APPEAL AGAINST DECISION MADE BY RESPONDENT RE STATUS OF EMPLOYMENT

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES Susan Waring

 Judith Margaret Wickham

 Shane Melville

APPELLANTS

-v-

WorkCover WA

RESPONDENT

CORAM PUBLIC SERVICE APPEAL BOARD

 Acting Senior Commissioner P E Scott - CHAIRMAN

 MS B CONWAY - BOARD MEMBER

 MR A PITTOCK - BOARD MEMBER

HEARD 2 September 2010

DELIVERED FRIday, 24 September 2010

FILE NO. PSAB 31 OF 2009, PSAB 33 OF 2009, PSAB 34 OF 2009

CITATION NO. 2010 WAIRC 00914

CatchWords Jurisdiction of Public Service Appeal Board – Permanent public servants – Fixed term contract officers – Interpretation of a provision of the Public Sector Management Act concerning conditions of employment – Validity of exercise of statutory power to appoint – Validity of appointments – Severing of conditions from contracts of employment – Contracting out of the Award – Industrial Relations Act 1979 s 80I(1)(a), s 114 – Workers’ Compensation and Injury Management Act 1981 – Public Sector Management Act 1994 s 64(1), (4) and (5) - Public Service Award 1992 cl 8 – Approved Procedure 3 – Permanent Appointments (Public Service Officers) – Approved Procedure 4 – Fixed Term Contract of Service (Public Service Officers)

Result Appeals dismissed

Representation 

Appellants Ms S Waring, Ms J Wickham and Mr S Melville each on their own behalf

Respondent Mr R Andretich of counsel

Reasons for Decision

1          The appellants each appeal to the Public Service Appeal Board (the Board) against the respondent’s decision said to have been given on 1 December 2009 that they are not permanent public servants.  They seek orders requiring the respondent to recognise them as permanent officers from 3 November 2005. 

Background

2          In 2005 there were significant changes to the workers’ compensation scheme in Western Australia following amendments to the Workers’ Compensation and Injury Management Act 1981 (WCIM Act).  Those changes included the creation of the Dispute Resolution Directorate (DRD) within WorkCover, and the creation of positions of arbitrator. 

3          In August 2005 the respondent advertised in various media for applications for a pool of arbitrators, noting an intention to establish a team of 10–16 arbitrators “initially with a flexible mix of full and part-time positions, filled on a permanent or contract basis up to 5 years with the possibility of re-appointment” (Ex A2). 

4          The appellants each applied for positions as arbitrators.  By letter dated 30 September 2005, the Chief Executive Officer of WorkCover wrote to the Minister for Consumer and Employment Protection seeking approval under s 286(2) of the WCIM Act for the persons in an attached list to become arbitrators, and the Minister approved this on 8 October 2005. 

5          Along with a number of persons who were already officers of WorkCover, and others, the appellants were approved for appointment. 

6          Each of the appellants then received a letter dated 26 October 2005 offering them “a contract” “as a fixed term employee engaged as an Arbitrator”.  The fixed term was five years, and a commencement and expiry date were specified in each letter.  Mr Melville’s and Ms Waring’s letters each had a commencement date of 2 November 2005 and an expiry date of 1 November 2010, while Ms Wickham’s commencement date was 28 November 2005 with an expiry date of 27 November 2010 as she was not able to commence work earlier than 28 November 2005.

7          Mr Melville and Ms Wickham had each sought and were offered full time appointments and Ms Waring had sought and was offered a part-time appointment.

8          Each of them signed the letters of offer accepting the offers made therein.

9          Each letter was identical except for the commencement and expiry dates and the full time or part-time arrangement as noted above.  Mr Melville’s letter was in the following terms, formal parts omitted:

“ARBITRATOR POSITION No: 02202379 LEVEL 9, WORKCOVER WA

I am pleased to offer you a contract with the following terms:

1. Terms of Employment

This contract provides employment as a fixed term employee engaged as an Arbitrator in the Dispute Resolution Directorate at WorkCover WA.

Employment will commence on 2 November 2005 and will expire on 1 November 2010.

In signing this contract you acknowledge that you have been contracted to the position for the above period only and following the expiration of this fixed term contract there is no obligation on either party to enter into any further employment arrangement.

2. Termination of Employment

The employment will terminate on the expiry of this contract of employment on the date specified above.

In the event of a fundamental breach of the terms of this contract by either party, or of any other term or condition of employment, the other party may terminate the employment.

Other terms and conditions applicable to termination are set out in the Public Service Award 1992.

3. Hours of Work

You have been hired on a full time basis and your fortnightly working hours will be 75 hours under the Public Service Award 1992 and the Public Service General Agreement 2004.

4. Position

The duties of the position will primarily be those of an Arbitrator but may also include other duties as specified by the Director of Dispute Resolution.

Your salary for the position will be $98,180 per annum in accordance with the 1st increment of the Level 9 salary range.  This may be varied from time to time as provided for in the Public Service General Agreement 2004 and subsequent Public Service General Agreements that are applicable and that come into existence.

5. Other terms and conditions of employment

Other terms and conditions applicable to this contract of employment are as set out in the Public Service Award 1992 and the Public Service Agreement 2004.

WorkCover WA as the employer and you are also subject to obligations in relation to the employment relationship which arise under relevant legislation, including but not limited to, the:

• Public Sector Management Act 1994, together with the Approved Procedures which are available on the Public Sector Management Office website;
• Western Australian Public Sector Code of Ethics;
• Public Sector Standards in Human Resource Management, made under the Public Sector Management Act; and
• WorkCover WA Code of Conduct

Should you wish to accept this offer on the conditions outlined above, could you sign this letter of appointment and return it to the People and Performance Branch of WorkCover WA as soon as possible, please.  You may wish to retain a copy for your records.”

10       The evidence also demonstrates that a number of persons who were already officers of WorkCover were offered and accepted promotion to the position of Arbitrator and these officers were not offered fixed term appointments but remained as permanent public service officers (Attachments to the Witness Statement of Shane Melville – Ex A2).

11       In evidence the appellants each said that the position of Arbitrator was created as a consequence of the establishment of the DRD and was a new position requiring a legal qualification.  The manner of operation of the new arrangements of the DRD was imprecise and as time went on they got a better idea of the working operations. 

12       In cross-examination Mr Melville and Ms Wickham gave evidence of the Legislative Review of the WCIM Act in 2009, which “had been signed off” recommending a changed structure.  This included a proposal that the DRD be abolished and a conciliation service and separate arbitration service be established.  One of the proposals is for the positions of arbitrator to be abolished and new positions created and advertised, which may include reclassification of the positions.  The result would be less work for arbitrators (T7 and 11).

13       Mr Melville gave evidence that of the original pool of arbitrators, the attrition which had occurred since 2005 was that two casuals and one of two part-timers had left but had not been replaced.  One part-timer and one full-timer had left and had been replaced. (T8). 

14       Mr Melville says that the appellants’ appointments properly being fixed term was first raised with the respondent around October 2009.  By letter dated 16 October 2009, six arbitrators, including the appellants, who had been appointed in November 2005 for a fixed term of five years, wrote to the Chief Executive Officer (the CEO) of the respondent “to ascertain whether our employer, WorkCover WA, regards us as permanent employees.”  They set out reasons why they considered they were permanent employees by reference to the Public Sector Management Act 1994 (the PSM Act); the Public Service Award 1992 (the Award); the Public Service Agreement 2008; WorkCover’s Policy for Employment on Fixed Term Contracts; the Modes of Employment Policy; the Premier’s Circular 17 of 2002; Approved Procedure 4 – Fixed Term Contract of Service (Public Service Officers), and the Circular to Departments and Authorities (No. 2 of 2009).  The letter concludes by the writers saying: 

“We request that you advise us by no later than 26 October 2009 as to whether WorkCover WA regards us as permanent employees and, if not, why not.” (Ex A5)

15       The CEO, Michelle Reynolds, responded separately to each of the writers on 27 October 2009 in the following terms:

“PERMANENCY OF EMPLOYMENT TENURE

I refer to your memo of 16 October 2009.

Following your successful application for the position of Arbitrator in 2005 you were offered and accepted appointment on a contract basis for a term of 5 years expiring in 2010.

Advice about your suggested employment status as being a permanent officer of WorkCover WA was sought from the State Solicitor’s Office (SSO).

The advice received from the SSO confirms that you are not a permanent officer.  In order to obtain a permanent appointment it will be necessary for you to apply for an advertised vacancy and be selected for appointment to the permanent staff.

SSO advice is that your appointment was made as a term officer under section 64 (1)(b) of the Public Sector Management Act 1994.  If this appointment was made contrary to an industrial instrument made under the Industrial Relations Act or the Approved Procedures it can be argued that it has been invalidly made.  The consequence of successfully making this argument is not that the appointment is made as a permanent officer but there has been no valid appointment.

For your information as requested.”

(Ex A5).

16       The arbitrators wrote again on 24 November 2009 saying, amongst other things:

“We note that in your responding letters to us you advised us of part of the contents of the legal advice you have received from the State Solicitor’s Office.  You have however not advised us whether you, as the employing authority, have accepted that legal advice and what your position is regarding whether we are permanent public service officers pursuant to the provisions of s.64 of the Public Service Management Act, 1994.  We accordingly request that you do so in writing within 7 days of the date hereof.

Further, should your decision be that we are not permanent public service officers pursuant to the provisions of s.64, please advise us in writing why you have come to that decision.”

17       By letter 1 December 2009 Ms Reynolds responded in the following terms:

“PERMANENCY OF EMPLOYMENT TENURE

I refer to your memo of 24 November 2009.

As I advised on 27 October 2009, your appointment was made as a term officer under section 64(1)(b) of the Public Sector Management Act 1994.

Advice from the State Solicitor’s Office has confirmed my position that you are not a permanent officer.”

18       The appeals are said to be against this decision in relation to the respondent’s interpretation of a provision of the PSM Act concerning the conditions of service of the appellants, namely that their contracts of service are for a fixed term, being appeals under s 80I(1)(a) of the Industrial Relations Act 1979 (the IR Act).

ISSUES AND CONSIDERATION

What was the decision appealed against?

19       During the course of the hearing the Chairman of the Board asked the appellants whether what they really seek to challenge is the decision of the respondent made in 2005 to appoint them for fixed terms of five years.  If that were the case, their appeals would have been filed almost four years out of time.

20       The appellants then sought leave to amend their appeals so as to provide an alternative of an appeal against the decision nearly five years ago, however, following discussion of the requirements for the granting of leave to file out of time they decided not to proceed with an application to amend.  Therefore their appeals remain against the decision of the respondent in relation to an interpretation of a provision of the PSM Act concerning their conditions of service, made on 1 December 2009.

21       That decision is expressed as being:

“As I advised on 27 October 2009, your appointment was made as a term officer under section 64(1)(b) of the Public Sector Management Act 1994. 

Advice from the State Solicitor’s Office has confirmed my position that you are not a permanent officer” (Ex A5).

22       The appeals purport to be “against the decision that I am not a permanent public service officer … given on the 1st day of December 2009.”  Each of the schedules to the Form 11 – Notice of appeal to Public Sector Appeal Board say that:

“1. On 16 October 2009 and 24 November 2009, I requested that the CEO, WorkCover WA, recognise me as a permanent officer in accordance with section 64 of the Public Sector Management Act 1994 (the PSMA), or, if she refuses to do so, advise me upon what basis my employment as an Arbitrator in the Dispute Resolution Directorate (the position I have held since 2005) is of fixed term.

2. The CEO has now advised me (by letter dated 1 December 2009) that she does not consider me a permanent officer for the purposes of the PSMA because I was appointed as a term officer under section 64(1)(b) of the PSMA.

3. Accordingly, absent anything more, the employer will act unlawfully to terminate my employment upon the expiry of my purported fixed term contract on 2 (or 28) November 2010.”

23       The Schedules then set out the basis of the argument, and seek orders:

“requiring the employer to recognise me as a permanent officer from 3 November 2005 in accordance with section 64 of the PSMA and prohibiting the employer from appointing any other person to the position whether on a permanent basis or otherwise pending the hearing and determination of this appeal.”

24       The request made by the appellants and others by their letter of 16 October 2009 is “to ascertain whether our employer, WorkCover WA, regards us as permanent employees” and “(w)e request that you advise us by no later than 26 October 2009 as to whether WorkCover WA regards us as permanent employees and, if not, why not”.

25       The respondent’s reply of 27 October 2009 states the fact of the arbitrators’ appointments in 2005 being “on a contract basis for a term of 5 years expiring in 2010”.  It says that advice was sought about their suggested employment status, and that it confirms that they are not permanent officers.  If the appointments were made contrary to an industrial instrument, or approved procedures, it could be argued that it had been invalidly made.

26       By letter dated 24 November 2009, the arbitrators wrote again to the CEO this time asking whether she had “accepted that legal advice and what your position is regarding whether we are permanent public service officers,” and if not, why not.

27       The response, said to constitute a decision, dated 1 December 2009, is to confirm the advice of 27 October 2009 that their appointments were made as term officers, and that the advice from the State Solicitor’s Office has confirmed the CEO’s position that they are not permanent officers.

28       We are of the opinion that this is not a decision in relation to an interpretation of a provision of the PSM Act, but merely confirmation of a view expressed on 27 October 2009 that “your appointment was made as a term officer under section 64(1)(b) of the Public Sector Management Act 1994” and that advice “confirms that you are not a permanent officer”.

29       This is not a decision to do or not do anything.  At best, it may be a decision of the CEO to not change her mind.

30       What is the consequence of the CEO’s position being wrong whether it be a decision of 27 October or 1 December 2009?  If the interpretation is wrong and the opinion on which it is based is wrong, the opinion is void – i.e. the “decision” of 1 December 2009, is of no effect.  What does that mean for the appellants?  It seems to us that it means nothing more than that the “decision” is set aside as if it had not been made.  That provides the appellants with no change to their status, and it makes no difference to the appellants’ conditions of service.

31       We are of the view that the real appeal is against the decision of the respondent to appoint for a fixed term in 2005.  This is confirmed by the appellants seeking to have the appointments recognised as permanent from the beginning, not from 1 December 2009.  The 2005 decision is not challenged before the Board.  On that basis, the appeals ought to be dismissed.

32       If we are wrong and the letter of the 1 December 2009 constitutes a ‘decision’ to not recognise the appellants’ appointments as being permanent then we deal with that issue.

The Decision of 1 December 2009

33       The starting point for an examination of the appointments of the appellants is s 64 of the PSM Act.  The relevant parts provide:

64. Appointment of public service officers other than executive officers

(1) Subject to this section and to any binding award, order or industrial agreement under the Industrial Relations Act 1979 or employer‑employee agreement under Part VID of the Industrial Relations Act 1979, the employing authority of a department or organisation may in accordance with approved procedures appoint for and on behalf of the Crown a person as a public service officer (otherwise than as an executive officer) on a full‑time or part‑time basis — 

(a) for an indefinite period as a permanent officer; or

(b) for such term not exceeding 5 years as is specified in the instrument of his or her appointment.

…

(4) Subject to subsection (5), a person appointed under subsection (1)(b) cannot apply for an appointment under subsection (1)(a) unless the relevant vacancy has first been advertised in public service notices or in a daily newspaper circulating throughout the State.

(5) Subsection (4) does not apply to a person — 

(a) appointed under subsection (1)(b); and

(b) having, or occupying an office, post or position having, the lowest level of classification at which persons of the same prescribed class as that person are at the relevant time recruited into the Public Service.

34       This section provides that the employing authority may appoint a public service officer for either an indefinite period as a permanent officer or for a term not exceeding five years.  This power to appoint is exercisable subject to a number of conditions.  Firstly, it is subject to the other conditions set out in that section.  Those other conditions include:

(a) that a person appointed for a term cannot apply for an appointment as a permanent officer “unless the relevant vacancy has first been advertised in public notices or in a daily newspaper circulating throughout the State.”

(b) the condition set out in (a) above does not apply to a person appointed for a term who occupies a position which has “the lowest level of classification, at which persons of the same prescribed class as that person are … recruited into the Public Service.”

(c) that appointments are to be made in accordance with approved procedures.

35       There was no argument before the Board that the requirement in (b) applies to the appellants.  However (a) and (c) still require to be complied with before the employing authority can validly appoint persons as public service officers.

36       Secondly, s 64 is subject to any binding award.  The relevant award applicable to public service officers is the Award.  Clause 8 – Contract of Service provides for fixed term contracts of employment at subclause (5).

37       The current provision was inserted into the Award and took effect from 30 July 2004 (84 WAIG 2558) and was in force at the time the appellants were appointed.  It provides:

(5) Fixed Term Contract Employment

(a) The employer may employ officers on a fixed term contract in accordance with the Public Sector Management Act 1994.

(b) In exercising their employing authority employers may only employ a person as a fixed term contract officer in the following circumstances:

(i) covering one-off periods of relief;

(ii) work on a project with a finite life:

Where a project is substantially externally funded including multiple external funding, the employer must present a business case supporting the use of fixed term contract officers in such positions to the Peak Consultative Forum.  Where external funding has been consistent on an historical basis and it can be reasonably expected to continue the employer shall assess the percentage of positions for which permanent appointment can be made;

(iii) work that is seasonal in nature;

(iv) where an officer with specific skills is not readily available in the public sector is required for a finite period; or

(v) in any other situation as is agreed between the parties to this Award.

(c) Officers appointed for a fixed term shall be advised in writing of the terms of the appointment and such advice shall specify the dates of commencement and termination of employment.

(d) The provisions of subclause (2) and (3) of this clause shall also apply to officers employed on a fixed term contract.

Subclause 5(d) notes that subclauses (2) and (3) apply to officers employed on fixed term contracts as they do to permanent officers.  Those provisions deal with discipline and notice of termination of employment.

38       The criteria under which an employing authority may employ persons on a fixed term contract in accordance with the Award are “only” those set out in subclause (1)(b), there are no others.  They are:

(i) To cover on-off periods of relief.  There was no suggestion by any party that the appellants were employed to relieve in the absence of any other officer.  Each is appointed to a position.

(ii) Work on a project with a finite life.   The appellants were appointed following the creation of a new structure for the workers’ compensation system in the State.  Although the evidence indicates that there would be a settling in period for the operations of the new structure, there is no evidence that this was a project with a finite life.  As with all legislation and consequential executive and administrative structures established for the purposes of carrying out the requirements of the legislation, there ought to be regular reviews of the legislation and the structures.  However that does not mean that they meet the definition of a “project with a finite life”.

The Report of the Workers’ Compensation and Injury Management Act 1981 Legislative Review 2009 (Ex R3) does not suggest that the WCIM Act and the DRD were established as some sort of project, but rather that it was the latest in a series of structures designed to deal with disputes regarding workers’ compensation entitlements (p5 – Executive Summary).

There is no evidence that external funding played any part in these positions.

(iii) Work that is of a seasonal nature.  Each of the appellants gave evidence that there was no seasonal element to the work of arbitrators.  There was no evidence to the contrary.  We conclude that the work of arbitrators is not of a seasonal nature.

(iv) Where an officer with specific skills is not readily available in the public sector is required for a finite period.  There are two aspects to this criterion.  The first is the lack of ready availability of an officer with the required skills in the public sector.  The second is that those skills are required for a finite period.  There is no evidence that when the appellants were appointed the specific skills were not readily available in the public sector and were required for a finite period.  That is a matter within the knowledge of the respondent and it did not seek to bring evidence to deal with that matter.

As noted in respect of (ii) above, there was evidence that the work to be undertaken by the appellants was to be ongoing, not for a finite period. The WCIM Act makes no provision for any finite period in the work of the DRD.

It is not now appropriate to look back to a period nearly five years ago and say that because the legislation has now been reviewed and structural changes have been recommended that the work of arbitrators was for a finite duration.  This can be no more true than to say that any other piece of legislation absent any express term, which sets up a government agency and prescribes certain functions and structures, has a finite life. 

We conclude that this criterion is not met.

(v) In any other situation as is agreed between the parties to this Award.  Mr Underwood’s letter to Mr Melville of 19 August 2010 (Ex A1) says that “the tenure of the Arbitrators’ appointments was not determined pursuant to Clause 8(5)(b)(v) of the Public Service Award 1992.”  We take this to mean that the appointments were not made in any other circumstances which were the subject of an agreement between the award parties.  Therefore, this criterion is not met.

39       In these circumstances we conclude that the appointments of arbitrators on fixed term contracts were not made in accordance with the circumstances, which were the ‘only’ circumstances, under which an employing authority could employ a person as a fixed term contract officer, provided for in the Award.  Therefore one of the provisions of s 64 of the PSM Act had not been met.

40       The third requirement set out in s 64 of the PSM Act is that the employing authority may appoint “in accordance with approved procedures”.  Approved Procedure 4 – Fixed Term Contract of Service Appointments (Public Service Officers) says that it relates “to the functions of Chief Executive Officers … as provided for in Section 64(1)(b) of the … (PSM Act).”  It provides, amongst other things, “(c)ircumstances where fixed term contract of service arrangements are appropriate … include:-

• covering one-off periods of leave;
• work on projects with a finite life, where funding is not guaranteed past a certain date or the work is seasonal in nature;
• roles where the skills and abilities required to perform a function are expected to vary over time; and
• for periods of traineeships, apprenticeships and cadetships.

In the case of a finite task an opportunity should exist for permanent officers to be seconded to or to act in the position.  A permanent officer substantively appointed to an office on a fixed term contract for a term not exceeding five (5) years does so with the loss of appointment as a permanent officer.”

41       We note that by the use of the word ‘include’ that this list is not exhaustive, but is in effect a list of examples of circumstances where fixed term contracts may be appropriate.  Therefore, if the circumstances of the appointments are not included in that list, there may be other circumstances where fixed term contracts are appropriate.  A failure to meet any of the circumstances listed does not mean that Approved Procedure 4 has not been complied with.

42       If a fixed term appointment is made which does not comply with the PSM Act and the Award, it is not made in accordance with the requirements of s 64 of the PSM Act.  In this case we conclude that for the reasons set out earlier, the appointments did not meet the circumstances set out in the Award.  Therefore the appointments were not made according to the conditions for the exercise of the employing authority’s power to appoint pursuant to s 64 of the PSM Act. 

43       The appellants’ case is that where a condition in a contract of employment is contrary to the terms of an award, then s 114 of the IR Act provides that the condition contrary to the award is null and void without prejudice to the other provisions of the contract.  The remainder of the contract remains in place.  The terms of the appellants’ contracts then do not express a term, so the contracts are said to be taken to be indefinite or permanent.  Therefore the provision in their contracts which deals with a fixed term of five years is severed, leaving the contracts indefinite, permanent appointments ab initio.

44       The respondent says that the process for the resolution of the issue is not as the appellants specify.  It says that before the provisions of s 114 of the IR Act apply, there must be a valid contract of employment.  In this case that required a valid exercise of power under s 64 of the PSM Act.  If the pre-conditions for appointment were not met, the appointment would not be valid.  If there is no valid appointment, there is no contract and the issue in s 114 of the IR Act will not arise.

Conclusions

45       Section 114(1) of the IR Act on which the appellants rely provides:

114. Prohibition of contracting out

(1) Subject to this Act, a person shall not be freed or discharged from any liability or penalty or from the obligation of any award, industrial agreement or order of the Commission by reason of any contract made or entered into by him or on his behalf, and every contract, in so far as it purports to annul or vary such award, industrial agreement or order of the Commission, shall, to that extent, be null and void without prejudice to the other provisions of the contract which shall be deemed to be severable from any provisions hereby annulled.

46       However, Robin Creyke and John McMillan in Control of Government Action; Text, Cases and Commentary say that:

“A decision made in purported exercise of a statutory discretion, but which is affected by a relevant irregularity, will normally be treated as valid until successfully impugned by an appropriate plaintiff; but once the decision is held to be bad in law it will be treated as being invalid – at least insofar as substantive rights are concerned – as from the date upon which it was made” (p 758).

47       In this case, the power to appoint is set out in a statute to include a requirement to meet a test set out in an award, that is s 64 of the PSM Act requires that the test for fixed term appointments set out in the Award be complied with.  The employer is required to exercise their employing authority to appoint officers in accordance with that test.  In this case it has been demonstrated that the purported exercise of statutory power, to appoint, has been made contrary to the statutory requirements and therefore the decision to appoint was invalid from the date it was made.  (See Wattmaster Alco Pty Ltd v Button (1986) 13 FCR 253.)  While the Award requirement is binding on the employer by virtue of s 64 of the PSM Act, the Award does not at this point apply to the employee because no valid contract yet exists.  The Award only applies to the employment relationship once a valid contract of employment is in place.  In Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 at 423, Latham CJ said:

“The creation of the relation of employer and employee depends upon an agreement between them and not upon any award.  Thus, the existence of the obligations under an award in relation to a particular employer and employee always depends on the existence of a contract between them.”

48       Where the employer, being bound by the statute (the PSM Act), appoints contrary to the statute, then the appointment is invalid before the Award has any application to the employee.  This means that the application of the provisions of s 114 of the IR Act does not arise.

49       Even if s 114 of the IR Act applied, it would not be possible to simply excise those sentences from the contracts which specify the fixed term and conclude that the contracts are then, in the absence of a provision setting out a term, contracts for an indefinite term.

50       The contracts in this case are established under a statutory regime.  Under that regime, s 64 of the PSM Act sets out that the employing authority may appoint in accordance with, amongst other things, approved procedures.  Approved Procedure 3 – Permanent Appointments (Public Service Officers) applies to permanent appointments.  A permanent appointment is not simply a default appointment for a fixed term appointment which was invalidly made.  The provisions of Approved Procedure 3 would need to have been complied with, along with s 64(4) of the PSM Act.  There is nothing before us to indicate whether Approved Procedure 3 has been complied with.  Also, the issue of whether s 64(4) applies in this case has not been addressed.

51       The question then arises as to what if anything can or ought to be done.  Should the Board direct the respondent to appoint the appellants permanently?

52       In the Minister for Education and the Director General of the Education Department of Western Australia v The Civil Service Association of Western Australia (Inc) ((1977) 77 WAIG 2185 at 2187) President Sharkey noted that:

“There was no power in the Commission to make an order directing the appellants to act contrary to their obligations under s 64 of the PSM Act, and it was not therefore in accordance with equity, good conscience and the substantial merits of the case to do so.”

In that case the Full Bench was dealing with the powers of the Public Service Arbitrator which are those of the Commission set out in Divisions 2 to 2G of Part II of the IR Act, which are quite broad powers.  The jurisdiction and powers of the Board are far more circumscribed, and are to hear appeals against decisions of the employing authority of the nature set out in s 80I of the IR Act and to adjust those decisions.  Only those parts of Division 2 of Part II of the IR Act as provided by s 80L, apply to the Board.

53       The power of the Board is to “adjust” the decision of the employer (s 80I(1) of the IR Act).  In State Government Insurance Commission v Terence Hurley Johnson (1997) 77 WAIG 2169, the Industrial Appeal Court examined the powers of the Board and in particular the power to “adjust”.  Anderson J, with whom Franklyn and Scott JJ agreed, said that “(t)he power to “adjust” a decision or determination can only be a power to reform the decision in some way”.  In the case before the Industrial Appeal Court, the appellant made a claim for monetary compensation on the basis that the decision to dismiss him was unfair.  Anderson J said that:

“(t)o give compensation to a dismissed employee is perhaps to change and thus to adjust the rights and obligations flowing from the decision to dismiss, or to super-add a consequence to the decision to dismiss, but it is not to adjust the decision to dismiss” (p 2171).

54       What would it mean to “adjust” the respondent’s decision of 1 December 2009?  It was a decision that each of the appellants is “not a permanent officer”.  To adjust that decision may be to reform it, or to reverse it.  The question then arises as to whether it is appropriate or within power to reform the decision by way of reversing it, i.e. to be a decision that each of the appellants is a permanent officer, in circumstances where the initial power to appoint was not exercised in accordance with the statute and would therefore be invalid.

55       While the Full Bench in Minister for Education and the Director General of the Education Department of Western Australia v The Civil Service Association of Western Australia (Inc) (1977) 77 WAIG 2185 did not deal specifically with the powers of the Board, the statement of President Sharkey applies equally to this case, that there is no power to direct the respondent to act contrary to the obligations under s 64 of the PSM Act and therefore it would not be in accordance with equity, good conscience and the substantial merits to do so.

56       To require the respondent to recognise the appellants’ appointments as permanent would be to require the respondent to ignore the requirement to apply Approved Procedure 3 and s 64(4) of the PSM Act.  We recognise the irony of declining to require the respondent to act contrary to those requirements, when it appears to have already acted contrary to other requirements.  However the remedy for one error is not the requirement to act in error in some other way.

57       We also say this in the context of these appointments having less than two months to run, the appellants having not raised the issue until nearly four years into their contracts, that each appellant was appointed having met a criterion of being a legal practitioner and having entered into the fixed term contracts offered to them. 

58       Further, if the decision of the respondent of 1 December 2009 is wrong, then for the respondent to properly permanently appoint the appellants from the date of that decision would require the respondent to comply with Approved Procedure 3 and s 64(4) of the PSM Act.  This means the employing authority would be required to advertise vacancies and undertake appropriate appointment processes.  We understand that this is what the respondent has commenced to do for the purpose of dealing with positions of arbitrator when the appointments, made nearly five years ago for five year terms, expire.

59       In the circumstances, if the Board has the power to declare the appointments and thus the contracts of the appellants to be invalid or void, to require the respondent to permanently appoint the appellants or to recognise their appointments as being permanent, we would decline to do so because it would be contrary to the equity, good conscience and the substantial merits.  It may also be contrary to the public interest to formally declare the appointments to be invalid or void if there is power to do so.  The appellants have performed duties as arbitrators under the WCIM Act conciliating and arbitrating disputes over nearly five years.  Formally invalidating their appointments may raise questions about the validity of their decisions and possibly of agreements reached in the conciliations conducted by them.

60       The appellants’ contracts have less than two months to run.  We would decline to do anything which would change that situation.

61       We would dismiss the appeals.