100315690

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES DIRECTOR GENERAL, DEPARTMENT OF JUSTICE

APPELLANT

 -and-

 THE CIVIL SERVICE ASSOCIATION OF WESTERN AUSTRALIA INCORPORATED

RESPONDENT

CORAM FULL BENCH

  HIS HONOUR THE PRESIDENT P J SHARKEY

  COMMISSIONER P E SCOTT

  COMMISSIONER S WOOD

DELIVERED TUESDAY, 25 MARCH 2003

FILE NO/S FBA 53 OF 2002

CITATION NO. 2003 WAIRC 07994

_______________________________________________________________________________

Decision  Appeal upheld, order 6 of the decision at first instance quashed

Appearances

Appellant   Mr R J Andretich (of Counsel), by leave and with him

   Mr N Cinquina (of Counsel), by leave

Respondent   Ms M M in de Braekt, as agent

_______________________________________________________________________________

Reasons for Decision

THE PRESIDENT:

INTRODUCTION

1          This is an appeal against the decision of a Public Service Arbitrator (hereinafter referred to as “the Arbitrator”) by the above-named appellant employer.  There was no cross-appeal.

2          I refer to the respondent hereinafter as “the CSA”, and to the appellant as “the Director General”.

3          The decision was made on 5 December 2002 in matter No P 2 of 2001.  The decision, formal parts omitted, reads as follows (see pages 83-84 of the appeal book (hereinafter referred to as “AB”)):-

“1) That the decision of the Director General, Department of Justice to exclude Ms Bowles from Broome Regional Prison is a decision within the jurisdiction of the Public Service Arbitrator.

2)        That the decision of the Director General, Department of Justice to exclude Ms Bowles from the Broome Regional Prison is void.

3)        That the application for an order requiring the Director General, Department of Justice to return Ms Bowles to work in the Broome Regional Prison is hereby dismissed.

4)        That the decision to transfer, and the purported act of transferring, Ms Bowles to Hakea Prison are hereby declared void.

5)        That the Director General, Department of Justice is not to transfer Ms Bowles to Hakea Prison unless there is demonstrated an acceptance of her by the aboriginal community of the local area.

6)        That the Director General, Department of Justice should not have ceased paying  Ms Bowles her ordinary salary and:

(a)          from the date of this order is to reinstate payment of her salary; and

(b)          by 18 December 2002 is to pay Ms Bowles the balance of the salary due from the date it was ceased.

7)        That until 17 January 2003 the Director General, Department of Justice endeavour, in consultation with Ms Bowles, to see whether a suitable alternative position can be found for her in the Broome area, including part-time or at a lower classification.

8)        That the application otherwise is hereby dismissed.”

GROUNDS OF APPEAL

4          The Director General now appeals against that decision on the following grounds (see pages 2-3 (AB)):-

“1. The Public Service Arbitrator erred in law in declaring that the decision of the Appellant to exclude Ms Bowles from Broome Regional Prison is a decision within his jurisdiction.

PARTICULARS

(a) The decision was not an industrial matter.

(b) The Public Service Administrator was functus officio in respect of this issue having considered it and having made determinations in respect of it in his decision delivered on the 14th of March, 2002 which were not pursued in Appeal FBA 17 of 2002 to the Full Bench.

2. The Public Service Arbitrator erred and erred in law in declaring that the decision of the Appellant to exclude Ms Bowles from the Broome Regional Prison is void.

PARTICULARS

(a) The Public Service Arbitrator was functus officio in respect of this decision having considered it and having made determinations in respect of it in his decision delivered on the 14th of March, 2002, which were not pursued in Appeal FBA 17 of 2002 to the Full Bench.

(b) The decision was not an industrial matter.

(c) The Public Service Arbitrator failed to execute his arbitral jurisdiction in his determination in respect of this decision, if it constituted an industrial matter, in that he did not consider the decision according to equity, good conscience and its substantial merits in relation to both the Appellant and Ms Bowles in that he had no or insufficient regard to the position of the Appellant.

3. The Public Service Arbitrator erred and erred in law in declaring that the Appellant should not have ceased paying Ms Bowles her ordinary salary and ordering that:

(a) from the date of his order the Respondent is to reinstate payment of Ms Bowles salary and,

(b) by the 18th of December 2002 is to pay Ms Bowles the balance of the salary due from the date it was ceased.

PARTICULARS

(a) Ms Bowles was not entitled to salary having rendered no service.

(b) The Public Service Arbitrator had no or insufficient regard to his finding that it was Ms Bowles behaviour which precluded her being able to render service at Broome Regional Prison in accordance with her appointment and her stated requirement to be placed in Broome.

(c) The Public Service Arbitrator had no or sufficient regard to the prospect of the Appellant being unable to place Ms Bowles in alternative employment acceptable to her.

(d) The Public Service Arbitrator failed to execute his arbitral function in respect of this issue in that he did not consider it according to equity, good conscience and the substantial merits as he had no or insufficient regard to the position of the Appellant.

4. The Appellant seeks the following orders:

(a) Orders (1) and (2) made by the Arbitrator be quashed.

(b) Order (6) made by the Arbitrator be quashed.”

BACKGROUND

5          This is an appeal against the decision of the Arbitrator made when the matter was, in fact and substance against only one finding, remitted by the Full Bench by order dated 25 September 2002 after the Full Bench heard and upheld an appeal, No FBA 17 of 2002, against a decision made by the Arbitrator in the same matter, P 2 of 2001, on 14 March 2002.

6          The appeal to the Full Bench (FBA 17 of 2002) was against only one matter which was the sole subject matter of the decision and which constituted the order made by the Arbitrator at first instance, namely the dismissal of the CSA’s application by the Arbitrator because he had no jurisdiction.

7          The background to the matter is expressed in detail in the reasons for decision of the Full Bench in CSA v Director General, Ministry of Justice (2002) 82 WAIG 2858 (FB) ((ie) in the appeal proceedings to which I have just referred).

8          The above-named respondent, the CSA, is an organisation of employees which made application to the Arbitrator, at first instance, on behalf of Ms Blanche Bowles, in relation to a decision made by the Director General to transfer her from her position as a prison support officer at the Broome Regional Prison to the position of prison support officer at the Hakea Prison, Perth.  This was a decision made by the Director General, as Chief Executive Officer of a department called the Ministry of Justice.  At all material times, Ms Bowles has been an officer of that department, and the prisons concerned were administered by the Director General.

9          On 17 July 2000, having been on sick leave for some time, she was told not to return to the prison, and in fact, the then superintendent of the prison, Mr Phillip John Coombes-Pearce, purporting to act pursuant to s.66 of the Prisons Act 1981, excluded her from the prison.

10       The basis of this decision, as he expressed it, was that, having regard to the matters involving Ms Bowles and unresolved issues relating to her, he held grave concerns for the good order of the prison if she were to resume her duties there.

11       The Arbitrator found, and this finding was not challenged, that there were problems with her fellow employees and that these were due to her.  There were serious problems.  She had herself said in July 1999 that she had absolutely no faith in the management system of the prison or in the management system in Perth, and she felt that she could no longer effectively fulfil her role as prison support officer at the prison, he found.

12       On 26 February 2001, the department purported to transfer her to Hakea Prison as a prison support officer, requiring her to report for duty there on 28 March 2001, and gave her written notice to that effect.

13       What is not in dispute in this appeal is as follows:-

(a)     Ms Bowles is not working and has not worked since she was excluded from the prison.

(b)     Ms Bowles is not being paid.

(c)     Ms Bowles is not able to be transferred to Hakea Prison, the transfer being void.

(d)     Ms Bowles does not wish to leave the Kimberley region because of personal and family considerations.

(e)     Ms Bowles has not worked in any capacity for the Director General since July 2000.

(f)      The Director General undertook to continue to pay Ms Bowles’ salary and continued to pay it until 22 April 2002, that is until the hearing and determination of the first proceedings at first instance, but she has not been paid since and was not being paid when the matter was first before the Arbitrator.

              In fact, the Arbitrator found at first instance, and it was not in issue in these proceedings, that the Director General ceased to pay wages because Ms Bowles was absent from work without approval.

(g)     Her employment was, at all material times, subject to the Public Sector Management Act 1994.

(h)     She has, in fact, been excluded from Broome Regional Prison since the original letter of 26 February 2002 and resisted her transfer to Hakea Prison, which purported transfer the Arbitrator declared to be void.

14       When the matter was remitted back by the Full Bench for the second hearing by the Arbitrator, the following orders were sought (see pages 76-77 (AB)):-

“(1) The decision of the respondent in relation to the transfer of Ms Bowles is void ab initio. 

 (2) That the respondent facilitate Ms Bowles’ return to work in Broome Regional Prison, or transfer Ms Bowles to a suitable alternative position in the Broome Region. 

 (3) That until such time as Ms Bowles returns to work in Broome Regional Prison or is transferred to a suitable alternative position in the Broome Region, the respondent is to continue to pay Ms Bowles her salary without loss of entitlements or continuity of service.

 (4) The respondent pay Ms Bowles damages for breaching their implied obligation to always act in a manner consistent with maintaining confidence and faith in the employment relationship.”

15       Ms Bowles has, in fact, been excluded from Broome Regional Prison and has resisted her transfer to Hakea Prison at Perth.

THE FUNCTUS OFFICIO GROUNDS OF APPEAL

16       This appeal is based, inter alia, on the grounds that certain findings could not be made by the Arbitrator, because in relation to them the Arbitrator was functus officio, and he could not therefore revisit findings which he had made at first instance, on the occasion of the first hearing.

17       I should point out that the findings necessary for the disposition of the matter at first instance prior to the appeal were those necessary to establish whether jurisdiction existed or not, because that is what the Arbitrator determined and only what he determined.

18       The Full Bench determined that there was jurisdiction to hear and determine the matter of the transfer proposed to Hakea Prison, its validity and otherwise, and made certain observations about the course of the proceedings, otherwise.

19       However, once it was determined that the Arbitrator had jurisdiction and the matter was remitted to him to hear and determine according to law, he was then required to make all of the necessary findings of fact or law or fact and law to enable him to reach a decision in accordance, inter alia, with s.26(1)(a) of the Industrial Relations Act 1979 (hereinafter referred to as “the Act”), which is what he did.  Findings which he made earlier at the first hearing, but not required for the determination of whether he had jurisdiction or not, were not binding on the Arbitrator, unless there was express or implicit consent to that from the parties or unless the Arbitrator himself allowed those to stand, or otherwise adopted them expressly or impliedly.  In other words, the Arbitrator was commencing a hearing and determination of the matter based on the fact that he now had jurisdiction to do so, which he had said previously he did not have.

20       The doctrine of functus officio is a description or consequence of the performance of a function, having regard to the statutory power or obligation to perform that function.  The effect of the application of the doctrine is that, once the statutory function is performed, there is no further function or act for the person authorised under the statute to perform (see Jayasinghe v Minister for Immigration and Ethnic Affairs and Another (1997) 145 ALR 532 per Goldberg J, and see also Aussie Online v John Lane 81 WAIG 2511 (FB) and the cases cited therein).

21       In this case, the matter was remitted back to the Arbitrator by the Full Bench for his statutory function to be performed because the Arbitrator had not commenced to perform that statutory function, previously having determined that he did not have jurisdiction.  The matter then seems to have been proceeded with using the findings made in relation to the evidence at first instance (the first hearing) and without adducing further evidence.

22       The Arbitrator was therefore entitled and indeed required to make the findings referred to in grounds 1 and 2, and, indeed, all of those findings of fact or law or fact and law which were necessary for the hearing and determination of the CSA application.  For those reasons, grounds 1 and 2(a) are not made out.  The Arbitrator was not functus officio.

THE DECISION TO EXCLUDE – AN INDUSTRIAL MATTER

23       For the reasons already held by the Full Bench, and which I adopt and repeat hereunder, the decision to exclude Ms Bowles from Broome Regional Prison was an “industrial matter”, and the decision to declare it void was within jurisdiction for that reason (see CSA v Director General, Ministry of Justice (FB) (op cit) at pages 2863-2866).

24       It was also submitted that the Arbitrator failed to exercise his arbitral jurisdiction according to equity, good conscience and the substantial merits of the case; that is the exercise of the discretion miscarried.  I do not understand that submission.  The decision to declare the superintendent’s decision void because Ms Bowles was denied natural justice was not a discretionary decision as that is defined in Norbis v Norbis (1986) 161 CLR 513 (see also Coal and Allied Operations Pty Ltd v AIRC and Others [2000] 203 CLR 194), and, for the reasons advanced by the Arbitrator, it was correct.  It was not submitted that the decision was one based on a finding of mixed fact and law or of a finding of law only which was the case.  It was also open to find that the superintendent’s act was void as being beyond power for the reasons expressed in CSA v Director General, Ministry of Justice (FB) (op cit).  That ground fails also for that reason, and, in fact, the Arbitrator being correct in law was therefore correct according to s.26(1)(a) of the Act.

THE MAIN COMPLAINT – ORDER 6 – NO WORK NO PAY

25       The main complaint, upon the appeal (ground 3), was against order 6 of the decision which required the Director General to reinstate payment of Ms Bowles’ salary indefinitely into the future, and to pay what she had not been paid in the past by 18 December 2002, that is the salary due from the date when it ceased to be paid.

26       The first question which arose was whether Ms Bowles was entitled to be paid any salary, she not having, as was not an issue in the case, rendered any service for the period in the past, for which it was ordered to be paid.

27       A fortiori, such a proposition would apply to any future employment.

28       The Director General submitted that Ms Bowles was not entitled, on any contractual basis, to be paid any salary if she rendered no service.  There was reliance on Automatic Fire Sprinklers Pty Ltd and Another v Watson [1946] 72 CLR 435 and Csomore and Another v Public Service Board of NSW [1986] 10 NSWLR 587.  (The Full Bench was also referred to Bennett v Commonwealth and Another [1980] 1 NSWLR 581 and Electricity Commission of NSW v FEDFA (NSW) (1975) AR 504).  (Those cases are not apposite).

29       Automatic Fire Sprinklers Pty Ltd and Another v Watson (op cit) at pages 465-466 per Dixon J is authority for the proposition and has long been held in this country to be such, which I now express in the following terms, quoting His Honour’s reasons for judgment:-

“A contract for the establishment of the relation of master and servant falls into the same general category of agreements to pay in respect of the consideration when and so often as it is executed, and is, therefore, commonly understood as involving no liability for wages or salary unless earned by service, even though the failure to serve is a consequence of the master’s wrongful act.

It is, of course, possible for the parties to make a contract for the payment of periodical sums by the master to the servant independently of his service.  Indeed that is, in effect, what the Duke of Westminster persuaded the majority of the House of Lords he had done in Inland Revenue Commissioners v. Duke of Westminster (2).  But, to say the least, it is not usual.  The common understanding of a contract of employment at wages or salary periodically payable is that it is the service that earns the remuneration and even a wrongful discharge from the service means that wages or salary cannot be earned however ready and willing the employee may be to serve and however much he stand by his contract and decline to treat it as discharged by breach.

…

His only remedy is in unliquidated damages for wrongful dismissal.  By keeping his contract open, he may be able to resume his service without a new contract, if his employer is induced to retract the discharge.”

30       In Macken, O’Grady, Sappideen and Warburton, “Law of Employment”, 5th Edition, at page 104 the learned authors say:-

“… even though an employee wrongfully discharged cannot recover wages, for they have not been earned according to the terms of the contract, he or she will have other remedies of varying utility available.”

- and at page 105:- 

“the passage quoted from Watson affirms the interdependence of service and wages in a claim for wages; particularly important is the point made in the passage that even if the worker is prevented from working by the wrongful act of the employer, the worker still cannot claim wages”.

31       This same conclusion was reached by Rogers J in Csomore and Another v Public Service Board of NSW (op cit) where His Honour said at page 595:-

“Unless an employer waives the usual requirement of a contract of employment that an employee perform the full range of work properly assigned to him or unless the award under which the employee works makes a contrary provision, payment of wages is conditional upon performance by the employee of the full range of work assigned or, at least, a readiness and willingness to do so.”

32       His Honour also said at page 598:-

“The right of the employer is not a right to deduct or a right of set-off.  It is the right to deny payment on non-fulfilment by the other party of the obligation which makes the weekly or fortnightly salary payable.”

33       It is service not work which earns wages, although work will be the usual service (see “Law of Employment”, 5th Edition, (op cit) at page 104).  However, the readiness, willingness and ability of the worker are irrelevant if the employee seeks not wages but damages and injunctive relief (see “Law of Employment”, 5th Edition, (op cit) at page 106), and see also the discussion of relevant cases by Ryan J in Independent Education Union of Australia v Canonical Administrators, Barkly Street, Bendigo and Others (1998) 157 ALR 531.

34       Where a statute or award requires the payment of award wages, except in designated circumstances, if the employer’s conduct falls outside the provisions there may be a duty to pay wages (see Kidd v Savage River Mines [1984] 6 FCR 398).

35       In Automatic Fire Sprinklers Pty Ltd and Another v Watson (op cit) the employee, Watson, was willing to work in his old position and refused to treat the contract as at an end, but still presented himself for work.  However, it was held that that readiness and willingness would not have entitled him to wages at common law.

36       I wish therefore to make it clear that it is service, not readiness and willingness, which entitles a person to recover wages upon a claim for wages on that authority.  In this case, there was no service by Ms Bowles and that was undisputed.  As to the question of willingness, if it were relevant, Ms Bowles’s willingness to work must have been in doubt given the finding on the evidence referred to above that in July 1999 she had said that she had absolutely no faith in the management system of the prison at Broome or the management of the department in Perth, and that she felt that she could no longer effectively fulfil her role at the Broome Regional Prison.

37       No award was prayed in aid in this case. 

38       What was submitted on behalf of the CSA was that the Public Sector Management Act 1994 (hereinafter referred to as “the PSM Act”) applied to Ms Bowles’ employment and that statute modified the contract of employment.  It was not seriously submitted that Ms Bowles was an “officer” and not an “employee”.  Under the PSM Act, an employee may be employed by the Crown or any Minister of the Crown or any public authority (see s.3 to s.5 of the PSM Act).

39       Where a contract and statute exist side by side, it is clear that the common law will imply terms in the manner and to the effect dealt with earlier and subject to the statute (see Day v Hunkin [1938] 61 CLR 65 at 75 per Latham CJ).

40       If the relationship is contractual, the contract must be consistent with any statutory provision which affects the relationship.  No agent of the Crown has authority to engage a servant on terms at variance with the statute.  To the extent that the statute governs the relationship, it is idle to enquire whether there is a contract which embodies its provisions (see Director General of Eduction (NSW) v Suttling [1987] 162 CLR 427).

41       The PSM Act, it is common ground, applies and applied to the employment of Ms Bowles. 

42       In particular, Part 5 - Division 3 of that Act deals with disciplinary matters, and obviously applies and applied to Ms Bowles’ contract of employment.

43       S.80 of the PSM Act prescribes what is a breach.

44       S.81 of the PSM Act prescribes the procedure which must be followed if it is suspected that a person has committed a breach of discipline as defined in s.80 whilst serving as an employee in a public sector body.

45       The only power to suspend is a power to suspend without pay and which is contained in and required to be exercised in accordance with s.82 of the PSM Act, which reads as follows:-

“(1) If an investigation is initiated under section 81, the employing authority may at any time before proceedings against the respondent are terminated within the meaning of subsection (2) suspend the respondent, if still its employee, without pay.

(2) When proceedings against a respondent for a suspected breach of discipline are terminated by-

(a) the taking of action under section 83 or 84 that is not cancelled under section 85, or the taking of action under section 86(3), 88(1) or 89; or

(b) a finding that no breach of discipline was committed by the respondent,

the employing authority shall terminate any suspension of the respondent without pay under subsection (1) and, if no breach of discipline has been found to have been committed by the respondent, restore to the respondent the pay of which the respondent has been deprived during the period of that suspension.

(3)          An employing authority may, in relation to an employee who has been suspended without pay under subsection (1), on its own initiative or on the application of that employee restore pay to that employee for such period as the employing authority thinks fit.”

There cannot be any lawful suspension with pay under the PSM Act (see s.82(1)).

46       Further, suspension can only occur after an investigation is initiated under s.81.  Otherwise, there cannot be a lawful suspension.

47       It was conceded that no action was taken by the Director General, under s.81or s.82 of the PSM Act, at any time, but there was a de facto suspension at first with pay and then without pay, all unauthorised by the statute.  It was not contended that the suspension was authorised by the statute or by an award.  It must therefore be accounted ultra vires.  However, it cannot, for fundamentally the same reasons as were found in Csomore and Another v Public Service Board of NSW (op cit), found a claim for wages.

48       It was submitted on behalf of the Director General that the Director General had acted fairly in not instituting disciplinary proceedings, and or/effecting a dismissal.  I do not understand the relevance of that submission, whatever the motivation was, for the Director General’s inaction.  It really should be observed that since Ms Bowles has not since 2000 rendered any service, the problems which have followed have arisen because the proper procedures under the PSM Act or the contract have not been followed or the remedies available invoked by either party.

49       The important question in this matter is whether the statute requires the payment of monies whether services are rendered by Ms Bowles or not, because as a matter of common law, as will be obvious from the above-mentioned authorities, there was no obligation in contract, upon the Director General to pay any salary to Ms Bowles when she was not rendering any service, as she was not, whether she was being unlawfully prevented from rendering such service or not.

50       It follows, too, that if the common law applies, she is not entitled to claim wages under the contract without performing services.

51       On a fair reading of the PSM Act there is no express provision in it, and no obligation to be implied from it, which could be construed as requiring the Director General to do what is not required by the contract of service.

52       Ms Bowles has rendered no service and is not entitled to be paid wages or salary.

53       Whether the suspension was unlawful or not, however, on the authority of Csomore and Another v Public Service Board of NSW (op cit) and “Law of Employment”, 5th Edition, (op cit), Ms Bowles was not entitled to be paid a salary, since she has not rendered any service for the relevant periods.

Estoppel

54       It was submitted on behalf of the CSA that because the Director General had paid her her salary until the first hearing was completed this constituted some sort of estoppel.  It was not submitted in any detail, however, how such a proposition was tenable.  I do not understand that it could be.  There was a payment voluntarily paid for a fixed term and accordingly withdrawn as the Arbitrator found when she did not render any service.  There was no entitlement to be paid salary whilst Ms Bowles did not provide a service.  That is the case whether the employer had acted unlawfully or not.  She was not entitled to be so paid.

Ground 3 – The Exercise of the Discretion

55       Appeal ground 3(d) alleges there was an error in the exercise of the discretion.  At first instance an order was made that Ms Bowles be paid for a future indefinite period irrespective of her failure to give service.  The order made was in itself an unsound exercise of discretion within the meaning of House v The King [1936] 55 CLR 499.  Thus, the Full Bench is able to exercise its discretion in substitution for that of the Arbitrator. That was the weight of the submissions.

56       The current situation can therefore be summarised as follows:-

(a)     Ms Bowles has been unlawfully suspended from her employment at Broome Prison and remains so suspended.

(b)     The order of the superintendent excluding her from the prison has been declared void and of no effect.

(c)     The Arbitrator has specifically imposed, however, no obligation on the Director General to return Ms Bowles to work in the Broome Regional Prison.

(d)     It is not clear that she is or was ready, willing, able and available to return to work having regards to her expressed views in July 1999 about this matter.

(e)     There is a finding which has not been appealed against that finds culpability in her for her inability to get on with her fellow employees, and remarks on the strong feeling against her by her fellow employees, at Broome.

(f)      The purported transfer to Hakea is void and she is not to be transferred unless there is demonstrated an acceptance of her by the aboriginal community in the area.

(g)     Thus, she:-

(i) Is not presently being required to transfer, nor was it so submitted.

(ii) Is not validly excluded from the Broome Regional Prison but she is not required to return to work there nor is her employer required to have her work there.

(iii)            The Director General was directed to endeavour to find an alternative position in the Broome area and to do so before 17 January 2002.  It is not a matter for the Full Bench to consider what has happened in relation to that order.

(iv)            She is also required to be paid the arrears of unpaid salary and to be paid her salary indefinitely into the future, whether she is rendering service or not.

57       In my opinion, whilst acting as Arbitrator the Arbitrator is not to determine existing rights and enforce them as if she were acting judicially when he or she is not.  He or she may, however, determine rights on the way to arbitrating in accordance with s.80E(5) of the Act which gives the Arbitrator wide powers to review, nullify, modify or vary any act, matter or thing done by an employer.

58       The Arbitrator is required to act according to equity, good conscience and the substantial merits of the case (see s.26(1)(a)).

59       I am not persuaded that in this jurisdiction this enables to the Arbitrator to depart from the duty to apply the general law (see Qantas Airways Ltd v Gubbins and Others [1992] 28 NSWLR 26).  It was not so argued before me.  If that is so then there is simply no legal right to be paid any salary for the time that Ms Bowles did not serve and certainly no entitlement to be paid indefinitely in the future when there is no evidence that she intends to serve.

60       However, if the matter as it might well be arguable, were required to be settled by arbitral orders not impeded by such a view, I am of the opinion that the equity, good conscience and substantial merits of the case militated against those orders being made and that the exercise of the discretion at first instance miscarried.  There a number of facts and factors which are relevant and which support such a finding:-

(a) The exclusion of Ms Bowles from Broome Regional Prison was unlawful.

(b) The Director General attempted to transfer her in her employment by an ultra vires act.  That, however, occurred after the difficulties arose in the prison between Ms Bowles and the other employees.

(c) The Director General effected her suspension from employment unlawfully and failed to resolve this matter in accordance with the PSM Act and/or the contract of employment when that is what should have been done.

(d) Against that is a matter of fact:-

(i) Ms Bowles, in 1999, expressed a lack of confidence in management and after a period of disputation, an unwillingness to continue in her employment at Broome Regional Prison.  It is not therefore the case at all that she has necessarily been willing to perform as an employee at Broome Regional Prison for some time.

(ii) She will not work outside the Kimberley which makes resolution of this matter difficult.

(iii) She is not employable in the Broome Regional Prison because of her own culpable inability to get on with her fellow employees, as found by the Arbitrator, and her presence there was disruptive.

(e) Given those facts and as a matter of principle, an order that she be paid indefinitely into the future when there is no evidence that she will perform any service, has performed any service or is entirely willing to, is unfair to the employer, in any event.

 The mere indefiniteness of the order’s duration in itself is not in the interest of the employer, or, for that matter, the employee (see s.26(1)(c)), and is an unsound exercise of the discretion for those reasons as well as for its uncertainty.

(f) For the reasons expressed in (d)(i), (ii) and (iii), an order for past salary to be paid is unsatisfactory and unfair.

(g) These factors, (d)(i), (ii) and (iii) weigh against the effect of the ultra vires acts of the Director General because it is Ms Bowles’ undisputed inability to get on with her workmates and her disruptiveness which are at the core and the cause of this matter.

(h) It is not all certain that an order for past unpaid salary as compensation can be made in any event (see SGIC v Johnson (1997) 77 WAIG 2169 (IAC).

Finally

61       For those reasons, it is open to find that the exercise of the discretion at first instance miscarried because the Arbitrator did not apply all of those factors or apply them in the manner in which I am satisfied they should have been applied.

62       In my opinion, regrettably, this matter has reached an impasse where the interests of the parties should take second place to that of the community (see 26(1)(c)).  This matter should have been settled by the parties long ago or otherwise resolved according to law.  That it was not is in part due to the fact that proper statutory or contractual steps were not taken.

63       For those reasons, I am satisfied that applying the principles in House v The King (op cit), the discretion, at first instance, miscarried.  I would uphold the appeal.  I would quash order 6 of the decision at first instance for those reasons.  I would otherwise dismiss the appeal.

COMMISSIONER P E SCOTT:

64       I have had the benefit of reading the Reasons for Decision of His Honour, the President.  They set out the background to this matter and the grounds of appeal.  I respectfully agree with him that as a matter of law, the learned Senior Commissioner was not functus officio when the matter was remitted to him by the Full Bench following appeal FBA 17 of 2002.

65       Given that the Full Bench in its Reasons for Decision in that appeal expressed views on certain matters, even though those matters were not the subject of grounds of appeal which were pursued during the course of the appeal, it is hardly surprising, and would be expected, that the learned Senior Commissioner would give further consideration to those matters about which he had previously expressed views, albeit that they were expressed in circumstances where he concluded that there was no jurisdiction.  The matter was remitted to him by the Full Bench.  In these circumstances of him not having issued orders in respect of any of those matters, he was able to give those matters further consideration.

66       I also agree with His Honour, the President that the issue of the matter being an industrial matter has been addressed in the Decision of the Full Bench in appeal No. FBA 17 of 2002 and I am not persuaded that the ground of appeal is correct.

67       As to the main issue of this appeal being order No. 6, that the Director General, Department of Justice should not have ceased paying Ms Bowles her ordinary salary and requiring that payment of salary be reinstated and, in effect be ongoing, I conclude that the learned Senior Commissioner erred.  The manner of Ms Bowles exclusion from the prison was clearly in error.  She was excluded from the workplace in a manner not dealt with by the Public Sector Management Act 1994 (“the PSM Act”) nor did the employer purport to suspend her according to the provisions of that Act.  What is of significance is that:

(a) the employer purported to exclude her in a manner which is not permissible; and

(b) she did not perform any work for the period following that exclusion; and

(c) the exclusion and the employer’s inability to provide work to Ms Bowles were due to her own conduct.

68       That conduct formed a reasonable basis for some action to be pursued.  However, there was no suspension from duty in accordance with the PSM Act.  Therefore, it is unnecessary to come to any conclusion as to impact of a suspension on any entitlement or otherwise to payment.

69       In any event, the Arbitrator was required to consider the matter not merely on the basis of the lawfulness of actions but also taking account of whether the result has been fair.  Section 26 of the Industrial Relations Act 1979, which applies to the Arbitrator, requires that the Commission give consideration to matters on the basis of equity, good conscience and the substantial merits of the matter and to have regard for the interests of the persons immediately concerned.  The Commission is not a jurisdiction for the purpose of enforcement of the law.  The Commission may, during the course of dealing with matters on the basis of equity, good conscience and the substantial merits be required to have consideration to issues of breaches of contract and of law but the ultimate test relates to resolutions according to fairness.  This was confirmed by their Honours E M Heenan J. and Hasluck J. in Garbett v Midland Brick [2003 WASCA 36 at paras 84-86 and 66 respectively].  Although that matter deals with a claim of harsh, oppressive or unfair dismissal made by an employee pursuant to s.29, the principle also applies to other matters before the Commission because of the requirements of s.26.

70       The question of whether Ms Bowles ought to have been paid for the period where she was not performing her duties involves a combination of questions of law and of fairness.  Firstly, as to the law, Automatic Fire Sprinklers Pty Ltd and Another v Watson [1946] 72 CLR 435 provides that there is no entitlement to payment in the absence of performance of work.  Even if that were not so, the Commission would be required to come to an equitable resolution of the matter.  In this case the reason for Ms Bowles exclusion from the prison, be it done in a lawful manner or otherwise, was due to her own conduct and attitude.  She was unable to perform duties in the prison in which she was employed.  As the Senior Commissioner found, it was untenable to return her to her normal workplace, and she was not prepared to move from her home to take up work elsewhere.  It was inappropriate for her to be transferred to Hakea Prison without consideration of her acceptance by the Aboriginal community in that local area.

71       I find that in those circumstances, taking account of the interests of both the employee and the employer, not just of the employee, that it was unfair to require the employer to pay Ms Bowles beyond the point of her exclusion from the workplace.  The fact that the employer continued to pay her during part of the process of the matter before the Arbitrator does not and should not mean that it is required to continue to pay her indefinitely.

72       Accordingly, I agree with His Honour that the learned Senior Commissioner erred in ordering payment from the date that the employer had ceased such payment.  Further, the order did not provide any conclusion to that requirement for payment of salary, notwithstanding that the employer was required by order 7 to endeavour to find a suitable alternative position for Ms Bowles only until 17 January 2003.  Order 6 required payment indefinitely.  I agree with His Honour, the President that the requirement for ongoing payment is not fair.

73       I would uphold the appeal in that respect, quash order 6, and otherwise dismiss the appeal.

74       I also, with respect, strongly endorse His Honour, the President’s comments as to the necessity for this long running matter to be resolved in the public interest.  The parties should move to do so expeditiously.

COMMISSIONER S WOOD:

75      I have had the benefit of reading the reasons for decision of the Hon President.  The grounds of appeal and background to the appeal have been charted in those reasons and I do not need to repeat them.  The appellant sets out three grounds of appeal challenging orders 1, 2 and 6 of the Arbitrator’s decision.  There is no cross appeal.  In my view, the appeal grounds in respect of orders 1 and 2 are not made out for the reasons expressed by the Hon President and I adopt those reasons. 

76      The main complaint relates to the order for the appellant to backpay Ms Bowles and to continue paying her.  The order is expressed as:

“6) That the Director General, Department of Justice should not have ceased paying  Ms Bowles her ordinary salary and:

(a)           from the date of this order is to reinstate payment of her salary; and

(b)          by 18 December 2002 is to pay Ms Bowles the balance of the salary due from the date it was ceased.”

In this regard, the reasoning of the Arbitrator is contained in paragraphs 9 to 16 and in particular at paragraph 12 the Arbitrator says:

“12. However, as I have found, the decision to transfer Ms Bowles to Hakea Prison was unlawful.  This finding was not challenged on appeal: see [40] of the Reasons of the Full Bench.  Ms Bowles cannot held to have been absent from work without approval for failing to report for work at Hakea Prison when the requirement to do so was unlawful.  Therefore, the reason that the respondent ceased paying her salary cannot stand.  It follows that payment of Ms Bowles’ salary should not have been ceased and it is to be reinstated and continued.”

77      The appellant challenges this order on a number of grounds.  They say in law an ordinary contract of employment requires performance of work to get paid (Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435)   In accordance with that case,

“a decision subsequently found to be void which resulted in an employer preventing an employee from rendering service does not for that reason give rise to a legal entitlement to the payment of wages unless the contract of employment so provides or a statute requires payment in the circumstances.” 

In that sense, on the appellant’s submission, it matters not that the transfer of Ms Bowles was found to be unlawful.  At law Ms Bowles was still not entitled to payment as she did not work (Csomore v Public Service Board (1986) 10 NSWLR 587).  The appellant also says that the Arbitrator had no or insufficient regard for the actions of Ms Bowles which adversely impacted on her employment, namely her disruptive behaviour towards other employees at Broome prison and her unwillingness to work other than in Broome.

78      The respondent says that the appellant “cannot, legitimately and in good conscience claim that Ms Bowles is not entitled to her salary because she did not render service, when it was the actions of the appellant which made it impossible for her to render such service”.  The actions of the appellant were the exclusion of Ms Bowles from Broome Regional Prison and the unlawful and unreasonable attempted transfer of Ms Bowles to Hakea Prison.  The respondent also says that the appellant does not have the ability to stand down Ms Bowles without pay except in accordance with the Public Sector Management Act 1994 (PSM Act), the Public Service Award 1992 or by order or agreement of the Commission.  The respondent says that Ms Bowles was appointed to an office, post or position pursuant to s.64 of the PSM Act.  This carries with it the element of remuneration.  If Parliament had intended that officers could lawfully be suspended without pay outside the provisions of the PSM Act then s.82 would not have been enacted.  Public Service Officers are not in a normal master-servant relationship but instead are covered by special statutory regimes (Bennett v Commonwealth of Australia and Another (1980) 30 ALR 423).  The respondent says that Ms Bowles remained ready, willing and able to work and hence had to be paid (Gapes v Commercial Bank of Australia Ltd (1980) 41 FLR 27).  This the respondent says was not challenged by the appellant before the Arbitrator.

79      The respondent says that the appellant contributed to the situation, it was not simply Ms Bowles’ actions which caused her to cease working, hence she cannot be lawfully denied her salary.  Finally, the respondent distinguished Csomore in that Ms Bowles did not refuse to perform part or all of her duties; and Automatic Fire Sprinklers in that Ms Bowles is a Public Service Officer and hence is different and the matter is not concerned with termination of employment.

80      It is the case that Ms Bowles has not worked for the appellant since July 1999.  She was unfit for work until July 2000.  The appellant agreed to pay her until 22 April 2002.  The submission of the respondent is that the appellant is somehow estopped from ceasing Ms Bowles’ salary because they agreed to continue paying her to that date.  This submission has no merit for the reasons expressed by the Hon President.

81      The Arbitrator’s order means that Ms Bowles would be paid from 22 April 2002 and continue to be paid into the future.  The Arbitrator says: “

“10. Accordingly, by the decision now to issue, the parties are returned to the same position that they were in at the time the decision to transfer was made.  That is, Ms Bowles remains an employee of the respondent. She is ready, willing and available to return to work.  She is not required by her employer to report for work.  She continues to receive her salary.”

Hence Ms Bowles who was seemingly available for work since July 2000, but has not worked, would be paid for all that time and continue to be paid because the actions of the employer in attempting to transfer her were wrong and the reason for ceasing her pay was thus wrong.

82      It is common ground that the appellant did not take action against Ms Bowles pursuant to Part 5, Division 2 or 3 of the PSM Act, which relate to substandard performance and disciplinary matters.  Whilst this is not a matter for this appeal, the appellant submits that lack of action on that front should not cause criticism of the employer.  I disagree.  I do not understand why, given the facts, the employer did not initiate disciplinary action or took so long to address the issue of transfer.  There would appear to be nothing in the contract of employment preventing the employer from paying Ms Bowles whilst she did not perform work, but the wisdom of doing so needs to be questioned and not simply due to the benefit of hindsight.

The facts in this respect are as stated by the Hon President and I repeat them:

(i)       Ms Bowles in 1999 expressed a lack of confidence in management and after a period of disputation, an unwillingness to continue in her employment at Broome Regional Prison.  It is not therefore the case at all that she has necessarily been willing to perform as an employee at Broome Regional Prison for some time.

(ii)     She will not work outside the Kimberley which makes resolution of this matter difficult.

(iii)  She is not employable in the Broome Regional Prison because of her own culpable inability to get on with her fellow employees, as found by the Arbitrator, and her presence there was disruptive.

Given these facts one must query whether, in fact, Ms Bowles presents herself as ready, willing and able to work for the employer as the Arbitrator states in paragraph 10 of his reasons.  The respondent says this was not challenged by the appellant before the Arbitrator.  I do not criticise this submission.  However, the matter was clearly put to the parties by the Arbitrator as an issue and would seemingly be part of the findings as quoted at paragraph 10.

83      The appellant does not concede the point but says that it does not really matter because the law says if you do not work you do not get paid.  In their mind it is as straightforward as that, irrespective of the circumstances.  I will turn to that issue later, however, I do not consider that it is an adequate portrayal of all the circumstances of this case to say that the issue of whether Ms Bowles was ready, willing and able to work is not in question.

84      Was Ms Bowles legally entitled to be paid in any event?  The respondent says ‘yes’ as she is a Public Service Officer and was not suspended without pay in accordance with s.82 of the PSM Act.  S.64 of the PSM Act says, and I paraphrase, that the appointment of a Public Service Officer may be on a full-time basis “for an indefinite period as a permanent officer”.  This is the only section of the Act that I can find which may assist.  The Public Service Award 1992 which is the other relevant document for the purposes of understanding the contract of employment does not assist in this regard.  S.82 of the PSM Act then permits suspension without pay where an investigation under s.81 is initiated for a suspected breach of discipline.  It strikes me that s.82 is not relevant here as no disciplinary investigation has occurred.  Ms Bowles was not suspended, the employer has simply decided not to pay Ms Bowles because she did not attend for duty as required, albeit that requirement was unlawful.  I cannot conclude, having viewed the Award and the Act as a whole, and in particular s.64 and s.82, that these form a complete and exclusive code which override any common law principle and prevent the deduction of pay except as prescribed by them.

85      I would have to read the term ‘permanent’ officer and likewise the terms ‘office, post or position’ also found in s.64 at their highest point to reach a conclusion that Ms Bowles was entitled to be paid in any event.  The appellant submits that the term ‘office’ cannot be read as such and I agree.  It cannot be the case that a Public Service Officer by virtue of being ‘permanent’ can somehow not attend to work and still be paid unless and only unless he/she is disciplined.  In this sense the PSM Act is not a complete code which displaces the common law principle whereby the promise of pay and work are mutually dependent. 

86      Csomore @ p.597 states:

“In so far as plaintiffs may have succeeded in claims for wages where they had declined to carry out their duties in full, the decision may be explicable by applicable statements, an award or by waiver of the employer’s rights.”

In this sense Csomore at p.598 deals with s.92 of the Industrial Arbitration Act which on its face supported the proposition that the statute prohibited deductions from pay except as authorised by award or agreement.  This statement at s.92(1) reads:

“(a) Where an employer employs any person to do any work for which the price or rate has been fixed by an award, or by an industrial agreement, made under this Act, or by the conditions of a permit issued under Section 89, he shall, but subject to section 92A, be liable to pay in full in money to such person the price or rate so fixed without any deduction except such as may be authorised by any award or industrial agreement or permit as the case may be.

(b) Where any such award, industrial agreement or permit fixes a price, rate or amount (not being a price or rate for work done) to be paid in the circumstances set out therein in relation to any other matter the employer shall in such circumstances be liable to pay such price, rate or amount in full in money to the person entitled thereto without any deduction except such as may be authorised by such award or industrial agreement or permit as the case may be.”

This proposition was rejected.  In any event there does not appear to be a prohibitive provision such as that which relates to pay within the PSM Act or the Award that would assist in this matter.

87      In short, I can find nothing in the PSM Act or the Award that mandates that Ms Bowles should have been paid in any event.  Put differently I do not conclude that Ms Bowles’ pay could only be withheld if done in accordance with those documents which form part of the contract of employment.  The common law principle which requires service to be paid must have application.  I can envisage many scenarios which this might have application, eg. an employee may decide to simply not present for duty or to restrict his/her duties.

88      The later circumstance was an issue in Csomore.  The extent of relevance of Csomore in this matter is that Csomore stands as support for the proposition that where an employee fails to perform part of their duties, the ‘no work – no pay’ rule applies, and the contract does not have to be brought to an end by the employer for it to apply.  It does not matter in those circumstances that the employee had not been properly suspended or disciplined.  However, past this point the facts of this matter are different.  Ms Bowles was excluded from her duties in the prison and the employer sought to transfer her to Hakea Prison.  In Csomore the issue was one of refusal to perform some duties or to restrict oneself to certain duties.

89      The appellant maintains that Automatic Fire Sprinklers requires the following conclusions apply in this matter.  Ms Bowles had to perform work to be paid.  If she were merely ready and willing to be able to perform her duty that would not be enough to require her to be paid.  The wrongful act of the employer in attempting to transfer her to Hakea Prison and hence preventing her from rendering service does not mean she should be paid.  Her contract does not require her to be paid in the circumstances.  The Hon President has quoted the relevant passages in Automatic Fire Sprinklers per Dixon J and in Macken et al and they do not need to be repeated here.  It is clear in my view that the principle enunciated therein applies and had to be applied by the Arbitrator.  Ms Bowles is not as a matter of right entitled to be paid.  Whether she should have been paid and continue to be paid as a matter of discretion is another issue.

90      The respondent says Ms Bowles is different because she is a Public Service Officer and her employment was not terminated.  I have sympathy for this view for the following reasons.  Firstly, these are facts in this matter which differ from those in Automatic Fire Sprinklers.  More importantly though it strikes me that to follow that case and the principle enunciated to its logical conclusion could lead to some unintended and wrong consequences, at least in matters involving public servants.  I can think of many examples, but the most obvious may be a situation whereby there is a change of Government and if an officer were then advised that there was to be no work for him or her specifically, is he or she then to suffer no pay, though ready, willing and able to work and simply be left to treat the contract at an end and seek relief as a wrongful or unfair dismissal.  Whilst I do not consider that the PSM Act mandates payment, I do not likewise consider that such a scenario is in anyway intended to apply.  This must be so in my view if the words in s.64, ie “indefinite period as a permanent officer”, are to have any practical meaning for the operation of the public service.  It must also be true given the regulations which apply to redeployment and redundancy in Part 6 of that Act.  In that sense the principle enunciated in Automatic Fire Sprinklers needs to be treated with some caution in this case.  I have already discussed Csomore and what differentiates that case from this matter.   

91      It is trite to observe that the Arbitrator must have regard to s.26 of the IR Act which, in part, provides as follows:

“(1) In the exercise of its jurisdiction under this Act the Commission — 

(a) shall act according to equity, good conscience, and the substantial merits of the case without regard to technicalities or legal forms;

(b) shall not be bound by any rules of evidence, but may inform itself on any matter in such a way as it thinks just;

(c) shall have regard for the interests of the persons immediately concerned whether directly affected or not and, where appropriate, for the interests of the community as a whole; and

92      The basis of the Arbitrator’s conclusion at paragraph 16 is as follows:

“… it is a conclusion which in my view necessarily follows from the finding of the Arbitrator that the decision to transfer Ms Bowles was unlawful and is squarely within the Arbitrator’s jurisdiction under s.80E of the Act to enquire into and deal with any industrial matter relating to a government officer.”

93      It is apparent, however, that the interests of the community as a whole are a factor to be considered.  There is much in the actions of the employer that warrants criticism.  Some of this has now been corrected by order of the Commission.  However, the origins of the problem lie in Ms Bowles actions.  I have difficulty concluding that it is in the interests of the community to allow a person, who due to her own actions, was excluded from the prison and then made it difficult to be transferred, but can be entitled to be paid for over two years for not working and to continue to be paid.  To benefit from her actions in this way is, in my view, not in the interests of the community, even having regard to the fact that the department adopted an inappropriate procedure to first exclude her from the prison and then to attempt to transfer her to a position in Hakea Prison.  It is clear that the appellant otherwise had reason to exclude her, did seek unsuccessfully to place her in Broome and then sought to transfer her to Hakea Prison.  For these reasons I would concur with the words of the Hon President, and I repeat them here for completeness, that:

“…regrettably, this matter has reached an impasse where the interests of the parties should take second place to that of the community (see 26(1)(c)).  This matter should have been settled by the parties long ago or otherwise resolved according to law.  That it was not is in part due to the fact that proper statutory or contractual steps were not taken.

For those reasons, I am satisfied that applying the principles in House v The King (op cit), the discretion, at first instance, miscarried.  I would uphold the appeal.”

THE PRESIDENT:

94       For those reasons, the appeal is upheld, order 6 of the decision at first instance is quashed, and the appeal is otherwise dismissed.

       Order accordingly