2008 WAIRC 01116

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

FULL BENCH

CITATION : 2008 WAIRC 01116

CORAM
: THE HONOURABLE M T RITTER, ACTING PRESIDENT
SENIOR COMMISSIONER J H SMITH
COMMISSIONER J L HARRISON

HEARD
:
MONDAY, 26 MAY 2008, TUESDAY, 27 MAY 2008

DELIVERED : WEDNESDAY, 6 AUGUST 2008

FILE NO. : FBA 1 OF 2008, FBA 2 OF 2008

BETWEEN
:
BOB PEMBERTON
Appellant

AND

CIVIL SERVICE INSURANCE AGENCY PTY LTD
Respondent

-AND-



LOUISE MCGOVERN
Appellant

AND

CIVIL SERVICE INSURANCE AGENCY PTY LTD
Respondent

ON APPEAL FROM:

JURISDICTION : WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
CORAM : COMMISSIONER S M MAYMAN
CITATION : 2008 WAIRC 00004
FILE NO : B 376 OF 2006 AND B 377 OF 2006

CatchWords:
Industrial Law (WA) – two appeals against decision of a single Commissioner –dismissal of denial of contractual benefits claims – denied – underpayment of salary and redundancy entitlement and non-payment of bonus – importance of adequate grounds and particulars of appeal – importance of adequate reasons – inadequate assessment of the evidence, factual findings and proper consideration of all issues– appellants’ reliance on estoppel misplaced – error in consideration of application of Jones v Dunkel – particulars of appeal established – review of all of the evidence to ascertain whether appeals allowed – claims of underpayment of salary – claims not maintainable – claims of underpayment of redundancy entitlement – claims not maintainable – claims of non-payment of bonus inadequately considered by Commissioner – not capable of resolution on appeals – remitted for decisions – appeals upheld

Legislation:
Industrial Relations Act 1979 (WA), s26, s29(1)(b)(ii), s35, s49, s49(5)

Industrial Relations Commission Regulations 2005, r102(2) and (3)

Public Sector Management (Redeployment and Redundancy Regulations) 1994, r20(ii)

Result:
Appeals upheld, orders made by Commission quashed, matters remitted to the Commission for determination
REPRESENTATION:
Counsel:
APPELLANTS :MR G MCCORRY, AS AGENT
RESPONDENT :MR P FRASER (OF COUNSEL)
Solicitors:
APPELLANT :
RESPONDENT :ILBERYS


Case(s) referred to in reasons:

Anderson v Rogers Seller & Myhill Pty Ltd (2007) 87 WAIG 289
BP Refinery Pty Ltd v Shire of Hastings Council (1977) 52 ALJR 20
Byrne and Frew v Australian Airlines Ltd (1995) 185 CLR 410
Camden v McKenzie [2008] 1 Qd R 39
Claremont Petroleum NL v Cummings (1992) 110 ALR 239
Fletcher Construction Australia Ltd v Lines MacFarlane & Marshall Pty Ltd (No.2) [2002] 6 VR 1
Fox v Percy (2003) 214 CLR 118
Furey v Civil Service Association Incorporated [1998] FCA 733
Hawkins v Clayton (1988) 164 CLR 539
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41
Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157
Jones v Dunkel (1958) 101 CLR 298
Mifsud v Campbell (1991) 21 NSWLR 725
Miles & Miles v Milward (2007) 87 WAIG 2991
Miles v Brendon Penn Nominees Pty Ltd (2006) 86 WAIG 3377
Mount Lawley Pty Ltd v Western Australian Planning Commission (2004) 29 WAR 273
NRMA Insurance Ltd v Tatt & Anor (1989) 92 ALR 299
Sealanes (1985) Pty Ltd v Foley and Buktenica (2006) 86 WAIG 1254
Skinner v Broadbent [2006] WASCA 2
Stacey v Civil Service Association of Western Australia (Incorporated) (2007) 87 WAIG 1229
The Western Australian Builders’ Labourers, Painters and Plasterers Union v RB Exclusive Pools Pty Ltd trading as Florida Exclusive Pools (1996) 77 WAIG 4
Tokyo Network Computing Pty Ltd v Tanaka [2004] NSWCA 263
Waltons Stores (Interstate Ltd) v Maher (1988) 164 CLR 387

Case(s) also cited:

Belo Fisheries v Froggett (1983) 63 WAIG 2394
Connelly v Wells (1994) 55 IR 73
Medical Board (SA) v N,JRP and Another (2006) 93 SASR 546
Perth Finishing College v Watts (1989) 69 WAIG 2307
United Construction Pty Ltd v Birighitti (2003) 83 WAIG 434
Waroona Contracting v Usher (1984) 64 WAIG 1500
Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435


Reasons for Decision

RITTER AP:

Introduction
1 These two appeals before the Full Bench were instituted under s49 of the Industrial Relations Act 1979 (WA) (the Act). Both Mr Bob Pemberton and Ms Louise McGovern appeal against the dismissal of their applications on 3 January 2008. The applications were heard together and a single set of reasons was published. Properly, separate orders dismissing the applications were made.

The Applications, the Respondent and the Period of Employment
2 The applications, filed on 26 May 2006, were referred to the Commission under s29(1)(b)(ii) of the Act. This subparagraph provides for an industrial matter to be referred to the Commission by an employee claiming “that he has not been allowed by his employer a benefit, not being a benefit under an award or order, to which he is entitled under his contract of employment”.
3 The respondent was in effect a fully owned subsidiary of the Civil Service Association of Western Australia (Incorporated) (the CSA). The CSA is an organisation registered under the Act. The respondent provided insurance cover for its clients who were primarily members of the CSA. “CGU Insurance” (CGU) was the respondent’s underwriter. From evidence later described it appears that the relevant corporate structure was that Civil Service Holdings Pty Ltd was a subsidiary of the CSA and it was Civil Service Holdings which owned the share in the respondent.
4 The governance of the respondent was undertaken by its Board of Directors (the Board). The Board met from time to time and minutes of relevant meetings were received as exhibits at first instance.
5 Mr Pemberton was first engaged by the respondent for a period of about four weeks towards the end of 1988 to “come and help” the respondent because they “were having some trouble”. This was precipitated by a telephone call from the then manager of the respondent. The details of this appointment will be referred to later. One of the directors of the respondent, Mr Mark Smith subsequently asked Mr Pemberton to “stay on”. Mr Pemberton was then appointed manager of the respondent in April 1989 which continued until 4 July 2006.
6 Ms McGovern was employed as an insurance consultant from 22 July 2002 until 4 July 2006. Her duties were to sell insurance policies and deal with claims enquiries for members of the CSA.
7 At the time the applications were filed Mr Pemberton and Ms McGovern were aware that the office of their employer was to close on 3 July 2006 and they were to be made redundant. This was stated in the applications.

The Particulars of the Claims
8 The particulars of the claims were amended prior to and at the commencement of the hearing. The appellants’ agent accepted the Commissioner accurately described their claims at first instance in her reasons at [3] and [4] as follows:
“3 Mr Pemberton claims against the respondent:
- payment of the difference between the rate of pay for a level 5.4 salaried employee of the Civil Service Association of WA Incorporated (“the CSA”) and the rate paid for the period 1 September 2003 to 26 August 2005, an amount of $11,654.04; and
- payment of the difference between the redundancy entitlements of a CSA employee and the amount paid on termination (inclusive of $7,681.00 pro-rata long service leave and $14,184.00 severance pay) a total of $21,865.00; or
- as an alternative claim if the Commission determines the CSA council resolution of 1992 applies then the redundancy entitlement $8,271.00 (and pro-rata long service leave of $7,681.00) a total of $15,952.00 applies; and
- payment of the profit bonus for the 2005-2006 financial year of $8,000.00.
4 Ms McGovern claims against the respondent:
- payment of the difference between the rate of pay for a level 3.4 salaried employee of the CSA and the rate paid for the period 1 September 2003 to 26 August 2005, an amount of $6,987.46;
- payment of the difference between the redundancy entitlements of a CSA employee and the amount paid on termination in the amount of $6,817.16 (or $7,148.09 at February 2006 rates);
- as an alternative claim in the event the Commission determines the CSA council resolution of 1999 applies then $14,491,79 (pro-rata long service leave and redundancy pay); and
- payment of the profit bonus for the 2005-2006 financial year of $4,000,00.”

9 Accordingly the claim of the appellants had three interrelated parts: the underpayment/non-payment of salary, redundancy entitlements and non-payment of bonus.

The Respondent’s Position
10 The position of the respondent at the commencement of the hearing was described at [7] and [8] of the Commissioner’s reasons. There was some variation from this by the end of the hearing based on the evidence. I will later describe what the respondent then argued. It is sufficient to now say that the respondent’s position was:
(a) There was no contractual entitlement to the claimed non-payment of salary.
(b) There was no redundancy policy of the CSA which applied to the appellants; alternatively there was no involuntary redundancy policy of the CSA.
(c) The appellants had a contractual entitlement that the Board would consider and pay a bonus if the respondent made a profit in the relevant financial year. The amount of the bonus was at the discretion of the respondent. For 2005-2006 no profit was made and so there was no obligation to pay a bonus. (There was a dispute between the parties as to the way in which “profit” was calculated for this purpose. I will later describe the relevant evidence).

Witnesses and Witness Statements
11 The appellants and the respondent each filed witness statements with documents annexed to them. They were received as exhibits at the hearing. Each of the witnesses had the opportunity to give additional evidence in chief, were cross-examined and could have been re-examined.
12 The witnesses who gave evidence for the appellants were:
(a) Mr Freddie Tan, the accountant for the CSA and company secretary of the respondent and other businesses run by the CSA between April 1988 and April 1998.
(b) Mr Pemberton.
(c) Ms Diane Robertson, a former president and vice president of the CSA between 1992 and 2004 and chair of the Board of the respondent and other businesses run by the CSA from at least as early as 1994 until 2004.
(d) Ms McGovern.

13 The respondent’s witnesses were:
(a) Ms Toni Walkington, a director of the Board from early 2002. At the time of the hearing in January 2007 she was general secretary of the CSA and branch secretary of the CPSU-SPSFCPSF Group. She was also chairperson of the Board for a short period in 2004.
(b) Mr Brendon Hewson, a director of the Board from January 2005.
(c) Ms Patricia (Pat) Brewer, the human resources officer within the state office of the CPSU and the CSA from 10 April 1995. Her duties included day to day personnel management for people working in the “CPSU-CSA building” in Perth including CSA staff, the staff of the respondent, “travel staff” and “6th Floor Club, chefs and kitchen hands”.

The Proceedings at First Instance
14 The course of the hearing was as follows:
(a) 10 January 2007 - Ms Walkington was interposed to give evidence.
(b) 16 January 2007 - Mr Tan and Ms Robertson gave evidence and Mr Pemberton gave his examination in chief.
(c) 17 January 2007 - Mr Pemberton was cross-examined and Ms McGovern and Mr Hewson gave evidence.
(d) 16 February 2007 - Ms Brewer gave evidence.
(e) 16 February 2007 - The appellants and the respondent filed written submissions.
(f) 16 February 2007 - Oral closing submissions were made by the appellants’ agent and the respondent’s counsel.

15 The application then in effect stood reserved for decision.
16 On 17 and 20 July 2007 the appellants and the respondent respectively filed written submissions about any effect on the applications arising out of my decision in Stacey v Civil Service Association of Western Australia (Incorporated) (2007) 87 WAIG 1229.
17 The Commissioner’s reasons for decision were published and the orders of dismissal were made on 3 January 2008.

The Notices of Appeal
18 The notices of appeal were filed on 23 January 2008. They each contained a schedule setting out the purported grounds of appeal and orders sought. The schedule was in these terms:
“SCHEDULE

The Commission erred in fact and in law in that the Commissioner failed to determine what were the Appellant's terms and conditions of employment, (in the alternative, erred in determining the terms and conditions) and failed to determine if a benefit under the Appellant's contract of employment had been denied, (in the alternative, erred in determining that a benefit had not been denied) by –

a) failing to take into account relevant matters;
b) taking into account irrelevant matters;
c) failing to draw proper inferences from the evidence;
d) failing to make proper findings on issues of credibility;
e) misdirecting herself as to the relevant law; and
f) failing to properly apply the relevant law to the evidence.

ORDERS SOUGHT

1) The appeal be upheld.
2) The order of the Commission at first instance be set aside.
3) It be declared that the Appellant's terms and conditions of employment were -

a) the same as those of an employee of the Civil Service Association of WA Inc (CSA) of the same salary level; and
b) in addition to the terms and conditions specified in paragraph (a) hereof, there was a contractual entitlement to a bonus each year if the business made a profit.

4) It be declared that the Respondent failed to grant the Appellant the benefits of the terms and conditions of employment specified in paragraph (3) hereof; and.

5) The Respondent do pay to the Appellant the amount of the benefit denied.”

The “Grounds” of Appeal
19 As discussed with the appellants’ agent at the commencement of the hearing of the appeals, the “grounds of appeal” were inadequate. The notices of appeal did not comply with regulation 102(2) of the Industrial Relations Commission Regulations 2005 which provides that the “notice of appeal must clearly and concisely set out the grounds of appeal …”. Regulation 102(3) amplifies this by saying that “it is not sufficient to allege the decision or part of it is against the evidence or the weight of evidence or that it is wrong in law. The notice must specify the particulars relied on to demonstrate that it is against the evidence and the weight of the evidence and the specific reasons why it is alleged to be wrong in law”.
20 As I have said before, the drafting of grounds of appeal is a most significant task which should not be done idly or carelessly or treated as a mundane task. As said in the joint reasons of Scott C and I in Anderson v Rogers Seller & Myhill Pty Ltd (2007) 87 WAIG 289 at [113]-[114]:
“113 The reason for the content of the regulations is reasonably clear. The grounds of appeal map the boundaries and chart the course of the hearing and determination of the appeal. The grounds and particulars provide proper notice to the respondent and the Full Bench of the issues relevant to a determination in the appeal. They should ordinarily be succinctly expressed. Part of the reason for the delineation of grounds of appeal is to provide procedural fairness to a respondent so that they know the case they need to meet in an appeal. Ordinarily, the Full Bench would have no authority to allow an appeal other than on the basis of the grounds of appeal as drafted, or argued and understood by the parties. Moreover in all cases the Full Bench must act in a way which is procedurally fair.
114 In our experience, far too frequently, when appellants are represented by counsel, solicitors or agents, the grounds of appeal are not drafted with sufficient care.”

21 The appeal grounds have a jurisdictional impact upon the proceedings and the decision of the Full Bench. The setting out of an appellant’s contentions in an outline of submissions filed in accordance with the relevant practice direction is no substitute for properly drafted appeal grounds. If representatives acting for an appellant reach the view that the grounds of appeal are inadequate or should otherwise be amended, then appropriate steps should be taken as soon as practicable.
22 At the hearing the respondent’s counsel took no objection to the forms of the notices of appeal. This was largely because the appellants had provided to the respondent a document headed “Particulars of Appeal Grounds” (Particulars of Appeal). This was not at that time or any time prior to the second day of the hearing filed with the Commission. The appellants’ agent said this was because he forgot to do so. This was regrettable.
23 The Particulars of Appeal set out eight alleged “errors of fact”, 17 “relevant matters not taken into account”, four “irrelevant matters taken into account”, 10 particulars of “failing to draw proper inferences from the evidence”, seven particulars of errors by the Commission in making “findings on credibility”, 11 “misdirections as to law” and three particulars of failing to “properly apply the relevant law”. This was a six and a half page document and formed the backdrop to both the appellants’ outline of submissions and the way in which the appeals were argued on their behalf.
24 It is not necessary to quote the Particulars of Appeal in full. On the second day of the hearing of the appeals the Full Bench, on application by the appellants and without objection by the respondent, granted leave for the notices of appeal to be amended to include the Particulars of Appeal. An order to this effect will be included in the final orders disposing of the appeals.

Appeal Procedures and Hearing
25 On 14 March 2008 by consent it was ordered that the appeals be consolidated into one proceeding and that there be a single set of appeal books and submissions.
26 Outlines of submissions were filed on behalf of the appellants on 19 May 2008 and for the respondent on 22 May 2008. The appeals were heard on 26 and 27 May 2008. The appellants’ agent and the respondent’s counsel adopted and amplified their outlines of submissions at the hearing.
27 The decision of the Full Bench was reserved.

Approach to Appeals and Primary Contentions of the Parties
28 Due to the content of the Particulars of Appeal, the way in which the appeals were argued and responded to and the reasons for decision of the Commissioner, I think it best to analyse the arguments of the appellants by first tracing the evidence about each component of their claims. As mentioned these were:
(a) The claim of underpayment of salary.
(b) The claim of non-payment of a bonus.
(c) The claim of underpayment of a redundancy entitlement including a component for long service leave. (See appellants’ written submissions at first instance, dated 16 February 2007 at [77]. I will refer to these as the appellants’ First Instance Written Submissions).

29 The way in which these claims were said to be a denial of a contractual benefit was set out in the appellants’ written submissions and oral closing submissions at first instance. The appellants asserted their contracts of employment were partly written, partly oral and partly “implied”. There were alternative assertions about the basis of the claim that the contracts contained a term providing for a redundancy payment and also the content of the term. For the purposes of the appeals however the appellants refined their argument to what is set out below (see Appellants’ Outline of Submissions at [10]-[16] and the First Instance Written Submissions at [1]-[36]). The appellants contended:
(a) Their “contracts of employment provided that they would be entitled to the same terms and conditions of employment as salaried employees in the CSA plus bonuses if the respondent made a profit in any financial year” ([10]). (I will refer to this as “the CSA Employees’ Condition”). This was based upon the oral terms of the contract and/or as implied (or inferred) from the conduct of the respondent.
(b) It was an express term of their contracts of employment that they be paid the same salaries as CSA employees classified at levels 5.4 (for Mr Pemberton) and 3.4 (for Ms McGovern) for the period between 1 September 2003 and 26 August 2005. (See First Instance Written Submissions at [32]). They had not been paid in accordance with this entitlement.
(c) The levels were the same as on the public service salary scale and payment at these levels involved all public service incremental salary increases.
(d) Employees of the CSA were entitled to redundancy benefits when involuntarily made redundant and accordingly so too were the appellants. The entitlement was set out in a document headed “Redundancy Provisions” which had a footer saying “Redundancy Provisions – CSA Condition 11 July 2000” (The 2000 Redundancy Document).
(e) These redundancy benefits included severance pay at the rate of two weeks’ pay per year of continuous service, to a maximum of 45 weeks, payment of 12 weeks’ salary, and the pay-out of accrued and pro rata long service leave.
(f) Further or alternatively the respondent was estopped from denying that the appellants were entitled to the redundancy payments they claimed. This was because of representations said to have been made in October 2005 by Ms Brewer to Mr Pemberton.
(g) They were entitled to a bonus if the respondent made a profit in the previous financial year. This was satisfied for 2005-2006. The amount of the bonus was, implied by conduct, to be no less than the bonus paid in the previous year.
(h) In deciding if the respondent made a profit the management and referral fees which the respondent paid to the CSA were not to be taken into account as expenditure.
(i) For the 2004-2005 financial year Mr Pemberton had been paid a bonus of $8,000 and Ms McGovern $4,000 but no bonus payments had been paid for the 2005-2006 financial year.

30 The respondent contended the contracts of employment were partly written, partly oral and partly “implied” (or “inferred”). As to the terms of the contracts on which the appellants relied, the respondent’s position by the end of the hearing at first instance was:
(a) The CSA employees’ condition was not an express or implied term of the contracts of employment of the appellants. In fact a number of their terms and conditions were different from employees of the CSA.
(b) There was a salary schedule for the employees of the respondent which was different from that which applied to the employees of the CSA.
(c) Mr Pemberton and Ms McGovern were placed on levels 3.4 and 5.4 respectively in August-September 2005. There was no entitlement to any “back pay” or any different pay from that which they received from 1 September 2003 to 26 August 2005.
(d) The appellants were not entitled to payment for the period claimed as if they were engaged on levels 5.4 and 3.4 respectively of the CSA employees’ salary scale; which in turn adopted the public service salaries schedule, levels and rates.
(e) There was no written policy of the CSA that applied to involuntary redundancy of its employees. The 2000 Redundancy Document was only a draft.
(f) There was no other contractual entitlement to the redundancy payments claimed. There were no contractual terms that the redundancy entitlements be the same as those applying to either the CSA or public service employees.
(g) The facts did not establish an estoppel which provided a basis for the recovery of the claimed redundancy payments.
(h) It was a term of the contracts of employment that the respondent would pay a bonus if a profit had been made in the previous financial year. The amount of the bonus was discretionary.
(i) There was no profit made in the 2005-2006 financial year and so there was no obligation to pay the appellants a bonus for that financial year.
(j) In determining whether a profit had been made, the management and referral fees paid to the CSA were not to be deducted from expenditure.

31 At first instance the appellants also relied on what had been rule 12(l)(vi) of the CSA rules which provided there was power to appoint people “subject to the same conditions and restrictions as an Officer appointed under the Public Service Act”. The meaning and effect of this rule was an important aspect of the Stacey decision and this is why the parties made additional submissions after my reasons were published. The appellants ultimately submitted that Stacey was irrelevant as they relied on contractual terms and not the rules to support their claim. The respondent relied upon Stacey as deciding that rule 12(l)(vi) was not capable of application and could not provide a basis for the implication of any term into the contracts of employment. Whilst Stacey did not much feature in the arguments on appeal there is an asserted error in how the Commissioner relied on it, which will need to be later considered.

Appellants’ Claim for Underpayment of Salary
32 As just set out, the appellants argued that the CSA employees’ condition was a term of the contracts. In turn it was submitted that CSA employees at all relevant times had the amount of their salary determined by assigning to their position a relevant level under the public service scale of salaries and then paying that amount, together with incremental rises.
33 The appellants contended that from 1 September 2003 to 26 August 2005 Mr Pemberton and Ms McGovern had been employed by the respondent at levels 5.4 and 3.4 respectively under the CSA/public service levels but not paid in accordance with those levels.
34 Although the appellants also relied upon what was asserted to be implications arising from conduct to support this claim, the appellants submitted the key pieces of evidence were:
(a) Evidence that Mr Tan told Mr Pemberton at his interview before his appointment in December 1988 that his terms and conditions would be “the same as CSA employees”; and
(b) A “concession” by Ms Walkington when cross-examined that Ms McGovern was employed under the same terms and conditions as Mr Pemberton, except for the amounts of salary and as a consequence bonus payments.

35 It was generally submitted that the Commissioner failed to properly consider this part of the appellants’ claims and that if she had they would have been allowed.
36 To test the cogency of this argument it is necessary to look with some precision at the evidence and reasons. In my opinion, having regard to the arguments of the parties, the evidence on this issue should be examined within these categories:
(a) The appointment of Mr Pemberton including whether there was one employment contract or two.
(b) The appointment of Ms McGovern.
(c) The course of the appellants’ employment including the tender and withdrawal of Mr Pemberton’s resignations.
(d) The terms and conditions of employment of Mr Pemberton and Ms McGovern including whether there were differences between the employment conditions of employees of the CSA and the respondent.
(e) The salary received by Mr Pemberton and Ms McGovern from time to time.
(f) The basis upon which the salary of Mr Pemberton and Ms McGovern was set – including any linkage to awards or industries.

37 I will describe this evidence and then that which was material to the claims for the bonus payment and underpayment of redundancy. I will then set out a chronology of documents and events which I think will also assist in marshalling the evidence to determine the appeals. With respect to the minutes of Board meetings, I will include the names of relevant attendees as recorded. After that I will summarise the Commissioner’s reasons for decision and then analyse those aspects which were the subject of the Particulars of Appeal.

(a) The appointment of Mr Pemberton including whether there was one employment contract or two
(a)(i) Mr Pemberton
38 In his witness statement Mr Pemberton said he had been involved in insurance at Westpac for the 18 years before he worked for the respondent. Mr Pemberton said he commenced employment with the respondent in December 1988. He said it was meant to be a one-off period of four weeks to help out. His employment followed a telephone call from the then manager Mr John Adams saying the respondent was “having trouble” and needed someone to “come and help”.
39 Mr Pemberton said that one of the directors of the respondent, Mr Mark Smith, asked him to stay on longer than the four weeks. He then continued working for the respondent until he was appointed manager in April 1989. The minutes of the meeting of the Board dated 19 April 1989 said Mr Pemberton “should be offered the position of Manager” until the report of a Mr Graham Knight was received. This was about Mr Knight taking over the running of the respondent. This did not eventuate. A motion that Mr Pemberton be appointed manager was carried.
40 In cross-examination Mr Pemberton was asked about his engagement by the respondent. He agreed that his employment was initially going to be for a period of four weeks. Before his commencement he spoke to Mr Adams and Mr Tan (T117).
41 Mr Pemberton agreed that after the four week period or sometime towards the end of it he was approached by Mr Smith. In the meantime Mr Tan had asked Mr Pemberton to extend the four weeks because things were still not “sorted out” (T118). Mr Pemberton said it was a “longer period and then in the meantime after that, Mark Smith, who was a director that used to drop in quite regularly to see how the agency was running, asked me whether I’d consider staying and taking on the management of the place, which I eventually did” (T118). Mr Pemberton said that Mr Tan then took the issue of his appointment to the Board and it was “approved” in April 1989.
42 Mr Pemberton said he then “got a copy [sic] saying that I’d been appointed manager as from the April board meeting” (T118). He elaborated that he first got a “note” saying he had been appointed and then got a letter of appointment. Although neither Mr Pemberton nor the respondent could find the letter it seemed to be accepted that the letter existed. The terms will be later discussed.
43 Mr Pemberton said he then took over the management of the respondent. Mr Pemberton said there had been no discussion with Mr Smith about the terms and conditions of employment (T118).

(a)(ii) Mr Tan
44 In his witness statement Mr Tan said he engaged Mr Pemberton as an employee of the respondent in December 1988.
45 Mr Tan was also asked both in cross-examination and by the Commissioner about the first period of Mr Pemberton’s employment. In cross-examination Mr Tan agreed with the proposition that Mr Pemberton “initially thought he was only going to be employed for a four-week period” (T77). Mr Tan also said that when the previous manager Mr Adams was not able to return to work, Mr Pemberton was his preferred choice to continue and work as the permanent manager (T78). Mr Tan accepted that it was in April 1989 when Mr Pemberton was appointed as manager and also agreed with the proposition that “after that initial four-week period of employment a decision was made to ask him to continue” (T78). A few questions later Mr Tan agreed that Mr Pemberton was first to be employed for a short period of some four weeks as a “temporary replacement for Mr John Adams” (T78).
46 Under questioning from the Commissioner Mr Tan agreed there was an initial period where Mr Pemberton came to the respondent for four weeks and then a “second period of employment and that’s where [sic] Mr Pemberton commenced a long period of employment with” the respondent. To this, Mr Tan answered “Permanency, yes”. In his next answer Mr Tan elaborated that “when we were made aware that Mr John Adams is [sic] not going to return, then obviously an offer of employment was made to Mr Pemberton for permanent employment” (T91).

(b) The appointment of Ms McGovern
47 In her witness statement Ms McGovern said she was employed by the respondent from 22 July 2002 until 4 July 2006. She was employed as an insurance consultant selling insurance policies and dealing with claims enquiries for members of the CSA. There was no dispute about this. Ms McGovern received a letter of appointment which is later quoted.

(c) The course of the appellants’ employment including the tender and withdrawal of Mr Pemberton’s resignation
(c)(i) Mr Pemberton
48 I have earlier described how Mr Pemberton was first employed by the respondent and his appointment as manager in April 1989.
49 Mr Pemberton said in his witness statement that when the Board did not consider issues of bonus payments or back pay for him or Ms McGovern at its meeting in September 2005 he tendered his resignation and left the meeting. Mr Hewson later tried to persuade him to withdraw it. Mr Pemberton was aware at the time that the respondent’s business was to be transferred or sold to Vero Insurance Pty Ltd (Vero) and thought he and Ms McGovern would be made redundant.
50 Mr Pemberton sent a letter to Mr Hewson dated 5 October 2005 which set out what he wanted for himself and Ms McGovern to withdraw his resignation. The letter listed his “requirements”, to be met by the respondent for the two of them. These were the payment of a bonus or a salary increase, as granted at the August 2005 Board meeting back-dated to August 2004; a guarantee of employment to 1 July 2006; and upon the cessation of their employment payment of pro rata long service leave on the basis of 13 weeks for each seven years of service and a redundancy payment of 12 weeks’ pay plus two weeks for every 12 months of service on a pro rata monthly basis. The letter said that for Mr Pemberton’s resignation to be withdrawn written confirmation of the acceptance of his terms was required by 12 October 2005.
51 Mr Pemberton also said that after a discussion with Mr Hewson, he confirmed his resignation by letter dated 11 October 2005. His last day of employment was to be 25 October 2005. After more discussions with Mr Hewson, which included his assurance that the bonus issue would be “sorted”, Mr Pemberton withdrew his resignation by letter dated 20 October 2005. Mr Pemberton explained that although he got no substantive reply to his letter he remained in the employment of the respondent until the redundancy took effect. Mr Hewson told him that he was trying to resolve the issues raised by Mr Pemberton in this letter but the Board could not agree on how to do so. Mr Hewson drafted letters but the Board could not agree on a reply. Mr Pemberton did however receive a bonus for the 2004-2005 financial year in the amount of $8,000 in January 2006.
52 On 11 April 2006 Mr Pemberton and Ms McGovern were both given letters formally advising of their redundancy from 4 July 2006. The letter contained the terms and conditions of a redundancy package, which will be later set out.

(c)(ii) Ms McGovern
53 Ms McGovern’s letter of appointment dated 4 July 2002 said she was subject to a three month probationary period, after which she would be eligible for permanency and membership of the staff superannuation fund. Ms McGovern said that she completed the probationary period and received confirmation of her permanent appointment. Her probationary report was in evidence and included a recommendation that she be offered permanency.
54 In her witness statement Ms McGovern said that in August 2005 she was informed by Mr Pemberton that the CSA intended to sell or transfer the insurance portfolio to Vero. She also referred to information being received from Mr Hewson at some time after September 2005 that the outcome of the transfer to Vero would be that she and Mr Pemberton would be made redundant.
55 The process of Ms McGovern being made redundant was as described for Mr Pemberton.

(c)(iii) Mr Hewson
56 In his witness statement Mr Hewson described what happened at the Board meeting on 27 September 2005 which led to Mr Pemberton tendering his resignation. After Mr Pemberton left the meeting, a decision was made to pay bonuses to Mr Pemberton and Ms McGovern. The decision was recorded in the minutes.
57 Mr Hewson’s statement also described what happened after 27 September 2005 including his receipt of Mr Pemberton’s letter dated 5 October 2005. Although the Board discussed a reply to Mr Pemberton and Mr Hewson drafted two responses, neither were sent. Mr Hewson said the Board did not finalise a response to Mr Pemberton’s letter nor send a substantive reply to him. I will later describe the evidence of the correspondence between Mr Hewson and Ms Walkington in October 2005 about the terms of the appellants’ employment contracts.

(d) The terms and conditions of employment of Mr Pemberton and Ms McGovern
(d)(i) Mr Pemberton
58 Mr Pemberton in his witness statement said he was engaged by Mr Tan in December 1988. Mr Tan told him at “the interview for the position … that the terms and conditions of my employment will be the same as those applied to CSA employees”.
59 Mr Pemberton said at “all times during my employment I was treated as if I was an employee of the CSA”. He said he was a member of the CSA superannuation fund; received the same entertainment allowance that was paid to CSA employees; and when that allowance was cancelled and became part of their salary, the same applied to him. He also said for most of the time his payslips showed the CSA as his employer. Mr Pemberton said he received a letter of appointment and believed it said his employment conditions were “similar to those of WA public service officers”. He said the letter also summarised some entitlements. As I have mentioned Mr Pemberton could not find the letter. Mr Pemberton said he had the “same leave entitlements, including public service holidays and long service leave after 7 years service as CSA employees and public service officers received”.
60 In his oral evidence in chief Mr Pemberton said that he did not know what the “CSA conditions of employment were during the period” of his employment (T109). He was also not aware of the contents of the “CSA enterprise bargaining agreement”. From the context of the questions, these two references were to the CSA and its employees. Mr Pemberton was shown a document headed Comparison of Conditions of Employment (the Comparison of Conditions Document) which was appended to the minutes of the Board meeting on 21 August 2002. Mr Pemberton said he did not create this document; Ms Brewer did. Mr Pemberton simply presented it to the Board (T110). Mr Pemberton was also shown a document described as MFI 1 which was a comparison of “pay scales” between CSA employees, those of the respondent and the “insurance industry” (the Comparison of Salaries Document). He said he also presented this to the Board at the same meeting (T122).
61 The minutes of the Board meeting on 21 August 2002 recorded that the “manager tabled a comparison table noting the differentials between the [respondent], CSA Union and Industry Award Conditions and Salaries. The manager informed the Board that some CGU staff were paid between 20% and 40% above award rates”. They also recorded the Board agreed the item should “lie on the table” until the next meeting scheduled for 18 September 2002.
62 The Comparison of Conditions Document set out differences between the conditions of the respondent’s and CSA’s employees for sick leave, long service leave and the notice period for resignation or termination. The hours of work, annual leave and bereavement leave were listed as being the same. The insurance industry award conditions were set out in a separate column. In the Comparison of Salaries Document each of the salary levels of the CSA employees were higher than those of the respondent.
63 Mr Pemberton also said he was not aware of the public service conditions of employment (T110). Mr Pemberton said that when he started he was told “we would be similar to the Public Service Award, the same as we advertised for staff … but I was never given any listing of what those actual conditions were other than what was in our letters of appointment saying the terms of long service leave after seven years and sick leave and things like that” (T110).
64 Mr Pemberton said that after October 2005, in the correspondence he had with the Board about his employment, he was not given any indication that his terms and conditions were not those of the CSA employees (T111).
65 In cross-examination Mr Pemberton said that at the meeting with Mr Tan in 1988 he was told the terms and conditions of employment would be the same as those applying to CSA employees. Mr Pemberton agreed with the evidence given by Mr Tan that for the four week period of employment it was not intended that redundancy or long service leave would apply because he was “purely … to be there for four weeks” (T117).
66 Mr Pemberton was shown the Comparison of Conditions Document. He said he was not sure but probably saw it in 2003 (T116). This appears to be an error given the minutes of 21 August 2002. Also Mr Pemberton when later shown the minutes said he assumed he saw the document at that meeting (T122). Mr Pemberton agreed that from the date he saw the document he was aware there were differences in the employment conditions between employees of the CSA and employees of the respondent (T116-117).
67 Mr Pemberton also thought he saw the Comparison of Salaries Document at the same time and that he then saw there were differences in the salaries between the respondent’s employees and those of the CSA (T117, T122).
68 As to his assertion in his statement that he was always treated as if he was an employee of the CSA, Mr Pemberton agreed that:
(a) At all times he reported to the Board of the respondent.
(b) He never reported or approached the Board of the CSA in relation to matters about his employment.
(c) The employees of the respondent were not involved in the CSA employees’ process of enterprise bargaining.
(d) The assertion that he was treated as an employee of the CSA was based upon invitations to their functions, council annual dinners, a shared lunchroom and the supply of tea and biscuits (T127).

(d)(ii) Mr Tan
69 In his witness statement Mr Tan said he informed Mr Pemberton that “his terms and conditions of employment would be the same as those employees of the CSA”. He then said at “the time I engaged Robert Pemberton the employees of the [respondent] were actually employees of the CSA”. Mr Tan clarified that the “staff of the [respondent] were always considered part and parcel of the CSA and were allowed to join the CSA staff superannuation fund”. Mr Tan said he provided Mr Pemberton with a letter of appointment which was in the same terms as those given to new employees of the CSA. He stated the letter said the terms and conditions of employment were “similar to those in the WA public service and it summarised the major conditions”. Annexed to his witness statement was an advertisement which Mr Tan had placed in The West Australian dated 12 April 1997. It said: “Conditions of employment are similar to those which apply in the WA Public Service and include staff superannuation benefits”.
70 Mr Tan said letters of appointment to employees of the respondent and the CSA later removed that comment because the introduction of enterprise bargaining in public service agencies meant there were different terms and conditions of employment for different agencies. He said that the terms and conditions under the CSA Staff Agreements were however still based on the public service conditions of employment. Mr Tan said CSA employees were “classified at levels within the Public Service Salaries Agreement and later the Public Service Award.” He said they received the same leave entitlements as public service officers and the same salary increments. Mr Tan said that when CSA employees were made redundant they received the same redundancy payments that public service officers received. Mr Tan also said the employees of the respondent “were entitled to the same terms and conditions of employment as those persons employed by the CSA”. He then went on to say the respondent’s employees were also entitled to a bonus if the business made a profit.
71 In his oral evidence in chief Mr Tan said that in his experience the Board of the respondent did not discuss the terms and conditions of employment of the respondent’s staff apart from salaries and bonuses “basically because they were paid the same terms and conditions as [sic] CSA [staff]” (T72).
72 In cross-examination it was put to Mr Tan that his statement about Mr Pemberton’s terms and conditions being the same as the CSA was when he employed him in December 1988. Mr Tan agreed but said it “would have been reaffirmed to him that on permanency the conditions would remain the same” (T79). Mr Tan was also shown the letters of employment of two employees of the respondent dated 24 April and 27 August 1997 respectively. Neither had the expression about similarity of conditions to the public service. He explained that this was due to the reason earlier mentioned, that it was removed with the introduction of enterprise bargaining in public service agencies (T81-83).
73 Mr Tan also said the “staff superannuation fund” was managed by National Mutual at the time he spoke of in his statement. He confirmed that those who could join the scheme were CSA staff, the staff of the respondent, the staff of Civil Service Holdings Pty Ltd and Jetwest Travel Pty Ltd (T76).

(d)(iii) Ms McGovern
74 Ms McGovern said in her witness statement that prior to her employment she was interviewed by Mr Pemberton and Ms Brewer. Ms McGovern said that she knew “nothing about how unions work” and assumed she was employed by the CSA and the respondent was a division of it. Ms McGovern said she was a member of the CSA staff superannuation scheme which she was told was only open to CSA staff members.
75 Ms McGovern said at the interview she was told what her salary, hours of work and leave entitlements were to be and that she would be in the CSA staff superannuation fund. She said that Mr Pemberton “also told me about the bonuses and it was an important point in favour of my accepting the position because in my previous job, from which I was about to be made redundant, I had access to a commission scheme that enabled me to earn significantly more than the salary that [the respondent] was offering”. Ms McGovern said Mr Pemberton told her she would get a bonus every year if the business made a profit.
76 Ms McGovern said she received a letter of appointment which was annexed to her statement. The letter was dated 4 July 2002 and said her appointment was effective from 22 July 2002. The presently material paragraphs were as follow:
“The appointment will be at Level 3:1, which is a fortnightly salary of $1,352.87 and $35,287 per annum. The office hours are from 8:30am to 5:00pm, Monday to Friday, with one hour for lunch…

Your conditions of employment include four (4) weeks annual leave, thirteen (13) weeks long service leave after seven (7) years continuous service and ten (10) days cumulative sick leave per annum. Should you wish to terminate your employment, two weeks' notice will be required.”

77 There was nothing in the letter about her conditions being the same as CSA employees or similar to those of the WA public service.
78 In her oral examination in chief Ms McGovern said she did not really know what the terms and conditions of the employees of the CSA were (T134). She also did not know much about the agreements the CSA had had with its staff. Ms McGovern also said she had no real knowledge of the public service conditions of employment during the period she was employed by the respondent (T135).
79 In cross-examination Ms McGovern was asked about some of the differences between her terms of employment and those of the CSA. She acknowledged employees of the CSA got long service leave after five years and “we” were entitled to long service leave after seven years (T135). Ms McGovern also said she assumed the superannuation scheme was only open to CSA staff members because of the name being the CSA Staff Superannuation Fund (T137-138).
80 In her re-examination Ms McGovern was asked to look at her letter of appointment and in particular the mention of level 3.1. She was asked if she knew what it was. Ms McGovern said “Not really, no. I assume it’s either something to do with the Public Service Award or the CSA staff, how they’re paid” (T139).

(d)(iv) Ms Robertson
81 In her witness statement Ms Robertson said it was her understanding that the terms and conditions of employment of the staff of the respondent were the same as those applying to CSA employees. She said the respondent’s employees were considered to be part of the CSA, eligible to join the CSA staff superannuation scheme which was limited to CSA staff, were paid the same salaries and allowances and had the same leave entitlements. She said the same leave application forms were used and all the administrative work relating to employees of the respondent was done by the CSA human resources officer.
82 Ms Robertson said that employees of both the respondent and the CSA received the same annual and long service leave and public holiday entitlements as public service officers, including the public service holidays observed at Easter and Christmas. Also the CSA and the respondent’s employees ceased receiving the public service holidays at Easter and Christmas when public service officers did. Ms Robertson also said that both industrial officer employees of the CSA and “the manager of the respondent” stopped receiving an annual entertainment allowance at the same time in 2003.
83 In her oral evidence in chief Ms Robertson was asked about the terms and conditions of employment of CSA employees. She said they were the “Public Service Award and related documents, and decisions of council, executive and other related committees in the organisation” (T94). A little later she said there was no single place where all of those documents were kept and that the “record-keeping of the union was not very good and a lot of times individual and collective memory was relied on when it came to remembering what had occurred”. She then said she had “no idea” where a CSA employee should go if he/she wanted to know his/her terms and conditions of employment (T95).
84 In cross-examination Ms Robertson was shown the Comparison of Conditions Document and the Comparison of Salaries Document. She said she did not recall seeing them before (T102, 103). Ms Robertson had “no idea” if the former was accurate (T103). She then clarified the notice of resignation “may well have been different” but “aside from that they look pretty much the same”. Ms Robertson did not know if a process of enterprise bargaining was entered into for employees of the respondent (T105).
85 As to the CSA staff superannuation fund, Ms Robertson accepted this was open to employees of the CSA, the respondent and “Civil Service Holdings” (T105).

(d)(v) Ms Walkington
86 In the oral evidence in chief of Ms Walkington, the PAYG payment summaries of Mr Pemberton and Ms McGovern were tendered. They showed the respondent as their employer (T23).
87 Ms Walkington said the claim that employees of the respondent were employed on the same terms and conditions as CSA employees was not correct. Ms Walkington was shown the minutes of the Board meeting held on 21 August 2002 when it was said that the manager (Mr Pemberton) tabled the Comparison of Conditions Document and the Comparison of Salaries Document (T20).
88 Ms Walkington accepted that employees of the CSA conducted the human resources for the respondent “under a service agreement” (T22). She said the respondent paid a fee to the CSA for these services. The current rate was $36,000 per year. Ms Walkington said the service arrangement had been in place since at least 1992. This comment was supported by the minutes of the meeting of the Board dated 24 July 1992.
89 Ms Walkington said the CSA staff superannuation fund was open to people who were employed by the respondent and also those employed by Civil Service Holdings Pty Ltd that operated a travel agency (T23).
90 Ms Walkington also gave evidence about the collective bargaining agreements reached between the CSA and its employees. The agreements for 1998, 1999, 2003 and 2006 were received as an exhibit. In the 1998 agreement, under the heading “Scope of Agreement”, it was said to not apply to employees of the respondent or Civil Service Holdings Pty Ltd (T24).
91 Ms Walkington was asked to provide examples of the difference in the conditions of employment of employees of the CSA and respondent. Ms Walkington said the employees of the CSA had three days extra paid leave per year, between Christmas and New Year; parental leave provisions were different; the union had personal leave and part-time employment arrangements were different. Overall the CSA employees had more advantageous terms and conditions than those of the respondent (T24).
92 Ms Walkington was asked about the letter Mr Pemberton wrote to Mr Hewson dated 5 October 2005. Ms Walkington said that her belief was that the letter contained a desire to improve the terms and conditions of Mr Pemberton’s employment rather than reflect what they then were (T28).
93 On 10 October 2005 Ms Walkington received an email from Mr Hewson which was also sent to Mr Spray, another Board member. The email attached a copy of a draft response to Mr Pemberton’s letter dated 5 October 2005. The email referred to the four topics covered by Mr Pemberton’s letter. The email expressed the opinion that the Board had been “generous in our attempts to rectify past wrongs in relation to the pay adjustment not granted in August 2004”. The email referred to discussions Mr Hewson had with Ms Brewer and information received from her that “salaries paid in September 2003 were based upon insurance industry awards, which didn’t increase to the same degree as the Public Service Schedule”. The email said the long service leave and redundancy issues (presumably in the draft) “were written after long consultations with [Ms Brewer]. The details are in accordance with CPSU/CSA Policies and Procedures … The redundancy information is taken directly from the Voluntary Redundancy Provisions Policy endorsed by Council Motion C237/92 on 12 November 1992, which is current” (The 1992 Redundancy Document). The email requested comments, criticisms or suggestions.
94 Ms Walkington replied by email dated 11 October 2005. Ms Walkington said she could not review the draft until the following week. She said that in the meantime there were several aspects that needed further consideration. Ms Walkington questioned why “the union staff agreement and employment arrangements” were being used as though they applied to the staff of the respondent. Ms Walkington went on to say that in her view it was not appropriate to link the respondent’s staff arrangements to those of the CSA staff nor to the public service. Ms Walkington said, for example “do CSA employees or public servants receive a bonus payment at the end of each financial year? This condition, that [Mr Pemberton] considers an entitlement, is one practiced in the insurance industry. I do not agree that policies adopted by the council concerning their own staff should be applied to” the respondent’s staff.
95 Mr Hewson sent an email in reply to Ms Walkington and Mr Spray on 20 October 2005. The email said Mr Hewson had searched the archives back to 1989 and confirmed the practice of “using union staff agreements and employment arrangements is historical”. Mr Hewson said this applied to all aspects except two which were annual bonuses which were insurance industry-related and had no relationship to “union agreements” and the absence of any reference to redundancy/severance terms and conditions. The email said that with respect to “appointment levels, hours of work, annual leave, long service leave, sick leave and superannuation, [the respondent’s] staff conditions of employment paralleled those of the Union Staff Agreement”. Mr Hewson then referred to Ms McGovern’s letter of appointment which was signed by Ms Walkington. Mr Hewson said he could not find anything relating to formal redundancy arrangements for the respondent’s staff. Mr Hewson said therefore it was logical to use the Insurance Industry Award 1998 conditions which allowed for accrued and pro rata annual leave and seven weeks’ severance pay for Ms McGovern and eight weeks for Mr Pemberton. The email concluded with information and the opinions of Mr Hewson about the future of the respondent and the employment of Mr Pemberton and Ms McGovern until July 2006.
96 Ms Walkington replied by email on the same date. Ms Walkington said she wanted to view a copy of the letter of appointment of Ms McGovern. Ms Walkington questioned whether the respondent’s staff conditions paralleled those of the CSA Staff Agreements. Ms Walkington said rhetorically that if it did then the respondent’s staff would be entitled to nine weeks’ long service leave following five years of service and a Christmas shut down arrangement whereby they do not attend work between Christmas and New Year and be paid for those days. In the same vein Ms Walkington questioned whether Ms McGovern had received higher duties allowance payments during Mr Pemberton’s absences. Ms Walkington concurred that any redundancy payment should be based on the industry award. Ms Walkington suggested she “view” the draft reply to Mr Pemberton and also one to Ms McGovern. Ms Walkington then set out her concerns about Mr Pemberton continuing to work for the respondent given his conduct over the last few weeks. Ms Walkington said the Board also needed to determine if it accepted or rejected the bonus claims from Mr Pemberton and Ms McGovern.
97 Mr Hewson sent an email to Ms Walkington and Mr Spray dated 2 November 2005 but this did not discuss the way in which Mr Pemberton’s letter should be replied to. There was no other correspondence in evidence about that issue. The email made reference to the bonus to be paid to Mr Pemberton and Ms McGovern. This is later described.
98 In cross-examination Ms Walkington was asked about the 2003 CSA Staff Enterprise Bargaining Agreement. She agreed the agreement provided that the salaries of CSA staff were the same as those in the Public Service General Agreement (T36).
99 Ms Walkington was also asked if there were any agreed changes to the conditions of employment of Mr Pemberton. She said there were changes in “salary …, bonuses and car”. Ms Walkington agreed that the respondent could not unilaterally determine the terms of employment but said Mr Pemberton as manager was at the Board meetings where these things were discussed. Letters were then sent to him to confirm the position. As Mr Pemberton did not report back any problems, acceptance could be “assumed” (T39). She later said there was no agreement to reduce the terms and conditions of Mr Pemberton’s employment (T45).
100 Ms Walkington was also asked whether there was “anything to indicate that Ms McGovern was engaged on any different terms and conditions than Mr Pemberton, other than salary”. Ms Walkington said the rate of the bonus was also different but did not think she was engaged under any different terms and conditions (T40). This was what the appellants relied on as the “concession” by Ms Walkington, which I mentioned earlier.
101 Ms Walkington also reiterated under cross-examination that the respondent’s employees did not have the same long service leave entitlements and were often not paid at the same classification levels as CSA employees (T40). She also disagreed with the proposition that until October 2003 Mr Pemberton and Ms McGovern were treated the same as employees of the CSA except for the bonus. She said the CSA employees had different terms and conditions, different salaries, work practices and policies that applied to them and the work that they did was different (T41).
102 Ms Walkington accepted that although the 2003 CSA Staff Agreement said the conditions of service should be read in conjunction with the conditions contained in a range of documents, resolutions and decisions of council, no attempt had been made to search for or itemise all of these (T57).
103 Ms Walkington specifically rejected the proposition that the respondent and the CSA employees both shared the same pay classification levels (T50). When asked about the reference in Ms McGovern’s letter of appointment to level 3.1, Ms Walkington said it was “in terms of the classifications of what the [respondent’s employees] are employed under” (T50). Ms Walkington said there was a CSA employees’ salary schedule which was different from that of the respondent’s employees. She identified a document setting out the latter, which was held up to her by the appellants’ agent (T50, 62).
104 In re-examination Ms Walkington was shown the document. It had been attached to a report by Mr Pemberton for the Board meeting on 19 June 2002. The document was headed “State Wage Case – 1997: Annual Salaries Applicable to Schedule A Salaries” and it contained a note which was “Safety Net Adjustment commencing on 1 August 2001”. Ms Walkington said this was prepared by Ms Brewer for the respondent’s employees and those of Civil Service Holdings Pty Ltd. The document was exhibit “Pemberton 3”. The CSA’s employees had a different scale with different salary rates (T62).

(d)(vi) Mr Hewson
105 In his witness statement Mr Hewson said that Civil Service Holdings Pty Ltd was a controlling company for the respondent, “Union Financial Services” and “Jetwest”. Mr Hewson also described the transition of the respondent’s insurance underwriting from CGU to Vero.
106 In his oral examination in chief Mr Hewson said he did not think it was correct that employees of the respondent were employed on the same terms and conditions as those of the CSA (T141). He said the differences were that the CSA staff had enterprise bargaining agreements; there were differences in long service leave and sick leave; and CSA employees were entitled to leave at the “Christmas close-down”.
107 In cross-examination Mr Hewson seemed to agree that the conditions of CSA employees included those in documents, resolutions and decisions of council. He “assumed” the human resources department held them but did not “know definitely” (T147).

(d)(vii) Ms Brewer
108 Ms Brewer said in her witness statement that neither the staff of the CSA nor the respondent were regarded as public servants and their conditions of employment were not in accordance with the public sector terms and conditions. She explained that the terms and conditions of employment of the CSA staff were embodied in enterprise bargaining agreements from 1998. Ms Brewer said these agreements had never applied to the respondent’s employees. Ms Brewer said that in her experience the conditions of employment of the respondent’s staff had been formulated as a mixture of conditions applicable to CSA staff and the insurance industry.
109 Annexed to Ms Brewer’s witness statement was the Comparison of Conditions Document and the Comparison of Salaries Document, which I described earlier.
110 In cross-examination Ms Brewer did not accept the evidence of Ms Robertson and Mr Tan that employees of the respondent were paid the same as CSA employees up to 2003 (T169).

(e) The Salary of Mr Pemberton and Ms McGovern from time to time
(e)(i) Mr Pemberton
111 The evidence about the salary of Mr Pemberton was a little disjointed. The basis upon which Mr Pemberton was paid is later set out, including the “level” under which he was first engaged. As also then described is a Board meeting on 17 August 1994 when his salary was moved from level 5.1 to 5.4, although it is not there set out what levels were being referred to and what the different salaries were.
112 At a meeting of the Board on 20 August 2003 it was decided to increase Mr Pemberton’s salary to $53,500. The minutes of the meeting are described later. The salary increase included an allowance Mr Pemberton had previously been paid. Mr Pemberton was informed of the new salary and the absorption into it of the allowance in a letter dated 10 September 2003. This said that the Board had approved an increase in his salary from “$49,967.26 (including allowance)” to $53,500 (allowance $2660 absorbed)…”.
113 The evidence of the next salary review by the Board was at a meeting on 18 August 2005 when it was decided to align Mr Pemberton’s salary to public service level 5.4, a salary of $61,664. Mr Pemberton received a letter dated 22 September 2005 informing him of this change. The letter was in similar terms to that which Ms McGovern received, which is later described. It was the period between these two salary increases that the appellants argued they were underpaid.

(e)(ii) Ms McGovern
114 I have earlier quoted Ms McGovern’s letter of appointment dated 4 July 2002 which set out her salary upon commencement.
115 In cross-examination, Ms McGovern agreed she received regular salary increases except for in the period between 2004 and 2005. She said she had been expecting a pay increase because there was a review each year after she started and Mr Pemberton had “gone to the Board for a pay review” (T138).
116 In her witness statement Ms McGovern said that after her first year of employment she received a bonus and salary increase. She received a further increase in September 2003 because she had taken on more supervisory responsibilities. Attached to her statement was a letter dated 10 September 2003, signed by Ms Robertson as “chairperson”, which so informed her. The letter said the directors of the respondent had approved an “increase in your annual salary from $35,287 to $43,090 effective from 1 September 2003”. The letter then referred to her increase in responsibilities. This had been decided at a meeting of the Board on 20 August 2003, the minutes of which are described later.
117 Ms McGovern elaborated that in or about August 2004 she received a $4,000 bonus for the 2003-2004 financial year but no pay rise. She did not receive another pay rise until August 2005, operative from 26 August 2005. There was no “back pay” for the 2004-2005 year. Ms McGovern said she thought she was entitled to “back pay” because she did not “get a pay review for 2004-2005”. It was put off because there were “no Board meetings for a long period of time” (T138). Ms McGovern said that she had been informed of this by Mr Pemberton.
118 Ms McGovern was informed about the 26 August 2005 salary increase by a letter dated 22 September 2005 from Mr Hewson, as “chairperson” of the Board. The letter described a salary review and resolution of the Board at its meeting on 18 August 2005. The letter said the Board “agreed to link your salary to the existing Public Service Schedule 1”. The letter said that in accordance with this schedule, approval had “been given to adjust your salary to public service level 3:4, being $48,362 per annum, effective from the next pay period (Friday, 26 August 2005)”.

(f) The basis upon which the pay of Mr Pemberton and Ms McGovern was set – including any linkage to awards or industries
(f)(i) Mr Pemberton
119 In his oral examination in chief Mr Pemberton was shown the minutes of a meeting of the Board dated 17 August 1994. His attention was drawn to item 6.1 where it was recorded that Mr Pemberton’s “salary be increased” from level 5.1 to level 5.4. Mr Pemberton said that, after that change, his level did not change up until the time he ceased employment (T112). He did say later however (in cross-examination) that he received safety net increases and “stuff that had come through in the meantime” (T121).
120 In cross-examination Mr Pemberton said that when he started his employment, he thought that he and other staff were paid at a level 2 (T119). He said they were “paid on the level of the public service”. The other employees were given “yearly increment increases” from a level 2.1 to a level 2.2. The rates of pay were given to Mr Pemberton by the human resources officer. He did not have any schedules himself (T119).
121 Mr Pemberton agreed that later he approached the Board and said the salaries of the respondent’s employees needed to be compared with the insurance industry, however salaries were “only ever adjusted to the public service rates” (T120).
122 Mr Pemberton was redirected to the minutes of the Board meeting on 17 August 1994. They recorded Mr Pemberton reiterating he would like some flexibility in negotiating salary rates. A motion was carried that the Board supported market rate adjustability for new or existing staff. Mr Pemberton agreed he had approached the Board requesting scope to make salaries more attractive and to “go up a level” to attract the right staff. Mr Pemberton said the Board looked at comparisons to the insurance industry and “brought the levels of the Public Service Award up to somewhere near that” (T120).
123 Mr Pemberton agreed that when Ms McGovern was employed in 2002, the Board determined salary by looking at what the position would pay in the insurance industry and then looking at the “scale to what level had a salary close to that range” (T121).
124 This seems to have been addressed at the meeting of the Board on 19 June 2002. In the minutes, under the heading “Staff Replacement”, it was recorded that Mr Pemberton recommended that “the position of two staff members be increased from a Level 2 to a Level 2/3 at a salary level of $35,287”. It was then resolved that the respondent offer “the equivalent salary” of that amount to an existing employee “and a Contract of Employment” to a new proposed employee.
125 The Comparison of Salaries Document tabled at the Board meeting on 21 August 2002 contained a salary schedule for the respondent as at 1 August 2001, the “CSA union salary schedule as at 1 March 2002”, and the Insurance Industry Award varied as at September 2001. The respondent’s salary schedule and the CSA salary schedule set out the salaries for level 2 years 1-5 and level 3 years 1-4. As mentioned earlier each of these salaries of the CSA’s employees was higher than those of the respondent.
126 Mr Pemberton accepted that at a Board meeting on 20 August 2003, which he attended, it was agreed that the “salary of staff should be linked to the relevant industry award” (T123). Mr Pemberton also accepted that the intent of the Board was to get salaries close to what was being paid in the insurance industry (T124).
127 The minutes of that meeting record as item 5.1 “CSA Staffing”. Under this heading was set out advice given to the Board by Mr Pemberton. This included that Ms McGovern’s position be upgraded to a “Supervisory” position. Also recorded was Mr Pemberton’s concern about retaining staff given the salary levels. The minutes recorded that there was discussion and then agreement by the Board that “the salary of staff should be linked to the relevant industry award”. The minutes then set out the Board’s decision about the position and salary of Ms McGovern. The “current package” of Mr Pemberton was then discussed. The Board decided the “base salary” of the manager and supervisor should reflect their different responsibilities. Therefore it was resolved to increase Mr Pemberton’s salary to $53,500. It was argued that this would include the existing manager’s allowance, which would no longer be paid.
128 Mr Pemberton was asked whether or not he could confirm he was paid the Public Service Award rates for what was called level 5.4. He answered that the award rate was that of the public service (T125).
129 Mr Pemberton was asked about his report to the Board dated 21 July 2005 and the minutes of the Board meeting of the same date. He accepted that the position he put to the Board was that the respondent’s employees’ salary rates needed to be adjusted because of the present insurance industry salary rates (T125-126). Mr Pemberton also acknowledged that in August 2004 the Board agreed to review his salary as opposed to deciding to increase it (T129).
130 Under questioning by the Commissioner, Mr Pemberton said despite that the resolution by the Board to set salaries by reference to move to the relevant industry award, it did not occur; they “stayed on the public service award levels” (T132).
131 In his re-examination Mr Pemberton agreed that there was nothing in the minutes of the Board meeting dated 20 August 2003 that indicated there was a point in the Insurance Industry Award close to $53,500, which was what it was resolved to pay him (T132).

(f)(ii) Mr Tan
132 Mr Tan gave evidence in cross-examination to the effect that by 1994 a position had been reached whereby the respondent was looking to attract employees with insurance experience and therefore had to be competitive within the insurance industry for salaries and conditions (T85). Mr Tan was referred to the minutes of the Board meeting held on 17 August 1994. Mr Tan accepted that the process of determining a scale was first based upon assessment of an appropriate salary (T88).
133 In re-examination Mr Tan said that this was not always the case (T90).

(f)(iii) Ms McGovern
134 The relevant evidence of Ms McGovern on this topic is described in (e)(ii) above at [114]-[118].

(f)(iv) Ms Robertson
135 In her witness statement Ms Robertson said employees of the CSA and the respondent “were classified in accordance with and paid the salaries and allowances provided for in the Public Service Salaries Agreement 1985 and later the Public Service Award 1992”.
136 In cross-examination Ms Robertson was asked whether the salaries of Mr Pemberton and other employees of the respondent were determined by reference to what the competitive rate was in the insurance industry. Ms Robertson did not accept this. She said that in deciding “classifications” for the positions in the respondent it looked at “similar job descriptions in the public service” (T99). She clarified that during the late 1990s or early 2000 years there was difficulty in attracting staff to work for the respondent and consideration was given to whether “we weren’t paying enough and we looked at the finance industry, to have a look to see whether or not that would offer us a better way of attracting people …”. Ms Robertson said this was dismissed as it was decided there would be no benefit (T99).
137 Ms Robertson also agreed when shown the minutes of the Board meeting on 19 June 2002 that in setting the salary of an employee, reference was had to what the insurance industry was paying (T102). As set out earlier Ms Robertson was also shown the Comparison of Conditions Document and it was pointed out by counsel that some of the conditions of employees of the CSA and respondent were said to be different. Ms Robertson could not say whether the document was accurate or not (T102-103). Ms Robertson was also unable to comment upon the Comparison of Salaries Document (T103). Ms Robertson said she did not know if there was a difference between the scale of salaries for the CSA’s and the respondent’s employees (T104). Ms Robertson said she did not know whether the enterprise bargaining process which occurred between the CSA and its employees also occurred between the respondent and its employees (T105).
138 Ms Robertson said that during the time she was on the Board, when it considered the amount of salary to pay to its employees it “looked to the insurance industry to get an indication of what salary would be required to attract persons … We did not set the salaries in accordance with what was being paid in the industry. We used them as a guide to consider the salaries that we were offering within the classifications that were being used” by the respondent (T106).
139 In re-examination Ms Robertson repeated she was “unaware that there were different salary scales for CSA” and the respondent (T106).

(f)(v) Ms Walkington
140 In her witness statement Ms Walkington traced through Board decisions and discussions about the salary of the respondent’s employees. By reference to the minutes of the Board meeting on 5 August 2004 Ms Walkington said the Board resolved that Mr Pemberton provide a recruitment plan for staffing for the next meeting. Ms Walkington then referred to the staff recruitment plan which Mr Pemberton tabled to the Board at its meeting on 16 September 2004. It was decided the recruitment plan lie on the table “until the operational problems associated with CGU are reconciled”. It was also resolved that “a review of staff salaries and bonus scheme be undertaken in the near future”.
141 Ms Walkington said in the period that followed, the Board deliberated on several occasions about the award conditions which were applicable to the respondent’s employees. Ms Walkington said her view was they should have their salaries aligned with market rates within the insurance industry rather than the public service schedule. Ms Walkington said despite requests being made of Mr Pemberton and her executive officer at the CSA, she was not provided with the market rates for the insurance industry.
142 Ms Walkington said Mr Pemberton presented a report to the Board on 21 July 2005 which submitted salaries should be adjusted because they were uncompetitive within the insurance industry. Ms Walkington said the Board “accepted a Public Service Award” at the meeting for information purposes to assist with their consideration of Mr Pemberton’s submissions. Ms Walkington said that at “no time between my appointment to the Board and 21 July 2005 had the Board previously considered [the respondent’s employees’] salaries with reference to the Public Service Schedule”.
143 Ms Walkington said that at its meeting on 18 August 2005 the Board decided to align the salaries payable to Mr Pemberton and Ms McGovern to those in the Public Service Schedule with a view to making them more competitive. Ms Walkington said this was in direct response to Mr Pemberton’s submission. Accordingly, the Board passed resolutions to link Ms McGovern’s salary to public service schedule 1, level 3.4; and Mr Pemberton’s to public service schedule 1, level 5.4.
144 In summary, Ms Walkington in her witness statement said Mr Pemberton’s salary was not, until 21 July 2005, based upon the public sector scale. Ms Walkington said it was “aligned to the Insurance Industry Award or … market rates in the insurance industry at the time” (T29). Ms Walkington said that later Mr Pemberton’s salary was aligned to the public service because “a pay increase was requested” and there was no evidence provided about what was happening in the insurance industry at the time or the market rates. She also said “I think it was just ease of reference”.

(f)(vi) Mr Hewson
145 In his witness statement, in context of describing the circumstances leading up to the redundancy of Mr Pemberton and Ms McGovern, Mr Hewson referred to Mr Pemberton’s report dated 21 July 2005 which in turn referred to a report tabled at a meeting of the Board on 5 August 2004. That report argued that the salaries paid to the respondent’s staff were not competitive and should be reconsidered. Mr Hewson said Mr Pemberton orally informed the Board that salaries should be in line with the “Public Service Schedule”. Mr Hewson said that the minutes of the meeting held on 21 July 2005 reflected that the public service schedule was accepted for information purposes to assist in the consideration of the salary review. The Board did not pass any resolution about salaries at the meeting; this occurred at the meeting on 18 August 2005.
146 In his oral examination in chief Mr Hewson said that when he reviewed the salaries of Mr Pemberton and Ms McGovern in late 2005 he found it difficult to ascertain “under what circumstances the two staff members were being paid” (T146). He also found it difficult to find any written conditions of employment.

(f)(vii) Ms Brewer
147 In her witness statement Ms Brewer said that although CSA staff salaries had been determined with reference to the public sector salary schedule, the respondent’s staff salaries were determined by the Board upon employment. Ms Brewer said there was a separate salary scale for CSA employees to those of the respondent. Attached to her statement was a copy of the salary schedules of the respondent as at 4 July 2002 when Ms McGovern was appointed. (This was the same document identified by Ms Walkington and noted above as exhibit Pemberton 3).
148 In her oral evidence in chief Ms Brewer said that both the CSA and the respondent’s salary scales were similar in design because they were both based on public sector levels for the job. Ms Brewer also elaborated that a level 3, 1st year salary for an employee of the respondent was less than an employee of the CSA. The CSA scale would provide the higher salary (T163).
149 In cross-examination Ms Brewer said she prepared the Comparison of Conditions Document when asked to do so by Ms Robertson. She thought it has been prepared around 2000 or 2001 (T169).
150 There was no relevant re-examination.

Evidence on Bonus Entitlement
(a) Mr Tan
151 In his witness statement Mr Tan said employees of the respondent were entitled to bonuses if the business made a profit. He said the amount of the bonus depended upon how profitable the business was in the financial year. Annexed to his statement were the minutes of the Board meeting held on 29 July 1987. This referred to the Company Secretary at the time having presented a bonus proposal for the staff to “allow them to participate according to the nett surplus of the operation and therefore benefit from their own endeavours”. Three staff members were listed with a percentage of “nett surplus” to be paid to them as their bonus. It was resolved the proposal be accepted.
152 In his oral evidence in chief Mr Tan described the way in which the profit of the respondent was calculated for the purpose of the bonus. Mr Tan said that not all expenses were included “because there are certain items of expense that are considered to be beyond the control of the manager and it’s not fair to actually include those items …” (T72). He explained that this involved deducting management fees and referral fees which were paid to the CSA (T73).
153 In cross-examination Mr Tan accepted that the management and referral fees were paid from the respondent to the CSA in the same way as other payments, like those for power bills, utilities and rent. He was also asked about but did not really accept that other payments such as the salary of Mr Pemberton was also outside his control but was an expense that would have been taken into account in assessing whether there was a profit (T74).

(b) Mr Pemberton
154 In his witness statement Mr Pemberton said that he was paid a bonus each year. He said he would make a recommendation to the directors each year about the amount of the bonus that should be paid. It was his understanding he had an entitlement to a bonus if the respondent made a profit. He said the amount of the bonus was based upon the profit which was made. He also said the bonuses paid were never less than that which had been paid in the previous year.
155 The evidence about the bonuses which were paid was not complete. Minutes of the meeting of the Board on 24 July 1992 recorded that Mr Pemberton was to be paid a bonus of $5,000 “based on gross operating profit of $119,025” for the 1991-1992 financial year. The minutes of the meeting of the Board on 17 August 1994 referred to Mr Tan reporting that bonuses had not been paid for 1992-1994. It was then resolved that Mr Pemberton be paid a bonus of $10,000 for this two-year period. (The minutes were tendered by the respondent. Mr Pemberton gave no specific evidence about these bonus payments).
156 The minutes of the Board meeting on 21 August 2002 recorded that Mr Pemberton be paid a bonus of $7,000 as superannuation. Mr Pemberton in his witness statement said that in 2003-2004 the bonus was $8,000. The minutes of the Board meeting dated 16 September 2004 record a decision to pay this bonus to Mr Pemberton and $4,000 to Ms McGovern. The minutes of the Board meeting on 21 July 2005 record that it received “business cases relating to the review of staff salaries and the payment of annual bonuses for the 2004/05 fiscal year”. It was decided bonuses would be paid upon the successful resolution “of the future” of the respondent.
157 Mr Pemberton said that at a meeting of the Board in August 2005 it was decided to defer consideration of the bonus. Mr Pemberton left the Board meeting on 27 September 2005 partly in response to the non-payment of the bonus. The minutes record, presumably after Mr Pemberton left the meeting, that it was agreed to pay him a bonus of $8,000 for the 2004-2005 year and $4,000 to Ms McGovern. It was also agreed that if Mr Pemberton resigned the bonus would not be paid to him. As it turned out both he and Ms McGovern were paid the bonuses but not until January 2006.
158 No bonus was received for the 2005-2006 financial year. The appellants’ entitlement to the bonus for that year was in dispute at the hearing.
159 In his oral evidence in chief Mr Pemberton said that from when he commenced employment, bonus payments were to be paid on the actual profit of the year less management fees and referral fees added in as profit (T108).
160 There was some cross-examination about the bonus claim but none that is sufficiently relevant to note (T129).

(c) Ms McGovern
161 As I have said earlier, in her witness statement Ms McGovern said Mr Pemberton told her about bonuses and it was an important point in favour of her accepting the job. Mr Pemberton said she would get a bonus every year if the business made a profit. To the best of her recollection he had said that over the previous few years there was a $2,000 or $3,000 bonus each year. Ms McGovern said she received a $4,000 bonus for the 2003-2004 financial year. She received the same bonus for the 2004-2005 financial year but not until January 2006.
162 She did not receive any bonus for the 2005-2006 financial year.
163 The issue was not elaborated on in her oral examination in chief.
164 In cross-examination Ms McGovern said that during the interview Mr Pemberton told her she would get a bonus at the end of the financial year if the respondent had made a profit (T137). He also said the amount varied.
165 There was no relevant re-examination.

(d) Ms Robertson
166 In her witness statement Ms Robertson said that whilst she was a director of the respondent, the staff received a bonus if the business made a profit in any year. She said she was not aware of when or where this first began but a bonus was awarded annually by the Board and the Board usually took the advice of the manager as to how much the bonus should be.
167 In her oral evidence in chief Ms Robertson was shown the detailed income statement for the respondent for the year ending 30 June 2006. She said that the year-ended statement would have been what was used to determine the bonus “but not all of the figures here as expenditure would have been included” (T96). She mentioned the management service fee, office accommodation, meeting costs and “anything that was not an expense that was incurred in achieving a profit in the organisation, because the management service fee was not something that staff had any discretion over” (T96). Referral fees were not included either (T97).
168 In cross-examination Ms Robertson said that she was not able to remember the specifics of what was taken into account in assessing profits. She said however that day-to-day expenses going out of the business and over which the people running the business had control were taken into account in determining profit (T97). Ms Robertson said the commencement of the practice of not taking into account some expenditure when assessing the performance of the staff pre-dated her time on the Board (T97). Her time on the Board commenced in mid to late 1994. Ms Robertson accepted that in her statement she simply referred to a “business profit” and that a business profit would not be a correct characterisation of what she had described (T98). She said that her statement was based upon her “historical knowledge of what had taken place in the business” (T98). Ms Robertson said she did not recall any occasion during her time on the Board when the respondent would not have made a profit if all of the expenditure was taken into account (T98). There was cross-examination about the bonus issue but none which is relevant to note (T100, 102 and 105).
169 There was no relevant re-examination.

(e) Ms Walkington
170 In her witness statement Ms Walkington said that Mr Pemberton would at various times approach the Board to initiate bonus payments. There was no accepted practice that the Board would consider bonuses at regular intervals. Mr Pemberton’s practice was to approach the Board for bonus payments when he presented the end of financial year report. In the event that Mr Pemberton did seek a bonus payment the Board considered it on a case-by-case basis. Ms Walkington said the Board would give consideration to such matters as business and personal performance in assessing Mr Pemberton’s proposals. Ms Walkington said she “did not consider that bonus payment [sic] were an entitlement, and such payments were only ever considered upon initiation by Mr Pemberton”.
171 In her oral evidence in chief Ms Walkington was taken to a copy of the annual reports of the respondent for the years ending 30 June 1999, 2001, 2003, 2005 and 2006. Ms Walkington confirmed that the income of the respondent from its “insurance agency” was $431,498 in 2005 and $298,921 in 2006. Ms Walkington explained the reasons for this reduction. Ms Walkington also said that in 2006 the respondent made a loss of $77-78,000 (T28).
172 In cross-examination Ms Walkington was asked about that part of her statement where she said in effect that the payment of the bonus to Mr Pemberton and Ms McGovern was at the discretion of the Board (T51). On being pressed, Ms Walkington agreed that the practice was that if there was a profit, a bonus would be paid; it was the amount of the bonus which was discretionary. Ms Walkington accepted the proposition of the appellants’ agent that the Board did not “reserve the right to be capricious, in that it can decide, well we don’t want to pay a bonus this year” (T52). Ms Walkington was then cross-examined about the income statement and notes to the 2005-2006 financial report. Ms Walkington confirmed that a factor in considering any recommendation made by Mr Pemberton for a bonus was the profitability of the business and performances (T54). Ms Walkington was asked what figure was used in considering the profitability of the business. She said that they looked at “whether we had a bottom line profit surplus …” (T55). She clarified that this was the “operating profit or loss before income tax” (T55). The following questions and answers took place at T55-56. I set them out in full because there is some ambiguity about the questions and the answers:
“When you came to consider the annual report after Mr Pemberton ceased his employment, that didn't come into consideration. That wasn't written back in determining whether or not a profit had been made?---That's correct.

You didn't consider it?---We looked at that and we also looked at what the overall profit and loss was, as we do all the time - on every other occasion.”

173 There was no relevant re-examination.

(f) Mr Hewson
174 The evidence in chief of Mr Hewson differed from the position which was taken by the respondent by the end of the hearing. At that time the respondent conceded it would pay a bonus to Mr Pemberton and Ms McGovern if a profit had been made in a financial year; but the amount was discretionary.
175 In his witness statement Mr Hewson said it was not a term or condition of the employment of either Ms McGovern or Mr Pemberton that they be paid a yearly bonus. It was initiated on a yearly basis by a report from Mr Pemberton requesting the Board consider the payment of the bonus. The Board would then determine whether a bonus should be paid. In doing so, matters to be considered included the performance of the employee; profits for the previous year; and the estimated trading pattern for the following year. The Board also considered the amount of the bonus. Mr Hewson said it was entirely at the discretion of the Board.
176 In his oral evidence in chief Mr Hewson said although he only joined the Board in 2005, “historically” around August-September every year, the manager of the respondent approached the Board about a bonus and it was “a matter of whether or not the agency had made a profit for the preceding 12 months, the financial year” (T141). He said that this was done with “the accountancy, profit and loss; balance sheets; normal business accounting practices” (T141). Mr Hewson later said that the bonus “was one of those considerations that the Board gave depending on the preceding 12 months performance from the staff”.
177 In an email from Mr Hewson to Ms Walkington and Mr Spray dated 2 November 2005 Mr Hewson advised that at the meeting of the Board on 27 September 2005 it was resolved that payments of $8,000 for Mr Pemberton and $4,000 for Ms McGovern be paid as bonus payments for the 2004-2005 financial year. The email also said a motion was passed preventing Mr Pemberton from receiving the bonus payment if he followed through with his resignation; but as he had withdrawn his resignation on 20 October 2005 he remained eligible for the payment.
178 When cross-examined Mr Hewson agreed the consideration of the payment of the bonus was an “obligation” but not the amount (T149).
179 There was no relevant re-examination.

(g) Ms Brewer
180 In her witness statement Ms Brewer said she had never been involved in the bonus payments made to the staff of the respondent and had no knowledge of the amount or timing of the bonuses.
181 Ms Brewer gave no oral examination in chief and was not cross-examined on this topic.

Redundancy Entitlement
(a) Mr Tan
182 In his witness statement Mr Tan said that employees of the respondent were entitled to the same terms and conditions of employment as those employed by the CSA. He said that when they were made redundant they received the same redundancy payments that public service officers received. He said that he and others were made redundant from the CSA in 1998. He received as redundancy payments the same payments public service officers received at that time, which was two weeks’ pay for each year of service. A letter confirming Mr Tan’s redundancy dated 18 March 1998 was sent to him by Mr Robinson as General Secretary of the CPSU/CSA. The letter said Mr Tan was “eligible for redundancy in accordance with the Union’s Redundancy Provisions”. The letter did not set out what they were.
183 In his oral evidence in chief Mr Tan confirmed that his redundancy was involuntary in that he was not given an option as to whether to take redundancy or not (T72).
184 Mr Tan said he received the redundancy benefits of the payment of two weeks’ salary for every year service plus “12 weeks leave [sic] of notice”, plus whatever pro rata annual leave and long service he was entitled to (T72). He clarified that it was not 12 weeks in lieu of notice but “just 12 weeks” (T72)
185 In cross-examination Mr Tan was asked about his statement that CSA employees received the same redundancy payment as public service officers. He said he knew that because it was “being said all over the place in the office; that everyone got the same as those paid out in the public service” (T87). He said that this was being said by the industrial officers and the staff. Mr Tan also confirmed that he was made redundant from the CSA and not the respondent. He also said that there were no redundancies, whether voluntary or involuntary, from the respondent during the period of time when he was Secretary to the Board (T87).
186 There was no re-examination on this topic.

(b) Mr Pemberton
187 In his witness statement Mr Pemberton said Mr Hewson advised him to see Ms Brewer about his redundancy. From the context of the statement this was in September-October 2005. Mr Pemberton said Ms Brewer informed him that the redundancy entitlements were 12 weeks’ pay plus two weeks’ severance pay, for each year of service, with pro rata payment on a monthly basis for parts of a year and pro rata payment on a monthly basis for long service leave. A claim for a redundancy payment to be calculated in that way was contained in Mr Pemberton’s letter dated 5 October 2005.
188 Annexed to Mr Pemberton’s witness statement was correspondence he had in 2006 with Mr Hewson, on behalf of the respondent, which discussed the redundancy issue. On 11 April 2006 Mr Pemberton received a letter from the respondent which described his redundancy entitlement. Included within this was payment for 12 weeks’ notice to commence that day and conclude on 4 July 2006 when the office was to close. Although Mr Pemberton corresponded about the amount of the redundancy, the respondent’s position did not change. This was fully set out in a letter from Mr Hewson, on behalf of the respondent, dated 23 May 2006. The letter said Mr Pemberton’s redundancy would be 12 weeks’ notice from 11 April 2006 to 4 July 2006, three weeks’ salary for each year of service up to a maximum of 40 weeks and payment of all accrued leave entitlements. Mr Pemberton said he was told by Mr Hewson that the redundancy had been capped at 40 weeks’ pay because “they had deducted the 12 weeks that I had been given as notice”. Mr Pemberton said he received the total net amount of $65,720.56 for his redundancy and other entitlements.
189 Mr Pemberton did not give any additional evidence about this topic in his oral evidence in chief.
190 When cross-examined Mr Pemberton said that what he put in his letter dated 5 October 2005 about redundancy was based upon what Ms Brewer had said about his entitlements (T128). When first interviewed by Mr Tan in December 2008 it was not contemplated that long service leave or redundancy would apply as it was a four week engagement (T117).

(c) Ms McGovern
191 In her witness statement Ms McGovern said that Mr Hewson informed her sometime after September 2005 that once the majority of the insurance portfolio had been transferred to Vero, she and Mr Pemberton would be made redundant. She said she and Mr Pemberton then tried to get details from Mr Hewson about what their redundancy benefits would be.
192 Annexed to her witness statement was correspondence with the respondent about this. She received letters in the same terms as those summarised in Mr Pemberton’s evidence on this issue. Ms McGovern was paid the total net amount of $11,043.10 when her employment finished. As described in the letter dated 23 May 2006, this was comprised by three weeks’ salary for each year of service (which was to be counted as four years as she would be only two weeks away from that length of service upon termination) and payment for accrued leave entitlements.
193 Ms McGovern did not give any oral examination in chief on this issue. There was some brief cross-examination but none that is relevant to note (T138). There was no re-examination.

(d) Ms Robertson
194 In her witness statement Ms Robertson did not provide any specific evidence about the redundancy issue. In her oral examination in chief she said that the CSA had an involuntary redundancy policy which was the same as the public service redundancy provisions (T95). She said that this was applied to several former employees and she named three, including Mr Tan.
195 Ms Robertson was then shown The 2000 Redundancy Document. She said she had seen a document with the same contents which was brought to her attention in discussions with the branch secretary (T96).
196 The 2000 Redundancy Document stated its provisions would apply to a staff member whose position was abolished or substantially changed by 50% or more as a result of restructuring or re-organisation. The document said the occupant of such a position would be redeployed to another suitable position or paid a redundancy package. In the latter situation the document stated that in addition to any other benefits owing under their contract of employment they would be paid:
(a) Severance pay at the rate of two weeks’ per year of continuous service to a maximum of 45 weeks, with any portion of a year’s service being recognised on a pro rata basis.
(b) Payment of 12 weeks’ salary.
(c) Accrued and pro rata annual leave.
(d) Accrued and pro rata long service leave, with the pro rata entitlement being calculated on each completed 12 months of service at the date of redundancy.
(e) Accrued annual leave loading, calculated on completed working months of service in the calendar year of the redundancy.

197 When cross-examined Ms Robertson said she did not recall there being a document specifying that the practice of the CSA in relation to involuntary redundancies was to follow the public service (T98). She also said that during the period of time she was on the Board she did not think there was any staff member made redundant, whether voluntarily or involuntarily (T105).
198 There was no relevant re-examination.

(e) Ms Walkington
199 In her witness statement Ms Walkington said there was no express policy outlining the terms of redundancy provided for the respondent’s staff. Accordingly at a Board meeting either in December 2005 or January 2006 the redundancy payments to be made to Mr Pemberton and Ms McGovern were discussed. The Board considered whether the Insurance Industry Award entitlements should apply but decided they were inadequate. The terms of the redundancy entitlements to Mr Pemberton and Ms McGovern were decided at a Board meeting on 14 March 2006. What was later paid to Mr Pemberton and Ms McGovern was in accordance with that decision. Ms Walkington said the package was not based upon any award, including the insurance industry or public service awards, or CSA employment practices.
200 In her examination in chief Ms Walkington was asked about The 2000 Redundancy Document. She said it was not a policy of the CSA (T24). Ms Walkington was also referred to The 1992 Redundancy Document. Ms Walkington said the background to the preparation of this document was a process of union amalgamation or rationalisation which was occurring in 1992. Ms Walkington said it was felt prudent in those circumstances to provide for a voluntary severance process should it be needed (T25).
201 The 1992 Redundancy Document contained parts A-C. Part A was headed “General Staff – Council Motion C237/92”. That said it applied to “CSA staff whose position is abolished or substantially changed as a result of any restructuring or reorganisation resulting from union amalgamation or rationalisation”. It then said that the occupant of the position will have two choices. The first was redeployment and the second was payment of a voluntary redundancy package including, in addition to any other benefits owing under their contract of service, six items being:
“i. severance pay at the rate of 2 weeks per year of continuous service to the maximum of 45 weeks, with any portion of a year’s service being recognised on a pro rata basis;
ii. special payment of 12 weeks salary;
iii. accrued and pro rata annual leave;
iv. accrued and pro rata long service leave, the pro rata entitlement being calculated on each completed 12 months of service at the date of termination;
v. pro rata annual leave loading calculated in respect of leave accrued at the date of termination; and
vi. the benefit allowable to the employee as a contributor to the CSA Staff Superannuation Fund.”

202 Parts B and C were about the assistant general secretaries and the general secretary. Ms Walkington said the policy expressed in The 1992 Redundancy Document was utilised for Mr Smith. He chose not to stand as the secretary of the amalgamated group and received a redundancy payment in accordance with clause C (T25).
203 Ms Walkington also said there was no policy in place for involuntary redundancies at the CSA. Ms Walkington said that if there was an involuntary redundancy to be considered by the CSA they would apply the Clerks (Unions and Labour Movement) Award 2004. Ms Walkington said there was no policy about voluntary or involuntary redundancies for staff of the respondent (T26).
204 In cross-examination Ms Walkington was asked about the resolution of the CSA council which endorsed The 1992 Redundancy Document. She was asked questions about whether it was based upon the government’s general order about public sector redundancies (T45-46). Inconclusive replies were given. Ms Walkington reiterated there was no involuntary redundancy policy of the CSA and if such a situation arose they would negotiate on a case-by-case basis, looking firstly at the “ASU award and would have to apply that as a minimum” (T58).
205 There was no re-examination on this topic.

(f) Mr Hewson
206 In his witness statement Mr Hewson described the circumstances leading to the redundancies of Mr Pemberton and Ms McGovern. Mr Hewson referred to the requirements in Mr Pemberton’s letter dated 5 October 2005. They included a condition that in the event the respondent terminated the employment of Mr Pemberton and Ms McGovern, a redundancy would be offered of 12 weeks’ pay plus two weeks’ pay for each 12 months of employment as at 1 July 2006. Mr Hewson described the difficulties the Board had in meeting and resolving the matters raised by Mr Pemberton in his letter. Mr Hewson said that after requesting that the executive officer conduct a review to locate the terms and conditions of employment of Mr Pemberton and Ms McGovern, it was determined there was no redundancy policy which applied to the respondent’s employees. Mr Hewson prepared a draft reply, dated 20 October 2005, to Mr Pemberton’s letter but its contents could not be agreed upon by the Board and no letter was sent.
207 Mr Hewson said the Board met on 14 March 2006 and considered the redundancy payment to be made to Mr Pemberton and Ms McGovern. Mr Hewson described the entitlements agreed upon in the same terms as Ms Walkington above. Mr Hewson said the payment of accrued leave entitlements was intended to apply to annual leave and long service leave entitlements but not sick leave. Mr Hewson also detailed his correspondence with Mr Pemberton about, and the finalisation of, the redundancy payments.
208 In his oral examination in chief Mr Hewson said that involuntary redundancies were dealt with by reference to the “Clerks Union” award of 2004 (T141).
209 In cross-examination, Mr Hewson was asked about that award but he did not have any real knowledge of its involuntary redundancy provisions (T144).
210 Mr Hewson confirmed there was an express agreement with Mr Pemberton and Ms McGovern in November 2005 that they would continue in their employment and there would be an offer of redundancy when their employment was to cease (T145). Mr Hewson said he thought the purpose of the agreement was to retain the staff during the transition from one underwriter, CGU to another, Vero (T145).
211 Mr Hewson was also taken to the email he sent to Ms Walkington and Mr Spray on 10 October 2005. Mr Hewson there referred to “redundancy information” taken from The 1992 Redundancy Document. Details of redundancy entitlements were set out in the email and said to be included after discussions with Ms Brewer. Mr Hewson said however that what was in the email was an “awful mistake” (T150). There was also “some confusion” as he got “a bit wrong” the difference between voluntary and involuntary redundancy (T150).
212 Mr Hewson also gave evidence of the other emails and discussions amongst Board members about Mr Pemberton’s letter dated 5 October 2005. During that evidence, the Commissioner had occasion to remind him that he was under oath and appeared to be confusing some of his evidence. The Commissioner said that if it was required she would provide Mr Hewson with an adjournment but said he was under oath and must answer the questions honestly and to the best of his ability. Mr Hewson said he was attempting to do that (T153).
213 In re-examination Mr Hewson said that in November 2005 there was no offer of redundancy made to Mr Pemberton and Ms McGovern (T158). He said:
“No, consideration that this would occur at that time. It wasn't actually made in November 2005. It was part of the arrangement for the closure - the termination of the two CSI staff people.”

214 When questioned by the Commissioner Mr Hewson said that Mr Pemberton and Ms McGovern knew they were going to be made redundant in November 2005 (T158).

(g) Ms Brewer
215 In her witness statement Ms Brewer referred to an email she sent to Mr Foley, the general secretary of the CSA, dated 16 May 2006. She said the document was prepared in response to a request from Mr Hewson. He requested general indication of the cost of redundancy payments to be made to Mr Pemberton and Ms McGovern. Ms Brewer said she had not prepared a redundancy payment for employees of the respondent in the past. She also said to her knowledge there was no policy in existence about the terms of redundancy payments to the respondent’s staff. Ms Brewer said that although her email addressed sick leave upon termination of employment this was not considered as a component of the redundancy payments. It was a mutually exclusive issue.
216 Ms Brewer referred to The 1992 Redundancy Document as a reference point. The Board ultimately determined the redundancy payments made to Mr Pemberton and Ms McGovern.
217 In her oral evidence in chief, Ms Brewer was shown The 2000 Redundancy Document. She said she drafted the document. It had not progressed beyond draft stage (T162). She said that in drafting the policy she was trying to shorten The 1992 Redundancy Document. (She later clarified that “simplifying” the policy was the objective as opposed to “shortening” it). The policy contained in The 1992 Redundancy Document was still applicable to CSA staff (T164).
218 Later, in cross-examination, Ms Brewer was asked about the redundancy of Mr Tan. She recalled a redundancy payment being made to Mr Tan. She also recalled other employees being made redundant and receiving redundancy payments. Ms Brewer said the payments were made in accordance with The 1992 Redundancy Document (T172).
219 Ms Brewer accepted she probably did have a discussion with Mr Pemberton in October 2005 about redundancy entitlements. Ms Brewer did not accept she told Mr Pemberton what his redundancy entitlements were. Ms Brewer said she “would have said to Mr Pemberton that the CSA Redundancy Provisions don’t apply to CSA [sic - the respondent’s] staff. And I would have been emphatic about that. And he would know that they don’t apply” (T176). She did not however recall a particular discussion (T176).
220 Ms Brewer was not re-examined.

Chronology of Events
221 The above summarises the relevant evidence by reference to categories. I also think that an understanding of the evidence and reasons and the determination of the appeals will be aided by setting out the relevant evidence in chronological order, based on the witness statements, oral evidence and exhibits.
Chronology
Date
Relevant Evidence

29 July 1987
Minutes of Board meeting recording resolution to accept the bonus proposal of the company secretary “for the payment of staff which would allow them to participate according to the net surplus of the operation and therefore benefit from their own endeavours”. Percentages of the net surplus were then specified for the three employees of the respondent. Six directors were present. Only Mr Mark Smith was referred to in the witness statements/oral evidence.
April 1988
Mr Tan commences employment with the CSA and the respondent.
December 1988
Mr Pemberton first employed by the respondent.
19 April 1989
Minutes of Special Board meeting recording discussion of long term management and resolving that Mr Pemberton be appointed as manager of the respondent “pro tem”, pending a report from Mr Graeme Knight about him taking over the “running” of the respondent. Six attendees recorded as being present including Mr Smith and Mr Tan.
April 1989
Mr Pemberton receives letter of appointment as manager of the respondent.
July 1992
Profit recorded of $119,025 for the 1997-1998 financial year.
1991-1992
The human resource requirements of the respondent commence being conducted by CSA employees. The respondent pays a fee for this to the CSA.
1992
Ms Robertson commences presidency or vice presidency of the CSA.
July 1992
Rule 12(l)(vi) inserted into the CSA rules.
24 July 1992
Minutes of Board meeting. Relevant attendees are Mr Smith, Mr Tan and Mr Pemberton. The minutes record resolutions to:
(i) Adopt administrative arrangements for the provision of administrative services as negotiated between Mr Smith of the CSA and Mr Pemberton in 1991-1992.
(ii) Ratify the arrangements as proposed in a letter dated 31 May 1991.
Pay a bonus of $5,000 to Mr Pemberton based on gross operating profit of $119,025 for 1991-1992 and a bonus payment of $1,000 to insurance clerk Ms Kylie Ferguson.
12 November 1992
The 1992 Redundancy Document endorsed by the council of the CSA.
1994
At the latest, Ms Robertson commences as a director of the respondent.
17 August 1994
Minutes of meeting of the Board. Relevant attendees are Ms Robertson, Mr Robinson, Mr Tan and Mr Pemberton by invitation.
The minutes record and/or resolve
(i) The tabling of Mr Pemberton’s report which says he would like some flexibility in negotiating salary rates for “insurance staff”;
(ii) To support market rate adjustments for new or existing staff;
(iii) Mr Pemberton’s salary is increased to level 5.4 and he is to be supplied with a company vehicle for use intra-state and whilst on annual leave. A levy of $50.00 be charged to cover running costs; and
(iv) Consideration of a “report from Mr Tan that a bonus for 1992-1993 had not been paid to Mr Pemberton and the bonuses for 1993-1994 was due and resolving to pay a bonuses totalling $10,000 for 1992-1994”.

10 April 1995
Ms Brewer appointed human resources officer of the CSA.
12 April 1997
Respondent advertises in the West Australian Newspaper for an insurance consultant saying “conditions of employment are similar to those which apply in the WA Public Service ...”
24 April 1997
Letter from Mr Tan on behalf of the respondent to Ms Susan Smith confirming her appointment as an insurance consultant with the respondent at a salary of $28,487. This letter does not refer to similarity to the public service terms and conditions.
27 August 1997
Letter from Mr Tan on behalf of the respondent to Ms Natalie Stockden advising of her appointment to the position of insurance consultant with the respondent at a salary of $28,487.
1998
Terms and conditions of employment and salaries of CSA employees change as a result of enterprise bargaining.
1998
First CSA staff enterprise bargaining agreement.
5 March 1998
Resolution by the Commonwealth Public Sector Union (the CPSU) and the CSA council to abolish position of accountant held by Mr Tan.
18 March 1998
Letter from Mr Dave Robinson, general secretary of the CPSU/CSA, to Mr Tan advising of abolition of his position and that he was “eligible for redundancy in accordance with the Union’s Redundancy Provisions”.
April 1998
Mr Tan ceases employment with the CSA.
April 1998
Mr Tan receives redundancy payments of two weeks’ pay for every year of service plus 12 weeks’ notice, pro rata annual leave and long service leave, together with an additional 12 weeks’ pay.
July 1998
Respondent records profit for 1997-1998 financial year of $16,301.
July 1999
Respondent records profit for 1998-1999 financial year of $34,551.
13 October 1999
Document headed “Draft of CSA Enterprise Bargaining Agreement 1999.”
2 December 1999
“CPSU/CSA salary increment report” about Ms Susan Smith of the respondent’s office recommending salary to be increased to level 2.5.
Late 1990’s
Ms Robertson says she discusses a document entitled “Redundancy Provisions” with the branch secretary, for involuntary redundancies for CSA employees.
July 2000
Respondent records profit for 1999-2000 financial year of $2,661.
11 July 2000
The 2000 Redundancy Document with this date and “Redundancy Provisions – CSA Condition” at the foot of the page.
July 2001
Respondent records profit for 2000-2001 financial year of $46,222.
2002
According to Mr Pemberton’s evidence prior to this date his salary increases are automatic and occur about the same time as the CSA employees. They then cease to be automatic.
Early 2002
Ms Walkington appointed as a director of the respondent.
19 June 2002
Minutes of meeting of the Board. Relevant attendees are Ms Robertson, Ms Walkington and Mr Pemberton by invitation. It was resolved:
(i) To offer a salary of $35,287 to new employees in accordance with a recommendation from Mr Pemberton that salaries be increased “from a level 2 to a level 2/3 at a salary level of $35,287”.
(ii) That Mr Pemberton make enquiries as to under which award insurance staff should be employed and report back to the next Board meeting.
July 2002
Respondent records profit for 2001-2002 financial year of $33,455.
4 July 2002
Ms McGovern’s letter of appointment.
26 July 2002
Ms McGovern commences employment.
21 August 2002
Minutes of meeting of the Board. Relevant attendees are Ms Robertson, Ms Walkington and Mr Pemberton by invitation. The minutes record resolutions to:
(i) Accept Mr Pemberton’s recommendation of payment of staff bonuses to Ms Susan Smith of $2,000 and $7,000 to Mr Pemberton as superannuation; and
(ii) Receive a table from Mr Pemberton “noting differentials” between the CSI, CSA union and insurance industry award conditions and salaries. The manager informed the Board that some CGU staff were paid between 20% and 40% above award rates”. (The “table” contained on separate pages the Comparison of Conditions Document and the Comparison of Salaries Document).
10 October 2002
“CPSU-CSA probationary report” about Ms McGovern recommending appointment to permanent staff on 22 October 2002.
22 October 2002
Ms McGovern appointed to permanent staff following successful completion of probationary period of employment.
July 2003
Respondent records profit for 2002-2003 financial year of $63,589.
20 August 2003
Minutes of meeting of Board. Relevant attendees are Ms Robertson and Mr Pemberton by invitation. Ms Walkington was an apology. The minutes record agreement to or resolutions that:
(i) Salary of staff be linked with “relevant industry award”;
(ii) Upgrading senior consultant position to a supervisory position on a salary level of $43,000 per annum or as close to a point in the Insurance Industry Award 1998 as possible; and
(iii) Increasing salary of Mr Pemberton to $53,500 including existing “manager’s allowance” which would no longer be paid.
1 September 2003
The period during which the appellants allege they were not paid at the appropriate salary level. (This ceases at 26 August 2005).
10 September 2003
Letter from Ms Robertson on behalf of the respondent to Mr Pemberton advising of increase in salary from $49,967.26 (including allowance) to $53,500 (with allowance of $2,660 absorbed) effective 1 September 2003.
10 September 2003
Letter to Ms McGovern from Ms Robertson on behalf of respondent advising of an increase in salary from $35,287 to $43,090 effective 1 September 2003.
2 October 2003
Document entitled Draft Without Prejudice of CSA Staff Wages and Conditions Agreement 2003. (It was accepted that this was the 2003 Agreement despite the word Draft).
2004
Ms Robertson ceases presidency/vice presidency of the CSA.
July 2004
Ms Walkington becomes chair of the Board.
July 2004
Respondent records profit for 2003-2004 financial year of $75,044.
5 August 2004
Relevant attendees are Ms Walkington and by invitation Mr Pemberton. The minutes record receipt of report from Mr Pemberton dated 5 August 2004, a document outlining salary levels in the insurance industry and resolving that a recruitment plan for staffing be provided by Mr Pemberton to the Board at the next meeting.
16 September 2004
Minutes of meeting of Board. Relevant attendees are Ms Walkington (as chair) and Mr Pemberton by invitation. Resolutions passed that:
(i) Staff recruitment plan “lie on the table until the operational problems associated with CGU are reconciled”;
(ii) That a staff bonus of $8,000 be paid to Mr Pemberton to his superannuation account and that bonus of $4,000 be paid to Ms McGovern for the year 1 July 2003 to 30 June 2004; and
(iii) That a review of the staff salaries and bonus scheme be undertaken in the near future.
2005 ff
The respondent suffers a significant decline in client base.
January 2005
Mr Hewson appointed a director of the Board.
29 April 2005 – 18 August 2005
Respondent’s Board considers options arising from decline in business.
29 April 2005
Minutes of meeting of the Board. Relevant attendees are Mr Hewson, Ms Walkington and Mr Pemberton by invitation. The minutes record advice from Mr Pemberton that it was “usual at this time to review the staff salaries and consider the annual bonus payments”. It was resolved that Mr Pemberton “provide a business case for both items at the next meeting”.
July 2005
Respondent records profit for 2004-2005 financial year of $102,149.
21 July 2005
Reports by Mr Pemberton for Board meeting – one typed and one handwritten.
21 July 2005
Minutes of meeting of the Board. Relevant attendees are Mr Hewson and Mr Pemberton by invitation. Ms Walkington was an apology. The minutes record Mr Pemberton tabled business cases relating to the review of staff salaries and payment of annual bonuses for the 2004-2005 “financial year”. Also resolved that “the Board will pay a staff bonus on the successful resolution of the future” of the respondent.
18 August 2005
Respondent agrees to transfer its business to Vero.
18 August 2005
Annotated agenda for meeting of Board.
22 September 2005
Letter from Mr Hewson on behalf of the respondent to Ms McGovern to advise the Board agreed to link her salary to existing public service schedule 1 and to adjust her salary to public service level 3.4 effective from 26 August 2005.
22 September 2005
Letter from Mr Hewson on behalf of the respondent to Mr Pemberton to advise the Board agreed to link his salary to existing public service schedule 1 and to adjust his salary to public service level 5.4 effective from 26 August 2005.
27 September 2005
Exchange between Mr Spray (a director of the respondent) and Mr Pemberton, at a Board meeting, about non-payment of bonus and “back pay” leading to Mr Pemberton leaving the meeting and tendering his resignation.
27 September 2005
Minutes of meeting of the Board. Relevant attendees are Mr Hewson and Mr Pemberton by invitation. Ms Walkington was an apology. They record it was resolved that a bonus be paid to Mr Pemberton of $8,000 and to Ms McGovern of $4,000 for the 2004-2005 financial year.
After September 2005
Ms McGovern advised by Mr Hewson that the CSA intended to sell or transfer the respondent’s business to Vero and the appellants would be made redundant sometime after September 2005.
September-October 2005
Mr Pemberton gives evidence that he was advised by Mr Hewson to see Ms Brewer about his redundancy entitlements.
5 October 2005
At the request of Mr Hewson, Mr Pemberton sends a letter of his and Ms McGovern’s requirements for him to withdraw his resignation.
7 October 2005
Letter from Mr Pemberton to Mr Hewson extending time for reply to his letter dated 5 October 2005 to 14 October 2005.
10 October 2005
Email from Mr Hewson to Ms Walkington and Mr Spray.
11 October 2005
Mr Hewson requests that Mr Pemberton provide additional time for a response to his letter of 5 October 2005.
11 October 2005
Email from Ms Walkington to Mr Hewson and Mr Spray.
11 October 2005
Letter from Mr Pemberton to Mr Hewson confirming resignation on 25 October 2005 and referring to withheld bonuses to Mr Pemberton and Ms McGovern and the lack of a “pay rise”.
20 October 2005
Email from Mr Hewson to Ms Walkington and Mr Spray.
20 October 2005
Email from Ms Walkington to Mr Hewson and Mr Spray.
20 October 2005
Draft letter (unsent) from Mr Hewson to Mr Pemberton.
20 October 2005
Letter from Mr Pemberton to Mr Hewson withdrawing resignation on 11 October 2005.
November 2005
Agreement between the respondent and the appellants that appellants to continue their employment for the period 1 December 2005 to 30 June 2006.
2 November 2005
Email from Mr Hewson to Ms Walkington and Mr Spray about respondent’s meeting on 27 September 2005 and resolution of payment of bonuses to Mr Pemberton and Ms McGovern of $8,000 and $4,000 respectively.
7 November 2005
Letter from Mr Hewson to Mr Pemberton. It is a holding reply to his letter dated 5 October 2005.
January 2006
Mr Pemberton and Ms McGovern receive payments of bonuses of $8,000 and $4000 respectively for the 2004-2005 financial year.
7 March 2006
Draft letter (unsent) from Mr Hewson to Mr Pemberton about Mr Pemberton’s letter dated 5 October 2005.
14 March 2006
Relevant attendees are Mr Hewson and Ms Walkington. The minutes record the Board resolving;
(i) To close the respondent’s office on 3 July 2006; and
(ii) To offer redundancy to appellants of 12 weeks’ notice from 3 April 2006, 3 weeks’ salary for each year of service up to a maximum of 40 weeks and payment of all accrued leave entitlements.
11 April 2006
Letters from Mr Hewson to Mr Pemberton and Ms McGovern about closure of respondent’s office, formally advising of their redundancy effective 4 July 2006 and details of their redundancy package.
11 May 2006
Jointly signed letter from Mr Pemberton and Ms McGovern to the respondent in relation to bonus for 2005-2006 financial year, pro rata long service leave, back payment for the 2004-2005 financial year and a maximum of 52 weeks’ severance pay as contained in regulation 20(ii) of the Public Sector Management (Redeployment and Redundancy Regulations) 1994.
15 May 2006
Letter from Mr Hewson to Mr Pemberton in reply to letter dated 11 May 2006.
16 May 2006
Email from Ms Brewer to Mr Foley, General secretary and senior accountant of the respondent.
17 May 2006
Email from Mr Foley to Mr Hewson.
17 May 2006
Ms Brewer prepares a draft response to the letter from the appellants about their redundancy entitlements.
23 May 2006
Letters from Mr Hewson to Mr Pemberton and Ms McGovern respectively explaining and itemising the details of their redundancy entitlements.
26 May 2006
Applications filed in the Commission by Mr Pemberton and Ms McGovern.
14 June 2006
Email from Mr Hewson to Ms Brewer about respondent’s staff annual leave entitlements.
14 June 2006
Email from Ms Brewer to Mr Hewson confirming Mr Pemberton and Ms McGovern have taken leave on a regular basis.
July 2006
Respondent records loss for 2005-2006 financial year of $77,549.
4 July 2006
The employment of Mr Pemberton and Ms McGovern with the respondent ceases.
4 July 2006
Statement of redundancy entitlements and cheque to Mr Pemberton for $65,720.56.
4 July 2006
Statement of redundancy entitlements and cheque to Ms McGovern for $11,043.10.
7 July 2006
“CSA Staff Agreement 2006”.
November 2006
Mr Pemberton obtains copies of the draft letters to him by Mr Hewson dated 20 October 2005 and 7 March 2006 respectively, which were not sent.

The Structure of the Commissioner’s Reasons
222 The Commissioner first set out the appellants’ claims and the respondent’s position as at the commencement of the hearing. The Commissioner then described as “background” the commencement of the employment of Mr Pemberton and Ms McGovern and quoted the letter of appointment of Ms McGovern. The Commissioner next summarised in a comprehensive fashion the evidence of each of the appellants’ witnesses and the submissions of the appellants. Following that, the Commissioner in the same way discussed the evidence of the respondent’s witnesses and its submissions.
223 Under the heading “Conclusions and Findings” the Commissioner then made findings about credibility, described the role of the Commission in applications of this type and stated what was said to be the “two principle questions that go to the heart of this matter” ([123]-[126]).
224 The Commissioner then decided the first of these. Under the heading “Who Was the Respondent” ([127]) the Commissioner decided the respondent was the employer of the appellants. The Commissioner then discussed the “Contracts of Employment”. The terms and conditions of the employment of Mr Pemberton and Ms McGovern were then considered and analysed including a statement of the law about implied contractual terms. The Commissioner next considered the issue of “Redundancy” followed by “Pro-Rata Long Service Leave”. The Commissioner then decided the “Effective Date of Wage Increases” and did not accept the claims for unpaid wages from 1 September 2003 to 26 August 2005.
225 The Commissioner discussed and determined the “Bonus Payments” issue and then “Other Matters”. The first of these was an assessment of the appellants’ redundancy claim based on “estoppel”. The second was the application of the principles of the High Court decision in Jones v Dunkel (1958) 101 CLR 298 to the respondent not calling Mr Mark Smith or Mr Dave Robinson to give evidence. The Commissioner decided both of these issues against the appellants.
226 The Commissioner concluded at [152] by saying that orders would issue dismissing the applications.

Analysis of Reasons and Particulars of Appeal
227 I have earlier referred to the headings in the Particulars of Appeal. In summary, the particulars asserted the Commissioner made errors of fact, did not take “relevant matters” into account, took “irrelevant matters” into account, failed to draw proper inferences from the evidence, erred in findings on credibility and misdirected herself on the law. In my opinion the arguments of the appellants can be best considered by reference to the paragraphs of the reasons which they attack. I will analyse the relevant paragraphs in turn and indicate whether the applicable particulars are established. If particular(s) are established I will then need to consider the consequence(s) of this. I will use the shorthand “PA” and the applicable number and letter to denote the relevant Particular of Appeal. There were two sets of particulars numbered “2”. To distinguish between them I will refer to the second of them as “2A”.

Reasons Paragraphs [12]-[13]
228 The appellants were not generally critical of those parts of the reasons which summarised the evidence and submissions of the parties. The respondent relied on them to rebut arguments by the appellants that certain evidence was not taken into account. The appellants did specifically criticise the Commissioner’s description of Mr Pemberton’s evidence about the basis upon which he was first appointed. At [12] the Commissioner said that Mr Pemberton testified he had been told by Mr Tan at this interview that the “terms and conditions of his employment would be the same as those applying to CSA employees”. In the next paragraph the Commissioner described Mr Pemberton’s evidence about receiving a letter of appointment stating his conditions would be “similar to those of public service officers”. The Commissioner then referred to the conditions which Mr Pemberton said were contained in the letter and his evidence that they were “the same as those received by CSA employees and WA public service officers”. In the next sentence however the Commissioner referred to Mr Pemberton testifying that he was told in 1988 that his terms and conditions would be “similar to CSA employees”. The appellants’ agent submitted this was a misdescription of his evidence and inconsistent with that which had been accurately described at [13]. It was submitted that this error was significant in combination with the Commissioner’s findings at [123]. The submission will be analysed alongside the other criticisms of [123].

Reasons Paragraph [123]
229 This was the first paragraph of the Commissioner’s reasons under the heading “Conclusions and Findings”. It is appropriate to set it out in full:
“123 There were occasions during proceedings where, from time to time credibility became an issue. Mr Tan’s evidence was unusually strident and exacting when reflecting on the detail of Mr Pemberton’s letter of appointment some sixteen to seventeen years earlier in particular his reliance that Mr Pemberton’s letter of employment contained a phrase that terms and conditions of employment were similar to those of CSA employees. When comparing Mr Tan’s evidence as to whether similar detail was included in the respondent’s letters of appointment even ten years ago Mr Tan became vague. The Commission accepts the evidence of Mr Tan that with respect to bonuses that profitability by the respondent was required before bonuses for the applicants could be considered. Mr Hewson appeared confused on occasion particularly when outlining the respondent’s considerations at the Board meeting in relation to emails that had passed between the Board directors during the period 11 October 2005 to 20 October 2005 asserting that the document of 20 October was not released to Mr Pemberton. The Commission prefers Mr Pemberton’s evidence and accepts that the document was in fact released and received by Mr Pemberton whether mistakenly or otherwise. The Commission rejects the evidence of Ms Robertson in relation to bonuses and conditions as she was not in a position to provide dependable evidence on the respondent’s circumstances. For the remainder of the witnesses credibility was not of considerable significance, evidence having been given to the best of the witnesses’ ability.”

Analysis of Paragraph [123] and Associated Particulars of Appeal
230 This is the only paragraph in which the Commissioner expressly made findings on credibility. It was heavily criticised by the appellants and in my opinion, with respect, justifiably so. In my opinion:
(a) The Commissioner misdescribed Mr Pemberton’s evidence at [13] in the way set out above. That error linked with what the Commissioner said in paragraph [123]. (PA 1(a) is established).
(b) The Commissioner did not at this point consider Mr Tan’s evidence that he told Mr Pemberton his conditions of employment would be the same as those of the CSA when he first engaged him and that all of the respondent’s employees were employed on this basis. Although the Commissioner described this evidence earlier in her reasons I do not think that demonstrates, in the context of the reasons as a whole and in this paragraph in particular, that this piece of evidence was analysed when deciding what the terms of Mr Pemberton’s contract were. As Steytler P indicated in Skinner v Broadbent [2006] WASCA 2 at [37], if an important piece of evidence is not analysed when making factual findings it can be inferred that it has been overlooked. In Camden v McKenzie [2008] 1 Qd R 39, Keane JA at [35] quoted with approval the observation in Fletcher Construction Australia Ltd v Lines MacFarlane & Marshall Pty Ltd (No. 2) [2002] 6 VR 1 at [157] that “… if evidence is significant, it is not to be peremptorily shunted aside or ignored”. Keane JA also cited with approval the comments to the same effect in Mifsud v Campbell (1991) 21 NSWLR 725 at 728 and NRMA Insurance Ltd v Tatt & Anor (1989) 92 ALR 299 at 312; and see also Mount Lawley Pty Ltd v Western Australian Planning Commission (2004) 29 WAR 273 at [28]. (PA 2(a), 2(d) are established).
(c) The Commissioner did not explain the reason why Mr Tan’s “strident” evidence about the terms of Mr Pemberton’s letter of appointment, in comparison to his “vague” evidence about more recent letters, affected his reliability or credibility. (PA 4(a) is established).
(d) In any event the Commissioner did not accurately describe Mr Tan’s evidence. The Commissioner said Mr Tan’s evidence was Mr Pemberton’s letter of appointment stated his conditions were “similar” to CSA employees; whereas his evidence in fact was that the letter said “similar to members of the WA public service”.
(e) Although the Commissioner made mention of Mr Hewson being confused there were no findings on what the impact of this was on his credibility or reliability other than in (g) below which was an error.
(f) I do not accept however that any findings on Mr Hewson’s credibility ought to have been made on the basis of the warning the Commissioner gave to him during his evidence to “answer the questions honestly”. That the Commissioner said this did not make it necessary for her to refer to it in her reasons – it was a passing moment in the hearing. It was not something which was so significant, in the context of the evidence and issues as a whole, to be erroneous not to do so. What occurred certainly did not oblige the Commissioner to find Mr Hewson to be a non-credible witness. (PA 4(c) is not established).
(g) The Commissioner’s statement, that the evidence of Mr Pemberton should be preferred to that of Mr Hewson about receipt of the draft letter dated 20 October 2005, misstated the evidence of Mr Pemberton. His evidence was that he only received the letter in November 2006, after his dismissal and as part of the proceedings.
(h) The Commissioner did not explain why Ms Robertson was not in a position to provide “dependable evidence on the respondent’s circumstances”, which was the reason given for rejecting her evidence about “bonuses and conditions”. I am unsure what the expression “the respondent’s circumstances” means in this context. It was not explained by the Commissioner. The appellants point out however that Ms Robertson was a director and chair of the respondent from 1994 until about 2004. From that position she had the capacity to give relevant evidence about the way in which the bonus condition was applied and how the contracts of employment of the appellants operated. (PA 1(b), 4(e) are established).
(i) The Commissioner said that credibility for the other witnesses was not of considerable significance. This did not accurately represent the submissions of the appellants’ agent at the hearing. His written submissions said the evidence of the witnesses called on behalf of Mr Pemberton and Ms McGovern should be preferred. Specific submissions were made about the credibility of Ms Walkington and Mr Hewson, both in writing and orally. These submissions were either not considered, or if they were, no adequate reasons were given for their rejection. (PA 4(f), (g) are established).
(j) In any event a finding that evidence was “given to the best of the witnesses’ ability” did not adequately consider the reliability of their evidence. This was at least an equally important consideration in determining the cogency of the evidence of the witnesses.

231 In relation to (c), a finding of credibility based on demeanour is difficult to overturn on appeal although it is not an insurmountable obstacle. (See Fox v Percy (2003) 214 CLR 118 at [28]-[29]). In addition there is a greater recognition of the difficulties of making demeanour based findings on credibility. (See for example Ipp, JA “Problems with FactFinding” (2006) 80 Australian Law Journal, 667 and Fox v Percy at [31]). In making the finding the Commissioner did not explain why the strident, as compared to the vague, evidence made the strident evidence not credible. There could well have been good reasons why Mr Tan more clearly remembered what was in Mr Pemberton’s letter of appointment. The Commissioner does not appear to have considered this. In any event the credibility finding against Mr Tan was based on a misdescription of his evidence and cannot stand for that reason alone.
232 What I have said in (a)-(j) above also brings into sharp focus the adequacy of the reasons of the Commissioner. Although this was not a separate ground of appeal it pervades many of the complaints about the reasons. In my opinion the point is, with respect, justified.
233 The requirement to give reasons is contained in s35 of the Act. It has also been described as an ordinary incident of the judicial process. (See Mount Lawley Pty Ltd at [26]). As the Commissioner pointed out she was making a legal determination about the contractual entitlements of the appellants and whether they had been denied the benefits thereunder. The Commissioner was obliged to provide adequate reasons to explain why she found in favour of the respondent. If inadequate reasons are given it can give rise to the parties having a justifiable sense of grievance. For the unsuccessful party, it can be more difficult to exercise statutory rights of appeal. That is why the giving of inadequate reasons can be an error of law in itself (Camden at [30]-[31]).
234 What is required to satisfy the requirement to give adequate reasons depends upon the circumstances of the case. This includes the ultimate question(s) to be decided, the issues, the evidence and any constraints on giving reasons such as time or other circumstances. In this instance the issues involved a combination of law and fact about the intertwined but ultimately separate applications of Mr Pemberton and Ms McGovern. There were seven witnesses who gave evidence over four non-consecutive hearing days, via witness statements, oral examination in chief, cross-examination and re-examination. There were three components to the applications, being underpayment of salary, non-payment of bonus and underpayment of redundancy entitlement. The parties’ representatives filed comprehensive sets of written final submissions and amplified these orally. The Commissioner had the capacity to and did reserve her decision and took a very considerable time in handing in down. These factors in combination meant a comprehensive and clear set of reasons were required. Regrettably and with respect this did not occur.
235 As stated a primary purpose of giving reasons is to enable the parties to understand why they have won or lost. To do this the reasons must clearly and adequately set out the issues for determination, the relevant facts and law and explain the basis for factual findings, legal determinations and the ultimate conclusion(s). Clear and coherent expression is required. The mere recitation of chunks of the evidence and generalised findings on credibility or other conclusions will not in many cases be adequate. The reasons must descend into sufficient detail to provide clarity and understanding. (See Mount Lawley Pty Ltd at [26] and Camden).
236 Another purpose of providing adequate reasons is to ensure that decision makers approach their important task with sufficient rigour. Again this is no more than what is required when, as in this case, the matters to be determined are of importance to the parties – financially, for their reputation, or otherwise.
237 As I said and with great respect I do not think the reasons were adequate. They contained errors of fact, do not at times state or properly decide the issues and are not always sufficiently clear to serve their purpose.

Reasons Paragraph [124]
238 It is also appropriate to quote this paragraph in full:
“124 With respect to the evidence of Mr Hewson and Ms Brewer it is clear in the Commission’s mind that although believable and credible the role played by the respondent [sic] in concluding the applicants’ employment with the respondent was not helpful. In particular the Commission finds that Mr Hewson added confusion and created false expectations where none existed.”

Analysis of Paragraph [124] and Associated Particulars of Appeal
239 I accept the criticism of this paragraph that it is unclear. The first use of the word “respondent” is plainly in error. It may be that it was intended for this be a reference to “Mr Hewson” but even then it is not entirely clear. Looking at this paragraph benevolently I think the Commissioner may have intended to say that the evidence of Mr Hewson about his interaction with Ms Brewer in October 2005 and what he did thereafter was accepted by the Commission. What he did as a consequence however in his interaction with the appellants created confusion and false expectation. Even expressed this way it is not very clear where the finding fits within the reasons for decision as a whole. It did not follow from this comment however that the Commissioner was bound to make an adverse credibility finding against Mr Hewson. (PA 4(d) is not established).

Reasons Paragraph [125]
240 The Commissioner referred to s29(1)(b)(ii) applications under the Act and said the onus was upon the appellants to establish the claims and it was:
“for the Commission to determine the terms of the contracts of employment and judicially determine whether the claims constitute benefits denied under the applicants’ contracts of employment having regard to the obligations on the Commission to act accordingly [sic] to equity, good conscience and the substantial merits of the case, pursuant to s 26 of the Act as per Belo Fisheries v Froggett (1983) 63 WAIG 2394; Waroona Contracting v Usher (1984) 64 WAIG 1500 and Perth Finishing College v Watts (1989) 69 WAIG 2307”.

Analysis of Paragraph [125]
241 The appellants did not have any specific criticism of this paragraph. Despite the reference to “equity good conscience and the substantial merits”, the Commissioner did not approach the applications on any basis other than by determining the appellants’ entitlements under their contracts as a matter of law and fact. This was consistent with how the parties approached the applications both at first instance and on appeal. It was not submitted that “equity, good conscience and the substantial merits” had any independent role to play in the resolution of the claims. Accordingly whether or not it does so need not be considered in this appeal.

Reasons Paragraphs [126]-[127]
242 I referred earlier to the Commissioner saying at [126] that there were two principal questions that “went to the heart of the matter” other than the bonus payments issue. The first was the identity of the employer and the second was the nature of the appellants’ contracts of employment and their terms and conditions.
243 At [127] the Commissioner found the respondent was the appellants’ employer throughout. The Commissioner found the respondent was a wholly-owned subsidiary of the CSA which undertook administrative functions on behalf of the respondent such as the preparation of wages. The Commissioner also said that “neither applicant was employed by the CSA as the evidence throughout proceedings on balance, suggests the industry relied upon by the respondent for consideration of most contractual matters relating to the applicants’ wages and conditions was, the insurance industry”.

Analysis of Paragraphs [126]-[127] and Associated Particulars of Appeal
244 At [126] the Commissioner said the identity of the employer was a “principle [sic] question” going to the heart of the matter. In my opinion this was wrong. The respondent did not argue it was not the employer. It was the terms and conditions of the employment and whether they were complied with in the payment of salary, bonuses and redundancy which was in issue.
245 The appellants submitted that in deciding the question “who was the employer”, the Commissioner erred by taking into account an irrelevant matter. I do not accept this. The identity of the employer was not irrelevant, it was just not in issue. The Commissioner’s comment did not lead her to any identifiable error. (PA 2A(a) is not established).

Reasons Paragraphs [128]-[129]
246 There was then a heading “Contracts of Employment”. The Commissioner first discussed the argument of the appellants that the respondent was required to operate consistently with the CSA, which in turn was required to act in accordance with former rule 12(l)(vi) of its rules. (In the Commissioner’s reasons the rule was in error referred to as rule 12(l)(iv) and not (vi)). I have earlier referred to the rule and the decision in Stacey. The Commissioner noted by reference to [173] of my reasons that the rule was inserted in July 1992, after the employment of Mr Pemberton. The Commissioner also quoted from [224] of my reasons and made a “finding” that “even if the terms and conditions of WA public service officers expressly applied to the applicants it would be an error at law given there is no one generic set of conditions applying to public service officers particularly since enterprise bargaining. If the Commission were to consider a second option, to imply terms and conditions to the applicants’ contracts of employment [sic] would prevent in the Commission’s view the reasonable and effective operation of the applicants’ contracts” ([129]).

Analysis of Paragraphs [128]-[129] and Associated Particulars of Appeal
247 I do not find these paragraphs to be clear. I do not understand what is meant by an “error at law” in the context in which the expression is used or what is said in the sentence after that. It may be of no consequence. This is because it is clear that Stacey did not support the appellants’ claims. Stacey decided, in part, that what was CSA rule 12(l)(vi) did not import the same or similar terms and conditions of employment of WA public service employees into the contracts of employment of CSA employees. In addition I found in Stacey that after agency specific agreements were made in the public sector in the mid-1990s, there was no identifiable set of conditions of the public service which could be imported into the contracts of the CSA’s employees. This might be what the Commissioner meant by an “error at law”. These aspects of Stacey undercut one of the arguments the appellants relied on at first instance and the Commissioner was not in error in deciding that it did not assist them. The appellants submitted that, subject to safety net requirements, there was nothing to prevent parties expressly incorporating into their contracts of employment the contents of other industrial agreements. Whilst this is so I do not accept the Commissioner decided this could not occur as a matter of law, as was argued on appeal. (PA 5(a), (f) are not established).
248 As the Commissioner pointed out, I said in Stacey that rule 12(l)(vi) did not commence until 1992. Accordingly it could not be relevant to the permanent appointment of Mr Pemberton which occurred in 1989. Ms McGovern’s appointment was in July 2002. Her letter of appointment did not contain a term that her conditions of employment were similar to the WA public service. Neither did the contracts of employment of CSA employees at that time because of the commencement of agency specific agreements as referred to in the last paragraph.
249 Stacey did not provide the answer to the question of whether the appellants’ contracts contained the CSA employees’ condition but in discussing it the Commissioner did not take into account an irrelevant matter. The appellants had based an argument on rule 12(l)(vi) and the parties had made submissions about Stacey. (PA 2A(b) is not established).

Reasons Paragraphs [130]-[131]
250 The Commissioner said it was “agreed” by the parties that redundancy and bonus payments were not included in the “applicants’ contracts of employment at first instance”. The Commissioner made a finding that both appellants were employed pursuant to letters of appointment “which covered broad terms and conditions”. The Commissioner then quoted from Ms McGovern’s letter of employment.
251 The Commissioner elaborated at [131] that when the appellants were first employed, “Mr Pemberton in 1988” and “Ms McGovern in 2002”, they were each given letters setting out annual leave, wages, long service leave and specified sick leave per annum. The letters set out the period of notice required for termination of employment. The Commissioner said she was able to make a finding that Mr Pemberton had a letter of employment even though it was not in evidence. The Commissioner found that similar terms and conditions operated for Mr Pemberton, as for Ms McGovern, with the exception of wages. In the latter part of [131] the Commissioner said the following:
“The applicants relied on the memory of Mr Tan that Mr Pemberton’s letter of appointment contained an expression suggesting the terms and conditions of employment for Mr Pemberton would be “similar to those of the WA public service officers”. The applicants further assert through Mr Tan’s evidence that all letters of appointment of employees of the CSA and the respondent contained such an expression until approximately the mid 1990’s when enterprise bargaining commenced in the public service. On balance and having regard for the issue of witness credibility the Commission finds there was no such term in Mr Pemberton’s letter of employment preferring the evidence of Ms Walkington who submitted that both Ms McGovern and Mr Pemberton were employed on similar terms and conditions (other than salary and bonus level). Even if the Commission is mistaken in that view and Mr Pemberton’s letter of employment did contain such a provision it is the Commission’s view that Mr Pemberton’s contract of employment was amended sometime after his employment to appropriately reflect insurance industry terms and conditions. The Commission notes that Ms McGovern’s letter of appointment contains no expression to the effect of similarity of terms and conditions between WA public service officers and employees of the respondent.”

Analysis of Paragraphs [130]-[131] and Associated Particulars of Appeal
252 In the first part of [131] the Commissioner referred to Mr Pemberton receiving a letter of appointment when first employed in 1988. This did not accurately describe the evidence. As set out earlier the evidence was that Mr Pemberton was first appointed for the short period of four weeks in late 1988. There was no evidence of there being any letter of appointment at that time. The evidence was that a letter of appointment was sent after the decision of the Board in April 1989 to appoint Mr Pemberton as manager of the respondent.
253 The Commissioner also did not deal with the respondent’s argument that there were two contracts of employment and that it was the terms of the contract in 1989 and not 1988 which were relevant. This is material as the evidence that Mr Tan said the terms of Mr Pemberton’s employment were to be the same as employees of the CSA was made in the interview prior to the 1988 contract. The Commissioner’s failure to decide this issue was not the subject of a notice of contention but it was raised without objection by the respondent’s counsel at the hearing of the appeals. (See appeal transcript at 76-77). I will later comment some more about this issue.
254 With respect to part of [131] which is quoted:
(a) It is infected with the earlier error made about the credibility of Mr Tan’s evidence on the issue.
(b) Ms Walkington’s evidence was not reasonably capable of supporting the finding which was made. Ms Walkington did not purport to give evidence that Mr Pemberton’s letter of appointment did not contain such a condition. She was in no position to do so having not seen the letter nor been employed by the CSA or otherwise connected with the respondent in 1989 when Mr Pemberton received it. Ms Walkington’s comment about the terms and conditions of employment of Ms McGovern and Mr Pemberton being essentially the same does not in my respectful opinion rationally translate to a finding that as Ms McGovern’s letter did not have these terms in then neither did Mr Pemberton’s. (PA 4(b) is established). The letters were, after all, provided some 13 years apart. Mr Tan’s evidence was that the letters did contain this statement until public sector agency specific agreements in the mid-1990’s.
(c) The Commissioner’s alternative finding of Mr Pemberton’s contract being “amended” was also the subject of a particular. It was asserted there was evidence from Ms Walkington that there had been no variation. I do not accept that this is correct given her evidence at T45, summarised above. The use of the expression “appropriately reflect insurance industry terms and conditions” is not clear as there is no specification of what “terms and conditions” were “amended”. There was evidence about the salaries of Mr Pemberton and Ms McGovern being set having regard to the insurance industry but not of “amendment” of any other terms and conditions. The use of “amendment” was also unfortunate because as pointed out by the appellants, the contracts could not be unilaterally changed, although variation could be agreed. (PA 1(c) is not established).
(d) It was also asserted the Commissioner failed to draw an inference that when the CSA employees’ terms and conditions of employment changed so did the appellants’. This submission is premised on it being found that the appellants’ contracts contained the CSA employees’ condition. I do not think that given all of the evidence, the Full Bench can make this finding. I will later discuss this in more detail. (PA 3(a), (b) are not established).
(e) As I have already indicated the Commissioner’s “note” about Ms McGovern’s letter was relevant to her application but not that of Mr Pemberton. He was appointed some 13 years earlier. There was uncontradicted evidence that letters of appointment at that time said that terms and conditions of employment were similar to those of the WA public service. (See the evidence of Mr Tan described above). It would have been in error for the Commissioner to have reasoned that, because Ms McGovern’s letter did not contain the term then neither did Mr Pemberton’s. I am not persuaded however that the noting of Ms McGovern’s letter meant she did so. (PA 3(h) is not established).

Reasons Paragraphs [132]-[134]
255 The Commissioner at [132] made a finding that there were some terms and conditions of the respondent’s employees and those of the CSA which were the same. The Commissioner found these included four weeks’ annual leave, access to CSA staff super fund, two days’ bereavement leave and a 37.5 hour working week. The Commissioner then set out terms and conditions of the appellants’ contracts of employment which were dissimilar to or “contradicted provisions of WA public service officers or CSA officials”. These included access to bonus payments subject to a profit being made by the respondent, sick leave provisions, long service leave and the period of notice for resignation ([133]).
256 At [134] the Commissioner said the appellants, when comparing the terms and conditions of their contracts to those of CSA employees, used the words “similar” and “same” synonymously and Mr Hewson when giving evidence suggested the terms and conditions of the appellants’ contracts “paralleled” those of CSA employees. The Commissioner then set out the Macquarie Dictionary definitions of “similar”, “same” and “parallel”.
257 The Commissioner at [134] made a “finding” that the words “similar” and “parallel” could not be used synonymously with the word “same”. The Commissioner then said:
“The Commission determines the applicants’ contracts of employment were not the same as those employees of the CSA but that some terms and conditions were similar. The Commission finds the terms and conditions of employment of CSA staff were provided in accordance with the enterprise bargaining agreements of 1998 and 1999 and currently the CSA Staff Agreement 2006 and these were neither expressly nor inferred as [sic] provisions of the applicants’ contracts of employment.”

Analysis of Paragraphs [132]-[134] and Associated Particulars of Appeal
(a) Paragraphs [132]-[133]
258 In my opinion the factual conclusions expressed in this paragraph were open on the evidence of Ms Walkington, Mr Hewson and Ms Brewer as supported by the Comparison of Conditions Document and Comparison of Salaries Document. On balance the evidence was that these documents were presented by Mr Pemberton to the meeting of the Board on 21 August 2002. Evidence that the respondent had a separate salary schedule was given by Ms Walkington and Ms Brewer. At [123] the Commissioner made a finding that the evidence of Ms Walkington and Ms Brewer was credible and such a finding could have supported the conclusions reached in this paragraph. The finding made however was deficient in that it did not deal with the submissions of the appellants that attacked the credibility of Ms Walkington and Ms Brewer. The same point may be made about the corroborative evidence of Mr Hewson.
259 The Commissioner also did not explore the consequence of Mr Pemberton’s acceptance that he knew of the contents of the Comparison of Conditions Document and Comparison of Salaries Document when he presented them to the Board. From at least that time he was aware that his employer treated him differently from CSA employees. This admission undermined his evidence in chief to the contrary.

(b) Paragraphs [133]-[134]
260 I understand the appellants’ argument that the Commissioner’s quotation of dictionary definitions of “same”, “similar” and “parallel” was unnecessary, but I do not think there was any error in this. The Commissioner was entitled to consult a dictionary for this purpose. Mr Pemberton had in part relied on the use of the word “similar” in conjunction with the reference to the WA public service in his letter of appointment, said he was told his conditions would be the “same” as the employees of the CSA and Mr Hewson gave evidence about “parallel” conditions. (PA 5(b) is not established). It was separately asserted that the Commissioner took into account an “irrelevant matter” in the “semantic distinctions between similar and same and parallel”. I do not think this can be characterised as such, as each of the words were used in the evidence. (PA 2A(c) is not established).
261 The appellants also argued that in the context of other evidence, the use of “parallel” by Mr Hewson in his email of 20 October 2005 meant “the same”. I do not think this is a point of substance. Whether this is what Mr Hewson meant does not have an impact upon what the terms of the contracts of employment were. (PA 3(j) is not established).
262 The appellants also argue however that the paragraph demonstrates the Commissioner misunderstood the appellants’ case, which was not that their conditions of employment were similar to the employees of the CSA but the same. This submission is supported by the Commissioner saying that the appellants used the words interchangeably when this was not appropriate given their different meanings. I accept the criticism that this was not the appellants’ case – it was that the conditions were the same as the CSA, except for the bonus payment. Mr Pemberton’s letter contained the expression “similar to the WA public service”. As I have said there was evidence that this expression was used in the letters of appointment of CSA employees at that time. The argument is undermined however by that part of the paragraph quoted in which the Commissioner makes the finding that the contracts of employment of the appellants and CSA employees were not the same. The way the paragraph is expressed however is not all that clear.
263 The appellants complained that in making the finding that the employees of the CSA and the respondent did not have the same terms and conditions of employment, the evidence that Mr Pemberton lost his allowance at the same time as CSA employees was not considered. I think this is established as that evidence has not been analysed, although mentioned when the Commissioner discussed the evidence (in her reasons at [51] and [73]-[74]),]. It is not a major point on its own but the relevant particular is nevertheless made out. (PA 2(k) is established).
264 It was also argued the Commissioner did not consider the “concession” by Ms Walkington, on behalf of the respondent, that Ms McGovern’s terms and conditions of employment were substantially the same as those of Mr Pemberton. I have earlier set out Ms Walkington’s evidence. The appellants attempted to use this as a basis for a finding that Ms McGovern’s terms and conditions of employment contained the CSA employment condition. The submission has two stages. Firstly, that Mr Pemberton’s contract had the condition. Secondly, so too did Ms McGovern’s because of Ms Walkington’s “concession”. I do not accept the submission. This is because Ms Walkington’s clear position was that Mr Pemberton’s conditions were not the same as CSA employees. Therefore her belief that the appellants’ employment conditions were substantially the same does not logically contain an admission that Ms McGovern’s contract contained the CSA employees’ condition. (PA 2(l), 3(f) are not established).
265 In a separate particular there is a complaint that the Commissioner failed to have regard to the email exchange between Ms Walkington and Mr Hewson in October 2005 which demonstrated the former did not know what the appellants’ conditions of employment were and “considered themselves free to determine them unilaterally”. This argument is antithetical to the previous one. Be that as it may, I do not think the emails from Ms Walkington establish this. The emails demonstrate she wanted to check what the conditions were as she did not accept what Mr Hewson was saying about them. The emails also demonstrate a reasonable knowledge of the terms and conditions and their differences from those of CSA employees. (PA 2(q) is not established). The evidence also did not establish that Ms Walkington had no knowledge of the appellants’ conditions of employment when she became a director in 2002. (PA 3(e) is not established).
266 The appellants also asserted that the Commissioner failed to take into account “evidence that there had been no agreement with the appellants that they would not get the terms and conditions in the CSA staff agreements”. This is not a very clear point. I construe it to mean that once the CSA Staff Agreements came into effect, there was no evidence it had been agreed that the conditions of employment of the appellants would then diverge from the CSA employees; with the consequence that the terms of the CSA Staff Agreements also applied to them. This argument does not in my opinion provide a foundation for a finding that the CSA employees’ condition applied. The argument rests upon an assumption that the appellants had the same terms and conditions as CSA employees before their staff agreements operated. This cannot be established for Ms McGovern as she was not employed until after the CSA Staff Agreements first came into effect. With respect to Mr Pemberton the evidence about his contract needs to be considered to see if the assumption is valid. On its own however this point does not have substance. (PA 2(n) is not established).
267 Another particular contended there was error because of a lack of any finding that the terms and conditions of employment of CSA staff, in accordance with the “enterprise bargaining agreements” included “documents, policies and resolutions of Council”. The finding made by the Commissioner is in the portion of [134] quoted above. As the “enterprise bargaining agreements” said that the conditions of service contained therein should be read in conjunction with other documented conditions, resolutions and decisions of council, the finding the Commissioner made included that which this particular asserted she did not make. (PA 1(d) is not established).
268 The appellants also argued the Commissioner erred in the final sentence of the paragraph in not answering the correct question which was whether it was agreed the appellants had the same conditions as CSA employees. I do not accept this. That question is in my opinion incorporated within the finding made. (PA 5(c) is not established).

Reasons Paragraphs [135]-[137]
269 At [135] the Commissioner discussed “implied terms”. The Commissioner cited BP Refinery Pty Ltd v Shire of Hastings Council (1977) 52 ALJR 20 and said there were five conditions which may overlap and which must be satisfied before a term can be implied into a contract of employment. These were set out as:
(a) It must be reasonable and equitable.
(b) It must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it.
(c) It must be so obvious that it goes without saying.
(d) It must be capable of clear expression.
(e) It must not contradict any express term of contract.

270 In the next paragraph the Commissioner said there was a “need for some caution in pursuing the BP Refinery … case as recognised by the Full Bench”. A quotation was then reproduced. There is no citation of the authority from which the quotation is taken. It is however from the joint reasons of Brennan CJ and Dawson and Toohey JJ in Byrne and Frew v Australian Airlines Ltd (1995) 185 CLR 410 at 422. It is unclear whether the Commissioner mistakenly thought this was a decision of the Full Bench of the Commission or was intending to cite a Full Bench decision, not identified by her, which quoted the passage from Byrne and Frew.
271 In the quoted passage their Honours referred to the reasons of Deane J in Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 121. Their Honours said Deane J had observed that the cases in which the BP Refinery criteria had been applied in the High Court were “cases in which there was a formal contract, complete on its face”. Their Honours said that Deane J “pointed out that a rigid approach should be avoided in cases, such as the present, where there is no formal contract. In those cases the actual terms of the contract must first be inferred before any question of implication arises. That is to say, it is necessary to arrive at some conclusion as to the actual intention of the parties before considering any presumed or imputed intention”. Their Honours then quoted the relevant “test” to be applied in such cases, from Deane J in Hawkins v Clayton (1988) 164 CLR 539 at 573. His Honour there said:
“The most that can be said consistently with the need for some degree of flexibility is that, in a case where it is apparent that the parties have not attempted to spell out the full terms of their contract, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case.”

272 Brennan CJ, Dawson and Toohey JJ in Byrne and Frew said it was appropriate to apply that test in the case before them. This was about, amongst other things, whether provisions of an award were implied into contracts of employment for baggage handlers employed by the respondent.
273 After quoting from Byrne and Frew, including the quotation from the reasons of Deane J in Hawkins, the Commissioner found “in the case of the applicants’ contracts of employment neither was provided with a complete and formal contract” ([137]).

Analysis of Paragraphs [135]-[137] and Associated Particulars of Appeal
274 These paragraphs contain the citation errors I have set out but I do not think they contain any errors of law or fact. The Commissioner’s conclusion that the contracts of employment of both appellants were not formal or complete was correct. Although both were provided with letters of appointment these did not contain all of the terms – for example the bonus payment. Apart from the letters there were other terms and conditions contained in other documents, made orally or as inferred from the actions of the parties. The principles set out in the authorities I cited in Miles & Miles v Milward (2007) 87 WAIG 2991 at [191] are applicable. I there said:
“191 It may also be that what the parties have agreed can only be inferred after a period of time by examining what has occurred. The same point has been made in authorities about deciding if a worker is an employee or independent contractor. As stated by Gleeson CJ in Connelly v Wells (1994) 55 IR 73 at 74, the conduct of the parties may need to be examined for the purpose of reaching a conclusion about the terms and conditions on which they were contracting with one another. Similarly, Anderson J in United Construction Pty Ltd v Birighitti (2003) 83 WAIG 434 at [14] said that in the case of informal oral agreements, the content of the arrangement may be inferred by examining events which succeeded the contract and from the course of dealing between the parties. His Honour said it was permissible to examine the conduct of the parties to see what their agreement was in its entirety.”

275 In relation to any “imputed intention” the process adopted in Byrne and Frew, set out above, would have been appropriate. The appellants argued however that the “implied terms principles in BP refinery” were an “irrelevant matter” taken into account by the Commissioner. This is because the appellants’ case was not based on an implication of a term into the contracts on the basis of the BP Refinery process. Instead the appellants argued terms were “implied into” the contracts by the “conduct of the parties”. The appellants argued before the Commissioner that CSA employees’ condition had been applied to the employees of the respondent. Specifically it was argued that the same classification and salary increment system was applied to them, they had the same public service leave entitlements, were paid superannuation contributions on the same basis and the entertainment allowance was removed from Mr Pemberton at the same time as it was lost by the CSA employees.
276 I cannot see however that the Commissioner dismissed this aspect of the appellants’ claim on the basis of the application of the BP Refinery principles. (PA 2A(d), 5(d) are not established).
277 It was asserted that based on the evidence I have described in the previous but one paragraph the Commissioner should have found that as these terms were applied to the appellants then the CSA employees’ condition were “their contractual entitlement”. I do not accept this was an inference the Commissioner was bound to make. There was evidence that the appellants’ terms and conditions of employment were different from those of CSA employees and the Commissioner was entitled to accept that evidence. This will be discussed again later. (PA 3(c) is not established).

Reasons Paragraphs [138]-[141]
278 There was then the heading “Redundancy”. The Commissioner said the evidence established the only documents containing express terms and conditions of employment were the letters of appointment and “some of the minutes” of the Board ([138]).
279 The Commissioner said there was disagreement about the “quantum” of the redundancy payment to which the appellants were entitled. The Commissioner referred to the appellants’ submission that the payment “should be determined by incorporating the involuntary redundancy provisions applying to CSA employees at the time”. The Commissioner said it was “clear that the terms of the redundancy payment to be paid to the applicants were those already provided by the respondent” ([139]).
280 The Commissioner concluded [139] with the following:
“In all the circumstances I am not satisfied that the applicants have proved, on the balance of probabilities that that [sic] they were entitled, whether expressly or referred [sic], to CSA employee or public service redundancy provisions as part of the terms of their contracts of employment. The evidence that the quantum of the redundancy payment having regard to the email of Mr Hewson (exhibit Pemberton 13), discussions with Ms Brewer, access to the CSA superannuation fund and the conduct of the parties over a period of time did not, in the Commission’s view, amount to conditions that on balance could be inferred or implied to be the same as employees of the CSA.”

281 The Commissioner then set out and rejected an argument of the appellants based upon the Federal Court decision of Furey v Civil Service Association Incorporated [1998] FCA 733. At the hearing of the appeals the appellants expressly abandoned any reliance upon this. The appellants retained however an overall criticism of [140]. This was as follows:
“The applicants submit that oral portions of the contracts, comprising representation and agreements made between Mr Pemberton and Mr Tan in 1988 and Mr Pemberton and Ms McGovern in 2002 together with the findings of the Federal Court of Australia [sic] Furey v Civil Service Association Incorporated (1988) (op cit) and the evidence of Ms Walkington and Mr Hewson’s email of 20 October 2005 (exhibit Pemberton 13) reflect an implied conduct of the parties that the terms and conditions of CSA employees were actually implied to the employees of the respondent and in addition a bonus was paid where the respondent made a profit in any one year.”

282 At [141] the Commissioner rejected the argument based on Furey and then said:
“… I refer to the Commission’s earlier findings in that the respondent currently under consideration is not the CSA and in order for the terms of CSA employees to be incorporated into the respondent’s employees’ contracts of employment it would be necessary for such terms to be implied, a concept already rejected with respect to the applicants in so far as redundancy, long service leave, sick leave and other provisions.”

Analysis of Paragraphs [139]-[141] and Associated Particulars of Appeal
283 The appellants criticised the statement by the Commissioner that in the redundancy claim, “quantum” was the only issue in dispute ([139]). I accept what the appellants say, that behind this was the issue of whether The 1992 Redundancy Document or The 2000 Redundancy Document were part of the appellants’ contracts of employment. But the Commissioner did not misstate the “bottom line” of the differences between the parties which was whether the contracts of the appellants provided them with an entitlement to be paid more than they were when made redundant. (PA 5(e) is not established).
284 It is the balance of [139], quoted earlier, which I think is at least to some extent problematic. The first sentence sets out the conclusion reached, although the use of the word “referred” is unclear and it may have been intended to be “inferred”. The next sentence purports to provide the reason for the conclusion but I find it difficult to understand what it means. I think the Commissioner is trying to say that the evidence referred to does not persuade her that the redundancy payment was required to be the same as employees of the CSA. The evidence listed includes “exhibit Pemberton 13” which was the email from Mr Hewson to Ms Walkington and Mr Spray dated 20 October 2005. I have earlier summarised the email, which said that although Mr Hewson’s research showed the conditions of the employees of the respondent were parallel to those of the CSA, redundancy and bonuses were exceptions. The Commissioner’s reference to the discussions with Ms Brewer I think must be to Mr Pemberton’s evidence about what Ms Brewer told him in October 2005 about his redundancy entitlement. The reference to the staff superannuation fund is clear enough. The final evidence referred to is the “conduct of the parties over a period of time”. In the context of the reasons as a whole I construe the Commissioner’s use of an “inferred” condition to mean the evidence did not support an inference that the intention of the parties was that the conditions of employment of the respondent’s employees were to be the same as those of the CSA and therefore include the same redundancy entitlements.
285 The appellants argued the Commissioner did not take into account, as relevant evidence, the respondent’s “adherence” to the CSA’s conditions for the appellants until 2003. In my opinion what the Commissioner said in this paragraph shows that the evidence about the parties’ conduct was taken into account. (PA 2(o) is not established).
286 The use however of “implied” in [139] and [140] is not clear to me. The Commissioner did not discuss whether the term should be implied on the basis of the imputed intention of the parties in accordance with the test she had earlier quoted. I elsewhere point out that in any event the appellants did not base their claims on that type of implied term. Paragraph [140] is also unclear in using the expressions “implied conduct” and “were actually implied to”. At [141] the Commissioner said that for the terms of the CSA’s employees to be incorporated into the appellants’ contracts, the terms would need to “implied”. This is incorrect in that there could have been an express term to that effect, which was the appellants’ case. The Commissioner then says the “concept” of the implication referred to has been rejected for the “provisions” then listed. The reasoning in the sentence is unclear and there is at least a hint of circularity. (PA 1(e) is established).
287 It was also argued that the Commissioner should have “inferred” that The 2000 Redundancy Document was part of the conditions of employment of the CSA employees. This was because the CSA Staff Agreements expressly incorporated into their contracts the existing conditions of service in a range of council resolutions, and these documents met that description. It was not in dispute that The 1992 Redundancy Document had applied to the CSA employees, although it had limited application because of its terms. The Commissioner did not decide whether The 2000 Redundancy Document formed part of the conditions of service of the CSA employees. There was however the uncontradicted evidence of Ms Brewer that it was a draft document which was not endorsed by council. In cross-examination it was not suggested to Ms Brewer that this evidence was either inaccurate or made up. Accordingly it could have been readily accepted by the Commissioner. The Commissioner did not however make such a finding. The lack of a finding on the status of The 2000 Redundancy Document did not of itself constitute error if the Commissioner otherwise decided, without error, that CSA employee redundancy provisions applied to the appellants. In my opinion however the Commissioner’s finding on that issue was problematic for reasons I have tried to explain. The Commissioner was not however required to draw the inference relied on by the appellants. (PA 3(d) is not established).
288 In finding against the appellants on the redundancy issue, the Commissioner did not address the argument that what occurred to Mr Tan when he was made redundant showed that the CSA did have an involuntary redundancy policy. The appellants tried to link what Mr Tan received in his redundancy with what was contained in The 2000 Redundancy Document. As the Commissioner did not analyse the evidence of Mr Tan on this point, she did not undertake the comparison exercise which the appellants submitted she should do. I do not think that, on its own, this evidence and submission was of much weight, but it ought to have been considered along with the other evidence on the redundancy issue. (PA 2(g), (h), (j) are established). Ms Robertson’s evidence that she thought the CSA did have an involuntary redundancy policy was also not here considered. (PA 2(i) is established).
289 It was also argued by the appellants that the Commissioner did not draw the proper inference from Mr Hewson and Ms Brewer not rebutting the evidence of Mr Pemberton about what Ms Brewer told him of his redundancy entitlements. I do not accept the premise on which this submission is based. Mr Hewson was not part of the discussion that Mr Pemberton gave evidence about and so was not in a position to rebut it, and Ms Brewer specifically contradicted his evidence. I have summarised above Ms Brewer’s evidence on the issue. (PA 3(g) is not established).

Reasons Paragraphs [142]-[144]
290 The next heading was “Pro-Rata Long Service Leave”. The Commissioner set out the length of employment of Mr Pemberton and Ms McGovern. (Although the Commissioner wrongly said Mr Pemberton was appointed manager from 1988). At [144] a finding was made that neither Mr Pemberton nor Ms McGovern were entitled to pro rata long service leave on termination “whether expressly or implied [sic]”.

Analysis of Paragraphs [142]-[144] and Associated Particular of Appeal
291 The appellants contended the Commissioner did not decide the correct issue on long service leave, which was the claim that it formed a component of the redundancy entitlement of the appellants. In my opinion this is correct. If however the Commissioner was not in error in her findings about the lack of application to the appellants of either “redundancy policy” the error is of no consequence. This is to be later considered. (PA 5(g) is established).

Reasons Paragraph [145]
292 The next heading was “Effective date of wage increases”. At [145] the Commissioner made a finding that the respondent on “1 September 2003 made a decision to review salaries” but “did not specify an entitlement to back date any wage rise subsequently approved” by the Board. The Commissioner made a finding that when the increases in salaries were determined by the Board there was no decision to pay these from 1 September 2003 to 26 August 2005. The Commissioner said that wage increases and the operating dates were made at the discretion of the respondent. The Commissioner concluded that “neither of the applicants received a shortfall in salary from 1 September 2003 to 26 August 2005”.

Analysis of Paragraph [145] and Associated Particulars of Appeal
293 The appellants again asserted the Commissioner did not decide the correct question. It was argued the issue was not whether there was a decision to “backdate” wages but whether the appellants should have been paid in the same way as CSA employees at levels 5.4 and 3.4, who like those in the public sector, received salary increases from time to time. I accept that this was the way the appellants’ agent put their claims. As set out earlier however both Mr Pemberton and Ms McGovern in their evidence referred to the lack of “back-pay”. Therefore it is understandable that the Commissioner would also refer to the issue in this way.
294 The Commissioner also made a finding that the appellants did not have the same conditions of employment as CSA employees. By 1998 at least CSA employees had their conditions of employment set out in the staff agreements. They did not apply to the respondent’s employees. (See [134]). (PA 5(h) is not established). In deciding that “wage increases were made at the discretion of the respondent” the Commissioner also at least implicitly found against the appellants on this point. The appellants’ argument was that as a consequence of the CSA employees’ condition, salary increases were required to occur at the same time as CSA employees; in other words not at the discretion of the respondent.
295 It was also submitted the Commissioner did not take into account the evidence that the appellants had been paid at classification levels in the CSA and “public service collective agreements”. The Commissioner did not set out with precision the basis upon which she thought the appellants were being paid; nor did she decide if she accepted the evidence from Ms Walkington and Ms Brewer, that there was a separate salary scale for the employees of the respondent. The evidence was that Mr Pemberton was engaged at a “level 5.4” from the time of the Board meeting on 17 August 1994. He asserted his level did not change. There was the evidence of the salary increase on 20 August 2003 which was not expressed to be related to a level. The evidence was then that Mr Pemberton would be paid in accordance with public service salary schedule level 5.4 from 26 August 2005. The Commissioner did not, as she should have, analyse whether this combined with other evidence meant Mr Pemberton ought to have been paid in accordance with level 5.4 of the CSA/public service scale for the period of the claimed underpayment.
296 Not dissimilarly the evidence was that Ms McGovern was appointed as a level 3.1 from 22 July 2002. Her salary increase, decided by the Board on 20 August 2003 and communicated in a letter to her dated 10 September 2003, was not expressed to be as a result of any change of level. Ms McGovern’s salary was next increased on 26 August 2005 when it was decided she would be paid at public service salary schedule level 3.4. The Commissioner should also have assessed this evidence in the way described in the last paragraph. Accordingly the Commissioner erred. The consequence of these errors will later be discussed. (PA 2(m), (p) are established).
297 It was also submitted the Commissioner erred in failing to find that the letters to the appellants from Mr Hewson dated 22 September 2005, which said that their salaries were to be linked to public service schedule 1 constituted an admission that neither he nor Ms Walkington knew the respondent’s employees had the same terms and conditions of employment as those of the CSA. This argument does not support the appellants’ claims as it is circular. It assumes that the CSA employees’ condition applied, as a fact, to support the assertion that Mr Hewson and Ms Walkington did not know the appellants’ terms and conditions of employment, which included that the CSA employees’ condition applied. (PA 3(i) is not established).
298 Another complaint is that the Commissioner did not take into account that changes to salary occurred unilaterally. I do not accept this. I have described above the evidence of Ms Walkington to the effect that there was an implied or implicit acceptance of and agreement to and by the appellants to the salary increases. Agreement can be inferred, as Ms Walkington in effect said, because the appellants received notice of the increases and then continued to work without communicating any non-agreement. (PA 2(c) is not established).
299 It was also argued the Commissioner did not take into account the evidence that there had been no agreed change to Mr Pemberton’s terms and conditions of employment. This rests on a false premise. The evidence of Ms Walkington summarised above was that agreed changes were made (T39). (PA 2(b) is not established).

Reasons Paragraphs [146]-[148]
300 The next heading was “Bonus Payments”. It is appropriate to quote in full the three paragraphs which dealt with this issue as follows:
“146 In considering the issue of bonuses the parties agreed that payment of bonuses was an express term of the applicants’ contracts of employment.  What was not agreed was the way in which the bonus was calculated and therefore the amount to be received by each applicant.  The Commission finds, based on the evidence, in particular of Mr Pemberton, that the payment of a bonus arose in circumstances where the respondent made a profit after outgoings and costs were excluded.  The Commission finds when bonuses were paid, Mr Pemberton received more than Ms McGovern.  In terms of how the amounts to be paid were calculated the Commission finds, based on the evidence of Mr Pemberton, an annual report was made to the Board of the respondent.  The Commission determines that costs were then deducted. The applicants submitted that bonuses in their experience were always equal to or greater than the bonus paid in the previous year, a concept rejected by the Commission. 
147 The Commission finds in respect of whether a bonus would be paid the following pre-requisites were required:
- the making of a profit in any financial year after costs and outgoings were excluded;
- the receipt of a report to the Board from the manager; and
- a determination by the Board to pay the bonus and the amount to be paid to the applicants.
148 The Commission finds in the year 2005/2006 that the respondent, once costs and outgoings were excluded, did not make a profit and therefore the applicants were not entitled to a bonus. As two of the three pre-requisites necessary to paying a bonus had not been met, namely the making of a profit and a decision by the Board to pay the bonus the benefit had, in the Commission’s view, not been denied.”

Analysis of Paragraphs [146]-[148] and Associated Particulars of Appeal
301 The Commissioner first said she accepted the evidence of Mr Pemberton that the payment of the bonus arose in circumstances where there was a profit “after outgoings and costs were excluded” ([146]). There are two problems with this finding. The first is that although Mr Pemberton said the bonus was payable if there was a profit, he did not refer to “outgoings and costs” being excluded. The second is that it is unclear what “outgoings and costs” meant in the context. All of the expenditure items in the financial statements could be characterised in this way. If they were then “excluded” in determining whether there was a profit, a profit would always be made each year. (PA 1(f) is established; PA 5(i) is not clearly expressed and given PA 1(f) is established, is not required to be independently determined).
302 The Commissioner then turned to the issue of how the amounts to be paid were calculated. The Commissioner said the annual report was provided to the Board and “costs were then deducted”. Again there was no evidence precisely in these terms and the word “costs” is unclear. I note however that Ms Robertson refers to “meeting costs” and “computer costs” not being included. (T96-7).
303 At [147] the Commissioner summarised the findings she had just made about whether a bonus would be paid. The Commissioner repeated that “costs and outgoings were excluded”. The Commissioner then found that there was no profit for the 2005-2006 financial year “once costs and outgoings were excluded” ([148]). Ms Walkington had given evidence based on the annual report that there was no profit made for that year, but there was no process of exclusion of costs or outgoings in the methodology she relied on to give that evidence. Her evidence was that there was no profit, indeed there was a loss, as the “bottom line” in the accounts showed this. That is there was a loss because all of the expenditure exceeded the income. As I have said though if “costs and outgoings” were excluded there would of course have been a profit.
304 The respondent’s counsel valiantly tried to rescue these findings and reasons. This was on the basis that what the Commissioner really meant when she said “excluded” was “taken into account”, so that she was endorsing the evidence and position of Ms Walkington. I do not however accept this submission. In the first place I find it impossible to decide that “excluded” should be construed in this way. Secondly The Macquarie Dictionary, online edition, at 27 June 2008 relevantly defines “excluded” as “to shut out from consideration”. (PA 1(h) is established).
305 Secondly although the Commissioner had at [123] accepted the evidence of Mr Tan that profitability was required before bonuses could be considered, she did not then nor at [146][148] analyse the other aspects of his evidence, summarised above about how profitability was calculated in the circumstances. In addition, although at [123] Ms Robertson’s evidence was not accepted on the bonuses issue, as I have said the reasoning does not support the finding. (PA 2(e) is established). The point is material because if Mr Tan’s evidence was accepted and payment of fees/costs to the CSA were excluded “expenditure”, there was a profit for the 2005-2006 year. (PA 2(f) is established).
306 At [146] the Commissioner also said the “concept” that the bonuses received were equal to or greater than the previous year had been “rejected”. I cannot see that any such finding was made and if so no reasons were given for it. The appellants submitted the Commissioner had, by contrast accepted the contention at [120]. I do not accept this as at that point the Commissioner was simply discussing the parties’ positions on the issue. This was not an error of fact therefore as contended by the appellants. (PA 1(g) is not established).

Reasons Paragraphs [149]-[150]
307 Under the heading “Other Matters” the Commissioner first dealt with the estoppel argument. The Commissioner cited Miles v Brendon Penn Nominees Pty Ltd (2006) 86 WAIG 3377. The Commissioner said that I there “considered the three principles of estoppel”. I pause at this point to note this is incorrect. The Full Bench did not there consider the principles. In Miles at [22] the Full Bench simply quoted from the Industrial Magistrate’s reasons which included an assertion that the Full Bench in The Western Australian Builders’ Labourers, Painters and Plasterers Union v RB Exclusive Pools Pty Ltd trading as Florida Exclusive Pools (1996) 77 WAIG 4 has considered three elements of estoppel by quoting from The Laws of Australia, Volume 35.6, paragraphs [2]-[5] and [79]. In Miles the key issue was whether the appellant was an employee or independent contractor and the Full Bench found the Industrial Magistrate was “sidetracked by his consideration of the issue of estoppel” which was not relevant ([29]). In her reasons the Commissioner quoted from the reasons of the Industrial Magistrate which were quoted at [22] of Miles.
308 At [150] the Commissioner said she rejected the:
“submissions of the applicants that the respondent was estopped from denying the redundancy provisions by virtue of the position espoused by the respondent through representations by Ms Brewer and Mr Hewson, namely that the applicants were entitled to redundancy provisions equivalent to a CSA official … no estoppel arises either as a consequence of an administrative act on the part of Ms Brewer, an employee of an organisation other than the respondent, and a clumsy action on the part of Mr Hewson however well-intentioned, who at no stage purported to represent the views of the respondent [sic]”.

309 The Commissioner also referred to Mr Pemberton’s knowledge of the Board having to act collectively to pass resolutions and said he would have “had knowledge at the time Mr Hewson did not reflect the views of the respondent and would have knowledge the Board had not made a determination on the issue”.

Analysis of Paragraphs [149]-[150] and Associated Particulars of Appeal
310 The appellants complain about the reasoning of the Commissioner in deciding that the asserted estoppel did not apply. I do not need to address this issue as in any event there is no basis on which the appellants could be granted a remedy under s29(1)(b)(ii) of the Act based on estoppel. That subsection allows an employee to refer a claim to the Commission where “he” has not been allowed a benefit “to which he is entitled under his contract of employment”. Estoppel, in the context of an existing contract, can have the effect that a party is not entitled to rely on their contractual rights because it would be unconscionable to do so. Estoppel does not supply a contractual term, or to put it in the words of s29(1)(b)(ii), a benefit to which a person is entitled under their contract. As stated in Lexis-Nexis, Carter on Contract, online at, 27 June 2008 at [07-100]:
“Accordingly, where there is a pre-existing legal relationship between the person who made the representation, promise or assurance and the person to whom it was made, estoppel may apply and prevent the representor or promisor asserting his or her strict legal rights in a way which contradicts the representation, promise or assurance, and the legal rights may be suspended while the estoppel operates”

311 The appellants relied on Waltons Stores (Interstate Ltd) v Maher (1988) 164 CLR 387. This was also misplaced. That was a case about promissory estoppel in the context of a relationship where there was no concluded contract. The outcome was that one of the parties to the precontractual negotiations was estopped from insisting the other party did not have any remedy for the representations made, on the basis that there had been no concluded contract. But the estoppel did not give rise to a contractual remedy or a contract. Brennan J specifically said “equitable estoppel does not elevate non-contractual promises to the level of contractual promises” ([427]). The same applies in the present context. The argument based on estoppel could not therefore succeed. (PA 5(j) is not established).

Reasons Paragraph [151]
312 The Commissioner then dealt with the appellants’ Jones v Dunkel argument. The Commissioner’s decision on this issue was contained in her final two sentences at [151] as follows:
“In this matter it was put to the Commission that Mr Dave Robinson, a previous General Secretary of the CSA would have assisted with clarifying the involuntary redundancy provisions/policies of the CSA prior to 2002.  I accept that to be the case as too would Mr Smith, Mr Robinson’s predecessor, however I do not draw a Jones v Dunkel and another (op cit) [sic] applicants were employees of the respondent and not the CSA.”

Analysis of Paragraph [151] and Associated Particulars of Appeal
313 Ignoring the grammatical errors in the final sentence, the Commissioner said in effect she would not draw a Jones v Dunkel inference as the appellants were not employees of the CSA. The Commissioner did not explain why. The argument of the appellants was, in part and as explained above, that the CSA had an involuntary redundancy policy which applied to their employees; and was also part of the appellants’ contracts. The fact therefore that the appellants were not employees of the CSA did not provide a sound reason for not drawing the Jones v Dunkel inference. The Commissioner therefore erred in her consideration of the point.
314 Whether a Jones v Dunkel inference will be drawn depends in part upon the closeness of the relationship between the party and potential witness. (See Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157 per Hill and Finkelstein JJ at [64]). The reasoning in Jones v Dunkel applies not only to employees of the relevant party but also others who are “in their camp”. (See Claremont Petroleum NL v Cummings (1992) 110 ALR 239 per Wilcox J at 259). Both Mr Smith and Mr Robinson could have fitted this description as former office holders of the respondent. The Commissioner did not expressly say whether she thought they were sufficiently close to the respondent to make Jones v Dunkel potentially applicable. If the Commissioner had decided they were now “independent of both sides and equally available to them, the Jones v Dunkel inferences cancel out”. (Claremont Petroleum at 259). An inference could not then be drawn against the respondent.
315 Although the Commissioner said the possible evidence of these witnesses could have clarified the involuntary redundancy provisions/policy, the submission made by the appellants’ agent at the hearing was broader – that it could also have been material to the terms and conditions of employment in the 1990s (T185). No specific point however was made about that.
316 From the witness statements, annexed documents and oral evidence given by and on behalf of Mr Pemberton, the respondent could have seen that evidence by Mr Smith and Mr Robinson may have refuted, at least in part, that which was adduced on behalf of Mr Pemberton. The fragmented nature of the hearing meant there was no obvious time constraint in them being called to give evidence after the appellants’ oral evidence was given. There was no explanation of them not being called as witnesses. Subject to the closeness of relationship issue, the Jones v Dunkel principle could have applied. The Commissioner erred however in her reasons in deciding it did not. (PA 5(k) is established).
317 The fact of this error does not necessarily and on its own mean that the appeal must be allowed. This is because as discussed in the next section of the reasons the appeal will not be allowed if the applications could not have succeeded in any event.

Particulars of Appeal 6(a)-(c)
318 In my opinion these particulars contain generalised assertions and conclusions which do not independently take the appeals any further. They are not established.

Outcome of Appeals
319 In my opinion therefore a number of the Particulars of Appeal have been established. They involve the Commissioner making errors of fact, failing to take relevant evidence into account, making errors in findings on credibility and misdirections on the law. Ordinarily, errors of the nature and extent of those made by the Commissioner would lead to an appeal being allowed and the application being remitted for determination. An exception is where despite the errors made, an appellant’s claim must fail on the evidence adduced at the hearing. (See for example Mt Lawley Pty Ltd at [29]; Camden at [39]). In the present appeals this involves the separate examination of the claims of each appellant and the relevant evidence upon the three components of their claims.

Analysis of Unpaid Salary Claims
320 The appellants claimed they were underpaid from 1 September 2003 to 26 August 2005. The claim rests upon that they were employed at CSA/public service levels 5.4 and 3.4 for this period.

(a) Mr Pemberton
321 Mr Pemberton and Mr Tan gave evidence that the former was told in 1988 that his conditions of employment were to be the same as employees of the CSA. In turn there was evidence that at that time the conditions of employment of CSA employees was similar to those of the WA public service. The Commissioner did not properly consider this evidence.
322 The Commissioner also did not decide whether Mr Pemberton was employed under one contract of employment or two. In my opinion however the evidence which I have earlier summarised strongly pointed to Mr Pemberton being separately employed under a new contract in April 1989. When he was appointed in December 1988 it was initially for a four-week period to help out. This period of time was later extended by mutual agreement. At that time however Mr Pemberton had not been appointed as manager. This only occurred after a subsequent interview with Mr Smith and a decision of the Board in April 1989. He then received a letter of appointment (T118). If Mr Pemberton was employed under a second contract of employment, there would be a question of whether that incorporated what was said to him by Mr Tan prior to the commencement of the first contract. There was limited evidence to support such a contention. Mr Tan said that it “would have been reaffirmed to him that on permanency the conditions would remain the same” (T79). This evidence was speculative in its terms and Mr Tan did not point to any specific facts to support what he said. The issue does not however need to be determined to decide the appeals.
323 There was also evidence that Mr Pemberton’s letter of appointment contained a phrase that his conditions were similar to those of the WA public service. This evidence from Mr Tan, Mr Pemberton and somewhat supported by the advertisement in the Western Australian (albeit that was in April 1997), was not properly considered by the Commissioner. She did not accept that the letter contained this phrase but the reasons for the rejection are tainted with error.
324 There was however clear evidence that the terms and conditions of employment of Mr Pemberton were not the same as CSA employees. Mr Pemberton attended the Board meeting on 21 August 2002. He tabled at the meeting the Comparison of Conditions Document and the Comparison of Salaries Document. His evidence was that they were prepared by Ms Brewer (T116). As set out above these documents clearly expressed differences in salary and conditions between CSA employees and the appellants. In his evidence Mr Pemberton accepted that from that date he understood there were differences in the two sets of employment conditions. There was no evidence that at that time or any time prior to October 2005 Mr Pemberton disputed or objected to this. Accordingly, even if his employment contract did have the CSA employees’ condition at the start, he must be taken to have at least agreed, by his conduct, to the contract being varied from that point onwards. By his conduct I mean his understanding of what the respondent as his employer said the terms of his contract were and his continuing to work without demur.
325 Accordingly if there is a basis for Mr Pemberton’s claim for underpayment of salary it must come from a source different to the argued existence of the CSA employees’ condition.
326 There was other evidence that Mr Pemberton had at one time been paid in accordance with the CSA/public service salary scales. Mr Pemberton gave this evidence directly and it was supported by Mr Tan and Ms Robertson. On 17 August 1994 the Board resolved to increase Mr Pemberton’s salary to “level 5.4”. That meeting of the Board was relevantly attended by Ms Robertson as chair, Mr Robinson, Mr Tan and Mr Pemberton by invitation. There was no evidence about the meaning of level 5.4 but the evidence of Mr Pemberton, Mr Tan and Ms Robertson was consistent with this being a reference to that level on the public service/CSA scale. The meeting was held before Ms Walkington or Ms Brewer were involved with the respondent, so they could not comment on it. Ms Robertson’s evidence supported the inference that level 5.4 was a reference to that level in the public service salary schedule (T99).
327 Mr Pemberton said that after he was appointed level 5.4 until he was made redundant he was still on a level 5.4 of the Public Service Award and all he had in the meantime “was the safety net increases and stuff that had come through” (T121). It is unclear what this evidence meant as Mr Pemberton’s claim was based upon not being paid at public service/CSA salary scale 5.4 from 1 September 2003 to 26 August 2005, including incremental increases.
328 The next evidence about Mr Pemberton’s salary was at the meeting of the Board on 20 August 2003. This was relevantly attended by Ms Robertson and Mr Pemberton by invitation. Ms Walkington was one of the two apologies. It was there decided to increase Mr Pemberton’s salary to $53,500 including the absorption of the allowance he had previously been paid. The minutes did not record whether this salary was that of a particular level. The minutes referred to a report by Mr Pemberton saying there were difficulties in attracting staff and concern about the ability to retain staff given salary levels and “the current environment” in the insurance industry. The minutes record that following the discussion the Board agreed the salary of staff should be linked to the relevant industry award. A resolution was passed that Ms McGovern be appointed to a supervisory position at $43,000 per annum or as close to this point in the Insurance Industry Award 1988 as was possible. The minutes recorded that the point in the award was $43,090.
329 The minutes then recorded discussion about the Mr Pemberton’s “current package”. Following discussion a resolution was carried that the “manager’s salary” should be $53,500 including the allowance. The Board agreed that all “increments, reclassification and staff levels would be effective as of 1 September 2003”.
330 This evidence establishes that a decision was taken by the Board to change the nature of the salary paid to Mr Pemberton from that date. Even if it was previously aligned to public service/CSA salary scale, it was not to be after that. On this basis there was no requirement to pay to Mr Pemberton increases in salary based upon a public service/CSA level of 5.4 from 1 September 2003. It was at the Board meeting on 18 August 2005, as explained to Mr Pemberton in the letter to him dated 22 September 2005, that it was decided to align Mr Pemberton’s salary to public service level 5.4 with a salary of $61,664.
331 It was argued on behalf of Mr Pemberton that he had been appointed at public service/CSA level 5.4 as from 1994 and the variation of his salary to that which was paid between 1 September 2003 and 26 August 2005 involved an underpayment to the extent that it did not match that level. It was relevant that Mr Pemberton was present at the meeting on 20 August 2003. He presented a report which was aimed at seeking greater flexibility in the salaries of the employees of the respondent. The Board then decided to link Ms McGovern’s salary to that of the insurance industry. The minutes suggest the same approach was taken to the salary of Mr Pemberton. I say this due to the context of Mr Pemberton’s report and the basis upon which Ms McGovern’s salary was increased.
332 Mr Pemberton received a letter informing him of the new amount of his salary and he was then paid in accordance with the letter. At the time he did not make any complaint that he was being underpaid. He carried on working and being paid at that salary. Moreover as set out above, Mr Pemberton was present at the meeting on 21 August 2002 and knew by then at the latest that he was not being paid in accordance with the schedules applicable to the CSA/public service (T116-117)
333 The evidence of Mr Pemberton’s attendance at the meeting on 20 August 2003, the resolution of the Board on that day about his salary, the letter to Mr Pemberton dated 10 September 2003, his continued employment, the payment of the amount set out in the letter and his acceptance thereof demonstrate that an agreement that $53,500 was to be the amount of Mr Pemberton’s salary. The salary was not agreed to be linked to any CSA/public service level 5.4.
334 It was argued on behalf of Mr Pemberton that he did not agree to this, but the evidence just discussed tells otherwise.
335 This was not a situation where there was a unilateral reduction by an employer of the agreed salary payable to an employee. (See Tokyo Network Computing Pty Ltd v Tanaka [2004] NSWCA 263 at paragraph [6]).
336 Accordingly the evidence did not establish that Mr Pemberton was engaged on public service/CSA salary level 5.4 as from 1 September 2003. Therefore despite the errors made by the Commissioner, Mr Pemberton is not entitled to appellate relief on this claim.

(b) Ms McGovern
337 The disposition of this aspect of Ms McGovern’s appeal is more straightforward. On the evidence Ms McGovern could not establish she was employed at the CSA/public service level 3.4 from 1 September 2003 to 26 August 2005.
338 The first mention of her being employed at level 3.4 was in the letter to her dated 22 September 2005. This referred to a decision being made by the Board on 18 August 2005 to link her salary to the Public Service Schedule 1 and adjust the salary to public service level 3.4. This provides no foundation to the claim that she was engaged on that level prior to 26 August 2005; indeed the opposite is conveyed. The evidence as to how the salary was set in September 2003 after the meeting on 20 August 2003 is analysed above. This evidence also does not support Ms McGovern’s claim.
339 Additionally the claim that Ms McGovern’s contract contained the CSA employees’ condition was not supported by the evidence. This is because:
(a) There was no such term in her letter of appointment.
(b) There was no evidence of this being an oral term of her contract.
(c) As set out earlier, Ms Walkington’s “concession” could not support the assertion that the condition applied.
(d) In her oral evidence Ms McGovern admitted there were differences in her conditions of employment to CSA employees.
(e) There was insufficient evidence to support the proposition that she had been paid as if a CSA employee before 26 August 2005.
(f) Due to (d) and (e) the claim that because Ms McGovern was given the same entitlements as a CSA employee, it should be inferred that the parties intended the CSA employees’ condition to apply, is not established.
(g) The conclusion in (f) was also supported by the Comparison of Conditions Document and the Comparison of Salaries Document. Although there was no specific finding by the Commissioner that these documents accurately described the conditions that applied at the time, Mr Pemberton did not dispute their contents. There was also the evidence from Ms Walkington and Ms Brewer that there was a different salary scale for the employees of the respondent, at least by the time Ms McGovern was appointed. The Commissioner did not make any finding on the accuracy of that evidence, although it is supported by the documents which Mr Pemberton tabled at the Board meeting on 21 August 2002.
(h) Ms McGovern was employed after the CSA Staff Agreements commenced and they did not apply to the respondent’s employees.

340 As Ms McGovern, on the evidence, could not have established she was entitled to the underpayment of salary claimed, this part of her claim does not gain from appellate intervention, despite the errors made by the Commissioner.

Underpayment of Redundancy Entitlements Claims
341 The claim was based on two propositions. The first was that CSA employees had as a term of their contracts of employment an entitlement to payment of redundancy benefits if they were involuntarily made redundant. The second was the CSA Employees’ Condition was part of the appellants’ contracts. For the reasons set out earlier, the CSA employment condition was not at any time part of Ms McGovern’s contract of employment. With respect to Mr Pemberton it was not part of his contract of employment, at least from August 2002 or shortly thereafter.
342 The first proposition was unclear on the evidence. The 1992 Redundancy Document was expressed to apply to specific and limited circumstances. They did not include employees of the CSA whom were in a substantially similar position to the appellants. Additionally Ms Brewer gave evidence that The 2000 Redundancy Document was a draft she had prepared. There was no evidence that the document had been endorsed by the CSA council and applied to CSA employees. Ms Walkington, Mr Hewson and Ms Brewer each gave evidence that the CSA had no involuntary redundancy policy which applied to their employees. On the other hand Ms Robertson gave evidence that she had seen a document with similar terms to The 2000 Redundancy Document and she believed it applied to CSA employees. She also said that the “staff of the union were always paid out in accordance with the public service redundancy provisions”, if “they were relieved of their positions” (T95). The letter to Mr Tan, from Mr Robinson when the former was made involuntarily redundant said he was “eligible for redundancy in accordance with the Union’s Redundancy Provisions”. This suggests there was at that time at least an applicable redundancy policy. All of this evidence was not properly considered by the Commissioner. Additionally the redundancy policy that existed at the time of Mr Tan’s termination was an issue relevant to the Jones v Dunkel point, which was not properly considered by the Commissioner. The dispute about whether there was an involuntary redundancy policy cannot and does not need to be resolved by the Full Bench. Accordingly if the first proposition was arguable on the evidence, the issue of the redundancy entitlement would need to be remitted for determination; but this is not the case.
343 Accordingly, despite the errors made by the Commissioner, the appellants are not entitled to any appellate relief for this aspect of their claims.

Non-Payment of Bonus Claims
344 On this issue the Commissioner made errors in her assessment of witnesses’ credibility, understanding the evidence, factual conclusions and expression of reasons. The resolution of the bonus payment issued depended upon the method which was employed when assessing whether a profit was made by the respondent for a financial year. There was different evidence given about this. The evidence of Mr Tan, Ms Robertson and Mr Pemberton supported the appellants. The evidence of Ms Walkington and Mr Hewson did not. The Commissioner did not properly resolve this difference in the evidence. The Full Bench is not in a position to decide what evidence should be accepted or rejected and consequently to determine the bonus issue. Accordingly, for the issue to be determined it will need to be remitted to the Commission.

Decision on Appeals and Remittal
345 In my opinion the appeals of both Mr Pemberton and Ms McGovern should be upheld and the decision on whether they have been denied an entitlement to a bonus under their contracts of employment should be quashed and remitted to the Commission for determination. The power to make such an order is not expressly provided for in s49(5) of the Act. Nevertheless as the Full Bench said in Sealanes (1985) Pty Ltd v Foley and Buktenica (2006) 86 WAIG 1254 at [36]-[37]:
“36 … the Full Bench, as any court of limited jurisdiction, has the jurisdiction necessarily implied to effectively carry out the powers granted to it. (See the reference to the authorities helpfully referred to in Medical Board (SA) v N,JRP and Another (2006) 93 SASR 546 at [21]-[23]).
37 In this context the reference to jurisdiction which is “necessary” is a reference to a power to make orders reasonably required or which are legally ancillary. (Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435 at [51]).”

346 In my opinion the making of an order of the type contemplated is reasonably necessary for the Full Bench to carry out its appellate function. I do not think the legislature could have intended that where, on appeal, it is established that the decision on one of three aspects of an application is flawed and the Full Bench cannot itself decide that aspect, it would not have the power to quash that part of the decision and order its remittal for determination. To make the order is in my opinion a necessary incident of carrying out the appellate jurisdiction given to the Full Bench.
347 It will be a matter for the Chief Commissioner to decide which Commissioner should re-hear and determine the bonus claims.

Costs
348 In the appellants’ outline of submissions the appellants claimed “costs”. The items which were claimed and their quantum were not identified. If the claim is to be pursued, the appellants should file written submissions within seven days, with the respondent having the opportunity to reply within another seven days.

Orders
349 In my opinion, in each appeal, the following orders should be made:
1. The appeal is upheld.
2. The decision of the Commission, insofar as it purported to determine the appellant’s claim to an entitlement to be paid a bonus, is quashed.
3. The application is remitted to the Commission, for the purpose of the proper determination of the appellant’s claim to an entitlement to be paid a bonus.
4. Any application by the appellant for costs should be supported by a written submission, filed and served within 7 days, setting out the items claimed, their quantum and the basis of the claim.
5. The respondent may file and serve written submissions in reply to any filed and served by the appellant, in accordance with order 4, within 7 days of the service thereof.

350 Minutes should issue in these terms.

SMITH SC:
351 I have had the benefit of reading the reasons to be published by the Acting President. For the reasons his Honour gives, I agree the appeals should be allowed and the orders proposed by his Honour should be made.

HARRISON C:
352 I have had the benefit of reading the reasons for decision of His Honour, the Acting President. I agree with those reasons and have nothing to add.
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