2023 WAIRC 00277
CONTRACTUAL BENEFIT CLAIM
WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2023 WAIRC 00277

CORAM
: COMMISSIONER T KUCERA

HEARD
:
THURSDAY, 13 APRIL 2023

DELIVERED : FRIDAY, 19 MAY 2023

FILE NO. : B 105 OF 2022

BETWEEN
:
PETER WATKINS
Applicant

AND

ATG BUNBURY PTY LTD AS TRUSTEE FOR ATG BUNBURY UNIT TRUST
Respondent

CatchWords : Industrial law (WA) – Denied contractual benefits claim – Jurisdictional object – Evergreen contracts – Excluded and non-excluded claims – The Commission’s jurisdiction in denied contractual benefits claims involving national system employees – Unfair contracts jurisdiction in other States – Statutory interpretation – Excluded and non-excluded claims – Relevancy of evidence – Jurisdiction found
Legislation : Fair Work Act 2009 (Cth) s 26(1), s 26(2)(e), s 27(2)(o), s 27(1)(d)(iii)
Industrial Relations Act 1979 (WA) s 23 (1), s 29(1)(d), s 29(1(b)(iii)
Industrial Relations Act 1996 (NSW) ss 105-109
Result : Matter to be listed for hearing
REPRESENTATION:

APPLICANT : MR C FOGLIANI, OF COUNSEL
RESPONDENT : MR P KING, OF COUNSEL

Case(s) referred to in reasons:
Byrne v Australian Airlines [1995] 185 CLR 410
Brett King v Griffin Coal Mining Pty Ltd (2017) 97 WAIG 527
Christos Triantopoulos v Shell Company of Australia Ltd (2011) 91 WAIG 67
City of Enfield v Development and Assessment Commission and Anor [2000] HCA 5
Saldanha v Fujitsu Australia Pty Ltd (2008) 89 WAIG 76
Matthews v Cool or Cosy Pty Ltd (2004) 84 WAIG 2152
Nolan Paul Grobler v Mr Andre Stasikowski Stass Environmental (ABN 73 976 537 552) [2017] WAIRC 00115
Case(s) also cited:
Hobart International Airport Pty Ltd v Clarence City Council [2022] HCA 5
Decision

1 Peter Watkins (applicant) is a bus driver who is employed on a casual basis. He is paid $34.61 per hour under a written contract of employment (employment contract).
2 The applicant is employed by ATG Bunbury Pty Ltd as trustee for the ATG Bunbury Unit Trust (respondent). The respondent is a private bus company providing school bus services under various contracts with the Public Transport Authority (PTA), in the South West of Western Australia.
3 One of the contracts between the PTA and the respondent is for the provision school bus services on the Bunbury Stratham Capel Route (BSC Route). The contract that applies to this route is known as an “Evergreen Contract” (Evergreen contract).
4 Under the Evergreen contract, the PTA pays the respondent service fees which include a component to ensure bus drivers are paid a specified “grossed up” hourly rate of pay for each hour worked.
5 An information bulletin issued the PTA entitled Evergreen Contract Model Payments Elements, states the “grossed up” hourly rate that should apply to the MR Burnside Route is $43.31 per hour (pass-through rate).
6 As a mechanism to ensure bus drivers receive the higher pass-through rate, the Evergreen contract at Clause 9.12 (Pass-through of wages) contains a prohibition against a contractor receiving a windfall from the additional money the PTA pays in service fees under the Evergreen contract.
7 The applicant drives school buses on the BSC Route. The respondent assigned these duties to the applicant in or around July 2018. After discovering the difference between the hourly rate of pay in his written employment contract and the higher pass-through rate, the applicant filed a denied contractual benefits claim (claim).
8 The respondent disputes the claim. It says that because the respondent is a national system employer, the Commission, does not have the jurisdiction to hear the claim.
9 For the reasons set out, I have determined the Commission does have the jurisdiction to deal with this matter.
Original application
10 The applicant first raised his claim in a Form 3 application he filed on 19 September 2022. The Australian Transit Group trading as Bus West, was named as the employer respondent to the claim.
11 At the same time the applicant filed his claim, Inger Isaksen (Isaksen) in B106 of 2022, filed a very similar and related application against the entity she thought was her employer, the Australian Transit Group trading as South West Coach Lines Pty Ltd.
12 Both Isaksen and the applicant were being assisted in their applications by Glenn Ferguson from Transport Edge Inc. It is helpful to refer collectively to these two applications as the claims (claims) and to the applicant and Isaksen as the applicants (applicants).
13 On 7 October 2022, the Australian Public Transport Industrial Association (APTIA) filed responses to the claims (responses).
14 In the responses, APTIA not only denied the entities named as the respondents to the claims (respondents) were the correct employers, but it also raised jurisdictional objections to the claims.
15 I convened two conciliation conferences in relation to the claims, the first of which was held on 7 November 2022. With the consent of the parties, I listed the claims together.
16 Mr Ferguson appeared for the applicants in the first conciliation conference. Mr Ian McDonald from APTIA appeared for the respondents.
17 At the second conciliation conference held on 12 December 2022, the applicants were represented by legal counsel, Cory Fogliani. During this conference, Mr Fogliani foreshadowed his intention to file amended claims on the applicants’ behalf.
18 Although the claims were not able to be resolved by conciliation, the parties did reach agreement on a set or programming orders that I issued 20 December 2022 (consent orders), as follows:
1. THAT the applicants are to file their amended applications by 9 January 2023.
2. THAT the respondents are to file responses to the amended applications by 16 January 2023.
3. THAT informal discovery is to be provided by 25 January 2023
4. THAT the parties are to confer on and file an agreed statement of facts by 3 February 2023.
5. THAT the matter is to be listed for a programming conference on a date to be fixed not before 3 February 2023.
6. THAT there be liberty to apply.
19 On 10 January 2023 the parties agreed to extend the dates by which they were required to complete the various steps under the consent orders. The dates were respectively extended to 13 January, 20 January, 3 February, and 10 February 2023.
20 Pursuant to the consent orders, the applicants filed amended applications on 13 January 2023 (amended applications).
The amended responses
21 On 20 January 2023 APTIA filed amended responses, which maintained very similar jurisdictional objections to the original claims.
22 The jurisdictional objections APTIA raised in its response to the applicant’s amended claim cane be summarised as follows:
(a) The Australian Transit Group Pty Ltd as trustee for the Australian Transit Unit Trust (ATG) did not employ the Applicant. The proceedings cannot proceed until the Commission determines the correct respondent.
(b) ATG is a constitutional corporation, which is a national system employer as defined in section 14 of the Fair Work Act 2009 (Cth) (FW Act). Section 26 of the FW Act places limits on the Commission’s jurisdiction to deal with industrial disputes involving national system employers and employees.
(c) By his claim, the applicant is not seeking to enforce a contractual benefit that arises under a contract of employment between the applicant and the respondent. Rather the applicant is seeking to enforce the terms of a contract between the PTA and ATG, to which the applicant is not a party. This is not a matter under section 27 (o) of the FW Act, in respect of which the Commission has jurisdiction.
(d) The applicant’s claim the respondent has engaged in an unlawful act involving a breach of a contract it has with the PTA and/or that it has acted against the public interest by withholding public funds from the applicant are not matters the Commission may hear under s 27(o) of the FW Act.
Programming of the jurisdictional objection
23 On 31 January 2023, I asked my associate to send an email to the parties identifying the jurisdictional objections to be decided. His email provided some suggestions I had recommended on programming orders for the determination of the jurisdictional issues.
24 His email drew the parties’ attention to s 27(2)(o) of the FW Act which appeared to suggest the WAIRC had the jurisdiction to entertain these claims.
25 It also drew the parties’ attention to relevant authorities on the WAIRC’s jurisdiction in matters under s 29(1)(d) of the Industrial Relations Act 1979 (WA) (IR Act) namely Christos Triantopoulos v Shell Company of Australia Ltd (2011) 91 WAIG 67 (Triantopoulos) and Nolan Paul Grobler v Mr Andre Stasikowski Stass Environmental (ABN 73 976 537 552) [2017] WAIRC 00115 (Grobler).
26 The parties were asked to review the relevant statutory provisions and the authorities referred to and to consider what programming orders should issue.
27 Following this, the parties provided a Minute of Proposed Orders (minute) signed by the representatives for the parties.
28 The minute identified the correct respondent to the applicant’s claim. To this end on 9 February 2023, I issued by consent [2023] WAIRC 00065 which resulted ATG Bunbury Pty Ltd as trustee for the ATG Bunbury Unit Trust being substituted as the respondent to the applicant’s claim.
Jurisdictional issues raised
29 On 9 February 2023, I also issued [2023] WAIRC 00067 which defined the jurisdictional objection to be decided in both claims as follows:
1. Whether the applicant has identified the correct respondent entity as his employer; and
2. Whether the Commissions’ jurisdiction to determine this matter is negated by section 26(3) of the FW Act.
30 I then issued orders for the respondents and the applicants to file submissions on the two jurisdictional issues referred to in the minute.
31 On 2 March 2023, Isaksen discontinued her claim. I was then only required to hear the jurisdictional objections in the applicant’s claim. To this end, I listed the applicant’s claim for a short hearing on the jurisdictional objection, which was convened on 13 April 2023.
Application of the Fair Work Act 2009
32 The FW Act by operation of s 26(1), applies to industrial and employment disputes between national system employers and employees, to the exclusion of all State and Territory industrial laws.
33 Section 26(2)(e) makes it clear that one of the specific State and Territory industrial laws excluded by the FW Act is:
(e) a law of a State or Territory providing for the variation or setting aside of rights and obligations arising under a contract of employment, or another arrangement for employment, that a court or tribunal finds is unfair;
34 There are however some State and Territory industrial laws that are not excluded by the FW Act. To this extent s 27(1) relevantly states:
27(1) Section 26 does not apply to a law of a State or Territory so far as:
….
(c) the law deals with any non-excluded matters;
….
35 Section 27(2) of the FW Act then defines what a “non-excluded matter” means.
36 Subsection 27(2)(o) relevantly provides that a non-excluded matter includes:
27(2) The non-excluded matters are as follows:
….
(o) claims for the enforcement of contracts of employment, except so far as the law in question provides for a matter to which paragraph 26(2)(e) applies;
….
37 The intended purpose of these provisions, subject to some exceptions, is to ensure the FW Act pretty much applies exclusively to any industrial and employment disputes between national system employers and employees.
Agreed facts
38 In the present case, the parties agree the applicant is a national system employee who works for a national system employer.
39 The parties also agree the respondent is party to the Evergreen contract with the PTA, that applies on the BSC Route. It is agreed the applicant is not a party to the Evergreen contract.
40 It is also agreed the respondent employed the applicant on a casual basis as a bus driver and that he works on the BSC Route.
41 The parties in the Statement of Agreed Facts set out the rates of pay the respondent pays to the applicant. These rates are less than the pass-through rates contained in the PTA’s Evergreen Contract Model Payments Elements document, that was attached to the Statement of Agreed Facts as Agreed Document 5.
The respondent’s submissions on jurisdiction
42 The representatives for the respondent, Mr McDonald and Peter King of counsel, filed two outlines of submissions in which they pressed the respondent’s argument on the jurisdictional objection.
43 Mr King also sought to advance the respondent’s argument by way of oral submissions at the hearing on 13 April 2023.
44 In summary, the respondent argued the applicant’s claim is not about a breach of existing entitlements under his employment contract. Rather, the respondent submitted the applicant is attempting to set aside, vary or amend his contract to incorporate the higher rates from the contract between the PTA and the respondent, to which he is not a party.
45 This, the respondent argued, would require the Commission to make findings the applicant’s contract is unfair or illegal, which the respondent submitted would be in the nature of an “unfair contracts” claim that is excluded by s 26(2)(e) the FW Act.
46 Alternatively, the respondent says the Applicant is attempting to enforce an entitlement to higher rates of pay that arise under the Evergreen contract, which is not an employment contract or an instrument to which the applicant is a party.
47 The respondent argued, enforcing the Evergreen contract, which is how the respondent has characterised the applicant’s claim in part 2.2.1 and 2.2.2 of his amended application, is not a matter the Commission can entertain. The respondent says that this is because it is not a claim for the enforcement of a contract of employment within the meaning of s 27(2)(o) of the FW Act.
48 The respondent argued that because the “source” of the applicant’s rights as this term was used in Grobler at [46], is not the applicant’s employment contract, but something outside it, the Commission does not have the jurisdiction to deal with the matter. The respondent argued this claim would need to be referred elsewhere.
49 Such a case would require the applicant to prove his claim falls into an exception to the rule of privity as in Hobart International Airport Pty Ltd v Clarence City Council [2022] HCA 5, thereby allowing him to enforce the Evergreen contract to his benefit, against the respondent.
50 The respondent argued that either case, would involve claims that are excluded by ss 26(2)(e) and 27(2)(o) of the FW Act.
51 In support of its submissions the respondent filed a short witness statement from Ben Doolan who is the respondent’s Managing Director (Doolan’s statement).
52 The respondent argued it was necessary to receive Doolan’s statement into evidence because the decision in City of Enfield v Development and Assessment Commission and Anor [2000] HCA 5 requires the Commission make findings of jurisdictional fact about whether the applicant’s claim relates to a “non-excluded claim”.
53 In relation to this, Mr King argued Doolan’s statement was relevant to deciding whether the applicant was attempting to enforce something other than an employment contract or whether the claim was in the nature of an unfair contracts claim.
The applicant’s submissions on jurisdiction
54 The applicant argued it is settled law, that a denied contractual benefits claim under the IR Act is in practicality, a claim for the enforcement of an employment contract, for which an order for damages to remedy the denial of the contractual benefit may be made.
55 As the applicant’s claim is being made under a State or Territory law that deals with “claims for the enforcement of contracts of employment”. The Commission’s jurisdiction to hear and determine a denied contractual benefits claim, is as a result, not excluded by the exception under s 26(2)(e) of the FW Act because of the operation of ss 27(1)(d)(iii) and 27(2)(o).
56 The applicant argued the jurisdictional objection raised by the respondent is not novel or unique and has been rejected on many occasions, including the cases the parties were referred to in Triantopoulos and Grobler.
57 The applicant argued its case did not involve an argument the applicant’s contract of employment should be set aside or varied because it is unfair. The applicant also argued that it was not seeking to enforce the Evergreen contract between the respondent and the PTA either.
58 Rather the issue to be decided in the applicant’s claim is whether he is entitled to a contractual benefit in his employment contract with the respondent, to the minimum rates in the Evergreen contract, when he drives buses on the BSC Route.
59 The applicant submitted the determination of this issue is something the Commission, in a denied contractual benefit claim has the jurisdiction to hear and decide.
60 The applicant objected to Doolan’s statement being admitted into evidence as it is not relevant to the jurisdictional objection. The applicant argued Doolan’s statement goes to the issue of identifying the terms of the employment contract between the parties.
61 The Applicant submitted the point at which Doolan’s statement should be received into evidence is at the substantive hearing of the contractual benefits claim.
The Commission’s jurisdiction in denied contractual benefits claim involving national system employees
62 In Western Australia the right of an employee to bring denied contractual benefit claim arises under ss 23(1) and 29(1)(b)(ii) of the IR Act: Matthews v Cool or Cosy Pty Ltd (2004) 84 WAIG 2152 (Cool or Cosy).
63 The Commission under s 23(1) of the IR Act has the power to enquire into and deal with any industrial matter within its jurisdiction.
64 An “industrial matter” is defined broadly under s 7 of the IR Act and is sufficiently wide to include disputes over the identification of terms in an employment contract: Saldanha v Fujitsu Australia Pty Ltd (2008) 89 WAIG 76 (Saldanha).
65 The specific provision giving rise to an employee’s right to make a denied contractual benefits claim against an employer in respect of an employment contract, to which the employee is a party, is under s 29(1)(b)(ii) of the IR Act.
66 The Commission in a number of authorities that include in Triantopoulos and Grobler has decided that together ss 23 (1) and 29(1)(b)(ii) of the IR Act are provisions of a State or Territory Law that deal with “claims of enforcement of contracts of employment”.
67 To this end then Chief Commissioner Scott in Triantopoulos at [58] usefully summarised and characterised the function of the Commission in a denied contractual benefits claim as follows:
1. The Commission’s jurisdiction is to deal with an industrial matter which includes the power to compel by order the performance of a benefit under a contract of employment (Cool or Cosy at [73])
2. The Commission has power by the combined effects of s 23(1) and s 29(1)(b)(ii) … to enforce the payment of entitlements (Cool or Cosy, per Heenan J [64] and “… is empowered to make a monetary order, in the nature of damages to deal with the industrial matter before it ... for breach of the employment contract [73]. This is “… to give effect to common law entitlements on application by an employee under s 29(1)(b)(ii).”
3. The benefit claimed is contractual and exists independent of the provisions of the IR Act (Cool or Cosy per Heenan J [60]).
4. It is an enforcement of legal rights involving the exercise of judicial power (Saldanha per Ritter AP [122]).
5. A claim under s 29(1)(b)(ii) would be determined upon common law principles (Saldanha per Ritter AP [73]), the process being the same as that for the enforcement in courts of appropriate jurisdiction – the Commission must decide:
a. What the terms of the contract were;
b. Whether or not they have been complied with
and in doing so the Commission is exercising a judicial function (Saldanha per Ritter AP [80 – 81])
68 Scott CC in Triantopoulos identified the task of the Commission in a denied contractual benefit claim is to identify the terms of the contract using common law principles, whether those terms are express, incorporated or implied.
69 The Commission’s task then turns to whether an employer has breached one or any of those terms and to exercise a discretion as to what if any relief should issue.
No unfair contracts jurisdiction in WA
70 Western Australia does not have and has never had, a statutory “unfair contracts jurisdiction”.
71 When exercising jurisdiction in a denied contractual benefits claim, the Commission is not permitted to and does not, have any powers to amend, vary or set aside an employment contract on the grounds it is unfair to an employee.
72 This is a feature of what is known as an “unfair contracts jurisdiction” of the type that exists in NSW under Part 9 ss 105 – 109 (Unfair Contracts) of the Industrial Relations Act 1996 (NSW). It is helpful to note the unfair contracts jurisdiction in NSW is a creature of statute.
73 These observations are important, as s 26(2)(e) of the FW Act is directed at preventing state courts and industrial tribunals from exercising jurisdiction in disputes involving national system employees and employers, under state laws or statutes that provide for the exercise of an unfair contracts jurisdiction.
Consideration – Is the applicant’s claim excluded by s 26(2)(e) of the FWC Act?
74 Having reviewed the applicant’s amended claim, the Statement of Agreed Facts, the attachments to these documents, the parties submissions, and noting the relevant case law including Triantopoulos and Grobler, I have determined the Commission has jurisdiction to hear this claim.
75 The applicant’s claim is being made under ss 23(1) and 29(1)(b)(ii) of the IR Act which is a State or Territory industrial law that deals with “claims of enforcement of contracts of employment”.
76 This matter is not excluded by operation s 26(2)(e) of the FW Act because there is no unfair contracts law or jurisdiction in WA of the type that s 26(2)(e) is intended to exclude.
77 Put another way, the focus of the inquiry as to whether a claim is permitted despite s 26(2)(e) of the FW Act, is directed at whether the state industrial law under which the claim is brought is excluded by the FW Act rather than the content of the claim itself.
Is the applicant’s claim excluded by s 27(2)(o) of the FW Act?
78 The respondent’s argument the Commission does not have jurisdiction under s 27(2)(o) of the FW Act, because the applicant’s claim involves the enforcement of something other than a contract of employment, also misses the point of the jurisdictional objection to be decided.
79 There are two problems with the respondent’s characterisation of its jurisdictional objection and its submissions on this point.
80 Firstly, the applicant both in his amended claim and by his counsel’s submissions has made it clear that he is not seeking to enforce the Evergreen contract.
81 Secondly, s 27(2)(o) of the FW Act like s 26(2)(e) is directed at whether the law under which the claim is being made is excluded, not the content of the claim itself.
82 The identification of the contract upon which the applicant relies, is one of the elements the applicant will have to establish at a substantive hearing of his claim. The respondent says that the applicant must prove this element as a jurisdictional fact as in Enfield at [28], however as the relevant case law has demonstrated, this is something that would happen at the substantive hearing.
83 Section 27(2)(o) of the FW Act does not require the Commission to inquire into and make findings on whether a claim under a law for the enforcement of a contract of employment is in substance a claim for something else.
84 It requires the Commission to look at the law under which the claim is being made and to decide whether the exercise of its jurisdiction under that law is ousted by operation of s 26 of the FW Act see Triantopoulos at [29].
Was Doolan’s witness statement relevant?
85 Noting the conclusions I have reached in relation to the Commission’s jurisdiction to hear this claim, it follows Mr Doolan’s statement is not relevant to the jurisdictional objection the Commission was asked to decide. For this reason, it was not appropriate for it to be admitted into evidence at the jurisdictional hearing.
86 By his amended claim, the applicant alleges his employment contract was varied by the parties’ conduct, or the terms in the Evergreen contract between the respondent and the PTA are implied into his contract of employment.
87 It is trite that terms in an employment contract can be varied and may be express, incorporated or implied. There are various principles under the common law regarding the identification of implied terms, including Byrne v Australian Airlines [1995] 185 CLR 410. To succeed in his claim the applicant will have to show how these principles, when applied, give rise to a contractual benefit to which he is entitled under his employment contract.
88 The task of the Commission in this case is as it was in Brett King v Griffin Coal Mining Pty Ltd (2017) 97 WAIG 527, is to establish whether terms are incorporated or implied and if so, whether those terms have been breached.
89 Mr Doolan’s statement is relevant to determining the terms of the employment contract between the applicant and respondent. It is my view that Mr Doolan’s statement can be revisited at the substantive hearing of this matter.
Conclusion
90 For all of the reasons set out in the preceding paragraphs, I have determined the Commission has jurisdiction to hear this claim.
91 Orders will now issue for the parties to confer and provide a draft minute of proposed programming orders, so the applicant’s claim can be listed for hearing.