Visscher
vthe Honourable President Justice Giudice

Judges: Gummow J

Heydon J
Crennan J
Kiefel J
Bell J

Legislative References:
Workplace Relations and Other Legislation Amendment Act 1996 (Cth) - Schedule 8, Item 19
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) - s 2; Schedule 1
Workplace Relations Amendment (Termination of Employment) Act 2001 (Cth) - Schedule 1, Item 9
Workplace Relations Act 1996 - s 3(h); s 120; s 170LT; s 170LZ(1); s 170LZ(4); s 170M(1); ss 170LO; s 170LP; s 3(b); s 170LI; Pt VIE; s 170CH(3); s 170CD(1); s 170CH(3)
Industrial Relations Act 1988 (Cth) - The Act

Decision by:
Heydon J
Crennan J
Kiefel J
Bell J

35. In proceedings before the Australian Industrial Relations Commission ("the AIRC") the applicant, Mr Visscher, claimed that his employment with the second respondent, Teekay Shipping (Australia) Pty Limited ("Teekay") had been terminated and that the termination was harsh, unjust or unreasonable within the meaning of s 170CE(1)(a) of the Workplace Relations Act 1996 (Cth) ("the WRA") ^[13] . He sought reinstatement by appointment to the position in which he had been employed immediately before the alleged termination ^[14] .

36. It was Mr Visscher's case that in January 2004 Teekay required him to undertake the role of a Second Mate on vessels in its fleet when his permanent position was that of a Chief Officer (also referred to as First Mate or Chief Mate). Teekay's response was that Mr Visscher had briefly been promoted to that position in September 2001 but that the promotion had been rescinded shortly thereafter, with Mr Visscher returning to the position of Third Mate. It had subsequently promoted him to Second Mate. However Mr Visscher continued to perform the duties of a Chief Officer and receive the same amount by way of salary as a Chief Officer. At a meeting in March 2004 a representative of Teekay said that Mr Visscher had only been acting in that role.

37. Mr Visscher regarded Teekay's requirement of him to sail as a Second Mate as a repudiation of his contract of employment. On his case the termination of the employment relationship was "at the initiative of the employer" ^[15] . Alternatively, Teekay's requirement could be viewed as a demotion. Section 170CD(1B) ^[16] , by implication, treated a demotion as a termination of employment where it involved a significant reduction in the remuneration or duties of the employee. On either approach it was necessary for the AIRC to consider whether Mr Visscher was employed as a Chief Officer when the acts which resulted in the cessation of his employment occurred.

38. Mr Visscher was not successful in his application before Commissioner Redmond nor on appeal, before the Full Bench ^[17] of the AIRC ^[18] . The Full Court of the Federal Court dismissed his application for writs of mandamus and certiorari, which had been brought under s 75(v) of the Constitution to this Court and remitted to that Court ^[19] .

39. The Full Court concluded that Mr Visscher was unable to establish the fact upon which his allegation of jurisdictional error on the part of the AIRC depended, namely that a contract whereby he was appointed a Chief Officer continued in existence in 2004 ^[20] . Two grounds were given for that conclusion. It held that Teekay's actions in September 2001 were effective to "terminate Mr Visscher's employment as a permanent Chief Officer" ^[21] . This appears to have also been the view of the Full Bench of the AIRC ^[22] and was likely to have been influential in the decision reached by Commissioner Redmond. The second ground identified by the Full Court had regard to the terms of a Certified Agreement which came into force on 5 May 2002 ("the Certified Agreement") ^[23] . The Court held that Mr Visscher, as a Deck Officer who was a member of the Australian Maritime Officers Union ("the AMOU") and employed by Teekay, was bound by the terms of the Certified Agreement ^[24] . In the agreement he was listed as a Third Officer (or Third Mate), and subsequently as a Second Mate, but never as a Chief Officer. The Certified Agreement was taken to be conclusive as to his position ^[25] . That conclusion is not correct as a matter of construction of the Certified Agreement, for the reasons which follow. Further, the approach of the Full Court and the AIRC to the rescission of Mr Visscher's contract as a Chief Officer proceeded upon a wrong assumption of law.

The facts

40. Mr Visscher commenced casual employment with Teekay in March 2000. In March 2001 he accepted an offer of permanent employment as a Third Mate. It was found by Commissioner Redmond that in August 2001 Mr Visscher was offered a promotion to the position of a Chief Mate, which he accepted on 7 September 2001. It does not appear to have been disputed that Mr Visscher satisfied the requirements of the Certified Agreement of 1998, then in force, for promotion to such a position.

41. An industrial dispute arose between Teekay and the AMOU concerning, relevantly, the promotion. The AMOU demanded that Teekay hold open vacancies for permanent positions as Chief Officer in order to allow employees with longer service to obtain the necessary qualifications. The Commissioner who dealt with the dispute recommended, on 11 September 2001, that "promotions recently made" be rescinded. Teekay notified Mr Visscher on 20 September 2001 that it intended to comply with the recommendation and that his "recent promotion to permanent 1st Mate is unfortunately rescinded". Mr Visscher did not accept the rescission. The Full Bench of the AIRC observed that he "thereafter maintained that it was of no legal effect" ^[26] . However he remained in Teekay's employ, continuing to undertake the role and duties of a Chief Officer and receiving an amount equal to the salary of a Chief Officer, as earlier mentioned.

42. On 5 March 2002 the AIRC certified the Certified Agreement. It was to take effect from 5 May 2002 and remain in force until 1 July 2004. It was expressed to be binding on employees of Teekay who were members of the AMOU and engaged as Masters or Deck Officers on vessels defined as the "fleet" operated or managed by Teekay. It dealt with a number of subjects including "Employee Performance & Career Progression". Clause 23.4 provided that the "grading (or rank/service) list attached will be the basis for future promotions/transfers etc". That was a reference to Appendix A to the Agreement, which comprised a "Deck Officers Grading List", and which was stated to be: "As at 15th February 2002". Mr Visscher was there listed as a "Third Officer", that is Third Mate. The Commissioner found that the gradings list was available to employees on a monthly basis. It may be assumed that Teekay updated the list when changes to staff or gradings occurred.

43. On 5 July 2002 Teekay wrote to Mr Visscher and offered him a permanent position as a Second Mate. His evidence was that he rejected the offer as unnecessary, given his existing contract of employment as a Chief Officer. Subsequent to this letter Mr Visscher appeared in the gradings list as a Second Mate.

44. At the time of his promotion to a Chief Officer Mr Visscher was engaged on the "Samar Spirit" and he continued to perform the duties of a Chief Officer on that vessel until early January 2004. The evidence before the Commissioner was that, from the time of the AIRC's recommendation that promotions be rescinded, Mr Visscher's payslips showed that he was paid a higher duties allowance, in addition to his pay which was at the rate of a Third Mate and later as a Second Mate.

45. On 8 and 9 January 2004 Mr Visscher had conversations with another employee of Teekay, Mr Bray. They concerned the position in which Mr Visscher would work after the conclusion of his current tour of duty on the "Samar Spirit" and a further tour of duty on the "Broadwater". Different accounts were given by Mr Visscher and Mr Bray as to what was said. In his email to Teekay of 22 February 2004, Mr Visscher claimed that Mr Bray had said that he, Mr Visscher, would be required to sail as a Second Mate. Mr Bray's evidence was that he said Mr Visscher would have to do so if no position as a Chief Officer was available and that Mr Visscher did not react negatively to that prospect. Commissioner Redmond did not make findings as to what was said. He made a general statement that he accepted Teekay's evidence as relevant to its belief about the employment relationship continuing but, as the Full Bench of the AIRC correctly observed, little reliance could be placed upon such a statement as findings concerning the events of 8 and 9 January 2004 ^[27] .

46. In his email of 22 February 2004 to Teekay, Mr Visscher said that the requirement to sail as a Second Mate constituted a demotion and that he considered his employment as terminated by Teekay upon his leaving the "Broadwater", the vessel upon which he was currently serving. Teekay responded by letter dated 24 February, expressing surprise at his comment about demotion. It said that he was currently graded as a Second Mate and had never been graded as a Chief Officer. It also said that it did not consider a demotion in rank for any officer to constitute constructive dismissal. Mr Visscher filed his application with the AIRC on 11 March 2004.

47. Mr Visscher undertook further work for Teekay for some months after his claim of termination of employment. The basis upon which he did so has not been the subject of findings in the AIRC. Teekay raised an issue before the Commissioner as to whether Mr Visscher's employment was terminated, or whether he resigned in June 2004, but the Commissioner made no determination and the issue does not appear to have been pursued in the following appeals.

The contract of employment

48. Commissioner Redmond did not make any findings as to what resulted from Teekay's notification of the rescission of Mr Visscher's contract as a Chief Officer on 20 September 2001. He noted that Mr Visscher advised Teekay that he did not accept it, but went on to find that Mr Visscher must have appreciated that he was not graded as a Chief Officer and that it must have been evident to him from his payslips what his ordinary rate of pay was and that he was in receipt of a higher duties allowance. This suggests that the Commissioner considered Teekay's repudiation effective to bring the contract to an end, with Mr Visscher continuing his employment in a Third Mate position. This is the view the Full Bench formed of the Commissioner's reasons ^[28] . Nothing in the Commissioner's reasons suggests that he regarded the Certified Agreement as conclusive of the question of Mr Visscher's position. He may have viewed it as confirming the demotion which had been achieved by Teekay.

49. The Commissioner's reference to Mr Visscher's knowledge about his grading and the basis of his pay is consistent with a view that Mr Visscher understood that he had been demoted. But the Commissioner made no findings about statements by Mr Visscher or conduct on his part following receipt of the notice of rescission which might have suggested his acceptance of what Teekay sought to do. The finding, that Mr Visscher had advised Teekay that he did not accept that his promotion had been rescinded, appears to the contrary of an election on his part to treat the contract as discharged by Teekay's breach ^[29] . However it is perhaps unwise to read too much into this finding. It stated the fact of the communication by Mr Visscher, not a conclusion about an election on his part. Plainly the Commissioner was not engaged upon such a determination, because he considered Teekay's notice of rescission to have been effective without more.

50. The members of the Full Bench of the AIRC were of the same view concerning the ability of Teekay to rescind the promotion. They determined that the conversations in January 2004 could not amount to a demotion constituting a termination of employment within s 170CD(1B) of the WRA because "the relevant demotion occurred in September 2001" ^[30] .

51. The Full Court did consider the legal consequences of Teekay's notice. Buchanan J, with whom Ryan and Madgwick JJ agreed, held that Teekay's letter of 20 September 2001 amounted to a breach of contract ^[31] . However, his Honour considered that it had the effect in law of bringing Mr Visscher's employment as a Chief Officer to an end, even though Teekay's conduct was wrongful ^[32] . This consequence followed upon Mr Visscher being unable to insist upon performance of his contract ^[33] . Buchanan J said that many of the legal principles applicable to contracts generally apply to contracts of employment, but because they are contracts for personal service they have some special features. His Honour gave as one example "the principle that employment (or an employment relationship) may be effectively discharged by wrongful termination of a contract of employment" ^[34] . The decision of this Court in Automatic Fire Sprinklers Pty Ltd v Watson ^[35] was cited as authority for that proposition.

52. Buchanan J went on to say that the fact that Mr Visscher remained in employment and sailed as a Chief Officer did not lead to a different conclusion ^[36] . In his Honour's view he continued under a new contract, in a demoted position, as had the employee in Brackenridge v Toyota Motor Corporation Australia Ltd ^[37] . However, as his Honour himself observed ^[38] , there was no breach of the contract of employment by the employer in that case. It was entitled to terminate the first contract and the parties replaced it with another ^[39] .

53. The reasons of Buchanan J elide the concepts of termination of an employment relationship and the discharge of a contract of employment. The concepts are different. It does not follow from the fact that a wrongful dismissal is effective to bring the employment relationship to an end that it thereby discharges the contract of employment. In Byrne v Australian Airlines Ltd it was said that ^[40] :

"It does not appear to have been doubted in this country that a wrongful dismissal terminates the employment relationship notwithstanding that the contract of employment may continue until the employee accepts the repudiation constituted by the wrongful dismissal and puts an end to the contract. That was accepted by both the majority and minority in Automatic Fire Sprinklers Pty Ltd v Watson ...".

And in one of the passages from Automatic Fire Sprinklers Pty Ltd v Watson to which reference was made in Byrne v Australian Airlines Ltd , Latham CJ said ^[41] :

"An employer terminates the employment of a servant when he dismisses him, though, as I say hereafter, such a dismissal does not put an end to the contract between the parties. An argument that a dismissal because wrongful was a nullity was raised and rejected in both Williamson's Case ^[42] and Lucy's Case ^[43] ."

And Dixon J said ^[44] :

"... there is nothing in the general law preventing the wrongful dismissal of a servant operating to discharge him from service, notwithstanding that he declines to accept the dismissal as absolving him from further performance but keeps the contract open and remains ready and willing to serve."

As was said in Byrne , the position was not always so clear in England ^[45] . For a time the opinion was maintained that contracts of employment are sui generis, in that certain forms of repudiation are effective automatically to terminate them without the need for their acceptance ^[46] . But, as has been observed, the theory was later rejected in favour of the "elective theory of termination" ^[47] . Such an approach accepts as correct the general principle in contract law that acceptance by the innocent party of a repudiation is necessary to terminate a contract ^[48] .

54. This is not to say that in a case of dismissal there will ordinarily be anything to be gained by employees refusing to accept the repudiation. Even if they keep the contract of employment on foot, they cannot receive remuneration after the dismissal, because the right to receive it is dependent upon services having been performed ^[49] . Further, historically the courts would not grant specific performance of a contract of personal service, save in exceptional cases ^[50] . This was largely because of perceived difficulties in supervision and because the courts were unwilling to compel employers to tolerate an individual employee whom they considered incompatible ^[51] . In Automatic Fire Sprinklers Pty Ltd v Watson , Latham CJ said ^[52] :

"... the wrongful dismissal determines the relationship of master and servant created by the contract, even though the servant may not have accepted his dismissal as entitling him to regard the contract as discharged. Any other view would in effect grant specific performance of a contract of personal service, a remedy which the courts have always refused in such a case ...".

55. It was said in Byrne ^[53] that, for all practical purposes, the contract of employment will be at an end upon dismissal. In the case of a wrongful dismissal, the possible continuation of it will rarely be of significance. In principle, however, it remains the case that an unaccepted repudiation does not terminate a contract. In the circumstances of this case this assumes importance. To view it as automatically discharged would be to elevate a problem concerning remedies to a substantive principle concerning the termination of contracts.

56. This is not a case involving dismissal, with a consequent destruction of the employment relationship. The employment relationship between the parties continued after 2001, as Buchanan J observed ^[54] . However his Honour assumed that that relationship continued by reference to a new contract of employment, one by which Mr Visscher was a Third Mate. It may be inferred that it was his Honour's view that, even if Mr Visscher said that he did not accept the rescission of his promotion, Teekay could not be required to permit him to perform his duties as a Chief Officer.

57. It is a feature of this case that the employment relationship continued with Mr Visscher undertaking the duties of a Chief Officer and being remunerated to the same extent. He was never required to undertake the duties of a Third or Second Mate, at least until January 2004, on his evidence. No issue as to the performance of the contract of 7 September 2001 arose.

58. In Rigby v Ferodo Ltd ^[55] the employer purported to reduce its employees' wages during the currency of the employment relationship. The employees made it clear that they were unwilling to accept the reduction and never did accept it. Lord Oliver of Aylmerton said ^[56] :

"Whatever may be the position under a contract of service where the repudiation takes the form either of a walk-out by the employee or of a refusal by the employer any longer to regard the employee as his servant, I know of no principle of law that any breach which the innocent party is entitled to treat as repudiatory of the other party's obligations brings the contract to an end automatically. No authority has been cited for so broad a proposition and indeed [counsel for the appellant] has not contended for it. What he has submitted is that where there is a combination of three factors, that is to say, (a) a breach of contract going to an essential term, (b) a desire in the party in breach either not to continue the contract or to continue it in a different form and (c) no practical option in the other party but to accept the breach, then the contract is automatically brought to an end. My Lords, for my part, I have found myself unable either to accept this formulation as a matter of law or to see why it should be so. I entirely fail to see how the continuance of the primary contractual obligation can be made to depend upon the subjective desire of the contract-breaker and I do not understand what is meant by the injured party having no alternative but to accept the breach. If this means that, if the contract-breaker persists, the injured party may have to put up with the fact that he will not be able to enforce the primary obligation of performance, that is, of course, true of every contract which is not susceptible of a decree of specific performance. If it means that he has no alternative to accepting the breach as a repudiation and thus terminating the contract, it begs the question. For my part, I can see no reason in law or logic why, leaving aside for the moment the extreme case of outright dismissal or walk-out, a contract of employment should be on any different footing from any other contract as regards the principle that 'an unaccepted repudiation is a thing writ in water and of no value to anybody' ... ^[57] ".

59. Mr Visscher's case is that he kept the contract alive by his refusal to accept the rescission and that Teekay resiled from its threat to demote him. Such an outcome is possible, for when a contract continues on foot it remains in force for the benefit of both parties and a party's refusal to perform may be withdrawn ^[58] . In Automatic Fire Sprinklers Pty Ltd v Watson Dixon J recognised the possibility that an employer might be induced to retract a discharge, where the employee kept his contract open, thereby allowing the employee to resume his service without a new contract ^[59] .

60. Neither the Commissioner nor the Full Bench made express findings of an election, on the part of Mr Visscher, to accept the rescission. The Full Bench made a statement that Mr Visscher had elected to continue his employment and this statement requires consideration. It said ^[60] :

"We think the true construction of events, the one the Commissioner accepted, is that the appellant elected to continue his employment after September 2001 in the full knowledge that the respondent had demoted him. Only in February 2004 did he decide to 'recognise' the demotion and characterise it as a termination of employment."

The Commissioner made no finding of an election by Mr Visscher with respect to Teekay's repudiation, which would be necessary to bring the contract of employment to an end, as discussed earlier in these reasons. This passage from the reasons of the Full Bench does not amount to such a finding. It is apparent that the Full Bench used the word "elected" to describe a choice by Mr Visscher to remain in employment with Teekay after the demotion, rather than in its legal sense, to describe a choice between inconsistent rights. On the approach taken by the Full Bench an election, in the latter legal sense, would not arise, because it took the view that Teekay's unilateral rescission was effective to demote Mr Visscher. That approach was based upon a misunderstanding of the law.

61. It does not appear from the arguments put for Teekay, as recorded by the Commissioner, that it contended that Mr Visscher was estopped from denying that the demotion was effective. It did not rely upon anything said, or not said, by Mr Visscher as affecting its belief as to the state of affairs which existed. The references by Teekay in the AIRC proceedings to what appeared in the payslips and in the annexure to the Certified Agreement were equivocal. They could have been relied upon to show that Teekay was acting in a manner consistent with its understanding of the contractual position, but this would not demonstrate any acceptance, on the part of Mr Visscher, to the demotion.

62. The Commissioner made no finding about Mr Visscher's knowledge of the annexure to the Certified Agreement, although there was evidence that it was made available to employees on a monthly basis. He did find that Mr Visscher would have appreciated the basis upon which he was paid and said that Mr Visscher "at no time other than in the first instance contested the fact that he was receiving higher duties allowance." The background to this and other findings was an assumption, on the part of the Commissioner, that Teekay's demotion of Mr Visscher was effective. The point which the Commissioner was seeking to make was that Mr Visscher must have appreciated that fact. That assumption was incorrect.

63. In the Full Court Ryan J observed that it was open to the Commissioner to conclude that Mr Visscher had acquiesced in the decision of Teekay to rescind his promotion, because he did not challenge it. In his Honour's view that inference could be seen as reinforced if it were found that Mr Visscher was aware of what was in the payslips concerning his position and how he had been graded in the annexure to the Certified Agreement ^[61] .

64. Acquiescence is a term which is used in a number of senses. In the sense used by Ryan J, it may refer to an estoppel of the kind which would arise in this case if Mr Visscher had stood by and done nothing when his rights were being violated ^[62] . However when Mr Visscher was advised of Teekay's purported rescission he made plain that he did not accept it. On his case Teekay thereafter did not deny his contractual rights; rather it performed its obligations by maintaining him in the position of a Chief Officer at a remuneration referrable to it.

65. That leaves for consideration the question of Mr Visscher's silence when faced with the payslips. The payslips themselves involved no interference with Mr Visscher's rights. His silence may possibly have conveyed to Teekay something approaching an assent to what was said about his position, although again there does not appear to be any evidence that Teekay was led to such an understanding. In any event there are difficulties in the way of holding him estopped on account of his conduct by his silence. In the first place it would be necessary for him to have been under some obligation to speak ^[63] . It would further be necessary that Teekay acted to its disadvantage or detriment on the basis of what was conveyed to it by Mr Visscher's conduct ^[64] . Teekay does not appear to have contended that it did so. It is neither necessary nor appropriate to deal further with these questions. They are among the matters yet to be determined by the AIRC.

66. Ryan J alluded to another possible view of Teekay's position, which might also be relevant to an assessment of the parties' conduct. The view is consistent with Mr Visscher's case, that Teekay was in fact performing its obligations under the contract appointing him a Chief Officer. His Honour observed that it may have been open to the Commissioner to find that Teekay's "demotion" of Mr Visscher was "a sham contrived to placate the AMOU and those officers with longer service with Teekay who had apparently complained that Mr Visscher [and another officer] had been promoted over them" ^[65] .

67. The questions whether Mr Visscher may be taken to have accepted Teekay's notice of rescission at some point after his express refusal to do so or whether Teekay's actions showed that it resiled from its repudiation are not questions which have been considered in the AIRC. They are questions which require findings of fact, in particular as to what was said and done by the parties after Teekay's notice of rescission and in connection with Mr Visscher's continuing employment.

68. For the reasons which follow, the Certified Agreement provides no answer to Mr Visscher's claims. It is therefore necessary for the matter to be remitted to the AIRC to determine what occurred concerning the contract of employment, by which Mr Visscher was appointed a Chief Officer, and the basis upon which the employment relationship continued after 20 September 2001. The failure to determine these matters arose from a misunderstanding of the legal efficacy of a repudiation of the contract of employment by Teekay, considered alone. In not addressing the question of the terms upon which the employment relationship continued the Commissioner and the Full Bench fell into jurisdictional error ^[66] .

69. Before turning to the issue concerning the Certified Agreement it is necessary to refer to one other aspect of the reasons of the Full Bench. It said that if it were wrong in its conclusion that Mr Visscher's demotion occurred in 2001, the conversations in January 2004 did not constitute a demotion, even on Mr Visscher's version of what was said. The Full Bench said ^[67] :

"In light of the history of formal correspondence in relation to changes in classification, something more would be required than the conversations referred to. They were at most an indication of future intention on [Teekay's] part."

The Full Bench said that it had proceeded on the basis that Mr Visscher's version of events was correct, in the absence of findings by the Commissioner as to what was said. Mr Visscher's version, as recorded by the Full Bench, was that Teekay's representative, Mr Bray, said to him that after his tour of duty with the "Broadwater" Teekay would sail him as Second Mate. The Full Bench could not therefore be suggesting that Teekay's intentions, as conveyed, were unclear at this point. If the contract appointing him a Chief Officer remained on foot, Teekay did not intend to continue to carry it out. That would be sufficient to constitute a repudiation without more, which Mr Visscher could accept ^[68] . For the purposes of Mr Visscher's application, Teekay may have initiated what resulted in the termination of his employment. It is not clear whether the "something more" that the Full Bench thought to be required was a requirement that Teekay commit an actual breach. It would not be correct to recognise that such a requirement existed ^[69] . And, if Mr Visscher's version of events is correct, which is a matter yet to be determined in the AIRC, it is difficult to see that formal correspondence was necessary to confirm Teekay's stated intention.

The 2001 Certified Agreement

70. The Full Court held that, regardless of the contractual position, Mr Visscher's interests were subordinated to the superior legal force of the Certified Agreement ^[70] . It is therefore necessary to turn to the legislative provisions respecting certified agreements and to the terms of the Certified Agreement in this case.

71. Buchanan J referred to the Certified Agreement as having that superior legal force, because of the provisions of the WRA ^[71] . So much may be accepted. An agreement which is certified by the AIRC ^[72] prevails over terms and conditions specified in a State law, award or employment agreement ^[73] and displaces conditions of employment specified in certain Commonwealth laws ^[74] , to the extent of any inconsistency. Moreover an agreement made under Div 2 of Pt VIB, as this agreement was, binds the employer and all persons whose employment is, at any time when the agreement is in operation, subject to the agreement ^[75] . The terms of the Certified Agreement confirmed that to be so. In Amalgamated Collieries of WA Ltd v True ^[76] Latham CJ pointed out that where there was an award the legal relations between employer and employee are determined partly by the award and partly by the contract between them, but "[t]he award governs their relations as to all matters with which it deals." ^[77] And in Byrne it was said that the contract of employment cannot derogate from the terms and conditions of an award, which operates with statutory force ^[78] . The same may be said of a certified agreement. The question then is the extent to which the agreement has effect with respect to Mr Visscher's grading. That question is to be determined as a matter of the construction of the Certified Agreement, which involves considering the subjects with which it was concerned and its terms.

72. In submissions for Teekay it was suggested that the Certified Agreement was connected with the previous dispute which arose as to Mr Visscher's promotion. If this were the case the Certified Agreement and its gradings might be seen as directed to Mr Visscher. It may well be that the agreement resulted from a desire, on the part of the AMOU, to establish the system for which it contended, but it cannot therefore be assumed that it was directed towards the subject of Mr Visscher's status. The matters with which it was concerned may be gleaned from its terms. It may be seen, by reference to those subjects, that they were not concerned with Mr Visscher and that the Certified Agreement did not involve resolution of any dispute concerning Mr Visscher.

73. In Byrne v Australian Airlines Ltd ^[79] McHugh and Gummow JJ said that the concept of an "industrial dispute" was central to the legislation then under consideration ^[80] . The prevention and settlement of disputes was a keystone of the WRA ^[81] . Part VIB, Div 3 provided for the certification of agreements which may be made on terms for settling matters in dispute, preventing further industrial disputes or preventing a situation giving rise to a dispute ^[82] . In one sense it may be said that the Certified Agreement was addressed to the possibility of further disputes, in the arrangements it put in place for promotions and transfers, but it also concerned wider aspects of the relationship between Teekay and its officers.

74. Another stated aim of the WRA was to ensure that the responsibility for determining matters affecting the relationship between employer and employee rests with them at the workplace or enterprise level ^[83] . The certified agreements referred to in Div 2 of Pt VIB were concerned with "matters pertaining to the relationship" between an employer who is a constitutional corporation and persons whose employment is subject to the agreement while it operates ^[84] .

75. The Certified Agreement had as its stated objective high standards of efficiency and service and the aim "to ensure that all officers are provided with a performance based salary and satisfying, long term careers". Its subjects were "Agreement Formalities", "Consultation and Dispute Resolution", "Conditions of Employment", "Employee Performance & Career Progression", "Leave", "Occupational Health and Safety", "Employee Benefits", "Ship Operations" and "Claims and Ongoing Matters". It was in the Part dealing with "Employee Performance & Career Progression" that reference to the Grading List appears.

76. In the earlier Part, "Agreement Formalities", and after the reference to the binding nature of the Agreement, it was said that it applied so that:

"5.3 An officer commencing their employment with Teekay after the date on which this agreement comes into operation shall be employed in accordance with the terms of this agreement.

5.4 The parties agree that no officer ... shall be employed other than [on] the terms of this agreement".

Under the heading "Collective Bargaining" it was said:

"6.2 The Terms [and] Conditions of this Agreement shall be a condition of employment and copies of this Agreement will be made available to all existing and new employed officers."

77. Mr Visscher submitted that if the Certified Agreement had the effect of altering his grading this would amount to an acquisition of property contrary to s 51(xxxi) of the Constitution; but he also argued that such an interpretation of the Agreement would be contrary to the "no disadvantage" provisions of the WRA ^[85] . It is not apparent that those provisions have the protective effect claimed by Mr Visscher, but it is not necessary to further consider these submissions. The matter falls to be determined by reference to the terms of the Certified Agreement.

78. There is nothing in the Certified Agreement which suggests that its subject matter included a reallocation of the positions of individual officers. No reference to such an intention to deal with that subject matter can be found in the body of the Agreement. The only statements concerning Mr Visscher and other officers were made in the Grading List which was an annexure to the Agreement. They stated a fact as to his employment, not a matter expressed to have been the subject of the agreement of the parties to the Certified Agreement. The fact, as it was there stated to be, was that Mr Visscher was a Third Mate. It may have been assumed, at least by the AMOU, that that statement correctly reflected the position achieved by Teekay's letter of 20 September 2001. But if it was wrong, there would be no impediment to its correction, along with other changes to personnel made in the annexure and made available to employees on a monthly basis. The statement in the annexure did not constitute a term of employment to which Mr Visscher was bound.

79. It will also be recalled that the Grading List was said to be "the basis for future promotions/transfers, etc". While this confirms a view of that annexure as containing a statement of officers' present positions, it also reveals it to be an integer in determining what promotions and transfers should be made in the future. It does not reveal any intention to effect a change to the position of any officer upon the Certified Agreement coming into force. There is no referential importation of the gradings into the contracts of employment ^[86] .

80. It follows that if Mr Visscher was employed in January 2004 as a Chief Officer under his contract of employment, nothing in the Certified Agreement was effective to alter that term.

Conclusion

81. Teekay's notice of rescission did not automatically bring the contract appointing Mr Visscher a Chief Officer to an end. It was necessary that Mr Visscher accept the repudiation before the contract could be terminated. Nothing said in Automatic Fire Sprinklers Pty Ltd v Watson suggests any different contractual principle as applying to a contract of employment. In order to decide whether Teekay had repudiated Mr Visscher's contract of employment in January and February 2004 it was necessary for the AIRC to determine the true contractual position between the parties at that time. It was necessary then to determine whether what was said by Teekay at that time amounted to a repudiation such that the termination of the employment relationship could be said to be at its initiative; or whether it amounted to a demotion within the meaning of s 170CD(1B). The correct legal starting point was not that Teekay had rescinded the agreement. Neither the Commissioner nor the Full Bench of the AIRC asked the correct question, as to the contract under which the parties continued after September 2001. This was an error going to jurisdiction.

Orders

82. We agree with Gummow J that special leave should be granted. However we would allow the appeal. The orders of the Full Court of the Federal Court dated 21 December 2007 should be set aside and in lieu thereof it should be ordered that:

(a)

A writ of certiorari issue to the Australian Industrial Relations Commission quashing:

(i)

the decision of the Full Bench of the Australian Industrial Relations Commission dated 9 October 2006 in matter C2006/132; and

(ii)

the decision of Commissioner Redmond of the Australian Industrial Relations Commission dated 5 May 2006 in matter U2004/2387.

(b)

A writ of mandamus issue to the Australian Industrial Relations Commission, directing it to hear and determine matter U2004/2387 in accordance with law.