FEDERAL COURT OF AUSTRALIA

Metropolitan Health Service Board v Australian Nursing Federation

[2000] FCA 784

INDUSTRIAL LAW – award conditions – underpayment – agreement to accept lesser rates in consideration of no transfer within employment – whether employees and Union estopped from proceeding for breach of award conditions – whether doctrines of estoppel and waiver are available – abuse of process – exercise of magistrate’s discretion in awarding repayment to employees.

Hospitals Act 1927  (WA) s 15(1), s 8

Financial Administration and Audit Act 1985 (WA)

Hospital and Health Services Act 1927  s 16(1)

Industrial Relations Act 1988

Workplace Relations Act 1996 s 178

Gapes v Commercial Bank of Australia (1979) 38 FLR 431 cited

Treharn v Geo McEwin & Son Pty Ltd (1982) 44 ALR 543 cited

Ex parte McLean  (1930) 43 CLR 472 cited

Byrne v Australian Airlines Ltd (1995) 185 CLR 410 discussed

Josephenson v Walker (1914) 18 CLR 691 discussed

True v Amalgamated Collieries of WA Ltd [1940] AC 537 cited

Beckford Nominees Pty Ltd v Shell Co of Australia Ltd (1986) 73 ALR 373 cited

Commonwealth v Verwayen (1990) 170 CLR 394 discussed

Duncan v Ellis (1916) 21 CLR 376 cited

Walsh v Commercial Travellers Association of Victoria (1940) VLR 259 discussed

Kidd v Savage River Mines (1984) 6 FCR 398 followed

Jackson and Wilson v Monadelphous Engineering Associates Pty Ltd (unrep IRCA 17.10.97) discussed

Horsman v Commissioner of Main Roads (unrep 14/9/98 French J) cited

Horsman v Commissioner of Main Roads [1999] FCA 1733 distinguished

Metropolitan Health Services Board v Australian Nursing Federation (1999) 94 FCR 132 cited

Spencer, Bower and Turner, The Law Relating to Estoppel by Representation 3^rd Edition, Butterworths (1977) at par 142

METROPOLITAN HEALTH SERVICE BOARD v AUSTRALIAN NURSING FEDERATION

W 14 of 1999

FRENCH, LEE AND CARR JJ

9 JUNE 2000

PERTH

THE COURT ORDERS THAT:

1.         The appeal is dismissed.

2.         Liberty to the parties to apply within fourteen days on the issue of costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

French J:

Introduction

1                     On 27 June 1999 an Industrial Magistrate found breaches of the Dental Nurses (ANF WA Public Sector) Award 1994 against the Metropolitan Health Service Board.  The breaches arose out of the failure to pay award rates to two dental nurses, Elizabeth Ringland and Yolanda Vyner between May 1993 and June 1995. 

2                     The Metropolitan Health Service Board which has succeeded to the liabilities of the nurses’ former employer, the Perth Dental Hospital, has appealed against the Magistrate’s decision.  The grounds of the appeal rely upon an agreement made at the time of negotiations about the award that dental health nurses could elect to waive entitlement to incremental increases in consideration of remaining at the Perth Dental Hospital and not being subject to transfer out to Community Dental Services pursuant to a proposed amalgamation between the Hospital and Dental Health Services run by the Health Department of Western Australia.

3                     The appeal raises the question whether the doctrines of estoppel and waiver are available by way of defence to asserted breaches of award conditions. 

Factual Background

4                     Prior to 1989, the Perth Dental Hospital was constituted as a public hospital under s 15(1) of the Hospitals Act 1927 (WA).  A Board was appointed under the provisions of the Act to manage and control the Hospital.  The Hospital operated a number of dental clinics in the Perth metropolitan area. The Dental Service Branch of the Health Department of the State of Western Australia operated a school dental service and adult dental services in some country areas.  A decision was taken by the Western Australian State Government in or about 1989 that the functions of the Hospital and the Dental Services Branch of the Health Department should be amalgamated.  This required statutory change.  In the meantime, however, on 4 August 1989, by notice published in the Government Gazette under s 8 of the Hospitals Act 1927, the Perth Dental Hospital Board was abolished.  As a result, by operation of s 7(1) of the Hospitals Act the Minister for Health was deemed to be the Board.  The Commissioner of Health (the Chief Executive Officer of the Health Department of Western Australia) became the accountable authority for the Hospital for the purposes of the Financial Administration and Audit Act 1985 (WA).  At the same time Mr David Neesham was appointed to the position of Director, Dental Services, in which position he was responsible for the management of both the Hospital and the Dental Services Branch of the Health Department.  The Hospital and the Dental Services Branch were thereafter operated in conjunction in a relationship described as an “administrative amalgamation”.  Notwithstanding that administrative amalgamation the Perth Dental Hospital for the time being retained its separate legal identity as a body corporate.  The Dental Services Branch was a branch of a department of the Public Service established under s 21 of the now repealed Public Service Act 1978 (WA). 

5                     Legal unification did not occur until the creation in July 1997 of the Metropolitan Health Service Board. The Hospitals Act 1927 became the Hospitals and Health Services Act 1927 and on 16 July 1997 a notice was published in the Government Gazette under s 16(1) of that Act establishing the Metropolitan Health Service Board (“MHSB”) as a Hospital Board under s 15(1).  The MHSB was thereby constituted as a Hospital Board in respect of a number of metropolitan public hospitals including the Perth Dental Hospital.  The MHSB then became the employer of staff of the former Perth Dental Hospital and it assumed the rights liabilities and obligations of the hospital.

6                     The administrative amalgamation of the Perth Dental Hospital with Community Dental Services, later known as Dental Services, meant that the occasion would arise, from time to time, to transfer dental nurses at the Perth Dental Hospital to other metropolitan locations.  At the time the relevant industrial award governing the pay and conditions of Dental Nurses in the Western Australian Public Sector was the “Nurses (ANF-Western Australian Public Sector) Award 1989” made under the Industrial Relations Act 1988 (Cth).  The proposed amalgamation led to negotiations between the Health Department of Western Australia and the Australian Nursing Federation, an organisation of employees registered under the Industrial Relations Act 1988, on the restructuring of the registered dental nurse classification under the Award.  In a circular dated 20 December 1991 to registered dental nurses from the Director, the agreement was announced and it was said that it would take effect from the pay period commencing 23 December 1991.  A summary of the agreement, said by Neesham to have been “ratified at a hearing before the Australian Industrial Relations Commission” accompanied the circular.  It was said to involve recognition that staff are part of Dental Services in its entirety and that accordingly internal transfer within Dental Services would be necessary.  This could occur as a result of employer or employee initiated action.  Pay rates relevant to dental nurses aged 23 years to 29 years inclusive were identified.  Dental nurses entitled to the 27 year old rate of pay or higher would be transferred into Community Dental Services on the basis of seniority to a higher level position.  That process, it was anticipated, would take a number of years based on existing low turnover rates.  Dental nurses initially occupying higher level positions at the Dental Hospital and former Hospital Clinics would not be required to transfer but would have the opportunity to transfer should they wish.

7                     Outside the formal framework of the agreement, which was apparently submitted to the Commission, there were discussions in March 1992 between Mr Pittendrigh of the Health Department and Ms Janice Blake of the Federation.  The subject matter of these discussions related to the desire of some dental nurses not to be liable to transfer from the Perth Dental Hospital to other centres.  By a letter dated 16 March 1992 over Mr Neesham’s signature as  Director of Dental Services and addressed to Miss Blake, a draft addendum to the November 1991 agreement was enclosed setting out a proposed agreement in the following terms:

“DRAFT

WITHOUT PREJUDICE

ADDENDUM TO NOVEMBER 1991 AGREEMENT

Registered Dental Nurses having completed twelve months service on the twenty six year rate of pay may elect in writing not to transfer to higher level positions in Community Dental Services.  Such an election will result in incremental progression to the twenty seven year rate being deferred until written notification is received of availability for transfer.

Dental Nurses who make such an election will be eligible for transfer to ‘Advanced Dental Nurse Practitioner’ positions.  All Dental Nurses who have completed twelve months service on the twenty six year old rate of pay will be considered for such positions as they become vacant, including those who have transferred to higher level positions in Community Dental Services.  Those with the greater length of service after attaining twelve months service on the twenty six year old rate will be given first preference for transfer.  Should there be two or more staff with similar service, interviews will be held to enable a selection to be made.

Registered Dental Nurses available for transfer into higher level positions in Community Dental Services will continue to be required to nominate preferences for four areas out of the twelve areas located within the metropolitan operations of Community Dental Services.  Filling of positions by transfer will be made from those Registered Dental Nurses who indicate the area in which the position is located as one of their preferences.  In the first instance selection will be from those who indicate the area as their first preference.  The Dental Nurse on the highest salary will be selected.  Where there are two or more persons on that highest salary, an interview process will be used to make a selection.  If there are no first preferences for the area, selection will be made from those nominating the area as a second preference and so on.

Dental Nurses can progressively change their area preferences according to changes in circumstances by advising the Deputy Director of Nursing.  Only advices received prior to a vacancy becoming available will be considered in relation to that vacancy.”

Miss Blake responded by letter to Mr Pittendrigh, on 19 March 1992 and advised that Federation members had “overwhelmingly endorsed the abovementioned Management proposal at the General Members’ meeting held on Tuesday 17 March 1992”.  The endorsement was subject to four points being included as an integral part of the revised agreement, none of which is relevant for present purposes.  A circular over Mr Neesham’s name, first cleared with the Federation, was sent by the Department to all registered dental nurses.  The circular included election or option forms to be signed by staff indicating whether they would be available for transfer to higher level positions within Dental Services generally.  Option 1, which is the relevant election for present purposes, was expressed thus:

“DEPUTY DIRECTOR OF NURSING

Incremental Progression: (OPTION 1)

In accordance with the agreement reached with the Australian Nursing Federation I elect to defer my incremental progression beyond the level 1, sixth year Rate of Pay (ANF fourth year of service rate of pay).

I understand that I may change this election at any time by written advice indicating that I am available for transfer to higher level positions within Dental Services.

NAME IN FULL: …………………………..

DEPARTMENT/CLINIC LOCATION………………………….

SIGNATURE:………………….

DATE:………………………….”

The second option form involved a confirmation by the nurse that she or he wished to continue incremental progression to the maximum of the salary range and expressed an understanding that he or she would be transferred to a vacancy in one of the four areas indicated as being preferred within the metropolitan operations of Dental Services.

8                     Among the nurses who elected to defer their incremental progression on this basis were Elizabeth Ringland and Yolanda Vyner.  They accepted the agreement and elected to remain at the Perth Dental Hospital because they understood that amalgamation was to proceed and they did not wish to be transferred to other locations throughout the metropolitan area pursuant to that agreement. 

9                     In the event, formal amalgamation of the two services did not take place until 1997.  The nurses in question were willing to forego their rights to increments upon the premise that they would otherwise have been required to transfer.  They and the relevant officials of the Health Department, acted upon the assumption that the terms of their agreement prevailed during the period that the parties were continuing negotiations which ultimately led to formal amalgamation.

10                  On 26 November 1997, the Australian Nursing Federation made two complaints against the Metropolitan Health Services Board alleging breaches of what was said initially to be “Award No D0151 of 1994”.  The complaints were subsequently amended to allege breaches of the Nurses (ANF WA Public Sector Consolidated) Award 1991 and Award No DO151 of 1994.  It was common ground however that the award in issue was that known as the Dental Nurses (ANF WA Public Sector) Award 1994.  The breaches of that Award were said to relate to failure to pay award rates to Ringland and Vyner.  The complaint relating to Ringland involved three alleged breaches and that against Vyner, two alleged breaches.  In each case it was asserted that during a period specified in the count the Board failed to pay its employee, who was at all relevant times employed in that part of the defendant’s operations known as Perth Dental Hospital, the correct increment pursuant to cl 34 subclause (b) of the Award and thereby underpaid the employee for the relevant pay period.  The periods and the amounts alleged were as follows:

Employee                    Period                                     Amount of Underpayment

Elizabeth Ringland      1 June 1993 to

                                    14 June 1993               $28.74

                                    31 May 1994 to

                                    13 June 1994               $48.58

                                    3 June 1995 to

                                    16 June 1995               $93.98

Yolanda Vyner            18 May 1993 to

                                    31 May 1993               $28.74

                                    20 May 1995 to

                                    2 June 1995                 $93.98

11                  Originally the complaints purported to be laid under the Industrial Arbitration Act 1979 (WA).  This flowed from the use of the wrong form of complaint.  Subsequently they were amended to make it clear that reliance was placed on the Workplace Relations Act 1996 (Cth). The complaints purportedly proceeded pursuant to s 178 of the Workplace Relations Act  which provides, inter alia:

“178(1)  Subject to s 182, where an organisation or person bound by an award, an order of the Commission or a certified agreement breaches a term of the award, order or agreement, a penalty may be imposed by the Court or, except in the case of a breach of a bans clause, by a court of competent jurisdiction.”

In truth it would seem that the complaints would have derived from s 178 of the Industrial Relations Act 1988 (Cth)as it stood prior to the 1996 amendments that changed its name to the Workplace Relations Act 1996, the breaches all having taken place prior to those amendments.  In the end nothing turns on this as the relevant elements of s 178 of the Industrial Relations Act are the same as those of the Workplace Relations Act albeit the penalties differ.  Pecuniary penalties are provided for in s 178(4) and orders for payment by employers of the shortfall in amounts paid may be made pursuant to s 178(6).  It was also not in dispute for the purpose of these proceedings that the Metropolitan Health Services Board, which had succeeded the Perth Dental Hospital as the employer of Ringland and Vyner, was the proper defendant (AB 65) notwithstanding that the breaches alleged predated its existence. 

12                  The complaints were heard by his Worship Mr R. Lawrence SM, sitting in the Industrial Magistrates Court.  The hearing commenced on 13 May 1998.  It appears from the record on the complaints, which were not models of clarity, that a decision rejecting a no case submission was delivered on 12 June 1998.  The Board thereafter elected to call evidence and the hearing resumed on 25 November 1998.  Evidence concluded on that day.  Mr Lawrence reserved his decision and on 27 January 1999 found the Board guilty of breaches on each of the counts.  No penalty was imposed, but an order made in each case that the Board pay the employee the amount of the underpayment which the Court evidently found to be a total of $77.94 in each case.  The quantum is not in issue.

13                  Following his Honour’s decision, the Metropolitan Health Service Board lodged an appeal to this Court.

The Grounds of Appeal

14                  The grounds of appeal, including a fourth ground added by consent at the hearing of the appeal, are as follows:

“1.       The Magistrate erred in fact and law in failing to find:

            (a)        that the Respondent (Complainant) was estopped from bringing proceedings against the Appellant (Defendant) for the breaches of the Dental Nurses (ANF – WA Public Sector) Award 1994 (“the Award”) alleged in Complaints 252 and 253 of 1997 (“the Complaints”); and

            (b)        that the Complaints should therefore be dismissed.

2.         The Magistrate erred in fact and law in failing to find:

            (a)        that the Respondent (Complainant) had waived its right to bring proceedings against the Appellant (Defendant) for the breaches of the Award alleged in the Complaints; and

            (b)        that the Complaints should therefore be dismissed.

3.         The Magistrate erred in fact and law, and in the exercise of his discretion, in failing to find:

            (a)        that the proceedings brought against the Appellant (Defendant) for the breaches of the Award alleged in the Complaints were an abuse of process; and

            (b)        that the Complaints should therefore be dismissed.

4.         The Magistrate erred in fact and law in failing to exercise, alternatively erred in fact and law in the manner in which he exercised, the discretion in section 178(6) of the Workplace Relations Act 1996 (Cth) to order the Appellant (Defendant) pay the sum of $77.94 to the employees Ringland and Vyner.”

The Magistrate’s Decision

15                  His Worship published two sets of reasons.  The first, delivered on 12 June 1998, related to his rejection of the no case submission.  The second, given on 27 January 1999, related to his finding that the Board had contravened the Award.  The learned magistrate had decided, in the exercise of his discretion, not to put the Board to its election before a no case submission was heard.  Although reliance was placed upon a decision of the State Industrial Relations Commission in that regard the course taken by the magistrate was consistent with the character of penalty proceedings as non-criminal – Gapes v Commercial Bank of Australia (1979) 38 FLR 431 – and the decision of Evatt J in Treharn v Geo McEwin & Son Pty Ltd (1982) 44 ALR 543.   The no case submission was based upon an argument advanced by the Board, that the Federation should be estopped from enforcing the provisions of the Award due to the existence of the agreement made in 1991 and the addendum to the agreement in 1992.  The relevant employees were said to have waived their rights under salary increment levels 5, 6 and 7 on the basis that they were bound by the terms of the agreement.  Having waived their rights pursuant to the Award, it was argued that they could not subsequently rely upon the provisions of the Award.  The submissions were rejected.  His Worship held, on the question of estoppel, that the parties had entered the 1991 and 1992 agreement to allow nurses the opportunity of staying at the Perth Dental Hospital, but it was reached upon the premise that the Perth Dental Hospital would amalgamate with the Community Dental Services.  The evidence was clear that that amalgamation had not taken place at the time the two complaints were made.  The fundamental basis upon which the agreement was reached did not therefore exist.  The agreement was ancillary to the Award.  It remained unregistered and was unenforceable under the Act.  In any event to suggest that estoppel would be available in such circumstances would, according to Mr Lawrence, be “contrary to the spirit of the Act”.  He rejected a related submission concerning abuse of process.

16                  In his reasons for decision delivered on 27 January 1999, His Worship found the essential facts as outlined in the factual background set out above. His central findings were as follows:

“In 1991 the Australian Nursing Federation reached an agreement with the Perth Dental Hospital concerning the salary increments to be paid to nurses employed at that hospital.  The Perth Dental Hospital was to amalgamate with the Community Dental Services necessitating nurses at the Perth Dental Hospital becoming available for transfer to other Metropolitan locations.  However, nurses employed at the Perth Dental Hospital were entitled to retain their positions provided they were willing to forego increments above the Fourth Year Level.  Both of the Complainants elected to defer any incremental advance beyond the Fourth Year Service rate in accordance with that agreement, provided they were permitted to retain their position at the Perth Dental Hospital.  If the Award provisions had prevailed and had it not been for the agreement both nurses would have been entitled to the Seven Year Service Incremental rate upon qualification.  I am satisfied that the Complainants accepted the agreement and elected to remain at the Perth Dental Hospital because they understood that the amalgamation was to take place and that they did not wish to be transferred to other locations throughout the Metropolitan area pursuant to that agreement.  I am satisfied on the evidence that the amalgamation did not take place as was agreed between the Australian Nursing Federation and the Defendant until 1996.”

After referring to submissions from the Federation and the Board, His Worship dealt with the estoppel question.  He accepted that had the amalgamation taken place and had there been full compliance with its agreed terms, a successful argument based on estoppel could have been advanced.  Here, however the nurses had been willing to forego their rights upon the premise they would otherwise have been required to transfer, a situation which did not arise.  His Worship also referred to an argument based on waiver.  On the evidence he was satisfied that the employees had not insisted upon their award rights because of the terms of the agreement and the pre-amalgamation negotiations.  He said:

“They hadn’t insisted upon their right by choice because of the circumstances surrounding the implementation of the amalgamation.  They didn’t waive that right whether the amalgamation took place or not.”

The agreement was referred to against the statutory framework, albeit in very broad terms.  The Board having chosen not to register the agreement, it was unenforceable pursuant to the Industrial Relations Act 1988.   The reliance by the Board upon equitable remedies to support its position in not paying wages in accordance with the award was “…contrary to the spirit of the Act”.  Both complaints were found to be proved.

Estoppel and Waiver in the Enforcement of Industrial Awards

17                  The rights conferred and the obligations imposed upon persons and organisations bound by industrial awards are statutory in origin.  In the case of awards under the Industrial Relations Act 1988, as with its predecessor The Conciliation and Arbitration Act 1904 and its successor by amendment The Workplace Relations Act 1996, the awards are not themselves laws of the Commonwealth.  But, once made, their provisions are given the force of laws of the Commonwealth by the terms of the Act -–Ex parte McLean (1930) 43 CLR 472 at 479.  It is the Act itself which renders an award made by the Commission binding on parties to the relevant industrial dispute and other organisations and persons specified in the Act (s 149 Industrial Relations Act 1988 and s 149 Workplace Relations Act 1996). 

18                  The nature of the relationship between awards and contracts of employment has been much agitated – de Meyrick, The Interaction of Awards and Contracts (1995) 8 AJLL 1 and the cases and articles there cited.  But the present law is plain.  The award is independent of contract.  It is neither incorporated by statute nor by implication into the contract of employment – Byrne v Australian Airlines Ltd (1995) 185 CLR 410.  Nor can those bound by an award contract out of it – Josephson v Walker (1914) 18 CLR 691 at 700 (Isaacs J) approved in Byrne at 421.  That is not to say that a contract may not be made which confers benefits upon an employee over and above those conferred by the award – Byrne at 421.  Nor does it prevent parties from expressly agreeing to incorporate the terms of an award into their contract of employment thus providing remedies over and above those provided by statute – True v Amalgamated Collieries of WA Ltd [1940] AC 537 adopted in Byrne at 420 and 444.

19                  Up until the enactment of the Workplace Relations Act 1996, an honest and common but erroneous assumption of parties to an award as to the nature of the rights it confers and obligations it imposes has been seen to have little effect against its statutory force.  Griffiths CJ in Josephson v Walker put it thus at 696:

“The obligation created by [the award] does not depend upon any agreement of the parties express or implied and may arise without their knowledge.  If by the award it is determined that journeymen plumbers shall receive not less than a certain rate of wages, each journeyman plumber is entitled to those wages, and although the employer and the employee have gone on for a long time the one paying and the other receiving what each honestly believes to be the proper rate of wages, nevertheless if it is afterward found that the wages paid are less than those fixed by the award, the right of the employee to receive the wages so fixed has accrued.”

It is possible to perceive in that passage some of the matters which might be relied upon today to found an estoppel.

20                  The inability to contract out of an award by virtue of its statutory operation militates against the proposition that parties may be estopped from enforcing its provisions or may waive its benefits in a way that is legally enforceable.  The effect of the statutory provisions which give awards their binding force are at least as powerful against the common law and equitable principles of estoppel and waiver as they are against the common law of contract.  There is nothing novel in the general proposition that statutes which preclude contracting out of the rights and obligations they confer will defeat the application of estoppel and waiver to like effect – Beckford Nominees Pty Ltd v Shell Co of Australia Ltd (1986) 73 ALR 373 at 378 (Pincus J). 

21                  The application of principles of estoppel and waiver to the enforcement of statutory rights depends upon their consistency with the terms and purpose of the statute creating the rights – Spencer, Bower and Turner, The Law Relating to Estoppel by Representation 3^rd Edition, Butterworths (1977) at par 142.  The general principle is that the availability of contractual variations, estoppel or waiver of a statutory right depends upon whether it is a private right only, or has also a public character in the sense that the general welfare of the community, or the interests of the class of persons whom it is the object of the law to protect, require it to be upheld against those common law and equitable doctrines.  That principle is reflected in the judgment in Commonwealth v Verwayen (1990) 170 CLR 394 at 456 per Dawson J, with whose analysis of the law and facts Deane J generally agreed, and at 486 per Gaudron J.  Mason CJ, although dissenting in the result in that case for reasons not relevant to the present point, acknowledged that some statutory rights are capable of being extinguished by the person for whose benefit they have been conferred.  Some rights however could be conferred for reasons of public policy so as to preclude contracting out or abandonment by the individual concerned (404).  At 405 his Honour said:

“On the footing that the right to plead the statute as a defence is a right conferred by statute, the respondent’s contention that the right is capable of waiver hinges on the scope and policy of the particular statute…The issue is not whether the relevant provisions are beneficial to the public, but whether they are “dictated by public policy” and enacted “not for the benefit of any individuals or body of individuals, but for considerations of state”.  Although in one sense all statutes give effect to some public policy…the critical question is whether the benefit is personal or private or whether it rests upon public policy of expediency…”.

His Honour concluded in that case, consistently with the position taken by the other Justices, that it was possible to contract out of a statutory provision imposing a time bar or to deprive it of effect by other means such as waiver (406).  Consistently with that conclusion the considerations that would preclude parties from contracting out of a statutory right would also preclude its effective barring or extinguishment by operation of estoppels based upon representations or extinguishment by waiver.

22                  At least up until the amendment of the Industrial Relations Act 1988 by the Workplace Relations and Other Legislation Amendment Act 1996 (WROLA Act), there was  a well established line of judicial authority in relation to industrial awards inimical to the notion of contracting out of award obligations and, a fortiori, the invocation of principles of estoppel or waiver in relation to them.  The underlying philosophy goes back to the beginnings of industrial law in Australia.  It is exemplified in Duncan v Ellis (1916)  21 CLR 379.  That case concerned a prosecution brought under the Factories and Shops Act 1915 (Vic) against an employer who had paid his employee less than the minimum rate applicable by statutory determination in the belief induced by his employee that he was younger than the age which would have entitled him to that rate. It was not a defence that the employer reasonably believed what his employee had said.  The primary object of the Act was “the benefit of the public” in the sense that it was an Act “not merely for regulating certain trade matters but, generally speaking, one of social reform – an Act for improving the condition of wage earners and others, not only for their sake but for the public betterment which will ensue from these provisions”, per Barton J at 382.  Isaacs J at 385 identified as the fundamental notion of the Act:

“…the inability of employees to bargain effectively for themselves as to their surroundings and their remuneration, and therefore, in order to protect them as a class and carry out the professed object of the enactment, the Legislature have found themselves compelled to lay down a rigid rule, precluding inquiry as to accident, or inadvertence, or negligence, or other person’s acts, except where it has expressly or by necessary intendment introduced those factors…”

Although estoppel was not raised in Duncan, it was relied upon in similar circumstances in Walsh v Commercial Travellers Association of Victoria (1940) VLR 259.  An adult who had obtained employment by fraudulently misrepresenting that he was 19 and had been paid the rate of wages payable to persons of that age, sued his employer to recover the difference between such rate and the Wages Board Rate prescribed for adults.  He was held by the Full Court to be entitled to succeed despite his own fraud.  Neither estoppel nor a counterclaim for deceit could avail the defendant.  The relationship between the inability to contract out of the obligations and the inapplicability of estoppel was made clear by Mann CJ at 263:

“It would destroy in a large measure the operation of the statute to allow a plea of estoppel where the statement relied upon constituted the means employed to bring about a contract of employment although the contract itself can afford no defence.”

See also at 268 per Gavan Duffy J.  Walsh was followed in Kidd v Savage River Mines (1984) 6 FCR 398 by Gray J dealing with an award made under the Conciliation and Arbitration Act 1904.  His Honour said at 409:

“It is a sound principle that statutory rights should not be defeated by estoppel, especially statutory rights created for the benefit of the public or a section of the public.  The rights given by the Award in the present case are of such a nature.  They have statutory force by virtue of the terms of the Act.  The obligations laid down by the Award are absolute, and prevail against any contract to the contrary, as did the provisions of the statute considered by the Full Court in Walsh’s case.  In my view a claim under an Award cannot be defeated by estoppel.”

And dealing with the Industrial Relations Act 1988 in Jackson and Wilson v Monadelphous Engineering Associates Pty Ltd (unrep IRCA 17.10.97), Moore J, sitting in the Industrial Relations Court of Australia, after referring to Byrne and authorities concerning awards under State law, said that:

“If an employee cannot agree to forego rights conferred by an award or Division 3, then it is unlikely an estoppel precluding their enforcement can arise from the conduct of an employee.” (at 59)

His Honour noted the changed statement of objects of the Industrial Relations Act 1988 introduced by the Industrial Relations Reform Act 1993, and observed:

“While the principal object of the Act remained the prevention and settlement of industrial disputes, the above paragraphs [s 3(b) and (c)] disclosed maintaining wages and working conditions by the protective mechanism of awards and fair bargaining as an aspect of the purpose.”

  He thought however that different considerations might arise in relation to the Workplace Relations Act 1996 with its greater emphasis on workplace based and individual agreements.

23                  The breaches of the award alleged in the complaints all took place between June 1993 and June 1995.  The right to take proceedings for penalties in respect of all of these breaches had accrued pursuant to s 178 of the Industrial Relations Act 1988 and prior to the passage of the WROLA Act.  Although the WROLA Act provided for pre-existing awards to be of no effect in respect of anything other than “allowable matters” after an interim period of eighteen months, there is nothing which would displace the operation of s 8(d) of the Acts Interpretation Act  1901 (Cth) relating to the continuance of accrued causes of action.  As I observed in Horsman v Commissioner of Main Roads (unrep 14/9/98 French J WG 111 of 1997):

“There is no express intention to be found in s 44 of the Workplace Relations and Other Legislation Amendment Act 1996 (Cth) that the new penalty for a breach of s 178 should apply to offences committed before the commencement of the Workplace Relations and Other Legislation Amendment Act 1996.  The relevant amending provision is simply in these terms:

            “Subparagraph 178(4)(a)(ii) – omit $1,000” substitute “$10,000 for a body corporate or $2,000 in other cases.””

The penalty provision as it stood prior to the WROLA Act 1996 continued to apply in relation to breaches of award which occurred prior to the amendment.  In my opinion therefore the proceedings were in truth brought under s 178 of the Industrial Relations Act 1988 as it stood in June 1995.  The questions of estoppel and waiver raised in this case fall to be considered by reference to the state of the statute as it stood at the time the alleged breaches were committed.

24                  The effect of the restatement of statutory purpose in the Workplace Relations Act 1996 on the ability of parties to contract out of awards and consequently on the application of doctrines of estoppel and waiver does not therefore arise.  On the face of it though it does seem that, notwithstanding the emphasis of that Act on agreements rather than awards, awards are maintained as a “safety net” specifying minimum conditions on certain matters including rates of pay.  The provisions of the Act under which they are made are likely therefore to be construed so as to continue to render ineffective attempts to contract out for lesser than minimum conditions.  In any event the provisions of the Industrial Relations Act at the time of the breaches found to have occurred in the present case were of the same character as those which had preceded it and, for the reasons explained by Moore J in Monadelphous, precluded contracting out and the application of the doctrines of estoppel and waiver.  Those doctrines being inapplicable, grounds 1 and 2 of the appeal must fail.

25                  Nothing that I have said in relation to the question of contracting out of award provisions or the availability of the defences of estoppel or waiver in relation to their enforcement should be taken as extending to the special case of agreements to compromise or settle disputes about the application or construction of awards or like instruments.  Nor can it be taken as stating any principle affecting agreements involving the selection of dispute resolution mechanisms in such cases.  I say this to distinguish, as inapplicable to the present case, the decision of the Full Court in Horsman v Commissioner of Main Road [1999] FCA 1733 which was cited in argument.  The appellant in that case alleged that he had been unfairly dismissed from his employment by the Commissioner of Main Roads.  He was found to have agreed, in advance of an arbitration by a Commissioner of the Australian Industrial Relations Commission, to abide by the Commissioner’s recommendations.  He had engendered in the employer an assumption that he would abide by those recommendations and the employer had acted accordingly.  That process having yielded a result which did not satisfy him, he was held estopped from bringing proceedings for unfair dismissal in the Federal Court.  No question appears to have been raised about the availability of the doctrine of estoppel in the way that it has been raised in this case.  In any event, the area of compromise agreements and agreed mechanisms for resolution of disputes involving awards requires specific consideration as and when cases arise in which questions of contracting out and the availability of estoppel or waiver defences are in issue.

Ground 3 – Abuse of Process

26                  The submissions for the Board on this point were brief.  In written argument it was said that to allow the Federation to obtain a remedy in the proceedings before the Industrial Magistrates Court in the circumstances of this case would be to allow the processes of the Court to be converted into an instrument of injustice or unfairness.  This was said to turn upon the conduct of the Federation prior to the institution of the proceedings in inducing the Board to assume that no proceedings would be brought for breach of the award.  As appears from this short submission, the abuse of process ground relied upon the same facts that were invoked in support of the estoppel and waiver arguments.  The Federation not being estopped from bringing the proceedings and not having waived its right to do so, no question of abuse of process arises by virtue of its initiation of the proceedings.  Ground of appeal 3 therefore fails.

Ground 4 – The Discretion under Section 178(6)

27                  Section 178(6) of the Industrial Relations Act 1988 and s 178(6)of the Workplace Relations Act 1996 are in identical terms.  The subsection provides:

“Where in a proceeding against an employer under this section, it appears to the court concerned that an employee of the employer has not been paid an amount that the employer was required to pay under an award, order or agreement, the court may order the employer to pay to the employee the amount of the underpayment.”

By its written submissions the Board contended that the Learned Magistrate was required, pursuant to the terms of s 178(6), to exercise a discretion in determining whether or not to order the short payment to be paid by the Board.  The Learned Magistrate, it was said, had not adverted to the existence of that discretion but had proceeded “to automatically order the payment of the relevant under paid amounts”.  This was said to constitute a failure to recognise the existence of and to exercise discretion or stop that failure was said to be an error of law “justifying appellate intervention, whether or not the point was adverted to or taken by any party”.

28                  The alternative submission made was that if the Learned Magistrate did in fact exercise the necessary discretion its exercise miscarried for failure to take into account relevant considerations.  Those considerations were said to be:

(i)         The circumstances leading to the 1991 agreement.

(ii)        The subsequent conduct of the parties.

(iii)       The fact the employees enjoyed the benefit of the 1991 agreement; and

(iv)       The endorsement given to the 1991 agreement by the 1996 certified agreement.

The Magistrate was said to have mistaken the facts by finding that the 1991 agreement was not complied with because the amalgamation did not take place until 1996.  Moreover he was said to have given undue weight to the delay in the amalgamation process.

29                  When His Worship gave his reasons for decision on 27 January 1999 he invited the parties to address him in relation to the orders sought.  A submission was made that amounts of $77.94 be paid to Ringland and Vyner.  This submission was evidently made by counsel for the Federation, albeit referred to in the transcript only by the designation “Speaker 1”.  Counsel for the Board, designated as “Speaker 2”, raised the question whether payment should be made to the employees or the union and then drew attention to s 178(6) adding:

“It -- there would seem to be power to order the amount be paid to the employee.  I don’t know what my learned friend’s view is.  It doesn’t trouble the defendant too much.  The money will ultimately be paid by us.”

His Worship accepted that there was power to make the order under the section.  Counsel for the Board raised no objection to the proposed course.  It is really quite extraordinary that the Board, represented by counsel as it was before the Magistrate, having referred him to the relevant provision, having made clear that the proposal to order payments to the employees did not trouble the defendant too much and having raised no objection to the proposed order should now seek to impugn the exercise of the discretion.  His Worship acted entirely reasonably in making the order that he did.   Ground 4 of the appeal fails. 

Conclusion

30                  For the preceding reasons the appeal should be dismissed.  I should add that I have had the opportunity of reading in draft the joint judgment of Lee and Carr JJ.  I agree with their Honours, for the reasons they give, that on the facts of the case no estoppel or waiver defence could have succeeded even if such defences were available.

Associate:

Dated:              9 June 2000

REASONS FOR JUDGMENT

LEE & CARR JJ:

Introduction   

31                  This is an appeal from a decision of a stipendiary magistrate sitting in the Western Australian Industrial Magistrates Court, made on 27 January 1999, whereby his Worship decided that the appellant had breached the Western Australian Public Sector Award 1994 (“the Award”) in relation to two complaints made against it pursuant to the Workplace Relations Act 1996 (Cth) (“the Act”).  The appeal was heard by a Full Court, following the decision of Lee J in Metropolitan Health Services Board v Australian Nursing Federation (1999) 94 FCR 132 to the effect that the matter was one which was required to be heard by a Full Court.

Factual Background

32                  The appellant is the statutory successor to the rights and liabilities of a hospital board which at all material times employed certain dental nurses at the Perth Dental Hospital (“the Hospital”).  The Hospital is a public hospital but, at the beginning of the events described below, its nurses were not employed by the State.  There were other dental nurses in the public health system in Western Australia who were employed in the Dental Services Branch of the Health Department.

33                  In 1991, the appellant’s predecessor reached an agreement (“the Agreement”) with the respondent concerning the salary increments to be paid to nurses employed at the Hospital.  The Hospital was about to amalgamate its administration with the Dental Services Branch of the Health Department.  This, so it was thought by the parties at the time, would mean that nurses at the Hospital would become liable to be transferred, as required, to other metropolitan locations.  However, under the terms of the Agreement nurses employed at the Hospital were entitled to retain their positions provided they were willing to “defer” (which, as argued before us, was taken to mean “forego”) increments above what was known as the Fourth Year Level or Service rate.

34                  The respondent is a union which at all material times represented the complainants both in negotiating the terms of the Agreement in 1991 and before the Industrial Magistrate when the complaints were heard.  The complainants were two nurses employed at the Hospital at the time the Agreement was made.  They had elected to defer any incremental advance beyond the Fourth Year Level or Service rate in accordance with the Agreement, provided they were permitted to retain their positions at the Hospital.  As events transpired, the complainants never became legally liable to be transferred from the Hospital to another part of the public health system.  They were not paid the increments which, according to the terms of the Agreement, they had given up in return for not being made liable to such transfer.

35                  Under the Award both nurses qualified for the seven year service incremental rate.  The complaints made by the respondent (on behalf of two dental nurses) against the appellant were as follows:

·          between 20 May 1995 and 2 June 1995 the appellant failed to pay its employee, Yolanda Vyner, who was at all relevant times employed at the Hospital, at the correct increment pursuant to clause 34 subclause (b) of the Dental Nurses (ANF – WA Public Sector) Award 1994, and thereby underpaid her for the pay period ending 2 June (amount due being $77.94); and

·          an identical complaint save that the dates were stated as being between 3 June 1995 and 16 June 1995 in relation to the second employee, Elizabeth Ringland, also involving an alleged underpayment of $77.94.

36                  We shall, as a matter of convenience, hereafter refer to Ms Vyner and Ms Ringland as “the complainants”.

The Decision of the Industrial Magistrate’s Court

37                  At the hearing before the Industrial Magistrate, the appellant submitted that the nurses were not entitled to the amounts claimed, on the following basis:

·          that they were either estopped from successfully claiming those amounts, because they had by the terms of the Agreement agreed to forego their rights under the Award; and/or

·          pursuant to the Agreement they had waived their rights; and/or

·          their action in making a complaint alleging a breach of the Award amounted to an abuse of process.

38                  The Industrial Magistrate examined the case law.  His Worship accepted that it was a well-established principle that estoppel may operate to bind the parties to a common assumption which deprives one of them of his legal rights, if to depart from that assumption would be unconscionable, that is, if it would be an affront to ordinary minimum standards of fair dealing.  He considered that the complainants had been placed in an “invidious and irreversible situation” because they were forced either to remain at the Hospital and waive their progressive salary incremental increases, or volunteer for transfer to retain that benefit.

39                  The amalgamation of the Hospital and the Dental Services Branch had not taken place during the period in question.  Because this amalgamation had not taken place, his Worship considered that an essential element of the Agreement had been breached.  This placed the complainants in a position where they could not be transferred and they were not receiving their rightful entitlement under the Award.  The Industrial Magistrate concluded that to deny the complainants the right to receive that which they would lawfully be entitled to under the Award, would be unjust in the circumstances.  Consequently, he decided that they were not estopped from initiating action. 

40                  As to the question of waiver, his Worship found that the complainants had not insisted upon their rights under the Award because of the terms of the Agreement and the negotiations that were taking place between the parties prior to the amalgamation.  He concluded that because of these circumstances, the complainants had not waived their rights under the Award.  The Industrial Magistrate also rejected the argument that the complainants’ actions amounted to an abuse of process. 

The Appeal

41                  Section 422 of the Act relevantly provides that an appeal lies to this Court from the Industrial Magistrate’s judgment.

42                  The appellant does not deny that it breached the Award in the manner alleged in the complaints.  Nor does it claim that the Agreement is an enforceable contract.  It concedes that it is not.  But it contends (and has always contended) that the respondent’s conduct disentitled it from bringing the proceedings in the court below.  Its grounds of appeal are as follows:

The Industrial Magistrate erred in fact and law in failing to find:

(a)        that the respondent was estopped from bringing proceedings against the appellant for the breaches of the Award;

(b)        that the respondent had waived its right to bring proceedings against the appellant for the breaches of the Award; and

(c)        that the proceedings brought against the appellant for the breaches of the Award were an abuse of process.

43                  By an amendment to its Notice of Appeal, made by leave at the hearing of the appeal, the appellant contended that the Industrial Magistrate had either erred in fact or law in failing to exercise his discretion to dismiss the complaints, or in the manner in which he had exercised his discretion under s 178(6) of the Act, i.e. by ordering the appellant to pay the above sums to the complainants.

Our Reasoning

44                  The questions to be decided are straightforward.  They are whether the facts as found by the Industrial Magistrate, or which are common ground, gave rise to the estoppel or waiver described above and whether the complaints were an abuse of process.

45                  Mr G T W Tannin, (with Mr M G Lundberg), counsel for the appellant, submitted that the “central assumption” upon which the estoppel was based was the possibility of transfer of the employment of the complainants from the Hospital to other places being “open at all times”.  He went somewhat further and submitted that there was no suggestion in the documentation that the assumption was that such transfer, or liability for transfer, would occur upon the making of the amalgamation.  What he described as the “trade-off” was that the nurses could elect either to be “open to transfer” or to remain at the Hospital.  Our impression is that those submissions do not sit easily with Mr Tannin’s argument that the fact that each party perceived that there was a risk of involuntary transfer (even if in reality there was no such risk), when coupled with the consequent re-arrangement (by the Agreement) by the parties of their relationship, founded the estoppel as claimed by the appellant.  Mr Tannin re-visited this in his address in reply, describing the situation as one in which both parties had a common assumption upon which they both acted. 

46                  We think it is necessary in those circumstances to get the facts straight.  Some of the facts emerged from submissions filed after the hearing of the appeal pursuant to directions.  But first there are the following clear findings of fact by the Industrial Magistrate:

“The Perth Dental Hospital was to amalgamate with the Community Dental Services necessitating Nurses at the Perth Dental Hospital becoming available for transfer to other Metropolitan locations.

. . .

I am satisfied that the Complainants accepted the agreement and elected to remain at the Perth Dental Hospital because they understood that the amalgamation was to take place and that they did not wish to be transferred to other locations throughout the Metropolitan area pursuant to that agreement.  I am satisfied on the evidence that the amalgamation did not take place as was agreed between the Australian Nursing Federation and the Defendant until 1996.”

47                  These findings are consistent with various pieces of evidence which were before the Industrial Magistrate.  In Health Department Circular 83/91 to all Registered Dental Nurses (Exhibit C – AB 145) which, in part, evidenced the Agreement, various bases for the Agreement were set out.  They included the following:

“1.       Recognition that staff are part of Dental Services in its entirety and accordingly internal transfer within Dental Services is necessary.”

48                  The Agreement was varied in March 1992 after a sequence of events which included a letter dated 11 March 1992 (AB 169) from the respondent to Mr Pittendrigh (Manager of the Hospital) in which it was said that:

“Concerns have been raised by ANF members at Perth Dental Hospital regarding the imminent transfer of staff.”

49                  This was followed by discussions between the parties on 13 March 1992 and a letter dated 16 March 1992 (Exhibit 4 – AB 170) from the Health Department of Western Australia to the respondent.  That letter proposed an addendum to the Agreement and included the following observation:

“The proposal will mean:-

* Dental Nurses will be able to decline transfer into higher level positions in Community Dental Services by electing to defer incremental progression.”

50                  On 20 March 1992 the Health Department sent a further letter to the respondent (Exhibit 12 – AB 200) which included the following comment:

“* Staff in accepting progression through to the maximum of the salary range are aware well in advance that they are subject to transfer.  A minimum period of two weeks notice of transfer will be given, however it is expected that in the majority of cases the period of notice will be in excess of this and will be the maximum possible according to the circumstances of each case.”

51                  The Health Department prepared a form of election by which nurses could elect either to defer their pay increments (Option 1) or to continue to enjoy what was referred to as “incremental progression” (Option 2).  The complainants each signed the election form on 31 March 1992, choosing Option 1.  The second paragraph of Option 2 (i.e. the option which neither of them chose) read:

“I understand that I will be transferred to a vacancy in one of the four areas which I have indicated as being my preferences within the metropolitan operations of Dental Services.”

52                  On 29 April 1992 the Deputy Director of Nursing sent to each of the complainants an acknowledgment of their respective written elections (Exhibits 10 and 11 – AB 198, 199) which included the following paragraphs:

“At any future date you may advise in writing that you wish to change to Option 2.  This will then entitle you to incremental progression to the maximum of the salary range.

It will also mean that you will be available for transfer to higher level positions within the metropolitan operations of Dental Services, and at that time you will need to submit your four areas of preference for transfer.”

53                  In our view, it was quite clear (and the Industrial Magistrate so found) that the whole basis of the Agreement was that the complainants and their fellow nurses at the Hospital were about to become liable for transfer from the Hospital to other areas, being areas within the Public Health Department.  The complainants wanted to remain at the Hospital and were prepared to “defer” salary increments under the Award rather than be so transferred.

54                  It is common ground (and again the Industrial Magistrate so found) that the amalgamation which effected the transfer of staff from the Hospital to the public service did not take place until 1997 (in fact on 16 July 1997 – see paragraph 8 of the appellant’s supplementary outline of submissions).

55                  The appellant contended that the relevant assumption which founded the estoppel, so far as the appellant was concerned, was “the future existence of a particular state of affairs, that is, the content of future conduct by the Respondent”.  This was particularised as being that –

“… notwithstanding the rights conferred by the Dental Nurses Award, the Respondent would not purport to exercise its right under the [Workplace Relations Act] to take any action for breach of that Award.”

56                  The appellant maintained that the part which the respondent played in the adoption by the appellant of that assumption and the appellant’s persistence in that assumption meant that it would be unconscionable to allow the respondent to depart from it.  The appellant contended that the respondent induced it to make the assumption, both by express and implied representations, in circumstances where it knew or intended or clearly ought to have known that the appellant would be induced by such representations to adopt and act on the basis of the assumption.  Further, the appellant contended that the respondent had entered into contractual and other material relations with the appellant on “the conventional basis of the assumption”.  Finally, so it was put, the respondent knew that the appellant laboured under the assumption and refrained from correcting it when it was the respondent’s duty in conscience to do so.  The appellant argued that it had for a period of 5-6 years arranged its affairs, made its decisions and approached the conduct of industrial relations with the respondent, on the basis of the assumption.  Had it known that the respondent would depart from the assumption, the appellant argued that it would have had the opportunity to ensure that the Agreement was given binding force at an earlier time, or to take some other step to ensure that it would not be at risk of being involved in any proceedings such as those in the court below.

57                  We have looked in vain for any real evidence of detriment to the respondent, apart from the detriment which would arise out of having to pay the complainants and their fellow nurses at the Hospital their incremental entitlements during the period when they were not at risk of transfer i.e. until July 1997.  It is true that the Industrial Magistrate accepted that failure to apply the doctrine of estoppel would “act to the detriment” of the appellant, but we think it is reasonably clear from his finding to that effect, that he was having regard only to the detriment of having to make such payments. 

58                  As Deane J observed in The Commonwealth v Verwayen (1990) 170 CLR 394 at 444, the central principle of estoppel is to prevent unconscientious departure (emphasis added) by one party from the subject matter of an assumption.  See also Mason CJ at 412-413.

59                  The Industrial Magistrate formed the opinion that it would be unjust and oppressive to apply the doctrine of estoppel to prevent the respondent from initiating action on behalf of the complainants.  In our respectful opinion, he was quite right in that regard.  His Worship had earlier found that the complainants were in a position whereby they could not have been transferred at the relevant times and yet they were not receiving what his Worship described as “their rightful entitlement”.

60                  It is true that an estoppel can flow from an assumption based upon the perceptions of the respective parties that a certain state of affairs exists when in fact it does not.  That really is the whole point of estoppel.  But in the end, the touchstone is unconscientiousness.  Mr Tannin spoke in terms of a “trade-off”.  The reality is that, if the complainants are estopped, they will have traded off their legal entitlements for nothing in return.  That is because they were never at risk of transfer and the risk of transfer was the whole basis for their giving up their rights.  We do not think that it is unconscientious, in all the circumstances, to allow the complainants to enforce their rights under the Award.

61                  If confirmation of the fairness of such an outcome were needed, it can be found by having regard to the strictly legal context.  The Agreement purports to be made between the Health Department (that is, the Minister for Health) and the respondent.  But at the time the Agreement was struck the nurses at the Hospital were employees of the Minister for Health in his capacity of being the deemed Board of the Hospital pursuant to s 7 of the Hospitals Act 1927 (W.A.).  It was not until 16 July 1997 that the appellant was established as a hospital board under s 15(1) of the Hospitals Act in respect of a number of metropolitan public hospitals, including the Hospital.  Notices published on 16 July 1997 effected the transfer of staff (i.e. relevantly the complainants) from the Board of the Hospital to the appellant.  The complainants in this matter then became co-employees of the staff at those other hospitals.  As at the date of the Agreement and until 16 July 1997, a transfer of their employment would have required the termination of their employment agreement with the Board of the Hospital, and their engagement as public servants for service in the Dental Services Branch, being a branch of the Health Department of Western Australia as established pursuant to s 21 of the now repealed Public Service Act 1978 (W.A.).  If the facts of the present matter can give rise to an estoppel (which it is not necessary for us to decide) there would be a certain proportionality in the estoppel not arising until the complainants, by the various statutory and regulatory mechanisms described in the appellant’s supplementary outline of submissions, became employed by the same employer who operated the other hospitals where the complainants did not want to serve.  Another central element of the doctrine of estoppel is that there must be proportionality between the remedy and the detriment which is to be avoided – see Verwayen at 413.

62                  As, in our view, no estoppel could have arisen in the present circumstances, it is not necessary to consider whether, as a matter of law, an award can be in effect varied or rendered ineffective by an estoppel or waiver – see Kidd v Savage River Mines (1984) 6 FCR 398 and Jackson v Monadelphous Engineering Associates Pty Ltd (unreported, Industrial Relations Court of Australia, Moore J, 17 October 1997, No 281 of 1997).

63                  The appellant relied on the fairly recent decision of a Full Court of this Court in Horsman v Commissioner of Main Roads [1999] FCA 1733.  In that case an employee was found to be estopped from issuing proceedings for wrongful dismissal because he had, as part of the terms of settlement of the dispute arising out of his dismissal, agreed to that dispute being referred to arbitration and, further, had agreed to accept whatever recommendations the arbitrator might make.  In any event, the appellant in Horsman did not contend that, as a matter of law, there could be no estoppel.  The case turned on matters of agency (the union acted for Mr Horsman in negotiating the settlement), alleged insufficient evidence of reliance, proportionality and the like.

64                  Counsel for the appellant conceded in argument that if the appellant were unsuccessful on the estoppel point, that would also dispose of the waiver ground.  The same applied to the ground which alleged “abuse of process”.  Mr Tannin said “… the abuse of process [point]does not take the matter a great deal further” and “I don’t think in the end it gets us anywhere”.  We agree with his assessment.

65                  That leaves the matter of the Industrial Magistrate’s exercise of discretion.  Pages 230-232 of the Appeal Book comprise a transcript of the proceedings which took place after his Worship had delivered his reasons for finding that the complaints had been proved.  The appellant and the respondent were each represented by counsel.  Counsel for the respondent moved for orders that $77.94 be paid to each of the complainants.  There was no submission from the appellant’s counsel that there should not be an order for any payment.  The argument was as to whether the payment should be made direct to the complainants or to the respondent on their behalf.  In those circumstances, we do not consider that the appellant is entitled to argue that the Industrial Magistrate failed to exercise his discretion or exercised it wrongly.

66                  For the foregoing reasons we would dismiss the appeal.  Pursuant to s 347 of the Act it would appear that no order for costs would follow but the parties may be given liberty to apply in that regard.

Associate:

Dated:                  June 2000