Industrial Relations Commission of New South Wales CITATION: Australian Salaried Medical Officers' Federation (New South Wales) o-b Bruce Milne Hall v Sydney South West Area Health Service (No 2) [2007] NSWIRComm 243 APPELLANT Australian Salaried Medical Officer's Federation (New South Wales) (on behalf of Bruce Milne Hall) PARTIES: RESPONDENT Sydney South West Area Health Service FILE NUMBER(S): IRC 2200 of 2006 CORAM: Wright J President; Walton J Vice-President; Boland J Appeal - Leave to appeal - Unfair dismissal - Contract of employment - Clinical Academic employed by University - Clinical Academic appointed by the University to the position of Professor of Medicine in the School of Medicine and Director of the Division of Medicine at Liverpool Hospital - Area Health Service directed Academic not to attend Liverpool Hospital until certain matters relating to his appointment at the Liverpool Health Service had been resolved - Clinical Academic sought reinstatement by Area Health Service - First instance decision found that Clinical Academic not employed by Area Health Service on the basis there was no intention to create legal relations and therefore relief under Ch 2 of Pt 6 of the Industrial Relations Act 1996 refused because Clinical Academic not an employee of the Area Health Service - New evidence admitted on appeal - Subjective intention of parties not relevant - Objective test to determine whether intention to create legal relations - Employment indicia - First instance decision and orders quashed - Held Clinical Academic entitled to bring and maintain proceedings pursuant to Chapter 2, Part 6 of the Industrial Relations Act 1996. CATCHWORDS: Unfair dismissal - Appeal - Leave to appeal - Contract of employment - Clinical Academic employed by University - Clinical Academic appointed by the University to the position of Professor of Medicine in the School of Medicine and Director of the Division of Medicine at Liverpool Hospital - Area Health Service directed Academic not to attend Liverpool Hospital until certain matters relating to his appointment at the Liverpool Health Service had been resolved - Clinical Academic sought reinstatement by Area Health Service - First instance decision found that Clinical Academic not employed by Area Health Service on the basis there was no intention to create legal relations and therefore relief under Ch 2 of Pt 6 of the Industrial Relations Act 1996 refused because Clinical Academic not an employee of the Area Health Service - New evidence admitted on appeal - Subjective intention of parties not relevant - Objective test to determine whether intention to create legal relations - Employment indicia - First instance decision and orders quashed - Held Clinical Academic entitled to bring and maintain proceedings pursuant to Chapter 2, Part 6 of the Industrial Relations Act 1996. Contract of employment - Whether intention to create legal relations - Subjective intention of parties not relevant - Objective test to determine whether intention to create legal relations - Employment indicia Fringe Benefits Tax Assessment Act 1986 (Cth) LEGISLATION CITED: Health Services Act 1997 s 76 Industrial Relations Act 1996 s 191(2) Air Great Lakes Pty Ltd and others v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 Australian Salaried Medical Officers' Federation (New South Wales) (on behalf of Bruce Hall) v South Western Sydney Area Health Service [2006] NSWIRComm 101 Australian Salaried Medical Officers' Federation (New South Wales) (on behalf of Bruce Milne Hall) v Sydney South West Area Health Service [2007] NSWIRComm 175 CASES CITED: Damevski v Guidice, President of the Australian Industrial Relations Commission and Others (2003) 202 ALR 494 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 Ex parte Robert John Pty. Ltd.; Re Fostars Shoes Pty. Ltd. [1963] SR (NSW) 260 Hollis v Vabu Pty Limited (2001) 207 CLR 21 The Queen v Foster and others; Ex parte Commonwealth Life (Amalgamated) Assurances Limited (1952) 85 CLR 138 HEARING DATES: 17 August 2007 DATE OF JUDGMENT: 26 September 2007 APPELLANT Mr R C Kenzie QC with Mr P Ginters of counsel Mr S Mead Australian Salaried Medical Officer's Federation (New South Wales) LEGAL REPRESENTATIVES: RESPONDENT Mr H J Dixon SC with Mr A B Gotting of counsel Ms K Crawshaw NSW Department of Health JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: WRIGHT J, President WALTON J, Vice-President BOLAND J Wednesday 26 September 2007 Matter No IRC 2200 of 2006 Australian Salaried Medical Officers' Federation (New South Wales) o/b Bruce Milne Hall v Sydney South West Area Health Service (No 2) Application by Australian Salaried Medical Officers' Federation (New South Wales) on behalf of its member, Bruce Milne Hall, for leave to appeal and appeal from a decision of Justice Staff given on 28 March 2006 in Matter No IRC 1427 of 2005 DECISION OF THE COMMISSION [2007] NSWIRComm 243 1 This appeal has two unusual features. First, it involves the question of whether a senior clinical academic (professor of medicine and renal physician), Professor Bruce Milne Hall, was employed at the same time by the University of New South Wales ("UNSW") and by the Sydney South West Area Health Service ("AHS") at Liverpool Hospital. In 1991 Professor Hall was appointed by the University to the position of Professor of Medicine in the School of Medicine and Director of the Division of Medicine at Liverpool Hospital, South Western Sydney Area Health Service (now known as Sydney South West Area Health Service). There was no issue that Professor Hall was, at all material times, employed by UNSW and continues to be employed by UNSW. 2 On 26 May 2005, the General Manager of the Liverpool Health Service, a unit of the Sydney South West Area Health Service, directed Professor Hall not to attend Liverpool Hospital Campus until certain matters relating to his appointment at the Liverpool Health Service had been resolved. The Australian Salaried Medical Officers' Federation (New South Wales) ("ASMOF"), on behalf of Professor Hall, sought his reinstatement to the position that he held at Liverpool Hospital. 3 In Australian Salaried Medical Officers' Federation (New South Wales) (on behalf of Bruce Hall) v South Western Sydney Area Health Service [2006] NSWIRComm 101, a decision given on 28 March 2006, Staff J determined that Professor Hall was excluded from obtaining relief under Ch 2 of Pt 6 of the Industrial Relations Act 1996 because he was not an employee of the Sydney South West Area Health Service. His Honour consequently dismissed the application for relief. 4 The decision of Staff J, which is now the subject of this appeal, raises the second unusual feature. As it was explained in the Full Bench's interlocutory decision in Australian Salaried Medical Officers' Federation (New South Wales) (on behalf of Bruce Milne Hall) v Sydney South West Area Health Service [2007] NSWIRComm 175, the appeal initially came before the Full Bench for hearing on 25 September 2006. The hearing did not conclude on that day and was adjourned to 28 November 2006. However, the November hearing date was vacated in favour of continuing conciliation between the parties. On 13 December 2006, the Full Bench was advised the conciliation that had been conducted under the chairmanship of Walton J, Vice-President was unsuccessful. Consequently, a further hearing date was set for 19 March 2007. 5 On that day, the Full Bench was advised that the parties had come to an agreement as to the disposition of the appeal, which involved the granting of leave, upholding the appeal and quashing the decision and orders of Staff J. However, in light of new evidence that had come to light it was further proposed by the parties that the Full Bench remit the matter to a single Member for hearing. The Full Bench declined to adopt the parties' proposals and, given the limited nature of the new evidence, decided in the interests of expedition and to avoid additional costs, to admit the new evidence pursuant to s 191(2) of the Act (subject to any objections), hear the evidence and finalise the hearing of the appeal. That was done on 17 August 2007. Factual background 6 Staff J addressed the relevant factual background in his decision at [9]-[60]. For the purpose of the appeal, we refer to the following matters, which we understand were not in issue: · In 1989, prior to the engagement of the applicant, the UNSW and the AHS came to an agreement that the AHS would make available the facilities at Liverpool Hospital, Fairfield Hospital and the Community Health Service for undergraduate, graduate and post-graduate medical teaching and research. The AHS agreed to become a principal teaching campus of the UNSW. From 23 January 1989, the AHS agreed to make available facilities including the provision of a clinical science building or equivalent facilities for the use of all teaching, research and administrative staff in university/academic departments to be established in the AHS. Such buildings or facilities were to include provision for teaching and research facilities, including lecture and seminar rooms, demonstration rooms, office and student amenities and associated facilities. · The AHS agreed to the provision of funding in full or part, as agreed appropriate, to the UNSW for the appointment by the UNSW in association with the AHS of academic staff in the AHS which included, but was not restricted to the Professor of Medicine. · The AHS agreed that where university appointments were made that the appointees would be accredited to the AHS as visiting medical officers with clinical responsibilities and duties to be defined according to the needs of the AHS and the interests of the academic. Such accreditation as a visiting medical officer terminated in the event that the appointee ceased to hold a university appointment. · It was agreed that all new appointments to the visiting and/or fulltime medical staff of the AHS would be required to be available upon reasonable request by the UNSW to participate in the UNSW Undergraduate Teaching Program. · Members of the UNSW staff, other than those appointed to the staff of the AHS were eligible for appointment to the consultant medical staff of the AHS. Any appointment of a member of the UNSW staff, as a member of the AHS' consultant medical staff was to be effective only whilst such person remained a member of the UNSW staff. · Agreement was reached between the Department of Health and the AHS providing that clinical academics were required, as part of their academic appointment, to perform clinical services for patients of public hospitals and it was agreed that such services would normally be provided for eight hours per week and in recompense for same, clinical academics would receive a clinical academic loading. It was acknowledged that clinical academics in fact provided clinical services for patients in public hospitals, on average, to an extent in excess of eight hours per week. In recognition that some clinical academics provided services in excess of eight hours, it was recognised that clinical academics could be remunerated for "additional duties" (i.e. duties beyond that required for the University appointment) by reference to the annual rate/hour per week paid for the University duties. In a final settlement of all issues and in consideration of the services provided by clinical academics, the agreement set out allowances to be paid for work done on public patients. · The position that was advertised and that Professor Hall applied for was the position of Professor of Medicine and Director, Division of Medicine, Liverpool Hospital, South Western Sydney Area Health Service. At a meeting of the Personnel Subcommittee of the Executive Subcommittee of Council of the UNSW held on 1 May 1990, the Subcommittee approved the issuing of an offer of appointment to the applicant. · Professor Hall commenced with the AHS on 15 July 1991. He was paid the relevant salary plus the clinical duties (Public Hospital) allowance and the on-call/re-call allowance. · There were negotiations between the Department and ASMOF regarding remuneration arrangements for clinical academics in 1998. These negotiations culminated in the Department issuing a circular dated 18 January 2000 setting out remuneration arrangements for senior medical practitioners (academics). The new remuneration arrangements were to be effective from 1 July 1998. · Arising out of negotiations concerning remuneration arrangements for clinical academics in 1998, on 2 October 1998, the Deputy Director General, Operations of the Department wrote to ASMOF setting out in a without prejudice letter the agreement reached between the parties. Paragraph 1 of that agreement was as follows: 1. Employee status - for clinical and administrative services provided to public patients in public hospitals, the Department proposes that clinical academics who are currently remunerated by Health Services under agreed arrangements with the Department and others in future who would be because they provide more than eight hours per week service to the respective Health Service, would in future be part-time employees of Health Services with fractional staff specialist appointments. 7 As Staff J noted in his decision at [50], by letter dated 17 November 1998, ASMOF wrote to the Department advising that it agreed to the new arrangements. 8 On 10 January 2000, the Director General of the Department of Health wrote to Mr Ian Southwell, Chief Executive Officer of the South Western Sydney Area Health Service regarding "Remuneration Arrangements for Clinical Academics". This letter was not before Staff J and only came to light in September 2006. Up until that time Professor Hall had a recollection of receiving a copy of the letter in January 2000 but had been unable to find a copy. He contacted a colleague who provided a copy of the letter to Professor Hall. The letter was tendered as new evidence in the appeal pursuant to s 191(2) of the Act. The letter was provided to Professor Hall and other clinical academics at Liverpool Hospital by Dr Colin MacArthur in about January 2000. At the time, Dr MacArthur was the General Manager of the Liverpool Health Service. 9 The letter is important and so we have set out its terms in full below: Mr Ian Southwell Chief Executive Officer South Western Sydney Area Health Service Locked Mail Bag No 17 LIVERPOOL NSW 2170 Dear Mr Southwell, Remuneration Arrangements for Clinical Academics As you would be aware, following lengthy negotiations with the Australian Salaried Medical Officers' Federation (ASMOF) an in-principle agreement was reached in late 1998 concerning new remuneration arrangements for clinical academics. Under the new remuneration arrangements proposed, clinical academics would be part-time employees of Health Services with fractional appointments and pro rata leave and award conditions. The in-principle agreement included a proviso that the agreement was subject to the Universities agreeing to continue to provide workers compensation and public/professional liability cover for all public health system work of clinical academics at no cost to the Health Services or the Department. To formalise these arrangements concerning workers compensation and public liability/professional indemnity cover the Department's Legal Branch was instructed to draw up a pro forma agreement between Health Services and the relevant Universities relating to the liabilities incurred by certain clinical academics who will be appointed as part time employees by Health Services. A copy of the pro forma Deed of Agreement is attached. Following a period of considerable discussion and debate the Universities have indicated the attached Deed is now acceptable. To enable final implementation of the new remuneration arrangements proposed for clinical academics execution of the Deed of Agreement by your Health Service and the relevant University is now required. Your Health Service will need to execute a separate Deed with each University with which it has arrangements concerning the engagement of clinical academics. The Universities have been advised that the relevant Health Services will be approaching them shortly in this regard. A Circular outlining the new arrangements has also been prepared in consultation with affected Health Services and ASMOF. A copy of the Circular is attached. The Department will now proceed to issue this Circular outlining in detail the new arrangements applying to clinical academics. If you wish to discuss any aspect of the remuneration arrangements please contact Nick Gerrand, Deputy Director, Employee Relations on (02) 9391 9373 or Deborah Frew, Legal Officer on (02) 9391 9601 if you wish to discuss the Deed of Agreement. Yours sincerely, Michael Reid Director-General 10 The letter referred to an attached circular outlining the new arrangements. The circular (No 2000/3), which was later issued and dated 18 January 2000, stated that clinical academics who provided clinical and administrative services for periods greater than eight hours per week "will be classified as part-time employees with fractional staff specialist appointments. Such academics will be engaged and known as senior medical practitioners (academic)." The terms of the Department's circular are also important and we set them out in full: REMUNERATION ARRANGEMENTS FOR SENIOR MEDICAL PRACTITIONERS (ACADEMICS) GENERAL 1. This circular replaces all previous correspondence from the Department about clinical academics, including the letters and memoranda dated 22 December 1985, 31 August 1988, 22 November 1990, 23 June 1992, 14 February 1997 and 15 Au g ust 1997. 2. The Department and the Australian Salaried Medical Officers' Federation (NSW) have reached agreement on the remuneration arrangements that will apply to senior medical practitioners (academics). The new arrangements will be effective from the first full pay period that commenced on or after 1 July 1998. 3. The Department and the Australian Salaried Medical Officers' Federation (NSW) agree that the new arrangements for senior medical practitioners (academics) as set out in this Circular shall not be used as a precedent in any negotiations or industrial tribunal proceedings including conciliation and/or arbitration. 4. For work undertaken by senior medical practitioners (academics) in respect of public patients, the agreement with the Australian Salaried Medical Officers' Federation (NSW) provides that the Universities of New South Wales, Newcastle and Sydney will continue to provide workers compensation and public/professional liability cover. All three universities engaging senior medical practitioners (academics) have confirmed this arrangement. 5. For work undertaken in respect of private patients, health services need to sight evidence that senior medical practitioners (academics) carry adequate public liability and professional indemnity insurance. 6. Pro forma deeds of agreement between employing health services and the relevant university formalising the above arrangements in respect of workers compensation and public/professional liability cover have been developed. Once the relevant parties have signed the deed of agreement the employing health service should proceed to implement the new remuneration arrangements without delay. Health services will need to ensure that the appropriate retrospective adjustments are made. 7. Tax on retrospective adjustments should be at the senior medical practitioners (academics) current marginal tax rate. Each senior medical practitioner (academic) should be provided with a letter identifying that portion of the back-pay accrued during the last financial year, and advising the senior medical practitioner (academic) to seek professional taxation advice or to read the "Tax Pack" provisions in relation to "Income Arrears Rebate". TRANSLATION ARRANGEMENTS 8. Those senior medical practitioners (academic) who, by the implementation of this package, would have their current level of payments from health services reduced, will enjoy a "grandparenting" of the current actual dollar payments, until increases under the above arrangements and/or the availability of salary packaging make the transition to the new arrangements beneficial. However, once an election is made by a senior medical practitioner (academic) to enter into a salary packaging arrangement there will be no return to the "grandparenting" arrangements. 9. Details of the translation arrangements are set out in the attached table. Lecturers and senior lecturers on steps 1 to 4 will be paid in the steps 1 to 5 range of the Senior Medical Practitioner pay scale. Senior lecturers on steps 5 and 6, associate professors and professors will be paid at the senior staff specialist rate. DEFINITIONS 10. Clinical academic - a clinical academic for the purposes of this Circular is defined as a medical practitioner member of a university faculty of medicine employed by the university who holds a public hospital appointment as a Visiting Medical Practitioner and provides services for the public hospital's patients. 11. Clinical academics are required, as part of their academic appointment, to perform clinical services for public patients of public hospitals for up to 8 hours per week and in recompense for same, clinical academics receive a clinical loading from the university. 12. Senior medical practitioners (academic) - it has been agreed that clinical academics who provide clinical and administrative services to public patients in public hospitals for longer periods will be classified as part-time employees with fractional staff specialist appointments. Such academics will be engaged and known as senior medical practitioners (academic). 13. Senior medical practitioners (academic) engaged as part-time senior medical practitioners pursuant to this Circular will be engaged for 40% appointments under the Salaried Senior Medical Practitioners (State) Award. Clinical academics who provide up to 8 hours public patient work per week to health services will not be engaged as senior medical practitioners (academic). It is recognized that these academics have this work covered by their university employment. 14. For the purposes of this circular, "public hospital" shall have the same meaning as provided for in the Health Services Act 1997. AWARD PROVISIONS 15. Except where otherwise specified, the provisions of the Salaried Senior Medical Practitioners (State) Award ("the Award"), as amended from time to time, will apply to senior medical practitioners (academic). 16. The salary for all senior medical practitioners (academic) will be set at 40% of the relevant Senior Medical Practitioner salary, including the 17.4% special allowance. This level of salary has been set by negotiation between the parties. 17. Each senior medical practitioner (academic) will have a written annual performance agreement, in accordance with the relevant provisions of the Award. It is expected that the normal duties undertaken by the senior medical practitioner (academic) would reflect the 40% appointment. The actual activities and normal duties required will be a matter for specification in the senior medical practitioner (academic) performance agreement. Any changes to existing working arrangements should be addressed in the performance agreement negotiating process. 18 Managerial allowances will be paid in accordance with the relevant provisions of the Salaried Senior Medical Practitioners (State) Award and Circular 98/5. Attention is invited to clause 8 of Circular 98/5 which provides that while senior medical practitioners are entitled to payment on a pro rata basis the employer may pay the full-time rate of the allowance where the senior medical practitioner is required to undertake the full responsibilities of the position. 19. Entitlements to annual leave, long service leave, sick leave, personal/carers leave and parental leave under the Award will be provided on a pro rata basis based on the 40% fractional appointment. Only public hospital service from 1 July 1998 shall count for leave accrual purposes. Health services will need to obtain details of leave taken by senior medical practitioners (academic) since 1 July 1998 from the relevant University and/or from each senior medical practitioner (academic). SALARY PACKAGING 20. Salary packaging will be available to senior medical practitioners (academic) on the same basis and with the same undertakings as for staff specialists. SUPERANNUATION 21. Superannuation at the levels set by the Commonwealth Superannuation Guarantee (Administration) Act will be payable on the remuneration provided under these arrangements. The fractional salary (including the special allowance) and the managerial allowances are to be regarded as salary for all paid leave and superannuation purposes. 22. Health services are to include in returns to the State Superannuation Authority for First State Super the employer superannuation component for senior medical practitioners (academic) on a retrospective basis to 1 July 1998 and on an ongoing basis for as long as a senior medical practitioner (academic) remains an employee of the health service. PRIVATE PRACTICE ARRANGEMENTS 23. Appointment as a senior medical practitioner (academic) to a public hospital includes the automatic appointment of the senior medical practitioner (academic) as a Visiting Medical Practitioner. Rights of private practice arrangements for Senior Medical Practitioners as set out in Department of Health Circular 98/5 do not apply. 24. Private practice will be conducted on the same basis as at present. Senior medical practitioners (academic) will continue to retain their private billings - they will not be paid into Senior Medical Practitioner trust funds or the public hospital General Fund. No facility fees are payable by senior medical practitioners (academic). TRAINING, EDUCATION AND STUDY LEAVE 25. Training, Education and Study Leave in accordance with the leave provided under Department of Health Circular 98/5 does not apply to senior medical practitioners (academic). SABBATICAL LEAVE 26. Subject to appropriate arrangements being made to provide for ongoing service needs and operational requirements health services, at their discretion, may approve payment for periods of leave not exceeding two months to coincide with approved University sabbatical leave. Approval will not be unreasonably withheld. Thus, if a period of leave approved by both the University and health service exceeds two months, payment will be made by the health service for the first two months, but not for the remainder of the period of approved leave. MISCELLANEOUS 27. Budget supplementation will be provided by Finance Branch based on standard information that will be sought from affected health services. Budget supplementation is only relevant for urban health services (excluding the Illawarra and Central Coast Area Health Services). 28. Pay codes and rates are as for the Salaried Senior Medical Practitioners (State) Award salary and special allowance codes. 29. Specific enquiries concerning the salary rates and allowances applicable should be directed to the relevant human resources personnel in the health service. Finance queries on budget supplementation and cash flows are to be directed to the health service's finance contact officer. Only human resources/finance personnel from health services are to contact the Department. Michael Reid Director-General 11 The deed of agreement referred to in paragraph 6 of the circular was entered into by the AHS and UNSW on 12 April 2000. The recitals to the deed were as follows: A. The University employs Senior Medical Practitioners (Academic) within its Faculty of Medicine whose terms and conditions of employment with the University may include providing Services set out in this Deed in Public Hospitals under the control of the Health Service. B. The Health Service administers Public Hospitals, and benefits from Services provided by Senior Medical Practitioners (Academic). C. The arrangements regarding the remuneration paid by the Health Service to Senior Medical Practitioners (Academic) have been determined by the Health Administration Corporation pursuant to the Health Services Act 1997. D. In consideration of the mutual benefits obtained by the University and the Health Service as a result of the Health Service allowing Senior Medical Practitioners (Academic) to provide Services in Public Hospitals, the University makes the following covenants contained herein. 12 The definition of 'senior medical practitioner' in the deed was: "Senior Medical Practitioner (Academic)" means a medical practitioner employed by the University in an academic position who, in addition to their on-campus duties, provides Services in one or more Public Hospitals within the course of their University employment for more than 8 hours per week. 13 Pursuant to cl 2.2, the deed was said to apply to: · each Senior Medical Practitioner (Academic) providing Services in a Public Hospital under the control of the Health Service as at the date of this Deed, notwithstanding that the Senior Medical Practitioner (Academic) was appointed in any capacity to provide such Services prior to the date of this Deed; and · each Senior Medical Practitioner (Academic) who is appointed to provide Services in a Public Hospital under the control of the Health Service during the term of this Deed. 14 The deed described the services provided by senior medical practitioners (academic) in public hospitals as: (a) Clinical management and treatment of: (i) Public Patients; (ii) Private Patients which is associated with teaching or research; (b) teaching and research; and (c) other services including administrative services directly associated with the activities listed in (a) and (b) above. 15 Under the heading "Employment Status", the deed provided: 4.1 The University and the Health Service agreed that, despite any remuneration and employment arrangements made, imposed, agreed or determined by the Health Service or the Health Administration Corporation in respect of Senior Medical Practitioners (Academic), the University continues to be the employer of Senior Medical Practitioners (Academic) to whom this Deed applies whilst the Senior Medical Practitioner (Academic) is providing Services in a Public Hospital under the control of the Health Service. The University acknowledges that, in providing such Services, a Senior Medical Practitioner (Academic) is acting within the course of his or her employment with the University. 16 At [56] of his decision, Staff J noted that the effect of the new remuneration arrangements was that the various allowances that were paid to the clinical academics were replaced by a salary fixed at 40 per cent of the relevant senior medical practitioner's salary, which included a 17.4 per cent special allowance. First instance decision 17 After referring to the submissions of the parties and addressing what his Honour regarded as the relevant principles to be followed in determining whether a person is an employee, Staff J made a number of relevant findings: (i) the allowances paid to Professor Hall were only payable as a condition of the applicant's employment with UNSW upon the basis that he provided the various services in the Hospital ([82]); (ii) there was no evidence, whatsoever, that the applicant applied for a position with the AHS ([83]); (iii) the evidence did not disclose that there was any offer of employment made to Professor Hall by the AHS ([85]); (iv) the AHS had agreed that where university appointments were made, the appointees would be accredited to the AHS as visiting medical officers (practitioners) with clinical responsibilities and duties to be defined according to the needs of the AHS and the interests of the particular academic. Such accreditation would terminate in the event that the appointee ceased to hold a university appointment. Following Professor Hall's employment by UNSW, he was granted the status of visiting practitioner with clinical responsibilities and duties in respect of patients treated in the Hospital ([87]-[88]); (v) the entitlement of senior medical practitioner (academic) to certain conditions set out in the Salaried Senior Medical Practitioners (State) Award did not result in the creation of a contract of employment between Professor Hall and the AHS ([106]); (vi) the first element essential to the existence of any contract, that being, the requirement that the parties have a mutual intention to create a legally enforceable bargain has not been established ([108]); (vii) it was necessary to establish that an agreement was reached between Professor Hall and the AHS from a particular point in time, and, on known terms, and conditions which were understood by both sides, identifiable, and to which the applicant consented with mutuality of obligation, in order for Professor Hall to become an employee of the AHS as well as being an employee of UNSW ([109]); (viii) Professor Hall was unaware that he had become an employee of the AHS from 1 July 1998 ([110]); (ix) it was conceded by counsel for Professor Hall that if he lost his University employment, he would also lose his senior medical practitioner position and the academic characterisation. This was a telling concession as it acknowledged that the ultimate right of control in respect of whether Professor Hall performed any services within the AHS depended on the University. It followed that in such circumstances, there would be no entitlement on the part of the AHS to demand the performance of work by Professor Hall as an employee. That entitlement to provide the service was within the ultimate control of the University, made by an agreement between Professor Hall and UNSW. The AHS exercised those rights ([116]); (x) the terms of the deed which is dated later in time to the circular runs counter to all the indicia which point to an employment relationship being created as between the AHS and the applicant on and from 1 July 1998. The terms of the deed bind Professor Hall and any other senior medical practitioner (academic) employed by UNSW. It followed that there was no intention on behalf of Professor Hall and the AHS to enter into an employment relationship, but rather not to disturb the existing employment relationship between Professor Hall and UNSW (125], [129], [130]); (xi) cases dealing with the determination of whether persons are employees or independent contractors were of limited assistance as the issue for determination was whether there existed a contract of employment between Professor Hall and the AHS. Similarly, reliance on The Queen v Foster and Others; Ex parte The Commonwealth Life (Amalgamated) Assurances Limited (1952) 85 CLR 138 did not take the matter further ([128]); (xii) the concept of dual appointment, where Professor Hall was appointed as a visiting practitioner pursuant to s 76 of the Health Services Act 1997 and therefore not as an employee, cannot sit with the contention by Professor Hall that the effect of the 1998 remuneration agreement was to make him an employee of the AHS without the existence of any evidence that Professor Hall was aware that he was entering into an employment contract with the Department or AHS. An analysis of the conduct of the parties revealed no intention on the part of Professor Hall or the AHS to enter into a contract ([135]); (xiii) the terms of the deed of agreement entered into between the AHS and UNSW on 12 April 2000 referred to Senior Medical Practitioner (Academic) being employed by the University "in an academic position who, in addition to their on-campus duties, provides Services in one or more Public Hospitals within the course of their University employment for more than eight hours per week." The effect of appointing such academics as visiting practitioners, triggered s 76 of the Health Services Act which deprived the academic of employee status with a public health organisation ([136]-[137]); (xiv) the agreement that was reached between ASMOF and the Department of Health in 1998 was in respect of the remuneration arrangements that would apply to senior medical practitioners (academic) and others with effect from 1 July 1998. These remuneration arrangements, used as a reference point the payment structure for staff (employees) classified as part time employees with fractional staff specialist appointments. This was a means of setting higher rates and other benefits by reference to terms and conditions applicable to staff specialists' appointments whose terms and conditions were covered by the Salaried Senior Medical Practitioners (State) Award. The arrangements so reached did not alter the employment status of Professor Hall with UNSW. Indeed, the arrangements required the agreement of the universities and in a separate deed entered into between the Health Service and UNSW, the University acknowledged that it continued to be the relevant employer whilst its academics were providing services in a public hospital under the control of the health services and that in providing such services, the senior medical practitioner was acting within the course of his or her employment with the University. The remuneration arrangements so introduced did not convert the relationship between Professor Hall and the AHS into an employment relationship. There is no evidence of any intention between the AHS and Professor Hall, by means of these arrangements, to enter into an employment relationship. Professor Hall was not a party to any contract of employment with the AHS. It was common ground that no written contract of employment existed between Professor Hall and the AHS ([140]-[144]); (xv) although Professor Hall was required to work to rosters; report to and ultimately take some directions from the General Manager of the AHS; that taxation was deducted and that there were arrangements in place for dealing with absences from hospitals and that various types of leave were made available, no reliable conclusion as to an employment relationship between Professor Hall and the AHS could be drawn from the existence of such matters ([151]); (xvi) Professor Hall was, and continues to be, an employee of UNSW. Professor Hall was subject to the control and ultimate control of UNSW in his position and role within the AHS. Professor Hall was entirely dependent upon his employment with UNSW to maintain his role with the Hospital/AHS. In the event that UNSW terminated Professor Hall's employment he would be unable to maintain carrying out his duties at Liverpool Hospital. The requirement to carry out such duties at Liverpool Hospital was a component of the duties that Professor Hall was required, by UNSW, his employer, to carry out. The AHS did not have the ability to bring the employment of Professor Hall with UNSW to a conclusion. This power resided solely with his employer, UNSW ([152]); (xvii) Professor Hall is excluded from obtaining relief pursuant to Ch 2 of Pt 6 of the Industrial Relations Act 1996 because he is not an employee of the Sydney South West Area Health Service ([154]). Grounds of appeal 18 The grounds of appeal were as follows: (i) Staff J erred in determining that the appellant is excluded from obtaining relief pursuant to Ch 2 of Pt 6 of the IR Act because he is not an employee of the respondent (at [154]). (ii) Staff J erred in dismissing the appellant's application for relief from unfair dismissal (at [155]). (iii) Staff J erred in failing to find that at least since 1 July 1998 the appellant was an employee of the respondent. (iv) Staff J erred in failing to give consideration to, or proper consideration to, the submission that the respondent was an "employer" (as that term is defined in the IR Act) of the appellant in that it employed the appellant either on its own behalf or on behalf of UNSW. (v) Staff J erred in making the finding that his Honour did at [137], namely that: "The effect of appointing such academics [including the appellant] as visiting practitioners, triggers s 76 of the Health Services Act which deprives the academic of employee status with a public health organisation." (vi) Staff J erred in failing to give consideration to, or proper consideration to, the submission that the doctrine of joint employment is an apposite way of characterising the relationship that existed between UNSW, the appellant and the respondent. (vii) Staff J erred in finding that there was no evidence that suggested "at any stage" that the appellant was appointed to a position as staff specialist under the Staff Specialists (State) Award (at [34]). (viii) Staff J erred in finding: (a) There was no evidence whatsoever before the Commission that the appellant applied for a position with the respondent (at [83]). (b) The evidence did not disclose that there was any offer of employment made to the appellant by the respondent (at [85]). (ix) Staff J erred in "accept[ing]" the evidence of an officer of the respondent, Mr Driver (at [84]). (x) Staff J erred in finding that the requirement that the parties have a mutual intention to create a legally enforceable bargain had not been established (at [108]). (xi) Staff J erred in finding that there was no intention on behalf of the appellant and the respondent to enter into an employment relationship or contract of employment (at [130], [135], [144]). (xii) Staff J erred in finding that the "arrangements" reached between ASMOF and the Department of Health did not alter the employment status of the appellant (at [142], [143], [145]). (xiii) Staff J erred in failing to have regard to section 115 of the Health Services Act 1997 (as then in force) in considering inter alia the question of the relevance of the intentions of the appellant and the respondent. (xiv) Staff J erred in having regard to, and placing weight on "subjective" aspects of the appellant's evidence (at [83], [110], [149]) whilst at the same time failing to have regard, or proper regard to other "subjective" evidence of the appellant to the effect that he had always been of the view that he had two employers (at [112]). (xv) Staff J erred in finding that there was no entitlement on the part of the respondent to demand the performance of work by the appellant as an employee (at [116]). (xvi) Staff J erred in finding that any ambiguity regarding the appellant's employment status was removed by reference to clause 6 of the NSW Department of Health Circular No. 2000/3 ( "the Circular" ) (at [118]). (xvii) Staff J erred in finding that the terms of a Deed of Arrangement between the respondent and UNSW bound the appellant (at [129]). (xviii) Staff J erred in finding that little assistance could be gained from the examination of the Fringe Benefits Tax Assessment Act 1986 ( "FBTA Act" ) in circumstances where the appellant, from 1 July 1998, had the ability to engage in the respondent's salary packaging arrangement (at [139]). (xix) Staff J erred in finding that whilst the provisions of the FBTA Act, when read in the context of the Circular, point in the direction of an employment indicia those provisions, and the ability of the appellant to engage in the respondent's salary packaging arrangement did not overcome the "fundamental hurdle" of there being a lack of an agreement between the appellant and the respondent (at [139]). (xx) Staff J erred in concluding that he was "not persuaded" that the conduct of the parties established that all the essential elements of a contract could be made out (at [149]). (xxi) Staff J erred in finding that although the appellant was required to work to rosters; report to and ultimately take "some direction" from the respondent's General Manager; had taxation deducted by the respondent; that there were arrangements in place for dealing with absences from hospitals by the appellant; that various types of leave were available (and that superannuation contributions were made by the respondent on behalf of the appellant with effect from 1 July 1998 (at [138]) that "no reliable conclusion" as to the existence of an employment relationship between the appellant and the respondent could be drawn from such matters (at [151]). (xxii) Staff J erred in that his Honour took into account irrelevant considerations (including consideration identified at [151] and [152]). (xxiii) Staff J erred in concluding that consistent with the principles in Nagle v Tilburg (1993) 51 IR 8 the proceedings before the Commission were at an appropriate stage to determine the question of whether the appellant was excluded from obtaining relief pursuant to Ch 2 of Pt 6 of the IR Act because he was not an employee of the respondent. Leave to appeal 19 In light of our earlier decision to admit new evidence in the appeal and the implications of that new evidence for the outcome of the appeal, we have decided to grant leave to appeal. Consideration 20 Whilst Staff J made a number of relevant findings relating to whether or not there existed an employment relationship between Professor Hall and the AHS, the core reason for finding that Professor Hall was not an employee was that one of the essential elements of a contract was missing, namely, a mutual intention to create a legally enforceable bargain. 21 Staff J found that it was necessary to establish that an agreement was reached between Professor Hall and the AHS from a particular point in time, and, on known terms, and conditions which were understood by both sides, identifiable, and to which the applicant consented with mutuality of obligation, in order for Professor Hall to become an employee of the AHS as well as being an employee of UNSW. His Honour found that none of these requirements had been established. 22 His Honour's main findings that supported his conclusion that there was an absence of a mutual intention were that: · there was no issue that an employment relationship did not exist between Professor Hall and the AHS prior to 1 July 1998; · there was no offer of employment made to Professor Hall by the AHS; · Professor Hall was unaware that he had become an employee of the AHS from 1 July 1998; · the agreement that was reached between ASMOF and the Department of Health in 1998 in respect of the remuneration arrangements that would apply to senior medical practitioners (academic) and others with effect from 1 July 1998 and set out in Circular 2000/3 did not alter the employment status of Professor Hall with UNSW. These remuneration arrangements simply used, as a reference point, the payment structure for staff (employees) classified as part time employees with fractional staff specialist appointments, to set the rates and conditions for senior medical practitioners (academic). There was no evidence of any intention between the AHS and Professor Hall, by means of this arrangement, to enter into an employment relationship; · the ability of Professor Hall to engage in a salary packaging arrangement with the AHS pursuant to the Fringe Benefits Tax Assessment Act 1986 (Cth), when read in the context of the Department's January 2000 Circular (where salaried packaging arrangements were provided for), pointed more in the direction of an employment indicia but did not overcome the fundamental hurdle of there being a lack of an agreement between Professor Hall and the AHS; · there was no entitlement on the part of the AHS to demand the performance of work by Professor Hall as an employee. That entitlement to provide the service was within the ultimate control of the University, made by an agreement between Professor Hall and the UNSW; · although Professor Hall was required to work to rosters; report to and ultimately take some directions from the General Manager of the AHS; that taxation was deducted and that there were arrangements in place for dealing with absences from hospitals and that various types of leave were made available, no reliable conclusion as to an employment relationship between Professor Hall and the AHS could be drawn from the existence of such matters. · the concept of dual appointment, where Professor Hall was appointed as a visiting practitioner pursuant to s 76 of the Health Services Act and, therefore, not as an employee, could not sit with the contention by Professor Hall that the effect of the 1998 remuneration agreement was to make him an employee of the AHS without the existence of any evidence that Professor Hall was aware that he was entering into an employment contract with the Department or AHS; and · that the new remuneration arrangements did not alter Professor Hall's employment status with UNSW, was confirmed by the fact that the arrangements required the agreement of the universities and in a separate deed entered into between the Health Service and UNSW, the University acknowledged that it continued to be the relevant employer whilst its academics were providing services in a public hospital under the control of the health services and that in providing such services, the senior medical practitioner was acting within the course of his or her employment with the University. The terms of the deed bound Professor Hall and any other senior medical practitioner (academic) employed by UNSW. 23 Before dealing with each of the foregoing findings, we remind ourselves that it was common ground that no written contract of employment existed between Professor Hall and the AHS. However, it was Professor Hall's case that the contract could be implied, based on the conduct of the parties: Damevski v Guidice, President of the Australian Industrial Relations Commission and Others (2003) 202 ALR 494. 24 It may also be inferred from the manner in which the parties presented their respective cases that it was common ground that a necessary element in the formation of every contract is the intention to create legal relations and that such a requirement applies to implied, as well as express, contracts. The general rule is that the test of intention is objective: see for example, Air Great Lakes Pty Ltd and others v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at 335-337 per McHugh JA; Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 per Gaudron, McHugh, Hayne and Callinan JJ at 105-106; Damevski at [93]-[97]. Whilst there was evidence about the respective subjective intentions of the parties, we understand both of them, correctly, are not to be relying on that evidence and so we do not propose to have regard to it. Prior to July 1998 25 As we have indicated, we are to proceed in the appeal on the basis that it was not pressed by Professor Hall that there was any contract of employment between he and the AHS prior to 1 July 1998. Staff J found in respect of the period prior to 1 July 1998 that Professor Hall had been employed by UNSW in the position of Professor of Medicine and Director, Division of Medicine, tenable at the Liverpool Hospital, within the AHS. It was this position that the appellant applied for and commenced employment in July 1991. In this position and role, the appellant was required to head the applicable clinical division within a major teaching hospital and perform a clinical role. He was also required to provide various services in the hospital, in particular, clinical management and treatment of public and private patients, teaching and research and other administrative services directly associated with those activities. His Honour found that the appellant was acting within the course of his employment with UNSW. 26 His Honour also found that at the time that the appellant was employed by UNSW, the position attracted a salary and allowances, the allowances being payable by the AHS where the services performed by the appellant in the Hospital exceeded eight hours per week. His Honour found these allowances were only payable as a condition of the appellant's employment with UNSW upon the basis that he provided the various services in the hospital. 27 As we understand the evidence, the work performed by the appellant, including the clinical, research, teaching, managerial and administrative work and the associated work patterns and arrangements (including rosters), were fundamentally the same prior to 1 July 1998 as they were after that date. 28 By the appellant not putting in issue his employment status prior to 1 July 1998, means that we need to examine what the parties did and said in the light of the surrounding circumstances on or after that date in order to determine whether the parties intended to, and did, create contractual relations on or after 1 July 1998. Of course, the respondent contended that the only real or effective change which occurred from 1 July 1998 was to various benefits provided to Professor Hall and that other factors relied upon by the appellant existed before he was alleged to have become an employee. In effect, it was contended by the respondent that the nature of the relationship between Professor Hall and the AHS, however it might be described (but not one of employment), did not change on or after 1 July 1998. No offer of employment 29 Staff J found that an application for employment form completed by Professor Hall some two months after he commenced work at Liverpool Hospital in 1991, was not evidence of an offer of employment: see [83]-[85]. The appellant had contended in his written submissions that his Honour erred in making this finding. However, in oral submissions Mr Kenzie QC, for the appellant, submitted that the completion of the application for employment form would not "feature greatly" in the appellant's case, and understandably so given that no issue was taken with the proposition that no employment relationship existed between the appellant and respondent prior to 1 July 1998. 30 There was no error by Staff J in finding that the completion by Professor Hall of an application for employment form in 1991 did not constitute an offer of employment. Appellant's understanding as to his employment status 31 A matter upon which Staff J placed considerable reliance was that the appellant was unaware that he had become an employee of the AHS from 1 July 1998: see [110]. His Honour seems to have drawn from this that there could not have been an actual or subjective intention on the appellant's part to create contractual relations if he was unaware that he had done so. Evidence that was not before his Honour, but which was tendered on appeal, was that the Chief Executive Officer of the respondent, Mr Ian Southwell, in a letter to ASMOF in September 2002, expressed the view that Professor Hall was an employee of both the respondent and UNSW. 32 As we earlier intimated, there was an understanding reached between senior counsel for both the appellant and the respondent to the effect that subjective views about the nature of the relationship would not assist the Full Bench and would not be relied upon. As we earlier indicated, in those circumstances we will not have regard to the material relating to those views. In any event, whilst the intention to contract, in the subjective sense may, in some factual circumstances, play a part in determining whether there is a binding contract (see Air Great Lakes at 330-331 per Mahoney JA), we do not consider that is the case here and the intention has to be discerned, as we have stated, objectively on the basis of what the parties did and said in the light of the surrounding circumstances. Circular No 2000/3 and other correspondence 33 Circular No 2000/3 was the product of negotiations between ASMOF and the Health Administration Corporation ("HAC")/NSW Health in relation to remuneration and terms and conditions of senior medical practitioners (academic) (otherwise referred to as clinical academics). Agreement was reached between these bodies on about 1 October 1998. By letter dated 2 October 1998 the HAC/NSW Health wrote to ASMOF to restate its proposal. Significantly, this proposal provided the following: 1. Employee status – for clinical and administrative services provided to public patients in public hospitals, the Department proposes that clinical academics who are currently remunerated by Health Services under agreed arrangements with the Department and others in future who would be because they provide more than eight hours per week service to the respective Health Services, would in future be part-time employees of Health Services with fractional staff specialist appointments (our emphasis). By letter dated 17 November 1998, ASMOF confirmed its acceptance of the proposal contained in the abovementioned letter. 34 On 21 May 1999, Mr McGregor, the (then) Acting Director General of the NSW Health Department wrote to Mr Brown, the Chief Executive Officer of the respondent at the time, to advise, amongst other things, that: Under the new remuneration arrangements proposed, clinical academics would be part-time employees of Health Services with fractional appointments and pro rata leave and award conditions. 35 The agreement that was reached between ASMOF and HAC/NSW Health regarding new remuneration arrangements resulted in the issuing of Circular 2000/3 on 18 January 2000. In the Circular: · clause 12 defined a "senior medical practitioner (academic)" as a clinical academic who provides clinical and administrative services to public patients in public hospitals for more than eight hours per week. It provided that such academics would be classified as part-time employees with fractional staff specialist appointments. The appellant's evidence was that he provided clinical services for well in excess of 8 hours per week; · clause 13 provided that senior medical practitioners (academic) would be remunerated by way of a 40 per cent part-time Staff Specialist appointment. This was the basis upon which the respondent remunerated the appellant; · clause 19 confirmed that annual leave, long service leave, sick leave, personal/carers leave and parental leave would be provided on a pro-rata basis in accordance with the Salaried Senior Medical Practitioners (State) Award (now known as the Staff Specialist (State) Award) from 1 July 1998. Both in relation to annual leave and long service leave the Award required agreement from the respondent prior to the taking of leave; · clause 20 confirmed that the salary packaging would be available for senior medical practitioners (academic) "on the same basis and with the same undertakings as for staff specialists"; · clause 21 provided that superannuation would be payable on the remuneration provided to senior medical practitioners (academic) from 1 July 1998. Clause 22 provided that such superannuation would be payable "… on an ongoing basis for as long as a senior medical practitioner (academic) remains an employee of the health service." 36 In addition to Circular 2000/3, Professor John Dwyer gave evidence to the effect that he was a member of ASMOF and between 1985 and 2004 led negotiations on remuneration arrangements for the work undertaken for public hospitals by clinical academics. In his evidence, Professor Dwyer referred, inter alia, to the letter dated 2 October 1998 where Dr Robert McGregor, Deputy Director General, Operations of NSW Health wrote to Associate Professor Duggin, the (then) secretary of ASMOF, setting out the agreement reached in relation to the employment status of clinical academics. He also referred to a memorandum dated 17 February 2000 from the manager of the Employee Services Unit at Prince of Wales Hospital to himself as Clinical Program Director for Medicine and Oncology at the Hospital. The memorandum stated in part: With the advice from the NSW Health Department that Clinical Academics are to be employees of the Area Health Service as from 1 July 1998, certain payroll information is being prepared for this transition and retrospective adjustment. As Clinical Academics were not considered 'employees' of this Area Health Service prior to 1 July 1998, no SGC should have been paid. In your case, an amount of $7,490.54 was incorrectly remitted up to 30 June 1998. (Any SGC amounts remitted since that date will now be encompassed by your new employee status.) Professor Dwyer was not cross examined by the respondent. 37 Notwithstanding this evidence, Staff J found that neither the Department of Health nor ASMOF were capable of entering into an employment contract on behalf of the appellant without the appellant's knowledge or consent. 38 We referred earlier to the additional evidence admitted in the appeal. This consisted of the letter of 10 January 2000 from the Director General of the Department of Health to Mr Southwell, the respondent's Chief Executive Officer, regarding "Remuneration Arrangements for Clinical Academics". As we earlier noted, the letter referred to the attachment that was to become Circular 2000/3 outlining the new remuneration arrangements for clinical academics and stated, inter alia, that: … Under the new remuneration arrangements proposed, clinical academics would be part-time employees of Health Services with fractional appointments and pro rata leave and award conditions . The in-principle agreement included a proviso that the agreement was subject to the Universities agreeing to continue to provide workers compensation and public/professional liability cover for all public health system work of clinical academics at no cost to the Health Services or the Department. To formalise these arrangements concerning workers compensation and public liability/professional indemnity cover the Department's Legal Branch was instructed to draw up a pro forma agreement between Health Services and the relevant Universities relating to the liabilities incurred by certain clinical academics who will be appointed as part time employees by Health Services . A copy of the pro forma Deed of Agreement is attached. Following a period of considerable discussion and debate the Universities have indicated the attached Deed is now acceptable. … (our emphasis). 39 The evidence was that Dr Colin MacArthur, who at the relevant time was General Manager of the Liverpool Health Service, received a copy of the letter and attachment and circulated it to all clinical academics at Liverpool Hospital, including Professor Hall. The clinical academics were then requested to provide information including "the actual number of hours per week each Clinical Academic is required to provide clinical and administrative services to public patients". In requesting this information recipients were asked to "note the definitions in the Circular [2000/3], Clinical Academics who provide these services for more than eight hours a week will be classified as part time employees with fractional Staff Specialist appointments." Professor Hall, together with all other clinical academics, subsequently provided the information as requested. 40 In rejecting the proposition that there was a mutual intention to create legal relations, Mr H Dixon SC, with Mr A Gotting of counsel for the respondent, submitted that the nature of the relationship between the appellant and the respondent needed to be considered in three time periods: (a) 1 July 1991 to 30 June 1998; (b) 1 July 1998 to January 2000; and (c) January 2000 to May 2005. 41 As to the first period, it was submitted that in the period from 1 July 1991 to 1 July 1998, the appellant was not an employee of the respondent. Further, that Circular 2000/3 did not purport to alter (and not did it have the effect of altering) retrospectively, for the period from 1 July 1998 to 18 January 2000, the nature of the relationship between the appellant and the respondent. Mr Dixon submitted that Circular 2000/3 did not evince, evidence or record a mutual intention of the parties that, in the period from 1 July 1998 to January 2000, a person such as the appellant was an employee of the respondent. He contended there was also no other evidence that revealed a mutual intention of the parties that, in the period from 1 July 1998 to January 2000, the appellant was (or was to be) an employee of the respondent. In any event, it was said, it was not possible to "retrospectively" create the relationship between the parties as one of employment. 42 Counsel for the respondent referred to that part of Circular 2000/3 stating that Senior Medical Practitioners (academic) "will be classified as part-time employees with fractional staff specialist appointments". It was submitted that this section of the Circular only identified the way in which the clinical academics were to be classified (so that there was a reference point for determining the remuneration arrangements) – it did not evince, evidence or record a mutual intention of the parties that, from the date of the Circular, a person such as the appellant was an employee of the respondent. 43 It was further submitted that: · Circular 2000/3 envisaged that each University "will continue to provide workers' compensation and public/professional liability cover" in respect of public patients. There was no logical reason for the University to agree to such insurance cover if the clinical academics were employees of the respondent in respect of public patients. · Circular 2000/3 addressed leave benefits, salary packaging and superannuation but such matters related to benefits to be provided to the clinical academics – they did not evince, evidence or record a mutual intention of the parties that, from the date of Circular 2000/3, a person such as the appellant was an employee of the respondent. · Circular 2000/3 did not constitute an "offer" to the appellant to commence employment with the respondent as a "part-time employee" with a "fractional staff specialist appointment" – the Circular was a document directing area health services to implement and backdate the "new remuneration arrangements". Circular 2000/3 was not addressed to the appellant or a medical practitioner and it did not seek a response from the appellant or a medical practitioner. · Properly considered and construed, the letter from the Director General of the Department of Health to the Chief Executive Officer of the respondent dated 10 January 2000 addressed new remuneration arrangements and did not of itself reveal a mutual intention of the parties that, from the date of the letter, the appellant was (or was to be) an employee of the respondent. · The letter of 10 January 2000 did not constitute an "offer" to the appellant to commence employment with the respondent as a "part-time employee" with a "fractional staff specialist appointment" – the letter was a document addressed to the Chief Executive Officer of the Respondent that advised of the need for the "Deed of Agreement" and the intended issuance of Circular 2000/3. · The only changes that occurred since the issuing of Circular 2000/3 were changes to the remuneration arrangements, the provision of leave benefits and the completion of annual leave forms (albeit that the changes to remuneration arrangements and leave arrangements were backdated to 1 July 1998). There was no change to rosters, reporting lines, manner of seeing and treating patients or use of equipment. · The "Clinical Services" provided by the appellant to the respondent were provided as part of his employment with UNSW from the commencement of his employment with UNSW and that he continued to provide those "Clinical Services" until 2005. UNSW also acknowledged expressly that a clinical academic providing such services was doing so in his or her capacity as an employee of the University. · The emailed memorandum dated 18 February 2000 from Dr MacArthur headed "Remuneration Arrangements – Clinical Academics" did not constitute an "offer" to the appellant to commence employment with the respondent as a "part-time employee" with a "fractional staff specialist appointment" – the memorandum was addressed to various General Managers of the respondent and not the appellant or a medical practitioner and related solely to the implementation of the new remuneration arrangements. The memorandum also did not invite a response from the appellant or a medical practitioner. 44 The evidence shows that in 1998 an agreement was reached between ASMOF (of which Professor Hall was a member) and HAC/NSW Health regarding remuneration arrangements for clinical academics. The agreement provided under the heading "Employee status" that clinical academics who were remunerated by the respondent and who provided more than eight hours per week service to the respondent "would in future be part-time employees of Health Services with fractional staff specialist appointments" subject to universities providing workers' compensation and public/professional liability cover for all public health system work of clinical academics. The agreement provided that clinical academics would receive benefits normally associated with employment including salary, allowances, leave, superannuation and "other conditions of employment" provided by the Salaried Senior Medical Practitioners (State) Award. Clinical academics were also to be subject to an annual assessment by the Health Services as to their performance. 45 Additionally, there is the internal departmental correspondence of 21 May 1999 and 10 October 2000 that "…clinical academics would be part-time employees of Health Services…" 46 Circular 2000/3 sets out in detail the new arrangements to apply to clinical academics. It reiterates what was said in the earlier correspondence referred to, namely, that clinical academics who provided clinical and administrative services to public patients in public hospitals for longer than eight hours per week "will be classified as part-time employees… and engaged and known as senior medical practitioners (academic)." The Circular noted that clinical academics who provided up to eight hours public patient work per week would not be engaged as senior medical practitioners (academic) but rather they would "have this work covered by their university employment." 47 The conclusion is inescapable, in our view, that NSW Health/HAC and ASMOF intended by their agreement that clinical academics who provided clinical and administrative services to public patients in public hospitals for longer than eight hours per week would become employees of the relevant Health Service, subject to a deed between "employing health services" and the relevant university that the university would continue to provide workers' compensation and public/professional liability cover. 48 If the intention was that clinical academics would not, under the new arrangements, become employees, despite the arrangements giving every appearance that the clinical academics were employees, it is impossible to accept that NSW Health/HAC would not have made its position unambiguously clear. This could have been done, for example, by simply indicating that although aspects of the new arrangements were reminiscent of an employment relationship, the arrangements did not result in any change in the relationship between clinical academics and the Health Service that had hitherto existed. Instead, there was a consistent, unqualified reference by the Department to the status of clinical academics being that of "employee". 49 The letter of 10 January 2000 and the attached circular were, in the normal course, provided to Professor Hall. The respondent could not have expected otherwise. In February 2000, Professor Hall, together with other clinical academics at Liverpool Hospital, were asked to supply information regarding the number of actual weekly hours they provided by way of clinical and administrative services to public patients in order to determine whether they would be classified as part time employees with fractional staff specialist appointments. Professor Hall provided his response, which meant he would be classified as a part time employee - not "the equivalent of" or "comparable to" and not any other qualifying term, but as a part time employee. 50 Even if the respondent never anticipated, in a subjective sense, that its letter of 10 January 2000 and the attached circular would give rise to any legal obligation in the form of an employment contract, the test of intention in relation to the creation of legal relations is, as we have said, an objective one: see in particular Damevski at [93]-[97]. In our opinion, a reasonable person in the position of Professor Hall was entitled to conclude that the respondent's intention was to enter into an employment contract with him on terms provided to him in the letter of 10 January and the attached circular. Professor Hall indicated his acceptance of the offer by responding to the request regarding his weekly hours. 51 The contract came into existence upon Professor Hall's acceptance of the offer, not on 1 July 1998. Whilst benefits arising from the employment relationship might have a retrospective operation once the relationship has been established, the legal relationship could not have been created retrospectively. Employment indicia 52 Staff J in his reasons for decision made a number of references to employment indicia, including the ability of Professor Hall to engage in a salary packaging arrangement with the AHS pursuant to the Fringe Benefits Tax Assessment Act; leave entitlements; and taxation. However, his Honour discounted these as either not overcoming the hurdle of there being a lack of an agreement between Professor Hall and the AHS or that no reliable conclusion as to an employment relationship between Professor Hall and the AHS could be drawn from the existence of such matters. Moreover, his Honour found that there was no entitlement on the part of the AHS to demand the performance of work by Professor Hall as an employee. That entitlement to provide the service was within the ultimate control of the University, made by an agreement between Professor Hall and the UNSW. 53 Given that his Honour found there was no intention to create legal relations, it is understandable his Honour would take the view that any indications of an employment relationship were not a reliable guide as to whether such a relationship in fact existed. 54 If, however, it were to be concluded, as we have on all of the evidence on appeal, that there was an intention to create legal relations, the employment indicia need to be considered in a new light. 55 In Hollis v Vabu Pty Limited (2001) 207 CLR 21 at [45] the High Court (per Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ) held that "control", the traditional indicia of the employment relationship, was only one relevant factor in determining the existence of an employment contract. The High Court took the view that it was necessary to consider the totality of the relationship between the parties when determining whether the relationship was one of employment or not. In this respect, as the appellant submitted, indicia which were considered to be relevant by the High Court in Hollis at [48]-[57] included matters such as: (a) Whether the person was providing skilled labour or labour which required special qualifications. (b) What level of control the person has over the manner of performing their work. For example, whether the person works to a work roster and/or whether the person is able to delegate any of their tasks or whether they could have worked for other persons in addition to the person they were performing work for. (c) As a corollary to (b) above, whether the right to control of the putative employer exists only in relation to incidental or collateral matters or whether there is considerable scope for the exercise of control by the putative employer. (d) Whether the person is presented to the public as being an emanation of the person they were performing work for. (e) Who is responsible for superintending the payment to the person in question. (f) Who is responsible for the provision of tools and equipment used by the person. 56 The appellant submitted, and the evidence confirms, that as a consequence of the agreement between HAC/NSW Health and ASMOF: · the appellant continued to perform Clinical Services to which the terms of the agreement between the HAC/NSW Health and ASMOF were applied and additionally administrative services; · the respondent began making superannuation contributions on behalf of the appellant; · salary packaging was made available to clinical academics such as the appellant by virtue of clause 20 of Circular 2000/3; · the appellant accrued entitlements to: · annual leave; · long service leave; · sick leave; · personal/carers leave; and · parental leave, arising from his performing work for the respondent; · the appellant worked to rosters that emanated from the office of the Director of Medicine of the respondent; · the appellant reported to and ultimately took direction from the General Manager of the respondent; · the appellant saw and treated patients for and on behalf of the respondent; · the appellant had access to and made use of equipment provided by the respondent; · the appellant received fortnightly remuneration from the respondent from which income tax was deducted; · the respondent provided the appellant with Group Certificates; and · if the appellant wished to take annual leave from the respondent he was required to fill in an application for leave. 57 One other matter, relating to the concept of 'control', was raised by Staff J at [116] of his Honour's reasons for decision: During the course of Mr Ginters' submissions, I raised with counsel what would occur if Professor Hall's employment was terminated by the University. In answer to this question, Mr Ginters stated that if Professor Hall lost his University employment, he would also lose his senior medical practitioner position and the academic characterisation. In my view, this was a telling concession made by Mr Ginters as it acknowledged that the ultimate right of control in respect of whether Professor Hall performs any services within the AHS depends on the University. It follows, in my view, that in such circumstances, there would be no entitlement on the part of the AHS to demand the performance of work by the applicant as an employee. That entitlement to provide the service was within the ultimate control of the University, made by an agreement between Professor Hall and the UNSW. The AHS exercised those rights. 58 The appellant submitted that the mere fact that a condition precedent to the holding of a position as a senior medical practitioner (academic) with the respondent was that the appellant remain employed by UNSW did not tell against the proposition that the appellant could be an employee of both UNSW and the respondent. We agree with this submission. 59 In light of our finding that there was an intention to create legal relations, we consider the matters identified in paragraph [56] confirm that the legal relationship established between AHS and Professor Hall was one of employer and employee. Section 76 of the Health Services Act 60 At [88] of his Honour's reasons for decision Staff J observed that following the appellant's employment by UNSW, he was granted the status of visiting practitioner with clinical responsibilities and duties in respect of patients treated in the Hospital. At [89] his Honour set out the terms of s 76 of the Health Services Act 1997: 76 Who is a visiting practitioner? A visiting practitioner is a medical practitioner or dentist who is appointed by a public health organisation (otherwise than as an employee) to practise as a medical practitioner or dentist in accordance with the conditions of appointment at any of its public hospitals or health institutions, or in relation to any health service it provides, specified in the appointment. 61 As the appellant submitted, in considering s 76 Staff J made reference to extracts from a NSW Health policy document that was relied upon by the appellant – the "Appointment of Visiting Practitioners – Policy for Implementation". At [131] of Staff J's reasons for decision his Honour stated: The applicant also relied upon a circular distributed by the Department in March 2005 entitled "Appointment of Visiting Practitioners: Policy for Implementation". This document refers to conjoint appointments. It provides as follows: A conjoint appointment arises in two circumstances. First, a staff specialist or visiting practitioner at a public health organisation may be granted an academic appointment at a tertiary education institution. In this circumstance, the academic appointment arises from the appointment at a public health organisation. Where the initial appointment to the organisation is as a visiting practitioner, ( which I understand to be the case here ) the appointment is made in accordance with the standard visiting practitioner appointment process. Second, a person may be granted an appointment at a public health organisation that is to be held as part of his or her teaching duties as a tertiary education institution. In this instance, the appointment is as either a clinical academic or a Senior Medical Practitioner (Academic) (our emphasis). 62 The appellant submitted the emphasised words were his Honour's, and reflected an erroneous understanding of the nature of the appellant's circumstances. Paradoxically, it was submitted, Staff J appeared to recognise that fact in [132] of his reasons for decision where his Honour held: The applicant would fall within the second category of conjoint appointments. 63 Staff J regarded the operation of s 76 of the Health Services Act as fatal to the appellant's contention that at least from 1 July 1998 he was an employee of the respondent. His Honour held: The effect of appointing such academics as visiting practitioners, triggers s 76 of the Health Services Act which deprives the academic of employee status with a public health organisation. 64 The appellant submitted that in so finding Staff J erred in that his Honour failed to have proper regard to the nature of the agreement that was reached between the HAC/NSW Health and ASMOF. The restated proposal from the HAC/NSW Health, which was accepted by ASMOF, provided: 9. Private practice - appointment as a clinical academic to a Health Service includes the automatic appointment of the academic as a Visiting Medical Practitioner… 65 Clause 23 of Circular 2000/3 provided that: Appointment as a senior medical practitioner (academic) to a public hospital includes the automatic appointment of the senior medical practitioner (academic) as a Visiting Medical Practitioner… 66 Thus, the appellant submitted, the situation that prevailed was as described in NSW Health's "Appointment of Visiting Practitioners: Policy for Implementation", which provided: These appointment policies and guidelines do not apply to SMPs (Academic) for the purpose of their public patient services. However, where the public health organisation decides to grant SMPs (Academic) admitting rights (with clinical privileges) to treat private patients, they will be required to hold appointments as visiting practitioners. To this extent SMPs (Academic) who have rights of private practice will have dual appointments: as employees on fractional arrangements and as visiting practitioners for private patients (emphasis added by appellant). 67 The appellant submitted that s 76, therefore, was no bar to Staff J concluding that the appellant was, at least on and from 1 July 1998, an employee of the respondent. We consider the appellant's analysis to be correct regarding s 76 of the Health Services Act, except as to the commencement date of the employment relationship. To the extent Staff J found at [135] that the appellant's appointment as a visiting practitioner pursuant to s 76 could not sit with the contention that the effect of the 1998 remuneration agreement was to make him an employee of the AHS, his Honour erred. Of course, his Honour's conclusion was reached in the context of more limited evidence than has been before the Full Bench on appeal. His Honour's conclusion may well have been different if all of the evidence had been available to him. The Deed 68 In respect of the Deed the respondent contended: (i) the payment to be made to Professor Hall and others was dependent upon the UNSW, as his employer, agreeing to the new arrangements; (ii) such agreement was procured by way of a deed signed in April 2000; (iii) the Deed was expressed to apply to 2 categories of Senior Medical Practitioners (Academic), namely, those providing services (defined in clause 3) notwithstanding their earlier appointment in any capacity to provide such services prior to the date of the Deed (Professor Hall fell in this category); and those who would be appointed during the term of the Deed (clause 2.2); (iv) UNSW's consent to the new arrangements was on the express basis that it continued to be the employer in respect of the provision of services to the AHS by those academics and acknowledged that the academic would be acting within the course of his or her employment with the University in doing so (clause 4.1); (v) the terms of the Deed extended to granting of an indemnity by the UNSW to the AHS in respect of acts or omissions in the course of the academic providing the said services (clause 6); (vi) it was as a consequence of agreement on those terms that Professor Hall received the benefit of the new remuneration arrangements. 69 In these circumstances it was submitted Staff J did not err in finding that the Deed bound Professor Hall. In its proper context that conclusion was correct in that it was the basis upon which the payments were to be made to him. Moreover, it was submitted, the basis upon which AHS agreed to the new arrangements with UNSW was clearly relevant to the question of whether it had an intention to alter the relationship it had with Professor Hall. 70 That the implementation of new arrangements contained in the letter of 10 January 2000 and the Circular were said to be in futuro because they were subject to the execution of a deed between UNSW and the respondent, does not negative any intention to create legal relations. The execution of the Deed, a matter about which Professor Hall was aware, may simply be regarded as a condition precedent to the existence of the contract. 71 We note the language of the Deed. It defines Senior Medical Practitioner (Academic) as meaning "a medical practitioner employed by the University in an academic position who, in addition to their on-campus duties, provides Services in one or more Public Hospitals within the course of their University employment for more than 8 hours per week". That definition clearly applies to Professor Hall. We note the first limb of cl 2.2 also applies to Professor Hall: This Deed applies to: · each Senior Medical Practitioner (Academic) providing Services in a Public Hospital under the control of the Health Service as at the date of this Deed, notwithstanding that the Senior Medical Practitioner (Academic) was appointed in any capacity to provide such Services prior to the date of this Deed; and · each Senior Medical Practitioner (Academic) who is appointed to provide Services in a Public Hospital under the control of the Health Service during the term of this Deed. 72 Clause 4.1 provides: The University and the Health Service agreed that, despite any remuneration and employment arrangements made, imposed, agreed or determined by the Health Service or the Health Administration Corporation in respect of Senior Medical Practitioners (Academic), the University continues to be the employer of Senior Medical Practitioners (Academic) to whom this Deed applies whilst the Senior Medical Practitioner (Academic) is providing Services in a Public Hospital under the control of the Health Service. The University acknowledges that, in providing such Services, a Senior Medical Practitioner (Academic) is acting within the course of his or her employment with the University. 73 The respondent contended that UNSW's consent to the new remuneration arrangements was on the express basis that it continued to be the employer in respect of the provision of services to the AHS by those academics described in cl 2.2 and acknowledged that the academic would be acting within the course of his or her employment with the University in doing so (cl 4.1). 74 The Deed is ambiguous. It provides, on the one hand, that "the University continues to be the employer of Senior Medical Practitioners (Academic) to whom this Deed applies…" (our emphasis), but on the other hand, cl 4.1 specifically countenances the existence of, inter alia, an employment arrangement between the Health Service or the Health Administration Corporation in respect of Senior Medical Practitioners (Academic). On one view of it, the Deed may be regarded as claiming the existence of an employment relationship between UNSW and clinical academics to the exclusion of any such relationship between clinical academics and the respondent, hence the use of the term "…the employer…" However, it is a curious use of words to say in seemingly categorical terms that the University is the employer but then to recognise the existence of another employment arrangement. The Deed does this by saying "despite" (or "notwithstanding", or "regardless of") the other employment arrangement. If the intent of the Deed was to exclude any employment arrangement other than the one existing between the clinical academic and the University, or to supersede any pre-existing employment arrangement, it would have been a simple matter of stating that position unequivocally in the Deed. 75 Our view of the Deed is that it recognised the existence of "employment arrangements" between its employees and the AHS. That is to say, it recognised joint or simultaneous employment. 76 That the Deed applies to clinical academics providing services in a public hospital of the nature of those provided by Professor Hall, and provides that such clinical academics are employees of the University, follows inevitably from the fact that the very purpose of the Deed was to record the University's undertaking to provide the insurances for these employees, including workers' compensation insurance, set out in cl 5 of the Deed. Given the acknowledgement in cl 4.1 of the existence of employment arrangements between the Health Service and a clinical academic, we do not agree with the submission by counsel for the respondent that it was not within the contemplation of cl 4.1 that in providing the services in cl 3 of the Deed, "the person would be anything other than an employee of the university performing the duties in the course of his or her employment with the university." 77 Moreover, we are left to wonder, because no adequate explanation was provided, why the parties considered the need for an indemnity in the form of the Deed if, as the respondent contended, all that was being done was to introduce new remuneration arrangements and not establish an employment relationship between clinical academics and Health Services. An indemnity had not been considered necessary prior to 2000 and we would not have thought NSW Health would require either workers' compensation insurance or an indemnity in respect of such insurance if the clinical academics were not employees of the Health Services. 78 In any event, as the appellant submitted, the task of a trier of fact is to discern the true relationship between the parties: Ex parte Robert John Pty. Ltd.; Re Fostars Shoes Pty. Ltd. [1963] SR (NSW) 260 at 269; see also 272. That means looking at the reality of the arrangements between the parties to determine the true nature of the relationship between them. In R v Foster. the High Court (Dixon, Fullagar and Kitto JJ) stated at 151 and 155: [I]f in practice the company assumes the detailed direction and control of the agents in the daily performance of their work and the agents tacitly accept a position of subordination to authority and to orders and instructions as to the manner in which they carry out their duties, a clause designed to prevent the relation receiving the legal complexion which it truly deserves would be ineffectual… The case for the respondent union simply is that [the agreement] does not represent the reality of the relation in practice of the agents and the prosecutor company. …. … [the evidence fails] to exclude to our satisfaction the possibility that the real relation between some or all of the agents and the prosecutor company in their actual work, week in week out, is in fact that of employer and employee, whatever the agreement may say. 79 Even if it were the case that the intent of cl 4.1 of the Deed was to establish an exclusive employment relationship between Professor Hall and the University (noting that Professor Hall was not even a party bound by the Deed), it was ineffectual in preventing "the relation [between Professor Hall and the AHS] receiving the legal complexion it truly deserves", namely an employment relationship. 80 Staff J found that the terms of the Deed ran "counter to all the indicia which point to an employment relationship being created as between the AHS and the applicant..." We consider his Honour erred in making that finding. However, his Honour's finding regarding the Deed was made in the absence of the evidence connecting the 10 January 2000 letter and the Circular to their receipt by Professor Hall and Professor Hall's response to the February 2000 email seeking information about his weekly hours. It may well have been the case that had this evidence been before Staff J it would have placed the Deed in a different light. Orders 81 The Full Bench makes the following orders: (1) Leave to appeal is granted. (2) The decision and order of Staff J in Matter No IRC 1427 of 2005 are quashed. (3) Professor Hall is entitled to bring and maintain proceedings pursuant to Chapter 2, Part 6 of the Industrial Relations Act 1996. (4) The matter is remitted to Staff J to hear and determine Professor Hall's application brought pursuant to Chapter 2, Part 6 of the Industrial Relations Act 1996. This does not preclude further conciliation if both parties agree that is appropriate. ________________________________ 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.