointed out in Westfield v Adams, it is a mistake to treat the considerations which inform the determination of a money order which is "just in the circumstances of the case" as resulting in the Court ordering, in some strict legal sense, for example, damages in lieu of reasonable notice. Tests and approaches from various areas of the law may be utilised in the task of determining a money order. However, it masks the true nature of the exercise to simply equate those matters with an order "for notice" or "due to redundancy" or "for severance pay". The focus will always remain on the unfairness demonstrated to be associated with the contract impugned. 81 Approached on the basis of the judgments in Byrne v Australian Airlines Ltd, it may be said that the Award alone (or certified agreement) is not the contract of employment. Section 106 deals with unconscionability associated with the contract of employment or any related arrangement, using that term broadly. It is for this reason, in my view, that orders made under s 106 of the Act would not usually be inconsistent with a law of the Commonwealth, namely the provisions of a certified agreement or Award. His Honour also held at [83]: 83 A further matter to be considered in light of recent legislative developments is the nature of Federal Award regulation. While it was appropriate for the court in the Metal Trades Industry Association case to describe, in 1982, the Awards of the Federal Commission as being comprehensive in nature and regulating terms and conditions of employment in a detailed fashion, that description is no longer apt. The Workplace Relations Act 1996 brought about a most significant change. Section 89A limited, in a decisive way, the matters which may be contained in an Award of the Commission. One of the principal objects of the Act was to ensure that the primary responsibility for determining matters affecting the relationship with employers and employees rested with the employer and employees at the workplace or enterprise levels. Awards were not only no longer to be comprehensive but were relegated to safety net arrangements to be supplemented by enterprise arrangements. In that context and having regard to the minimum rates nature of both the agreement and the Award relied on by the respondent in these proceedings, it is not possible to say that there is a legislative intent that those instruments are to cover the field in relation to every subject matter with which they deal. Section 152 of the Workplace Relations Act will, therefore, not assist the respondent's argument. Amendments to s 152 made in 1996 and 1997 (and particularly the introduction of ss1A) suggest that the field of exclusive coverage of federal Awards has been considerably narrowed in comparison with the operation of s 65 of the Conciliation and Arbitration Act. Further, s152 will not apply when the State law deals with a different matter, namely, the contract of employment at common law. 37 From the authorities and facts before me, I accept there is a Federal Award and a Certified Enterprise Partnership Agreement which covers the employment of labourers working on construction sites. I accept the relevant Award and Certified Enterprise Partnership Agreement have a statutory force and statutory remedies are available in the breach. I further accept the contract of employment operates separately from the Award and Certified Agreement and their terms are not automatically inferred into the contract of employment as the implication of their terms is not necessary for the efficient operation of the Award and Agreement. There was no evidence of the parties' intention to expressly incorporate any term of the Award and Agreement into the contract of employment. Inconsistency 38 An inconsistency arises under s109 of the Constitution if there is an inconsistency between "a law of a State" and a "law of the Commonwealth". Plainly enough, s106 of the Industrial Relations Act, 1996 is a "law of a State". The appropriate test for inconsistency outlined in Victoria v The Commonwealth (1937) 58 CLR 618 was refined from the words of Isaacs J in Clyde Engineering v Cowburn (1926) 37 CLR 466 (at 641): a State law is inconsistent, and is therefore invalid, so far as its effect, if enforced, would be to destroy or vary the adjustment of industrial relations established by the award with respect to the matters formerly in dispute. In Victoria v The Commonwealth (1937) 58 CLR 618, Dixon J stated (at 630): When a State law, if valid, would alter, impair or detract from the operation of a law of the Commonwealth Parliament, then to that extent it is invalid. Moreover, if it appears from the terms, the nature or the subject matter of a Federal enactment that it was intended as a complete statement of the law governing a particular matter or set of rights and duties, then for a State law to regulate or apply to the same matter or relation is regarded as a detraction from the full operation of the Commonwealth law and so as inconsistent. In the more recent decision of the High Court in Telstra Corp Ltd v Worthing (1998-1999) 197 CLR 61 comment was made on these two propositions at [28]: The second proposition may apply in a given case where the first does not, yet, . . ., if the first proposition applies, then s109 of the Constitution operates even if, and without the occasion to consider whether, the second proposition applies. 39 The High Court in Metal Trades Industry Association of Australia v Amalgamated Metal Workers and Shipwrights' Union (1983) 152 CLR 632 (at 641), in the joint judgment of Gibbs CJ, Wilson and Dawson JJ, discussed the position of a Federal Award : . . . They are not themselves laws of the Commonwealth and without more could not attract the operation of s109 of the Constitution so as to override inconsistent State laws or awards. However, the Parliament has made specific provision in this regard in s65 of the Commonwealth Act, which reads as follows: Where a State law, or an order, award, decision or determination of a State Industrial Authority, is inconsistent with, or deals with a matter dealt with in an award, the latter prevails and the former, to the extent of the inconsistency or in relation to the matter dealt with, is invalid. In Hudson v Qantas Airways Ltd (1985) 10 IR 331 the Full Bench of the Commission, in relation to these arguments, stated (at 333-334): In the light of the many authorities concerning the question of inconsistency where a Federal award is involved, (see, in particular, Metal Trades Industry Employers Association v Amalgamated Metal Workers Union (1983) 4 IR 284; 48 ALR 385 and the cases there discussed), it cannot be said that, as a general rule, inconsistency would arise simply because a Federal award regulates a particular employment in respect of which an order may be sought under s 88F(1) avoiding or varying the contract of employment or any collateral contract or arrangement, or, under Section 88F(2), to rectify or adjust, by the payment of money sums, any unfairness or the like which may have been suffered. Apart from the need to examine the declaration or orders which might be made under s 88F in the light of what is embraced by the particular award and the settlement achieved by it, the special nature and purpose of Section 88F makes inconsistency potentially unlikely to arise, especially where an alleged unfair situation relates to aspects of the employment relationship extraneous to the specific subject matters regulated by the award. 40 In the Metal Trades Case, the question of whether an inconsistency arose was addressed by the High Court (at 642): . . . the problem therefore is to be approached on the basis that the alleged inconsistency is between the Commonwealth Act which authorises the making of the Awards and the State law and the solution is to be found in application of s109 and the well-established doctrine of inconsistency derived therefrom. At the heart of the doctrine is the call to take the law or the Award with which the State law is alleged to be inconsistent and discern precisely the matters which it is the intention of the Parliament, or the Commonwealth arbitrator as the case may be, are to be exhaustively determined thereby. In the case of an Award which deals with a dispute between parties whose relations apart from the Award are ordinarily governed by State law including the common law, the existence of the State law is for the most part assumed and this assumption will be relevant to discerning any inconsistency (cf Wardley, per Wilson J (1980) 142 CLR, at pp 287-288). The contract of employment itself is the most obvious illustration. To the extent that it is not varied by the Award, its obligations will ultimately be derived from State law. The question will often be whether the Award provisions are intended to supplement or modify rather than supplant State law. 41 The applicant in answer to the respondent's assertion the Federal law (read Award and Agreement) must prevail relies on the reasoning of Haylen J in Thornthwaite at [77] where his Honour enunciated a number of matters to "provide guidance as to any court's consideration of whether there was an inconsistency": (a) first, take the law or Award with which the State law is allegedly inconsistent and discern precisely the matter which it is the intent of the Parliament or the Commonwealth arbitrator are to be exhaustively determined thereby; (b) where an Award is involved dealing with a dispute between parties whose relations apart from the Award are ordinarily governed by State law including the common law, the existence of the State law is for the most part assumed and the assumption will be relevant to discerning any inconsistency; The contract of employment itself is the most obvious illustration - to the extent it is not varied by the Award its obligations will ultimately be derived from State law; (c) the distinction between the right to dismiss and the machinery for termination may be material; (d) the industrial agreement and the State Act may deal with entirely disparate subject matters - an industrial agreement is confined narrowly to employment relationships determined in settlement of an industrial dispute while legislation may deal with a separate and distinct matter dealing with a general social question of equality; (e) the critical question is - what is the conduct or matter with which the relevant Award deals?; (f) even where there are comprehensive Awards there may be some matters which are left to the operation of State laws; (g) Awards usually operate in the context of the general law both State and federal. Where an Award fails to deal with a matter provided for by Statute, unless the Award exhibits an intention there is to be no benefit of that kind or alternatively that the benefit for which it provides are to be a complete and exclusive statement of the employee's entitlement in the relevant area, there will be no inconsistency. Such an intention cannot be ascribed lightly to an Award; (h) generally statutory rights have been treated as standing outside the matters dealt with by Awards unless a specific provision is made with respect to them; (i) as a general rule inconsistency will not arise simply because the federal Award regulates a particular employment in respect of which an order may be sought under s 88F(1) varying the Award or under s88F(2) rectifying or adjusting the arrangements by payment of a money sum; (j) the special nature of s 106 is such that it is highly unlikely that there would be inconsistency with the federal Award; (k) the federal Award is to be examined to see if it operates regardless of State law; (l) Awards are not to trespass on alien areas remote from its purpose and subject matter; (m) while an Award may be broadly similar in coverage of the engagement and dismissal, it may be essentially dissimilar in character and general content to a statutory provision; the Award may not be a general industry Award dealing exhaustively with the respective rights of the employer and employee and claiming an unfettered right of dismissal - in such circumstances there is room for the operation of the general law; (n) seldom will an Award lend itself to the covering of the field test on the subject of the contract of employment; (o) inconsistency depends upon the intention of the paramount legislature to express by its enactment completely, exhaustively or exclusively, what shall be the law governing the particular conduct or matter to which attention is directed. 42 For there to be an inconsistency between the Certified Enterprise Partnership Agreement read with the Federal Award and any orders under s106 of the State Act the court must therefore determine precisely what matters the Federal law deals with exhaustively The obligations under a contract of employment ultimately are derived from State law. The question to be determined is does the relevant Agreement or Award "supplement or modify rather than supplant State law". Nature of Orders under s106 of the Act 43 As to the nature of Orders available under s106 of the State Act such must be considered when determining inconsistency and also in a consideration of the terms of the contract of employment. In Barry v Incitec Ltd (1991) 45 IR 143, Hill J said of s88F (a similar provision to s106) at [146]: . . . s 88F of the Act deals with the matter of what for present purposes may be briefly described as unfair contracts. It applies to a contract or arrangement between the particular persons who are party thereto. Unfairness may arise either from the terms of the contract itself, the surrounding circumstances, and/or from the manner of performance or operation of the contract. The section deals largely with private rights inter partes. Despite that a general and relevant industrial prescription governing benefits payable to employees in termination of employment situations may exist, unfairness in relation to a particular contract of employment may nevertheless arise in a situation of redundancy or termination of employment for reasons unrelated to or not relevant to the basis of Award prescription of an objective and fair general standard of redundancy or severance benefits. It may arise simply in the special circumstances of and surrounding the particular contract. 44 In Stonham v Speaker of Legislative Assembly (2000) 97 IR 325, Hungerford J commenting on the nature and operation of s106 referred at [56-57] to the Full Bench (Wright J, President, Walton J, Vice-President, and Hungerford J) of the Court in Beahan v Bush Boake Allen (1999) 47 NSWLR 648, (1999) 93 IR 1 at 35) where, after reciting the various authorities, their Honours concluded: What emerges from the above authorities, we think, is the now settled view that s106 (as with the previous s88F of the 1940 Act and s275 of the 1991 Act) is directed to an impugned contract of employment, whether existing or terminated, as to the fairness of its express or implied terms. Such unfairness will depend upon the facts of each particular case by focusing attention on the contractual relationship between a particular employer and employee and where the unfairness may arise from the terms of the contract itself, the surrounding circumstances and/or the manner of performance or operation of the contract. The section, we emphasise, is not concerned with re-establishing an employment relationship which has ended nor with compensating an employee for the loss of his employment contract. In other words, the section is properly concerned with the fairness of the terms of a contract of employment in its various respects and, if relevantly found to be unfair, to provide remedial relief by avoiding or varying the terms of that contract and to order the payment of money in connection with any contract so avoided or varied as is considered just in the circumstances of the case. Hungerford J continued further in Stonham : 56 The important point for present purposes is that s 106 (like its statutory predecessors in s 88F of the Industrial Arbitration Act 1940 and s 275 of the Industrial Relations Act 1991) is concerned with a particular case, as distinct from attention to conditions of employment generally in an industry to be allowed by employers as minima for all employees in that industry, by focusing on the contractual relationship of an employer with an employee. Where relevant unfairness is found in the terms of an employment contract then s 106 may be utilised to provide remedial relief in respect of that employment contract. That mechanism is not, in my view, offensive of the exclusion of industrial instruments from the coverage of s 106 but rather provides conceptual support for the exclusion being provided. In other words, the statute recognises the true scope and ambit of s 106 as being directed to the contract of employment and makes it plain that industrial instruments may not be the subject of attack. 57 It is worth repeating at this point the fact in the instant case that the challenge is to the employment contract between the parties and not to the award or the enterprise agreement as such. The respondent's real concern, it seems to me, is that he faces the potential of orders being made granting to the applicant benefits more favourable to her than those in the award or in the enterprise agreement. 45 In Thornthwaite at [68] Haylen J referred to the decision of the Full Industrial Court in the State of New South Wales v Health and Research Employees Association of New South Wales (unreported, Fisher CJ, Bauer and Hill JJ, 31 March 1993) as to the remedies available to the court's discretion under s88F: It is clear that an instruction for the payment of a sum 'just in the circumstances' in Section 88F(2) has a wider base than that generally available under the principles of common law damages. Indeed, the existence of Section 88F indicates that the legislature found that common law remedies are not necessarily appropriate and it seems to follows, insofar as argument by analogy might be useful, that though persuasive, reliance solely upon common law rules as to 'damages' may well be inappropriate. Further, Kirby P in Walker v The Industrial Court of New South Wales (1994) 53 IR 121 at 135 said: The High Court of Australia, and this Court, have repeatedly stressed the very wide discretion conferred by Section 88F upon the former Industrial Commission (and now the Court). Once Section 88F(1) attaches, the remedies that are then at the disposal of the Commission (now the Court) are also extremely wide. There is no warrant for confining this very large power, or for narrowing the circumstances of its exercise, except as statute provides ... 46 In Westfield v Adams (2002) 114 IR 241, the Full Bench of the Industrial Commission of New South Wales adopted the view the general nature of s106 of the State Act and the nature of such orders which may reflect a finding of unfairness not being limited by common law concepts of assessment of damages. Sheldon J's view in Davis v General Transport Development Pty Ltd [1967] NSW AR 371 (at 374) was the consideration under s106 encompasses "the whole subject of right and remedy". Consideration 47 A Certified Enterprise Partnership Agreement between the respondent and the CFMEU was in place at the time of the applicant's termination. It was certified in accordance with the terms of the Workplace Relations Act 1996 (Cth) (s170). It is not in dispute the applicant is a member of the CFMEU. The applicant is represented by counsel instructed by a solicitor with the CFMEU in this hearing. 48 Underpinning the Certified Enterprise Partnership Agreement is the NBCI Award. The Award covers members of the CFMEU. The employer has been, since 1974, named in Schedule "B" as being a respondent to the Award. I accept the evidence the applicant was present during a number of meetings held by both the respondent and the union to vote on the terms and conditions of the Agreement. With the union representing his interests, the applicant was, through his union, in no inferior position as to bargaining power. The union represented the employees in negotiating the Agreement and followed the consultative process outlined in the Award (Clause 10). The applicant concedes the Agreement was fair. 49 The Agreement binds both parties, that is, the union and the employer given the provisions of the Workplace Relations Act. Further, the relevant Certified Enterprise Partnership Agreement covers members of the CFMEU. Both the Certified Enterprise Partnership Agreement and the Award have therefore the force of statute. 50 Whether or not the Award conditions and the terms of the Agreement form a part of the employment contract is a question of fact. Nothing in evidence leads to the conclusion the applicant intended to vary his contract of employment to incorporate into it the terms of the Award and Agreement. Nor was there evidence offered that the respondent had any such intention. The Agreement and Award stand with statutory force as defined in Byrne & Frew. The facts before me are also at variation with the circumstances examined in the BHP Case wherein in a Letter of Offer to the employees there was reference to the terms of the Award. It was held such an offer had to be specifically agreed to for any term of an Award to be incorporated into the employment contract. Such is not the circumstance before me. Scope of the Award & Agreement 51 It is necessary to therefore examine the specific relevant Agreement and Award provisions particularly related to the applicant's employment. 52 The duties the applicant performed were as a labourer on a construction site. Such employees are covered by the Certified Enterprise Partnership Agreement and the NBCI Award. The scheme in place on a reading of the Award and Agreement is as follows: under the relevant Award, there are three Employment Categories identified: Award ("A") 13.1.2 (i) weekly hire – operator; (ii) casual labourer; and (iii) daily hire – tradespersons and labourers. 53 I accept the provisions covering "weekly-hire operators" and "casual labourer" (A13.1.2(i)&(ii)) are not relevant. The respondent submits the applicant's employment category is "daily-hire tradespersons and labourers" and is the employment category held by the applicant. The applicant submits the category does not apply to him. The descriptors in the Award of daily-hire, casual and weekly-hire employees identify the categories of employment to which attaches the term of notice ("A" 13.1.2). 54 The Enterprise Agreement, which prevails where there is conflict between the Award and the Agreement, contains Clause EA 10 which is as follows: EA10.0 EMPLOYMENT RELATED MATTERS 10.1 RECRUITMENT, PROBABTIONARY PERIODS AND TERMINATION To help minimise misunderstandings and differences of interpretation the parties agree to the following employment procedures: (a) . . . (b) . . . (c) . . . (d) . . . (e) New Employees shall be engaged on daily hire (8 hours) for a qualifying period of four weeks from the commencement of employment, after which the Employee may be offered an ongoing position with Hansen Yuncken. This offer, at the discretion of the Company, will be on weekly hire basis. (f) Employment consideration shall be determined by work availability, suitability to the task(s) and an individual work performance. Seniority shall not be the sole determining factor, but rather included as part of those considerations. 10.2 TERMINATION OF EMPLOYMENT (a) For employment periods of up to four weeks, one days notice of termination of employment shall be given on either side or one days pay shall be paid or forfeited. For employees on weekly hire (after four weeks) one week's notice of termination of employment shall be given on either side or one week's pay shall be paid or forfeited. The Company reserves the right to withhold payment for failing to follow these requirements. (b) Subject to the termination provisions of Clause 24 of the NBCIA notice given at or before the usual starting time of any ordinary working day, shall be deemed to expire at the completion of the day's work. (c) The Company shall provide to the Employee, a written statement specifying the period of his/her employment and the classification of, or the type of work performed. (d) Nothing in this clause shall effect the right of the Company to dismiss an employee without notice, for serious or wilful misconduct. (e) (i) A termination of employment by the Company shall not be harsh, unjust or unreasonable. (ii) Without limiting the above, except where a distinction, exclusion or preference is based on the inherent requirements of a particular position, termination on the ground of race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction and social origin shall constitute a harsh, unjust or unreasonable termination of employment. (iii) Any dispute, or claim arising out of sub-paragraphs (i) and (ii) above, shall be dealt with in accordance with the dispute provisions and settlement clause 6 of this Agreement. 10.3 SUPPLEMENTARY LABOUR . . . 55 The Agreement and Award both include Notice of Termination ("A" 13.2.1 and "EA" 10.1(f), Cl 10.2(a)-(e) into the clauses which address "Employment Related Matters". The policy followed in both schemes acknowledges and links, through the employment category of the employee, the benchmark for appropriate notice. 56 At issue is the employment category of the applicant. He was described by Mr Wilson in evidence as a long term employee and more senior than the other employees: . . . Q. When I asked that question very early in the piece, was it your perception that he was a permanent employee? A. Yes without question. Q. And permanent employees are hired or employed from your point of view under the weekly hire clauses of the Award. A. Yes. . . . . . .he probably had at least seven years more service than any other builders labourer. The employer identified the applicant as a permanent employee. 57 I do not accept the applicant could be categorised as a "new employee" after 23 years of service as defined in the (EA 10.1(e)). The Enterprise Agreement refers to new tradespersons and labourers as weekly-hire employees yet Mr Wilson referred to the applicant as a permanent employee covered by a new employees clause. 58 Evidence revealed the applicant had, when first hired, been paid under the provisions of the Federal Award, which enunciated minimum rates. Later he was paid under terms of a Certified Agreement by agreement between he and the employer. He was then paid in accordance with the terms of the Enterprise Agreement as a labourer. The respondent, however, in the latter period of the applicant's employment, and at the time of termination had further changed his employment term and the applicant was paid at a higher rate than that of a construction worker. He was being paid the rate of a "tradesperson". The employer revealed he was paid the higher rate because of his longevity in the respondent's service and his associated skills. The applicant was also paid a "follow the job" loading. The respondent submitted given this payment it identifies him as a weekly hire employee under Clause 10 of the Certified Enterprise Partnership Agreement. 59 The applicant during the course of his contract of employment was offered and accepted a more generous rate of pay for his labour than the minimum rates for a labourer working on a construction site as defined in the Enterprise Agreement and the Award. Parties are entirely free to agree on terms considerably more generous than those provided in the Award and the Enterprise Agreement. Such arrangements outside the terms of the Enterprise Agreement and the Award become part of an employee's contract of employment. Therefore, under his contract of employment the respondent paid the applicant at a higher rate than the minimum rate under the Award or the supplementary rate struck under the Enterprise Agreement for a labourer on a construction site. This was an arrangement which was part of his contract of employment. 60 I find the applicant had statutory rights as enunciated in the relevant Award and Enterprise Agreement but these instruments did not exhaustively or exclusively cover the terms and conditions of his employment. The facts reveal he was categorised by the employer as a permanent employee and as a term of his employment, that is, as part of his employment contract, he was paid a higher rate of pay than a labourer. 61 The Award and Enterprise Agreement therefore do not "cover the field" in terms of this employee's contract of employment. His contract of employment incorporated supplementary terms and conditions. There is therefore no inconsistency in the application of s106 of the State Act to the applicant's contract of employment terms and conditions and to apply to those terms of his employment contract the test of unfairness. 62 In the circumstances, I find the Award and Certified Enterprise Partnership Agreement, both with statutory force, are not comprehensive and do not cover the field as to this employee's contract of employment. Orders under s106 would not therefore create an inconsistency if such orders related to the terms of his contract of employment. Termination 63 Under the Certified Enterprise Partnership Agreement continuing employment is to be determined with consideration as to work availability, suitability to tasks and an individual's work performance (Cl 10.2). Each has to be taken into account and seniority is not to be the sole determining factor but included as part of the consideration. The effect of this clause and the way it is drafted ensure the decision to terminate is made with the emphasis on who to keep in employment rather than to come to any determination from the aspect of who is to be terminated. 64 The applicant alleges the decision making process which led to his termination was not in accordance with the procedures outlined in the Agreement. The applicant submits he was terminated because the job to which he had been allocated was completed. The work in Wollongong was completed before his vacation. The decision as to who was to remain in employment was not taken until at least 18 January 2001. Mr Wallis outlined the discussions between the company which occurred before the termination. He assured the court he was well aware of the procedures required under the Enterprise Agreement. The decision as to continuing employment was taken by a number of company personnel and took into account suitability, the task, each individual's work performance and their seniority. I accept this evidence. 65 I reject this part of the claim. I find the provisions of the Agreement and Award covered the decision to terminate. It appears the procedure was followed. If the applicant wishes to challenge this aspect, he has statutory rights directed to breaches in the Federal jurisdiction. I do not find the applicant had any terms or conditions covering his termination procedures other than that which arise under the Agreement and Award. 66 Redundancy payments for construction employees are defined in both the Award [A38A (now Cl 16.2)] and the Agreement (EA 16.2 1-4) by payments through to a trust fund. Redundancy payments have also not been addressed other than through the Agreement and Award. 67 It is not for this court to determine whether the Federal Scheme before it, as defined through the certified Agreement and Award as to the Selection for Termination and the payment of Redundancy, is inherently unfair in its terms or in its conduct. Once the terms and conditions of the statutory scheme by force of the Award and Certified Enterprise Partnership Agreement cover the applicant. Orders made under s106 would lead to an inconsistency under s109 of the Constitution. 68 However, the contract of employment of this employee varied the minimum terms of the Award and supplementary terms of the Enterprise Agreement in two distinct ways – his category of employment and his remuneration. It remains to be determined whether there was an unfairness in the terms and/or conduct of these provisions in his contract of employment. 69 As to Notice, the applicant was not paid Notice on termination. Mr Wilson asserted the applicant had worked out his entitlement to Notice. The applicant, the respondent submitted, was first given notice in October 2000 that work could run out. Mr Wilson, as to the question of notice, revealed he had discussed retrenchment on a number of occasions with his employees. Further, he had revealed to the applicant's daughter and the applicant in his various discussions, over an extended period of time in which the applicant agreed to accept holiday payments that the forward work position of the company was difficult. He regarded such discussions as giving notice of termination under the terms of the Enterprise Agreement (EA l0.2(a)). 70 When asked what specific date, in his view, notice was given to the applicant of the termination of the employment, Mr Wilson identified 15 January 2001, that is, around the time he spoke to the applicant's daughter. 71 This employee of 23 years service was terminated with no payment as to Notice and after he had used up most of his accrued holiday pay. His accrued holiday payments were used up under an agreement with the employer. Mr Wilson was of the view the applicant did not have to receive a payment as to Notice on termination. He said: He does not have to receive a notice payment. The enterprise agreement is quite clear. It says one week's notice of termination of employment or one week's pay. It does not specify that a payment has to be made. The question of termination can be handled by one weeks' notice of termination. He was then asked: Q. While he was receiving holiday pay you say, on an interpretation of that clause, that you can just give him notice while he is receiving holiday pay and he does not get a week's pay? A. Certainly that is how the enterprise agreement reads. 72 It is a breach of the Annual Holidays Act 1944 to give any other definition to a employee's accrued statutory right for holiday pay (see J. Scott Pty Ltd v Stapp [1960] AR 300 (at 317) per Beattie J). Mr Wilson cannot claim the protection of the Enterprise Agreement to assert while an employee is receiving holiday pay he can also serve out a week's Notice. The respondent is not permitted to put another character onto the holiday payment. The possible statutory breach can be pursued in accordance with procedures under s13 of the Annual Holiday Act 1944 (as amended). 73 As the Award and Certified Enterprise Partnership Agreement follow a scheme which links the category of employment to appropriate notice, and following the finding this employee's category of employment is a term of his contract of employment, it follows the provision as to Notice should also be seen as part of the employee's contract of employment and can therefore be varied under the provisions of s106 of the Act if unfair in its terms or its conduct. 74 I find the failure to pay this employee a Notice payment and the decision to characterise an accrued right to holiday pay as a Notice payment is an unfairness in the conduct of the applicant's employment contract. 75 Section 106 requires a further consideration as to whether such unfairness should reflect in an order for just compensation. Having found it unfair a permanent employee with 23 years skilled service received no Notice payment I determine this is an appropriate matter for orders of just compensation. The contract of employment should be varied to add an additional clause reflecting the payment of Notice to the applicant for 12 months. 76 As to the claim for Redundancy such rights are dictated in accordance with the Enterprise Agreement and Award and are of statutory force. He has been paid in accordance with those statutory rights through the Trust. I reject any claim under s106 of the Act related to the redundancy payment. 77 The applicant also makes a claim for sick leave. The applicant alleges he suffered an injury to his arm and shoulder of a recurrent nature arising out of his employment, which was not incapacitating at the time of his termination, but became incapacitating at a later time. He asserts by his termination the respondent deprived him of his entitlement to sick leave. Under the Award and Agreement he was not entitled to a payment of accrued sick leave. I reject this claim. The applicant holds statutory rights under the relevant Workers' Compensation legislation related to any on going incapacity suffered by him through injury in the course of his employment. I reject this claim brought under s106 of the Act. 78 The respondent asserts any allegation as to unfairness as to this contract of employment should be brought in an unfair dismissal application and should be dismissed under s109A. An objection is raised by the respondent who asserts the claim is precluded by virtue of the operation of s109A of the Act. Section 109A of the Act provides: 109A Exclusion of certain contracts in connection with unfair dismissals (1) This Division does not apply to a contract of employment that is alleged to be an unfair contract for any reason for which: (a) an application has been or could have been made by the employee under Part 6 (Unfair dismissals), or (b) such an application could have been made but for the provisions of section 83 that exclude the employee from making an application under that Part. (2) In this section: " contract of employment " means any contract or arrangement under which work is done by a person in the capacity of an employee, and includes a related condition or collateral arrangement with respect to such a contract. " dismissal " has the same meaning that it has in Part 6. 79 The effect of the provision of s109A was examined by Walton J, Vice President in Hogan v Employment National (Administration) Pty Ltd [2000] NSWIRC Comm47 in an interlocutory application before him. The question of whether an application is in essence a claim for unfair dismissal is a question of fact that can only be determined after hearing evidence. Walton J, Vice President in Hogan relied upon the view expressed in Beahan v Bush Boake Allen Australia Ltd [1999] 47 NSWLR 648 where the Full Bench stated (at 692): In short, our view is that s109A operates to exclude a contract of employment from the operation of s106 only where the unfair contract claim is an unfair dismissal claim in disguise and where essentially it is of the nature of an unfair dismissal. Where a claim challenges the terms or operation of a contract of employment by genuine, not superficial or coloured, reasons related to the contract itself then, in our view, it is a claim properly within s106 and s109A has no operation in relation to it. Walton J, Vice President in Hogan then expressed the view as to the effect of s109A saying: 16 An application will not be excluded merely by reason of the fact that the applicant's dismissal motivated him or her to bring the claim. The question in each case will be whether the relief sought is, in truth, directed to the unfairness in or arising from the contract itself. 17 As Beahan v Bush Boake indicates, the question posed by s109A is not a matter which is likely to be determined solely upon the characterisation of the claim found in the pleadings. What is required is an examination of the substance of the claim. . . . 80 On an examination of the substance of this claim, I have found the relief sought is directed to the unfairness arising from a term of, and the conduct of, the employment contract. I therefore reject this alternative submission of the respondent that s109A of the Act precludes the claim. 81 As to the claim for interest made by the applicant, Schmidt J in Abboud v The State of New South Wales (Department of School Education) (No 2) [(2000)] 99 IR 299 held in a consideration as to interest as follows at [45]: The role of an interest component in monetary orders made under s88F of the Industrial Arbitration Act 1940, a predecessor to s106, was discussed by two members of the Industrial Commission in Court Session in Thomas Nationwide Transport Ltd v Thomas & Anor (1990) 34 IR 378. That approach has since been followed by the Court and its predecessors: see Westfield v Helprin (1998) 82 IR 411 at 443-444. Her Honour in Abboud then considered the reasoning of Bauer and Hungerford JJ in Thomas Nationwide Transport Ltd v Thomas & Anor (1990) 34 IR 378 as to what was an appropriate order for interest. She also, in consideration as to money orders under s88F, adopted the reasoning of Barwick CJ in Brown v Rezitis (1971) 127 CLR 157. Barwick CJ adopted the principle (at 165) that orders should ". . . effect wholly or partially the restitution of the parties to their former position upon the variation or avoidance of the contract or arrangement". Her Honour in Abboud then held at [49]: Here, the question which now arises is whether the express provision for a minimum of two weeks notice was unfair, where misconduct warranting summary dismissal has not been established, in the circumstances outlined. I take the view that the proper approach in the circumstances of this case is to make an order as to the payment of money "just in the circumstances of the case", which requires that interest should flow from the date of application and no earlier. While there undoubtedly have and will be cases brought under s106 where the issue is notice and where a proper basis for making an order in relation to interest calculated from a date earlier than the date of application will be established, there was nothing advanced in evidence or submissions in this case, which would provide a proper basis for going beyond that date. 82 The Full Bench of the Commission has adopted her Honour's reasoning as to interest (Abboud). The circumstances of this case persuade me there is reason to adopt the view of Barwick J to effect partially at least the restitution of the applicant to his position from the date of termination. As Schmidt J acknowledged, this is a case where the issue is Notice and the calculation should, I find, be made from the date of termination. 83 Interest is to be paid on the amount ordered from the date of termination, namely, 20 February 2001, in accordance with s94 of the Supreme Court Act 1970 as amended. ORDERS 1. The contract of employment between the applicant and the respondent be varied and the respondent pay to the applicant 12 month's payment as to Notice calculated at his full salary package rate from 20 February 2001. 2. Interest on that amount calculated in accordance with s94 of the Supreme Court Act 1970 as amended from 20 February 2001. 3. The respondent to pay the applicant's costs as agreed or assessed. The parties have liberty to approach in relation to the making of any costs order. 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.