Codelfa Construction Pty Ltd v State Rail Authority of NSW - Assignment Example

Question In the case of lfa Construction Pty Ltd V Railway ity of NSW (1982), the plaintiff was contracted to build a railway. The contract terms stated that the plaintiff was to work for 24 hours each day. However, after the contract was awarded, the residents of the area filed an injunction, which prevented the plaintiff from working for the required period of time. There was litigation on this matter and it was sent to court. The court held that there was a frustration of the contract owing to the fact that the discharge of obligations was restricted. In analysing the case, J. Mason stated that contract terms are agreed before the contract is enforced. However, a lot can change in light of circumstances during the discharge of the contract. In such situations, the court is generally hesitant and cautious about interpreting implied terms because some facts that were not foreseen could be relevant in determining the conduct of parties in the contract. This point of law means that the realities on the ground may make contracts less significant. Mason concedes that contracts with higher degrees of certainty in their terms cover more eventualities. However, since the future cannot be predicted, contracts can be modified significantly as a result of circumstances. In such cases, some important guidelines should be followed to find practical solutions to the issue. Employment contracts are contracts between employers and employees. By their nature, they are also open to uncertainty of interpretation in the future. Employment contracts set out express terms and implied terms. Express terms in employment contracts are the terms that are written or stated clearly by the employer or employee before the contract is signed. They can be found in formal service contracts, letters of appointments or oral negotiations at the time of recruitment. In addition, they may be included in management policy manuals and other written documents setting out how employees are expected to conduct themselves in the workplace. Express terms of employment contracts are often made on the basis of present facts and conditions. In other words, they are made with the best knowledge of both parties at the time of contracting. Hence, both present and foreseeable conditions should be taken into account to ensure the inclusion of all relevant terms conditions and ideas that may influence the employment in the future. However, in reality, situations may arise that were not factored into the initial contract and that may necessitate re-examination of the terms. These implied terms help in the interpretation of the employment contract. In the case of BP Refinery V Shire of Hastings (1978), the judge defined the framework for implying terms in employment contracts. From the case, it could be deduced that an implied term must: 1. be reasonable and equitable 2. be necessary for the discharge of business activities 3. be obvious (i.e. it goes without saying) 4. be capable of clear expression 5. not contradict the express terms of the employment contract. Thus, terms that the two parties could have reasonably perceived at the time of the contract or during the contract, according to these five points, could be called implied terms of the contract. In the same case, it was identified that terms could be implied either by law or by custom and usage. In times of dispute or exceptional circumstances, it might be necessary to invoke terms in an implied manner, identifying terms that are required by law or by convention or custom. Terms implied by law are those terms that are identified in relevant laws such as the Corporations Act 2001 and the Trade Policy Act 1974, which are binding on all organisations and provide guidance for employers and employees with respect to any particular employment. Other elements of employment contracts may be implied by custom. The employees duty of care in carrying out functions, for example, is obvious and does not need to be specified in a contract. However, in an incident where this duty is not discharged, it could be raised as a breach of the relevant term of the contract, as the requirement to carry out one’s duties with care is something that every reasonable person should assume. Employees also have to meet certain other requirements, such as to work in good faith and respect confidentiality. They should not compete with their employers, misuse confidential information or take bribes or secret commissions. All these are implied terms of an employment contract. Action can be taken against an employee who breaches any of them, even though they were not expressly stated. By the same token, employers are customarily expected to avoid exposing employees to unnecessary risks during working hours. This is another implied term of employment that may be relevant in employment disputes. Question 2 The Fair Work Act was passed in 2009 with a view to promoting egalitarian bargaining in Australian organisations. It sought to abolish the old system wherein disputes between trade unions and employers were adversarial and destructive in nature. Rather, it aimed to encourage enterprise-based bargaining instead of the individual agreements that existed under previous laws. The law seeks to institute flexible and negotiable terms between employers and employees. It also promotes terms for consultation, whereby employers should consult with employees about significant matters. In the case of TVA, there is a strong desire to cut down on administrative costs, which can be partly met by doing everything necessary to reduce labour disputes and ensure that there is goal congruence at all levels. Critically speaking, the FWA 2009 is a positive tool for attainment of this end, as it seeks to eliminate the destructive elements of conflicts between employers and employees. In order to cut down costs, the first option I recommend is that we come together as a single entity and negotiate with all employee classes. All the divisions of TVA, which includes my ACT division, should then seek to enter into agreements with all the different employee classes or units. Section 248 (1) of the FWA 2009 states that single-interest bargaining is possible when all the groups agree to bargain together. In the case of KFC Order PR989955 (October 2009), it was ruled that all the franchises of a company can come together and negotiate as a single unit. In this case, each franchise was owned and operated separately. The ruling was upheld by s493 of the FWA. Such an arrangement could be used in matters pertaining to employment relationships, employee organisations and employers, wage deductions for employees and the operation of agreements. It ensures that the organisations involved share the costs of negotiations and transactions, thereby reducing administrative costs. Instead of holding separate meetings at different venues, the organisation or group of organisations can hold one major meeting at which all employees are represented. Another option is to use a bargaining representative to stand in for the employees in negotiations. Section 228 of the FWA 2009 allows for employees to come together and decide how to put a case to their employers. The representative can then request a meeting with the management, at which he or she will present proposals in a timely manner. As employers, TVA must refrain from actions that could restrict employees right to freedom of association. As such, they must allow the employees and their bargaining representatives to come up with appropriate actions and hold meetings as and when they want. Also, the employer must recognise the bargaining representative. These obligations give the employees freedom and facilitate negotiation. If using an employee representative, employees should hold meetings to discuss issues and reach decisions that should be approved by the necessary majority. It is the responsibility of the employee representative to bargain with the management of TVA in seeking the interests of the employees (Section 185, FWA 2009). These are advantageous options for the organisation, because at a time when there is a lot of competition in the electronics industry, compromise and reduction in costs are sought wherever possible. Thus, the TVA group coming together as a single bargaining entity or appointing a bargaining representative has great merit, preventing duplication of effort and avoiding high administrative and meeting costs. In addition, this procedure helps to clarify the situation by providing a channel of communication, through which the management of TVA can readily pass on information about difficulties and challenges on the ground to the employees and the employees can make their wishes and ideas known to the management. Additionally, it is an egalitarian system of dealing with one another, which promotes motivation and a sense of belonging among the employees. Question 3 The Fair Work Act 2009 provides a framework for regulating the relationship between employers and employees, promoting understanding, fairness and consistency. For employers, it helps to secure a workforce who are willing to dedicate themselves to the interests of the organisation. The Act encourages employers to choose from a wide range of favourable payment methods and offer other good incentives such as holidays, which can promote efficiency. For employees, the FWA provides a framework for the identification and implementation of their rights, protecting their workplace rights and freedoms of association. Further, the Act grants employees the right to belong to unions, protecting their collective rights. Workers who belong to unions get 77% more benefits than those who do not. The Act establishes that they cannot be sacked or victimised because they belong to unions. Also, the Act prevents employers from dismissing employees on grounds that are not serious. For instance, employers cannot dismiss people for temporary absence, illness or injury. Thus, the Act protects employees from unjust actions that could damage their careers. The FWA bans discriminatory practices of all kinds in the workplace. Employers are barred from discriminating against prospective employees on the grounds of their colour, race, sex or other personal characteristics. This ensures that people may enter gain employment on the merit of who they are and what they can offer. As such, the FWA 2009 prevents discrimination and prejudice. Additionally, the Act gives employees the right to initiate complaints, which can be heard in an appropriate tribunal. This keeps employers in check and guarantees the rights of employees to fair treatment. The FWA 2009 lays down procedures for cases where employers take adverse actions against employees, such as dismissal or demotion. When an employee who has worked for an organisation for a period of 12 months or more is dismissed, s/he can file an Unfair Dismissal claim within 14 days (Section 394 (2) of the FWA). When this happens, a tribunal should be convened to investigate the matter. In the investigation, the tribunal would ask four main questions: 1. Has the person in question been dismissed? 2. Was it harsh, unjust or unreasonable? 3. Was it consistent with the Small Business Fair Dismissal Code? 4. Was it a case of severe redundancy? Answers to these questions would determine whether the individual in question should be reinstated or compensated or whether the decision should be upheld. This ensures that all decisions to dismiss employees are thought through carefully before they are taken. The FWA 2009 ensures that employers are efficient and abide by the relevant terms of employment, both implied and expressed. This ensures fairness. By guaranteeing their rights, the Act gives employees an incentive to remain motivated, which leads to efficiency and enhanced productivity. By the same token, however, with certain rights of employers guaranteed by the FWA, employees know that they have to work hard to remain in employment. Finally, the Act promotes flexibility by giving employers and employees options to explore in order to reach agreements that satisfy both sides and attain their goals. Reference CCH Australia (2010) Fair Work Act 2009. Sydney: CCH Australia. Read More