Category: Employment Law

Permanent Impairment Benefits And The High Court Decision Of Goudappel

Permanent impairment benefits and the High Court decision of Goudappel

The good, bad and the ugly…

Timothy Driscoll LLM

 

  1. On 16 May 2014 the High Court of Australia full bench (5 Judges) handed down its decision.
  2. Unfortunately, the High Court unanimously upheld the Appeal and reversed the NSW Court of Appeal’s decision.
  3. They did so in very brief fashion – some 67 paragraphs (ironically the same number as the provision which at one time gave pain and suffering benefits!).
  4. The effect of this decision has caused much a headache for both an injured worker and WorkCover.
  5. For workers, the decision effectively confirms the following.
  6. Firstly, there are 2 sets of rules – those who made a claim for permanent impairment benefits before 19 June 2012 and those who did not.
  7. Depending on when your claim for permanent impairment benefits (if any) has been made will depend on which system applies to your permanent impairment claim

The Bad – The 2 Systems

 

  1. Specific claim for permanent impairment benefits before 19 June 2012

i.         Your are entitled to permanent impairment compensation for WPI or Permanent loss under Table of Maims (for pre 2002 injuries) above 0%

ii.         If you are 10% WPI or received $10,000 or more under the Table of Maims, you are entitled to compensation for pain and suffering between $1 and $50,000.

iii.         You can make as many claims as you want if/when you condition deteriorates.

 

  1. For Workers who have NOT made a specific claim for permanent impairment benefits before 19 June 2012

i.         You must reach 11% WPI to get any compensation

ii.         You can only make one claim, and

iii.         You cannot get any additional compensation for pain and suffering.

 

Which one applies to me?

 

  1. Only those injured workers who have made a specific claim for permanent impairment benefits in writing before 19 June 2012 come under the first system.
  2. Normally workers injured will fill in a standard claim. The ordinary/general claim form is not sufficient.
  3. So if you injured yourself at work after 18 June 2012 or made a claim for permanent impairment benefits (even if you made you original claim) after 19 June 2012 then you fall under the old system.

 

 The Ugly – The dilemma for WorkCover

  1. As I have previously reported, the NSW Court of Appeal reversed the NSW Workers Compensation Commission’s decision effectively finding that if you made any claim for compensation before 19 June 2012 then the old provisions applied.
  2. WorkCover, on this advice, implemented its policy that it would pay workers in accordance with this decision.
  3. However, now that the High Court has reversed this decision, the question remains as to how WorkCover is to deal with current claims on foot.

 

WorkCover’s Response

  1. If an injured worker and a Scheme agent (or the representatives) have agreed in writing to the payment of permanent impairment compensation in accordance with the NSW Court of Appeal’s decision they will meet that agreement and pay that compensation.
  2. The effect of WorkCover’s agreement is that if you have agreed or have in fact been paid under the old scheme when you had no right to then, WorkCover will not come after you to reclaim this money.
  3. If however, your claim was not agreed at the time of the High Court Judgment on 19 May 2014 then you will miss out.

 

The Good – What has happened since the High Court decision?

  1. Some reprieve came for workers who made a claim for permanent impairment benefits before 19 June 2012.
  2. It was thought that if workers decided to seek a top up of permanent impairment benefits due to their condition deteriorating, then that claim would be brought after 19 June 2012 and thus come under the new scheme.
  3. That issue (to date) has been resolved. The Workers Compensation Commission determined that the 1st system would apply in all of its glory: Cauldield v Whelan Kartaway Pty Limited (2014) NSWCC PD 34.
  4. However, WorkCover may want to appeal this decision.
  5. The Scheme Agent themselves, however, cannot, as to do so would raise an issue not submitted/contended before the Commission. However, another scheme agent may wish to bring another ‘test case’ and challenge this decision in the Courts at a future date.
  6. Time will tell…

 

8 July 2014.

About BPC Lawyers: BPC provides people with workers compensation claims, motor accident claims and public liability claims. Beilby Poulden Costello has its origins in a legal practice started by Barry Beilby in 1975.

Civil Liability And The ‘One Punch’ Laws

Civil Liability and the ‘one punch’ laws

Security Guards, assault and liability – who can I sue?

By Timothy Driscoll LLM

 

Case study: Day v The Ocean Beach Hotel Shellharbour Ltd (2013) NSWCA 250

If someone assaults you could sue them for damages for the loss suffered including perhaps aggravated (punitive) damages for the egregious breach which you have suffered.

The question then normally comes who should/can I sue?

In certain circumstances a legal entity including an individual or Corporation can be held to account for someone else’s conduct.

The most noticeable example is that of an employer being held liable for the conduct of its employees or the State of NSW being held liable for it’s Police Officers on duty.**

But what about security guards/bouncers at pubs or clubs?

Ordinarily, a security guard is employed by a security company – a $1 company with little if any assets or insurance. Hence, any action brought against security guards/bouncers for an assault will typically lead to a case of all liability but no means of enforcement of an order for compensation.

So what about the club or pub?

A recent case in the Court of Appeal in NSW named Day v The Ocean Beach Hotel Shellharbour Ltd (2013) NSWCA 250 sought to attach liability to the owner of the principles arguing a new situation in which a person can be held to account for another’s actions.

In this case a bouncer was hired by a security company called Checkmate. He was directed by the pub/club/hotel to remove a patron.

The bounder did so but used excessive force pulling the chair from underneath them causing the patron injury.

There was no doubt that ‘Checkmate’, the employer of the bouncer was liable. But they were no longer in existence! So that left the pub/club/hotel.

The Plaintiff argued that the pub/club/hotel were responsible because:

1. The acts were authorised by the pub/club/hotel,
2. The bouncer was the agent of the pub/club/hotel,
3. Section 91 of the Liquor Act implies agency and liability,
4. The pub/club/hotel should be held to account dually with his employer for the actions of the bouncer.

All of the above arguments were rejected.

The Court found that the actions were not authorised, nor was he an agent at law or deemed under the Liquor Act, nor was there a principle enabling his non-employer to be held to account for his conduct.

The only glimmering light is that the Court of appeal felt bound by a higher Court’s precedent on whether a pub/club/hotel should be held to account dually with his employer for the actions of the bouncer.

This leaves the door open for the High Court to clarify this issue which is of great significance. The ‘one punch laws’ and other policies regarding alcohol fuelled violence and anti-social behaviour, causing government intervention to tackle the issue. Will the Common law follow suit? Time will tell.

There seems to me a least some policy grounds for the creation of such a responsibility. However, the fundamental condition of control seems to be lacking – the pub/club/hotel does not usually exert any sufficient control over the conduct of the bouncer past directing them to do something as opposed to the means of or training as to how to perform such bona fide duties.

If you have been assaulted by a bouncer and are suffering wage loss and/or require significant treatment – we suggest you consider obtaining legal assistance to determine any rights that you may have against a security company or perhaps a pub/club/hotel.

Timothy Driscoll
10 July 2014

 

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* Section 7 Law Reform (Miscellaneous Provisions) 1983 (NSW)

** Section 9B Law Reform (Miscellaneous Provisions) 1983 (NSW)

About BPC Lawyers: BPC provides people with workers compensation claims, motor accident claims and public liability claims. Beilby Poulden Costello has its origins in a legal practice started by Barry Beilby in 1975.

Workers Compensation: Death Claims

When a loved one dies unexpectedly or prematurely, they often leave behind family members who were financially dependent on them. If the death of that loved one was caused or substantially contributed to by their work, the dependents have the right to claim a lump sum death benefit under Workers Compensation legislation.

We recently acted for the children of a deceased worker. The deceased worked extremely long hours and was on call 24 hours a day, 7 days a week, causing her significant stress. It was not disputed that she was a very dedicated worker.

On the day of her death, the deceased worker was travelling to a work meeting, when she suffered a fatal heart attack. The children brought a claim against her employer, alleging that their mother’s employment had been a substantial contributing factor to her death.

This was a complex matter. The deceased had a variety of risk factors for a heart attack, and some of these were unrelated to her work. However, she also had risk factors (such as not having time to exercise, and being under great stress on the day of her death) which were work related.

We sought several expert reports from a cardiologist in relation to these issues, and we got reports that were supportive of the childrens’ case. We also took statements from all of the children, as well as close friends and partners as to the deceased’s work situation. This matter was then heard in the Workers Compensation Commission. A decision was given after some months, and the children won. They were awarded the maximum death benefit.

The employer’s insurer then appealed that decision, and several months later, that appeal was heard by the Deputy President of the Workers Compensation Commission. We have recently been advised that the children won the appeal as well.

This has been a long and hard fought case, and was helped by the thorough preparation of both lay and expert evidence. It has been very rewarding to assist such deserving clients, and to see them secure a positive outcome on 2 separate occasions.

This article was written by Caryn Ger, a senior solicitor with the firm. For more information or to speak with Caryn, please contact us on 8355 4003.

About BPC Lawyers: BPC provides people with workers compensation claims, motor accident claims and public liability claims. Beilby Poulden Costello has its origins in a legal practice started by Barry Beilby in 1975.

Victory for Workers in the High Court

Beilby Poulden Costello were recently successful in a landmark case before the High Court of Australia which will have real benefits for injured workers in New South Wales.

On 12 March 2003 our client suffered severe injuries when a pushbike he was riding in Gardeners Road, Mascot was struck by a car travelling in the same direction.  He sued the driver of that car for damages.  For his part the driver pleaded that our client was guilty of contributory negligence, that is to say that he alleged the accident was partly our client’s fault.

The accident occurred while our client was in the course of his employment and as a result he received payments of workers compensation.

The claim for damages was settled by our client’s acceptance of an Offer of Compromise.  The amount of the offer took into account the allegation of contributory negligence.

If damages are recovered by an injured worker, the worker is required to repay the workers compensation payments that have been received.  In 1965 the Parliament of New South Wales enacted legislation as a result of which the recovery of workers compensation payments are to be reduced to the same extent as the workers contributory negligence.  For example, if the worker was 50% responsible for the injury then the worker would be entitled to recover only 50% of the damages suffered but would only be required to repay 50% of the workers compensation payments.

Our client suggested to the employer that he was not required to repay the full amount of the workers compensation payments because he had settled his claim for a reduced sum due to the issue of contributory negligence.  The employer alleged that because the claim was settled the worker was required to repay all of the workers compensation payments.  The Courts have not been previously required to decide which of these arguments was correct.  In a unanimous decision delivered on 12 March 2009 the High Court determined that our client was obliged to pay back only part of the compensation payments to his employer even though the claim had been settled.

This decision has far-reaching benefits for workers who can now bring and settle a claim for damages without being disadvantaged because the accident was partly their fault.

By Scott Hall-Johnston

Workcover NSW Workshops

WorkCover NSW run free workshops on a range of workplace safety and workers compensation issues – check their website for up to date times and dates. These workshops cover height safety equipment, scaffolding safety nets, appliance tagging and testing, safety and isolation switches, and power distribution boards among other things.

The Safety Show Sydney is held from October 26 to 28 2010. The shows organizers Manufacturers Monthly will lead daily tours guiding visitors through the shows, with the aim of ensuring attendees are up-to-date with the latest and best safety solutions.

The shows are expected to have a hands-on emphasis, with full demonstration stage and safety theatre programs. The Safety Show will also focus on safety solutions for the building and construction industry, with a special feature area that incorporates height safety equipment, scaffolding safety nets, appliance tagging and testing, safety and isolation switches, and power distribution boards.

Report Slams Collective Agreements – Hockey Objects

The University of Sydney conducted a study on various Work Choices collective agreements and released its findings in a report entitled, “Lowering the Standards: From Awards to Work Choices in Retail and Hospitality Collective Agreements.” It summarized its observations as follows:

* Most of the agreements were made from templates of contracts that incorporated minimum standards which do not offer much to the employees.
* Agreements that had better terms for employees were usually negotiated by unions or large companies with bargaining experience.  Those in smaller entities suffered lower monetary and non-monetary compensation.
* The collective agreements did not deal so much with worker-related issues like skills, childcare and work and family balance matters.
* Most of the collective agreements took away protected awards resulting in a loss of up to 30 percent of the employees’ earnings.  This percentage could go higher when other items such as allowances, paid breaks, overtime and annual leave loading are considered.

The study concluded with some recommendations for the policy makers and researches under the new Industrial Relations regime, such as:

* Further review and evaluation of registered agreements;
* Continuous support for decent employers through labor standards;
* Adjustment of labor standards when certain patterns are observed;
* More industrial relations policy to address the real, rather than the imagined, problems of the labor sector;
* More focus on the lower-skilled, private services industries where employees are most vulnerable.

The report was funded by the Victorian, New South Wales and Queensland governments and has been accepted on its face by Julia Gillard, Shadow Employment Minister.  Gillard remarked at how Australian working families in the retail and hospitality sector have lost so much as a result of the agreements under Work Choices.  She said:
“It shows workers in that sector have lost up to 30 percent of their income because of Mr. Howard’s extreme laws.  They have seen basic conditions stripped away, penalty rates, overtime, all gone, costing up to 30 percent of income.”

However, Federal Employment Minister Joe Hockey rejected the truthfulness of the
report saying that the state Labor governments paid a “left-leaning academic to come up with misleading research that attacks the federal workplace relations system.”

Furthermore, he stated that:
“This report joins the six state parliamentary enquiries, advertising campaigns, sham workplace advocates, bogus IR conferences and court actions that have cost state taxpayers more than $22 million to date. The states have clearly decided that an expensive political campaign against the Howard Government is a good use of their time.”

Hockey criticized the report for ignoring the following:
* Wage increases of 3.2 percent in the retail industry and of 3.1 percent in the hospitality business in the last 12 months;
* The creation of 64,000 new jobs in accommodation, cafes and the restaurant industry; and
* The additional days allowed for sick leave, which went from 8 to 10 days and for carers’ leave, which went from 5 to 10 days under the Work Choices agreements.

Hockey maintains that conditions have improved contrary to the findings of the study of the University of Sydney.  The study effectively fell on the Federal Employment Minister’s deaf ears.

The Fairness Test for Workplace Agreements

The Workplace Relations Amendment (A Stronger Safety Net) Act 2007 received Royal Assent on 28 June 2007.  This Act made important amendments to the agreement-making provisions of the Workplace Relations Act.  The Act’s most important feature is the “fairness test” which Australian Workplace Agreements (AWAs) and collective agreements must pass in order to be effective.

A.  Application of the fairness test.  The fairness test applies to an AWA:
* That is lodged on or after 7 May 2007;
* Where the employee’s annual salary is less than $75,000 ( this cap does not apply to collective agreements);
* If it eliminates or modifies any of the protected award conditions such as:

1. rest breaks
2. incentive based payments and bonuses
3. annual leave loadings
4. public holidays
5. monetary allowances
6. loadings for overtime work or shift work; and
7. penalty rates

* Where the affected employee:

1. works in an industry or occupation where a federal award usually applies; or
2. works in an industry or occupation where a state award would have applied prior to 27 March 2006; or
3. performs work that is specified in a federal award that is binding on the employer; or
4. was the subject of a Preserved State Agreement or a Notional Agreement Preserving a State Award immediately before the workplace agreement commenced operating.

B.  The Workplace Authority.  Formerly known as the Office of the Employment Advocate (OEA), the Workplace Authority is responsible for applying the fairness test to agreements submitted by the employers, approving agreements that pass the test, and reviewing pre-lodgment reviews of agreements.

C.  The fairness test.  A workplace agreement passes the fairness test if the Workplace Authority determines that the AWA or collective agreement provides fair compensation to the employee or employees.  In determining whether there is fair compensation, the Workplace Authority shall consider:

* both monetary and non-monetary compensation that the employee will receive under the agreement;
* the work obligations of the employee;
* the personal circumstances of the employee; and
* other factors such as the economic circumstances of the employer.

D.  Workplace agreement lodgment and approval procedures.

1. A workplace agreement will be lodged with the Workplace Authority.
2. Employers may also wish to submit an agreement or a modification of an existing agreement to a prior review known as pre-lodgment.
3. If the agreement passes the fairness test, the Workplace Authority will approve the agreement and the employer shall have 14 days within which to lodge the agreement.
4. If the Workplace Authority finds that an agreement or provision thereof does not pass the fairness test, the Workplace Authority shall send a notice to the employer and employee about the failure while citing the protected conditions that are missing or removed.
5. For agreements that fail the fairness test, the Workplace Authority may offer suggestions on how to make the agreement fair and advice that the payment of back-pay is necessary to rectify the error.
6. If the necessary changes are not made, the agreement will be void and the payment of back-pay may be required.
7. If an agreement is approved, the employer will be given 14 days within which to lodge the agreement.

Workplace Relations Minister Joe Hockey said that employers have no reason to fear the fairness test and “shouldn’t be confused, given the amount of information the Workplace Authority has distributed to companies.  The fact is that, overwhelmingly, most AWAs are passing the fairness test.”  Unfortunately, actual figures show that as at October 2007, only one-third of all agreements assessed by the Workplace Authority have passed the fairness test.

Expectedly, the low passing rate of agreements has drawn criticisms from pro-management individuals.  They also lament the high fines of up to $33,000 that are imposed on employers who do not comply with the Act.  But this should not discourage the proponents of the law promoting the fairness test.  A recent study conducted by the Australian Research Council showed that employees in low-skilled positions like child care workers and shop assistants were earning less under their AWAs as compared to their counterparts who are covered by collective agreements.  The application of the fairness test would correct this disparity for the benefit of the low-skilled worker.

Workers told to think before they drink

An employer can legally terminate the services of an employee who drank two beers during his lunch break for violation of a “no alcohol” company policy.  Thus, it was the decision of the Australian Industrial Relations Commission in the case of Selak v. Woolworths [2007] AIRC 786 to validate a company’s “zero tolerance” policy on an employee’s alcoholic consumption during working hours wherever the employee may be.

The facts of the case are as follows:

1. Mr. Tony Selak has been an employee of Woolworth’s Safeway chain of stores for 18 years.  He worked his way up from trolley boy to the position of store manager.  Mr. Selak’s employment contract contained a provision stating “no alcohol is to be consumed by employees during working hours, including meal breaks”.  Furthermore, Selak’s employment contract stated that “if in the reasonable opinion of the company [the employee is] found to be in breach of Company Policy, involved or party to serious and willful misconduct … the Company may terminate [the employee’s] services immediately.”

2. On 2 May 2007, Mr. Selak and another Safeway employee spent their lunch break at the Sandbelt Hotel where Mr. Selak had two beers.  Upon returning to the store, Mr. Selak was informed that he was being suspended immediately, as he was observed drinking beer by a colleague.  Subsequently, Mr. Selak was terminated from employment for breach of his contract and company policy.

3. Mr. Selak filed an action against Safeway under Sec 643(1)(a) of the Workplace Relations Act of 1996, claiming that his dismissal was harsh, unjust or unreasonable.

4. Mr. Selak argued that:

a. He had no idea that the company’s “Intranet Drugs & Alcohol Policy”  was a strict one as he was not informed that it was such.

b. The same alcohol policy should not have been applied to him because he drank beer during lunch break, outside of the premises of Safeway, and was not operating heavy or dangerous equipment that day.

c. The penalty of termination from employment should have been tempered by his long service in the company and being his first offense, a warning should have been the more appropriate action.

The AIRC, speaking through its Commissioner Grainger, ruled that Mr. Selak’s employment contract contained in clear and unambiguous terms the policy against drinking during working hours and meal breaks.  Thus, the company had every right to terminate his services when he consumed alcohol during his lunch break.  The circumstance that Mr. Selak consumed only two beers was of no moment, as  Commissioner Grainger said:

“The fact that each only drank two beers does not avoid the fact that this was a breach of an express term of Mr Selak’s contract of employment, a term which constituted in its express wording a lawful direction to Mr Selak from the respondent … Mr Selak’s conduct in drinking alcohol with Mr T at the Sandbelt Hotel on 2 May 2007 to have been conduct that is so serious that it goes to the heart of his 2005 contract of employment with the respondent.”

The Commissioner also rejected Mr. Selak’s claims that he had no idea that the “zero tolerance” policy was a strict one and that Safeway should have considered his long employment history before applying the penalty of termination upon him.  The Commissioner maintained that it is precisely because of his senior position in the company that he should have been the first one to observe such a strict policy, as a superior who is immediately responsible for more than a hundred subordinates who are also obliged to observe the same policy.

Understandably, the decision of the AIRC in the Safeway case has raised a howl among critics of Woolworth’s strict zero tolerance policy.  While it is a known fact that many Australian workers like to enjoy a beer or two during the holiday season, they may have to examine their employment agreements and company policies first before grabbing that drink.

Unions slam employers backing AWAs ahead of Work Choices scrap

A report entitled, “AWAs, Collective Agreements and Earnings: Beneath the Aggregate Data” recently revealed that employees on AWA individual agreements earn 16% less than employees under collective agreements.  The Australian Council for Trade Unions (ACTU) accepted the report which was prepared by Professor Dadid Peetz of Griffith University and Professor Allison Preston of Curtin University.  The study was conducted on behalf of the Department of Innovation, Industry and Regional Development of the Industrial Relations Victoria.

The report, which was released on 17 July 2007, addressed the concerns about the negative effect of the Work Choices reforms on the earnings of employees under Australian Workforce Agreements (AWAs).  The study compared the hourly earnings of employees under AWAs and those under collective agreements:
* In different industries;
* In different occupations; and
* In various company sizes.

The report cites the following relevant observations:

1. There is a major pay gap between employees under AWA individual contracts and those under collective agreements.  To illustrate, AWA workers were paid a median hourly rate of $20.50, which is $4 less than the hourly rate of workers under collective agreements.

2. The wage gap is higher for women covered by AWAs, with the female median earnings almost 19% lower than those of women under collective agreements.

3. The industries that paid AWA workers less than their counterparts under collective agreements are the manufacturing, construction, transport, storage, health, community services, property, business services and the personal and other services sector.

4. Although a pay gap between AWAs and collective agreements exists in most businesses, the gap is wider among small businesses than among larger enterprises.

5. The so-called “flexibility benefits” under AWAs are not sufficient to offset the reduction in the workers’ wages.

6. AWAs eliminated or reduced “protected” award conditions such as penalty rates, overtime rates, shift work loadings, public holiday pay and rest breaks.

7. Employers tend to pay more under AWAs only when they wish to avoid negotiations with unions.

Thus, the ACTU referred to the report as “proof” that the Howard Government’s AWAs were being used to cut labor wages and conditions and to “sideline” the role of unions in helping workers bargain collectively.  In an official statement on 17 July 2007, ACTU President Sharan Burrow said, “This study confirms that vulnerable workers – those with fewer skills or with little bargaining power –are the ones most likely to lose pay and conditions under AWA individual contracts.  There can no longer be any shadow of doubt that typical workers on AWAs are worse off than their counterparts on collective agreements.”

Incorporation of Company Policies into Employment Contracts

Is a company’s redundancy policy deemed incorporated into an existing employment agreement?  This was the legal issue in Willis v Health Communications Network Ltd., [2007] NSWCA 313.  In a decision that has been considered a triumph for employers, the New South Wales Court of Appeals ruled that a redundancy policy being applied to employees did not automatically apply to a terminated employee whose employment agreement was silent on the incorporation of such policy.

The facts of the case are as follows:

1. In 1999, Health Communications Network Ltd. (HCN) employed Mr Willis as its Chief Financial Officer.  In 2005, HCN terminated his services and served him six months’ notice.  The following day, Mr Willis was informed that he was no longer required to work for the six-month period earlier given, and that his termination became effective immediately.   In lieu of the six months’ notice, HCN decided to pay Mr. Willis the equivalent of six months’ salary without superannuation on this payment or on the redundancy.

2. Mr. Willis initiated proceedings in the New South Wales District Court claiming that he was in fact made redundant by his termination.  He sought to recover a redundancy pay equivalent to 3.5 months’ salary and superannuation on the payment of six months’ salary in lieu of notice. His action relied on a redundancy agreement negotiated by employees in 2000. Though the redundancy agreement was not formally adopted and formally published by HCN, the company applied its terms upon employees whose employment agreements were terminated due to redundancy.

3. A perusal of the employment agreement of Mr Willis showed that it was dated on December 6, 1999 and that it expressly incorporated another document entitled, “Terms and Conditions of Employment”.  There was no mention of a separate redundancy agreement which was negotiated in 2000.  In 2005, the company issued a letter amending the employment agreement of Mr. Willis and reconfirming the other terms of the said agreement. There still was nothing in the letter amendment that expressly incorporated the redundancy agreement of 2000 into the contract of Mr. Willis.

4. Mr Willis claimed that although his contract and its letter amendment were silent on the redundancy policy of 2000, the same policy was deemed incorporated into his contract by virtue of the company’s practice of paying redundancy to affected employees.  Thus, he sought that the same policy be applied to his case.

5. The primary judge dismissed the claims of Mr Willis. He elevated his case to the New South Wales Court of Appeals.

The appellate court said that the employment agreement of Mr Willis was entered into before the company observed the redundancy policy of 2000. His contract and its letter amendment did not expressly incorporate the provisions of the redundancy policy of 2000 into its terms.  For such a policy to apply to him, Mr Willis should have given his express or implied consent to it.  Moreover, the provisions of the redundancy policy could not have been read into his contract as its absence did not affect the validity of his employment agreement.  Thus, the appellate court ruled that the redundancy policy did not apply to Mr Willis.

On the claim for superannuation, the appellate court noted that his employment contract expressly provided that superannuation was a component of his total remuneration without regard to how that remuneration was earned.  Therefore, the appellate court ruled that superannuation should have been applied to the payment in lieu of notice.

The ruling in this case is a departure from earlier jurisprudence that took into consideration a company’s customs and practices in termination pay.  It seems to declare that what is not included in a contract is deemed excluded.

Consequently, employers and employees are advised to review the terms of their employment contracts. If an employer wishes to apply new policies to employees with older agreements, it must expressly incorporate the new policy in the existing agreements.  On the other hand, employees are reminded that newer policies that affect other employees do not automatically apply to them.