LWB Disability Services South Limited t/as Life Without Barriers v Smith

1. [1]

   BELL P: This appeal relates to an award of damages in the sum of $208,815.74 following the purported termination of an employment contract between the respondent, Mr Greg Smith (Mr Smith), a disability support worker, who was employed by the appellant, LWB Disability Services South Limited t/as Life Without Barriers (LWB).

2. [2]

   Mr Smith had originally been employed in the public sector, within the Department of Family and Community Services (FACS), commencing in 2008 as a casual disability worker at the Rickard Road Group Home in Sydney. His conditions of employment were governed by a series of industrial awards including, for purposes relevant to the current proceedings, the Crown Employees Ageing, Disability and Home Care – NSW Department of Family and Community Services (Community Living Award) 2010 and the Crown Employees (Public Service Conditions of Employment) Award 2009. He was also subject to the operation of the Public Sector Employment and Management Act 2002 (NSW) (the PSEM Act).

3. [3]

   Disability support was privatised in 2018 in New South Wales with the employment of public sector employees in the sector being transferred to LWB in circumstances explained more fully later in these reasons.

4. [4]

   By 2018, Mr Smith was working at a group home in Wheeler Street, Carlton (the Carlton Group Home), a suburb in southern Sydney within what FACS had described as the “Metro South Region”. In late April 2018 and early May 2018, LWB directed Mr Smith to work from a different group home operated by it within the same region of Sydney. Mr Smith refused to change the location of his work and insisted upon continuing at the Carlton Group Home (albeit that at that time he was not physically attending the premises and was in receipt of workers compensation payments, as will also be explained more fully below).

5. [5]

   LWB, in turn, insisted that it was entitled to determine where in the region Mr Smith undertook work for it. Mr Smith claimed that this insistence by LWB amounted to a repudiation of his employment contract, purported to accept that repudiation, and brought a claim for damages in the District Court of New South Wales.

6. [6]

   Smith SC DCJ (the primary judge) found in favour of Mr Smith (see Smith v LWB Disability Services South Limited t/as Life Without Barriers [2020] NSWDC 141), holding that it was an essential condition of the employment contract that Mr Smith’s place of employment was at the Carlton Group Home and that he could not be directed by LWB to work in another group home in the same region or district.

7. [7]

   His Honour held that, while there was provision in the Crown Employees Ageing, Disability and Home Care – NSW Department of Family and Community Services (Community Living Award) 2015 (the 2015 Award) (which his Honour treated as applying to Mr Smith) which enabled LWB to change the location of its employees’ work, this provision did not alter the term of Mr Smith’s employment contract and, more specifically, it did not allow LWB unilaterally to change the place where Mr Smith was to carry out his work.

8. [8]

   The primary judge awarded damages, said to be equivalent to what Mr Smith would have earned had he continued to work under the contract of employment up until the end of February 2020, together with damages for a further period from that date ending 12 months after the date of judgment.

9. [9]

   In a separate judgment delivered on 2 July 2020, the primary judge assessed Mr Smith’s damages as $208,815.74.

10. [10]

    Before turning to the grounds upon which LWB seeks to challenge this decision, further factual background to the proceedings is necessary.

Background

1. [11]

   As already noted, in about February 2008, Mr Smith commenced his public sector employment as a casual disability worker at the Rickard Road Group Home.

2. [12]

   Between 2008 and 2013, Mr Smith worked in various positions at a number of work locations. In around mid-2009, he commenced permanent part-time employment as a disability support worker at the Carlton Group Home. In around September 2011, he accepted a permanent full-time position as a disability support worker at the Rickard Road Group Home.

3. [13]

   On 17 January 2013, Mr Smith was offered and accepted a full-time position at the Carlton Group Home. The offer was made by letter dated 17 January 2013 from FACS which commenced by noting that approval had been given for Mr Smith’s permanent transfer in terms of s 87(2) of the PSEM Act (the 17 January 2013 letter).

4. [14]

   Section 87 falls within Div 1 of Pt 3.2 of the PSEM Act. That part is headed “Staff mobility”, and the division is headed “Movement of staff within and between public sector agencies”. It makes provision for temporary and permanent transfers. Section 87(2) provides:

5. [15]

   The 17 January 2013 letter then stated “[t]he details of the position and the conditions of employment are as follows”. There was then set out a table as follows:

6. [16]

   The letter then continued:

7. [17]

   The primary judge noted that the Crown Employees Ageing, Disability and Home Care – Department of Human Services (Community Living Award) 2010 became the Crown Employees Ageing, Disability and Home Care – Department of Family and Community Services NSW (Community Living Award) 2010 in 2012 (the 2010 Award). In turn, that Award became the Crown Employees Ageing, Disability and Home Care – NSW Department of Family and Community Services (Community Living Award) 2015 (the 2015 Award).

8. [18]

   In each iteration of the Award, there was a provision entitled “Mobility of Staff”, in relevantly identical terms, save that the word “Region” in the 2010 Award was altered to “District” in the 2015 Award. A variation of the 2015 Award was made on 30 August 2017 which had the effect that cl 25 became cl 27 but there was no material alteration to the wording of the “Mobility of Staff” clause.

9. [19]

   Clause 25 of the 2010 Award provided that:

10. [20]

    The reference to PSA in cl 25(v) was to the Public Service Association.

11. [21]

    Mr Smith accepted the offer of a position at the Carlton Group Home on 10 February 2013, by counter-signing and returning the 17 January 2013 letter and in due course commenced working there.

12. [22]

    In mid-2016, Mr Smith was advised that the NSW Government was planning on privatising its accommodation and respite services in NSW.

13. [23]

    On 20 June 2017, Ms Rachel Bartley (Coordinator at FACS), Ms Vanessa Harris (Team Leader at FACS) and Mr Thomas Due (Manager, Accommodation and Respite at FACS) (Mr Due) received a letter of joint complaint from twelve staff members at the Carlton Group Home against Mr Smith. That letter requested that all staff grievances relating to Mr Smith be escalated to a formal independent investigation, in particular the allegations concerning bullying, harassment and intimidation.

14. [24]

    In or around July 2017, FACS arranged for an independent investigation to be undertaken by Ms Wendy Klaassen (Ms Klaassen), a Director of GVK Consulting, into the complaint that had been raised in relation to Mr Smith.

15. [25]

    On 1 August 2017, LWB was announced as the new operator for supported accommodation and respite services in the South-East Sydney region.

16. [26]

    On 14 August 2017, Mr Smith was interviewed by Ms Klaassen in relation to the complaint. During the interview with Mr Smith, the topic of his transfer to another location within the same region was canvassed. Mr Greg Shaw of the PSA (Mr Shaw) participated in this discussion and indicated that any approach to moving Mr Smith to another position either part-time or permanently needed to be managed cautiously, as staff in the new environment often wonder about a staff member’s history, or what they have done to be transferred. Mr Shaw also acknowledged the impact that Mr Smith’s absence may have on clients with whom he had a strong connection.

17. [27]

    By letter dated 12 September 2017, Mr Smith was informed by FACS that his employment would be transferred automatically to LWB, and that the Government was planning on finalising the transfer by 22 February 2018. The 12 September 2017 letter stated that a LWB “letter enclosed confirms the terms and conditions that will apply to your employment following transfer”. That particular letter does not appear to have been tendered at the trial.

18. [28]

    Prior to the transfer of his employment to LWB, Mr Smith was off work for a period of time as a result of an anxiety related psychological injury arising from or related to the complaint about him by other staff members at the Carlton Group Home.

19. [29]

    Ms Klaassen’s report was received by Mr Due in or around September 2017. It recommended that Mr Smith should be relocated to an alternative vacant position away from the Carlton Group Home.

20. [30]

    A meeting took place between Mr Smith, Mr Shaw, Mr Due and Mr Keith Paten (IM Rehabilitation Coordinator at FACS) on 9 November 2017 (the first PSA meeting). The purpose of the first PSA meeting was to discuss the findings and recommendations of Ms Klaassen’s report. The minutes of the first PSA meeting included the following (with references to “Wheeler St Group Home” being to the Carlton Group Home):

21. [31]

    On 7 December 2017, Ms Carina Vitelli (Ms Vitelli), Rehabilitation Consultant at Workers Health Centre, issued a Return to Work Suitable Duties Program No 1 for Mr Smith to return to work at the Gardeners Road, Rosebery Group Home (the Gardeners Road Group Home). This was an alternative work location to the Carlton Group Home. The Program assessed Mr Smith as being fit for “suitable” duties (but not pre-injury duties) for 4 hours per day, 3 days per week. Mr Shaw of the PSA signed off on this Program on 12 December 2017.

22. [32]

    Mr Smith returned to work at the Gardeners Road Group Home in December 2017 but remained for less than a week.

23. [33]

    Ms Vitelli completed a second Return to Work Suitable Duties Program No 2 for Mr Smith on 22 February 2018 (the No 2 Program). This stated that he was fit for “suitable” duties for 4 hours per day, 2 days per week and specified the suitable duties location as being 1 Chamberlain Avenue, Caringbah (the Caringbah Group Home), which was an alternative work location both to the Gardeners Road Group Home and the Carlton Group Home.

24. [34]

    By letter dated 26 February 2018, LWB wrote to Mr Smith to confirm “your terms and conditions of employment following transfer” and to “set out the terms and conditions that now apply following the transfer”. The letter contained the following terms:

25. [35]

    The transfer of employment was effected by operation of law. In this context, s 14 of the National Disability Insurance Scheme (NSW Enabling) Act 2013 (NSW) (the Enabling Act) provided that:

26. [36]

    A transfer agreement was in due course entered into between the State of New South Wales and LWB, and specified an employment guarantee period of two years.

27. [37]

    Consistent with this agreement, the letter of 26 February 2018 sent to Mr Smith referred to at [34] above noted that the employment guarantee period was two years for permanent employees and that, during this period, employment would not be terminated except for serious misconduct, by the proper application of reasonable disciplinary procedures, or by agreement with the employee.

28. [38]

    On 27 February 2018, Mr Smith attended work at the Caringbah Group Home as recommended by the No 2 Program but only remained for approximately one week.

29. [39]

    Mr Smith was certified by WorkCover as having no capacity for work from 10 March to 18 April 2018.

30. [40]

    A meeting was held on 30 April 2018 attended by Mr Smith, Mr Due, Ms Vitelli, Mr Shaw of the PSA and Mr Diarmuid Hogue (Human Resources at LWB) (the second PSA meeting). Mr Due gave the following account of this meeting:

31. [41]

    Upon request for written confirmation, Mr Smith received a letter dated 4 May 2018, which stated under the heading “Change in reporting line – Location”:

32. [42]

    An email was sent by Mr Due to Mr Smith on 7 May 2018, providing written confirmation of the change in Mr Smith’s reporting line and location of work, as follows:

33. [43]

    By letter dated 10 May 2018, Mr Smith protested the decision, stating that he had not requested it and did not agree to the transfer. It also stated that he did not agree “to being terminated from my employment at Wheeler Street Group Home”.

34. [44]

    LWB responded to Mr Smith on the following day, stating that:

35. [45]

    Also on 11 May 2018, Ms Vitelli issued a Return to Work Suitable Duties Program No 3, for Mr Smith to work at the Caringbah Group Home.

36. [46]

    On 16 May 2018, Mr Smith responded to LWB’s email of 11 May 2018 as follows:

37. [47]

    Mr Due responded on 18 May 2018, referring Mr Smith to the earlier email as of 7 May 2018 and indicating that LWB’s “standpoint has not changed”.

38. [48]

    On 30 May 2018, Mr Tom Jones (Mr Jones), a clinical psychologist, prepared a Treating Clinical Psychologist Report in relation to Mr Smith, based on information obtained and observations over a total of 26 sessions he had held with Mr Smith. Mr Jones indicated that, in his opinion, Mr Smith met the criteria for diagnosis of Adjustment Disorder with Anxiety and Depressed Mood and stated that he did not believe that he could successfully return to work for his former employer and that a return to the Carlton Group Home was “not possible”.

39. [49]

    Mr Smith remained off work during 2018.

40. [50]

    By letter to LWB dated 27 September 2018, solicitors for Mr Smith reiterated his position that he did not agree to any transfer, and asserted that the refusal to permit Mr Smith to return to work at the Carlton Group Home constituted a repudiation of his contract of employment. That letter included the following:

41. [51]

    LWB responded by letter dated 18 October 2018. The primary judge characterised this letter at [20] of his judgment as LWB “refus[ing] to withdraw its direction for [Mr Smith] to relocate”. That was, with respect, neither a fair nor accurate characterisation of what was a detailed response from LWB. It is necessary to set out that response in full:

42. [52]

    By letter dated 29 October 2018, Mr Smith’s solicitors informed LWB that Mr Smith regarded its conduct as a repudiation of his employment contract, and that he accepted the repudiation.

43. [53]

    By email dated 7 November 2018, LWB responded, rejecting Mr Smith’s acceptance of the purported repudiation and affirming the employment contract.

44. [54]

    From November 2018, Mr Smith applied for many jobs and had one face-to-face interview, but was unable to secure permanent employment.

45. [55]

    By letter dated 19 December 2019, solicitors for LWB wrote to Mr Smith’s solicitors, stating:

46. [56]

    No response was received to this letter.

The primary judgment

1. [57]

   The primary judge held that LWB was not entitled unilaterally to change the location of Mr Smith’s workplace, and that LWB repudiated the contract of employment when it insisted that Mr Smith work at a place other than the Carlton Group Home: at [43]. The essence of the primary judge’s reasoning to this conclusion was as follows:

2. [58]

   The primary judge rejected LWB’s argument that the mobility provisions of the Award which, by 2018, was the 2015 Award, gave LWB the right to change Mr Smith’s work location.

3. [59]

   His Honour held that although the provisions of an award bind relevant employers and employees, given their scope and purpose, it was open to employers and employees to agree to terms that conferred benefits on the employee that were greater than those provided for in the award: at [36]. At [37], his Honour stated that:

4. [60]

   The primary judge rejected LWB’s alternative argument based on the well-known observation of Dixon J in The King v The Darling Island Stevedoring and Lighterage Company Limited; Ex parte Halliday; Ex parte Sullivan (1938) 60 CLR 601 at 621-622; [1938] HCA 44, that it was an implied term of the contract that Mr Smith comply with all reasonable and lawful directions of LWB, and that the requirement to work at a different group home was such a direction. The primary judge held at [41] that this argument failed to recognise that a direction is not lawful unless it falls within the scope of the contract, and that it is not lawful simply because it is reasonable in every other respect.

5. [61]

   Given his conclusion in relation to repudiation and lawful direction, the primary judge noted that it was unnecessary to deal with the third issue, namely that, if there was a power to transfer Mr Smith, whether what the primary judge described as the “preconditions” to the exercise of that power had been fulfilled. This was a reference to cl 25(v) of the Award: see [19] above. Such conditions were that an employee’s travel must not be unreasonable having regard to the individual’s circumstances, and that there must be “consultation” with the PSA prior to any transfer.

6. [62]

   The primary judge held that it was not unreasonable for Mr Smith to be required to travel to the Caringbah Group Home nominated in the direction of 4 May 2018. As to the second condition, however, his Honour held at [55] that, although there had been consultation with the PSA on 9 November 2017 (see [30] above), LWB had failed to consult the PSA as required by the mobility clause prior to the directive of 4 May 2018 for Mr Smith to work at the Caringbah Group Home. In relation to the second PSA meeting on 30 April 2018 (see [40] above), the primary judge held that:

7. [63]

   The primary judge held that, in the alternative, even if it were open to LWB to transfer Mr Smith to a different group home, its relevant failure to consult with the PSA also amounted to repudiatory conduct which entitled Mr Smith to terminate the employment contract.

Grounds of appeal

1. [64]

   LWB, for whom Ms Nomchong SC and Mr Avery-Williams appeared, appealed on the following grounds:

   1. (1)

      In respect to the application of cl 27 of the 2015 Award, the primary judge erred:

   2. (2)

      The primary judge erred by finding that LWB did not give a reasonable and lawful direction in directing Mr Smith to work at a different location;

   3. (3)

      As a result of the errors alleged in appeal grounds 1 and 2, that the primary judge erred in finding that LWB repudiated Mr Smith’s contract of employment;

   4. (4)

      In relation to the assessment of damages, the primary judge erred in finding that Mr Smith would have earned income from 29 October 2018 until 14 May 2021 had his place of work remained the Wheeler Street Group Home;

   5. (5)

      The primary judge erred in finding that Mr Smith would be likely to find further employment in the social work industry within 12 months of the date of judgment;

   6. (6)

      The primary judge erred in accepting Mr Smith’s calculation of the quantum of damages;

   7. (7)

      The quantum of damages was manifestly excessive.

Consideration

1. [65]

   Central to the primary judge’s decision on liability was his construction of the 17 January 2013 letter: see [13]-[21] above. As noted above, his Honour held that the identification of “Carlton GH 13 Wheeler St, Metro South Region” in the table contained in this letter was an “express condition” and an “essential term” of the employment contract.

2. [66]

   The effect of his Honour’s characterisation of the identification of a particular place of work, viz. the Carlton Group Home, as an essential condition was that, absent Mr Smith’s consent, LWB was obliged to employ him in that location and that it would be a fundamental breach of contract amounting to repudiation for LWB to transfer Mr Smith to another group home within the Metro South Region, however reasonable or justified or necessitous such a transfer might be.

3. [67]

   The primary judge’s construction had the consequence that the simple identification of the Carlton Group Home in the 17 January 2013 letter operated to disapply cl 25 of the 2015 Award, the terms of which were materially identical to the 2010 Award set out at [19] above.

4. [68]

   This would be a particularly surprising consequence as the 17 January 2013 letter expressly stated that Mr Smith’s “employment conditions will be in terms of the Crown Employees Ageing, Disability and Home Care – Department of Human Services (Community Living Award) 2010”. That statement was unqualified, that is to say, the whole of the Award was referred to and it was made “binding on all employees and employers to which it relates, whether or not they were a party to the making of the award”, by force of s 12(1) of the Industrial Relations Act 1996 (NSW) (the IRC Act).

5. [69]

   It is immaterial that the 2010 Award (and by extension, the 2015 Award) was not incorporated by reference nor implied into Mr Smith’s employment contract. It applied by virtue of s 12(1) of the IRC Act and, as far as concerns Mr Smith’s employment with LWB, by virtue of s 14(4) of the Enabling Act. The 2010 Award’s operation by force of law was a necessary and critical part of the context in which the contract constituted by Mr Smith’s acceptance of the 17 January 2013 letter fell to be construed, as was Pt 3.2 of the PSEM Act.

6. [70]

   The Award and the PSEM Act were “matters of law” forming part of the “background knowledge” that would reasonably have been available to the parties: see Maggbury Pty Limited v Hafele Australia Pty Limited (2001) 210 CLR 181; [2001] HCA 70 at [11]; see also Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241; [2005] HCA 10 at [50] and [64]; K Lewison and D Hughes, The Interpretation of Contracts in Australia (2012, Lawbook Co) at [4.06]; P Herzfeld and T Prince, Interpretation (2nd ed, 2020, Thomson Reuters) at [29.70] (Interpretation). Indeed, both the Award and the PSEM Act were expressly referred to in the 17 January 2013 letter of offer.

7. [71]

   With that background knowledge, by simply nominating or specifying a particular place of work in the 17 January 2013 letter, the parties should not have been taken to have intended to deprive FACS of an ability to transfer an employee either within or to another public sector agency. That was a matter that had been expressly bargained for in the Award, was consistent with Pt 3.2 of the PSEM Act and was undoubtedly an important management tool. It also comported with commercial common sense: see Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12 at [23]-[25] and [57].

8. [72]

   Further, a natural reading of the 17 January 2013 letter supports the view that the information contained in the table of the letter simply supplied the “details of [Mr Smith’s] position” and that the conditions of his employment were contained in the 2010 Award as well as the Crown Employees (Public Service Conditions of Employment) Award 2009. After all, the sentence of the 17 January 2013 letter immediately following the table began by stating that “[y]our employment conditions will be in terms of” the Awards (emphasis added): see [15] above. His Honour’s construction of the 17 January 2013 letter with respect failed to have regard to the terms of the letter as a whole, contrary to a well-established canon of contractual construction: see Interpretation ch 22, and the cases there digested and referred to.

9. [73]

   Even if the details in the table did constitute contractual terms, the reference in the table to the location at which Mr Smith was to work, at least insofar as it referred to “Carlton GH 13 Wheeler St”, supplied a “[d]etail of the position” that Mr Smith was to assume within the Metro South Region. Clause 25(i) of the 2010 Award stated “[a]ll staff members are recruited to a Region, not a unit”. A “unit” was defined in the Award as meaning “a group home, respite centre or in-home support service”.

10. [74]

    As a matter of construction, therefore, reading the 17 January 2013 letter in its proper context including that supplied by the Award and cl 25(i) in particular, Mr Smith was not retained to work in a particular group home but in the Metro South Region. The Carlton Group Home was simply the place within that particular region to which he was to report, subject to the possibility of being transferred within that region at some future time.

11. [75]

    In light of cl 25(i) of the 2010 Award, the reference to the Carlton Group Home in the 17 January 2013 letter could not reasonably be construed as involving a promise, let alone one amounting to an essential term or condition of the employment contract, that Mr Smith would only ever work at the Carlton Group Home. The primary judge was in error in so concluding. Mr Smith was not “recruited to” the Carlton Group Home but to the Metro South Region.

12. [76]

    This analysis is reinforced when regard is had to Byrne, a seminal decision dealing with the operation of industrial awards which sit alongside contracts of employment. At 421, Brennan CJ, Dawson and Toohey JJ held that:

13. [77]

    Their Honours cited in support of this last proposition Kilminster v Sun Newspapers Limited (1931) 46 CLR 284; [1931] HCA 37, and had earlier cited with approval the following passage from the decision of Isaacs J in Josephson v Walker (1914) 18 CLR 691 at 700; [1914] HCA 68, a case in which an employee claimed the unpaid balance of wages due under an award:

14. [78]

    The primary judge’s interpretation of the reference to the Carlton Group Home as being an essential term or condition of the employment relationship and as outflanking the mobility of staff clause in the Award was in the face of these authorities. Whilst it might be open to parties to an industrial award separately to negotiate to confer additional benefits on a worker by way of contract, that is only permissible to the extent that the award in question is not derogated from, for instance by purporting to withdraw rights conferred on employers by the award.

15. [79]

    To the extent that the primary judge drew any support for his construction from the reference in the 17 January 2013 letter to “permanent transfer in terms of section 87(2) of the” PSEM Act, “permanent” in that context was plainly being used in the same sense as it was used in that Act, namely by way of contrast to a “temporary” transfer. Mr Smith’s transfer was “permanent” in contrast to a transfer for a particular period of time to or within another agency, at the expiry of which he would return to his existing agency or position within a particular agency. It did not mean that he could never be transferred again, but simply that he was being transferred from the Rickard Road Group Home to the Carlton Group Home on a permanent rather than temporary basis.

16. [80]

    A further aspect of the primary judge’s reasoning was that, given that Mr Smith was already a permanent employee of FACS at the time of the 17 January 2013 letter, the only significance of this letter lay in the new work location that it specified. His Honour used this fact to elevate the specification of the Carlton Group Home into a contractual promise that Mr Smith could not ever be transferred from that location without his consent.

17. [81]

    Not only did that reasoning not take into account the various matters, principles and authorities set out above precluding such a construction, the purpose of the 17 January 2013 letter could be readily explained on a basis other than that it represented an agreement that Mr Smith could not be transferred from the Carlton Group Home in the future without his consent. It is plain from the reference to s 87(2) of the PSEM Act in the opening words of the letter that there must have been consultation by or on behalf of the head of the public sector agency with Mr Smith in relation to his transfer. The letter was the formal confirmation of his transfer and it was scarcely surprising in that context that it would make reference for the sake of good order to the group home to which Mr Smith was being transferred and set out the details of his position.

18. [82]

    The details supplied sensibly recorded the date upon which he would enter into duty, his commencing salary and the hours per week Mr Smith would work at this new location. Even if these did not differ from those applicable at the previous group home at which he had worked, setting them out in detail in a formal letter such as that of 17 January 2013 in the context of his move to a new location no doubt constituted good practice and ensured that there could be no issue or confusion as to the matters specified upon commencement at the new location. The reference to the location did not, however, necessitate interpreting the 17 January 2013 letter in a way that precluded FACS (and LWB as a result of the 2018 transfer of Mr Smith’s employment) from transferring Mr Smith at some point in the future, should the need arise or circumstances otherwise require that outcome.

19. [83]

    One consequence of the primary judge’s construction was that, if the Carlton Group Home for example ceased to be habitable or became unsuitable to operate as such, Mr Smith could have insisted on his contractual rights and FACS would have been powerless to transfer him against his will to another group home. That further illustrates the lack of commerciality of the construction preferred by the primary judge.

20. [84]

    For all of the above reasons, it follows that appeal ground 1(a) should be upheld and that the primary judge erred in his construction of the 17 January 2013 letter and in his analysis of the rights and obligations of the parties as at 2018 when Mr Smith purported to terminate the contract on the basis of LWB’s alleged repudiation. The primary judge also erred in holding that LWB was not entitled to transfer Mr Smith to a different group home in the Metro South Region in May 2018 because it had effectively contracted out of any right under the Award to do so.

21. [85]

    It follows further that LWB’s insistence in asserting its entitlement to do so and in resisting Mr Smith’s position to the contrary was not repudiatory conduct that entitled Mr Smith to terminate the employment relationship as he purported to do so, through his lawyers, on 27 September 2018. There was no entitlement to terminate on this basis and thus no entitlement to the damages awarded.

22. [86]

    Even if the primary judge had not erred in the ways explained above, there would have been a question whether LWB’s conduct was in truth repudiatory, in circumstances where it was not looking to sever its relationship with Mr Smith, but endeavouring conscientiously to find a place for him to work within the network of Group Homes that would accommodate, on the one hand, his psychologist’s view that he should not return to the Carlton Group Home and, on the other hand, the complaints that had been made in relation to him in 2017. In circumstances where parties have a bona fide disagreement as to the meaning of their contractual rights and obligations, a mistaken understanding by one party of those rights or obligations will not always or necessarily amount to repudiation: see DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 432; [1978] HCA 12.

23. [87]

    It is not, however, necessary to enter upon that question in view of my conclusions as to the primary judge’s construction of the contract and Mr Smith’s lack of any entitlement to terminate the contract and to an award of expectation damages.

24. [88]

    Mr Gibian SC, who appeared for Mr Smith, accepted that the second and third grounds of appeal were tied to success or failure on ground 1(a). It follows that those two grounds should also be upheld.

25. [89]

    There remains to be addressed the question of the correctness or otherwise of the primary judge’s conclusion on the alternative basis that there was a lack of consultation by LWB with the PSA within the meaning of the mobility of staff transfer provisions in cl 25 of the 2010 and 2015 Awards, and that this lack of consultation amounted to repudiatory conduct.

26. [90]

    It will be recalled that cl 25(v) of 2010 Award which ultimately became cl 27(v) of the 2015 Award, as varied in 2017, provided that “[w]here an involuntary transfer is necessary, consultation with the PSA will be undertaken prior to the transfer being affected [sic].”

27. [91]

    The primary judge’s reasoning on this issue has been set out at [62] above. There are a number of difficulties with it. Most fundamentally, to the extent that [58] of his Honour’s reasoning was to the effect that a failure by LWB to consult the PSA amounted to a repudiation by LWB of its contract with Mr Smith, such a conclusion cannot be sustained and, in fairness to Mr Smith’s legal representatives, was not pleaded.

28. [92]

    Any failure to consult may have amounted to a breach of the Award, but how it would manifest an intention no longer to be bound by a contract and thus amount to repudiatory conduct is not clear in circumstances where the very transfer about which the consultation was to have occurred involved the continuation of the contract and employment relationship, albeit at a different location.

29. [93]

    I would, in any event, accept the submission made on behalf of LWB that there was no relevant failure to consult the PSA.

30. [94]

    The primary judge found that there had in fact been consultation with the PSA in relation to Mr Smith’s transfer away from the Carlton Group Home during the first PSA meeting on 9 November 2017: see [62] above. His Honour appeared to treat this consultation as irrelevant because at that consultation, the new group home to which Mr Smith was to be transferred was not the Caringbah Group Home which was the subject of the direction of 4 May 2018 but, rather, the Gardeners Road Group Home.

31. [95]

    Whether or not consultation within the meaning of cl 25(v) of the Award requires consultation not only in relation to the reasons for a proposed transfer but also in relation to the specific location to which an employee is to be transferred need not be decided because I am of the view that there was in fact consultation about the transfer to the Gardeners Road Group Home at the second PSA meeting of 30 April 2018, and that the primary judge’s conclusion to the contrary was not correct. The purpose of the second PSA meeting was to discuss the transfer. Mr Shaw of the PSA was in attendance at that meeting. That no witness in the case gave evidence as to what if anything he said during the meeting did not mean that the PSA had not been consulted. Mr Smith made very clear at the meeting what he wished to say. Mr Shaw could have spoken up if he did not think that Mr Smith understood what was happening or was not being given an opportunity to express his view or had not communicated that view clearly. From the affidavit accounts of the meeting, Mr Smith was given an opportunity to and did express his view and evidently understood the position as it was put to him on behalf of LWB.

32. [96]

    The primary judge appears in [58] of his decision, extracted at [62] above, to have based his view as to lack of consultation in part at least upon the fact that he thought that LWB had made its decision to transfer prior to the consultation. That is one construction of the exchanges. Another (and the preferable one) is that nothing that was said in the meeting altered a provisional view that LWB would not return Mr Smith to the Carlton Group Home.

33. [97]

    The 2015 Award required consultation with the PSA to occur before a transfer was effected, not before a decision is made to transfer an employee. There was no failure to consult prior to the transfer; the 30 April 2018 meeting occurred prior to the direction of 4 May 2018. Even if cl 25(v) should be construed as meaning that consultation must occur prior to a decision to transfer an employee, it will invariably be the case that at least a provisional decision will have been made to transfer by the time of consultation and that the purpose of the consultation is to give the PSA the opportunity to ensure that the employee’s views have been communicated. That plainly occurred in the present case.

34. [98]

    It follows that appeal grounds 1(b) and (c) should be upheld.

35. [99]

    It is not strictly necessary to address the various grounds of appeal relating to the award of damages, as I have held that Mr Smith was not entitled to damages as there was no repudiatory conduct on the part of LWB and thus no valid termination of the employment contract by Mr Smith.

36. [100]

    It is sufficient to record, however, that there appears to be considerable merit in LWB’s submission that, on the primary judge’s own reasoning, the income Mr Smith would have earned in what the primary judge specified as the damages period would have been zero (or close to it) because:

37. [101]

    In this latter respect, LWB pointed to the primary judge’s acceptance of the evidence of Mr Jones, Mr Smith’s treating psychologist, that it was impossible for him to remain at the Carlton Group Home: at [66]; that that Home had a toxic effect on Mr Smith’s health: at [66]; and that it was most likely that he could not have continued his employment at the Home far beyond the end of the Guarantee Period (being 26 February 2020), if that far: at [65].

Conclusion

1. [102]

   For all of the above reasons, the orders I would make are as follows:

   1. (1)

      Allow the appeal with costs.

   2. (2)

      Set aside the orders of the primary judge of 15 May 2020 and 2 July 2020.

   3. (3)

      Order that the statement of claim filed 25 January 2019 be dismissed.

   4. (4)

      Order that the Respondent pay the Appellant’s costs at first instance.

2. [103]

   MACFARLAN JA: I agree with Bell P.

3. [104]

   PAYNE JA: I agree with Bell P.