Department of Justice

Tasmanian Industrial Commission

www.tas.gov.au
Contact  |  Accessibility  |  Disclaimer

T9288

 

 

TASMANIAN INDUSTRIAL COMMISSION

Decision Appealed - See T9620

Industrial Relations Act 1984
s.29 application for hearing of an industrial dispute

Ken Farrell
(T9288 of 2000)

and

The Crown in Right of State of Tasmania, Department of Premier
and Cabinet, Office of the Premier

 

COMMISSIONER P C SHELLEY

HOBART, 30 May 2001

Industrial dispute - severance pay in respect of termination of employment as a result of redundancy - jurisdiction - whether termination was as a result of redundancy - whether a former employee is limited to those matters set out in s29(1A) - application dismissed

REASONS FOR DECISION

[1] On 20 November, Ken Farrell (the applicant), applied to the President, pursuant to s.29(1) of the Industrial Relations Act 1984, for a hearing before a Commissioner in respect of an industrial dispute with the Crown in Right of State of Tasmania, through agency of Department of Premier and Cabinet, Office of the Premier (the respondent) arising out of severance pay in respect of termination of employment as a result of redundancy.

[2] On 22 November, 2000, the President convened a hearing at `Lyndhurst', 448 Elizabeth Street, North Hobart, Tasmania, before myself, to commence on Wednesday 13 December, 2000 at 10.30 am. At the hearing Mr Farrell represented himself and Mr C Willingham appeared for the respondent. There were further hearing days on 5 January, 2001 and 15 February 2001.

Background

[3] The background to the dispute, as established through the evidence, is as follows:

[4] Mr Kenneth James Farrell was appointed to the position of Economic Adviser, Office of the Premier, for a period specified in an Instrument of Appointment ("the Instrument") dated 24 June 1996, which states inter alia:

"1(a) The appointment shall be for a term expiring on the thirty-first day of May two thousand or on the resignation or other termination of the Government whichever shall occur earlier (hereinafter called the termination date")1

[5] Schedule 4 of the Instrument states that should the termination of appointment be by expiration of its term, or by the Premier or his delegate, Mr Farrell would be paid a severance payment calculated on a formula based on years of service multiplied by "two weeks pay".

[6] Mr Farrell's appointment was terminated on 14 September 1998 when the state Liberal government was not returned to office.

[7] Mr Farrell was paid twelve weeks pay by way of a separation payment. The dispute concerns the quantum of that payment. Mr Farrell claims that superannuation should also have been paid, and, in addition, an amount for private telephone costs and the value of a car parking space, on the basis that his remuneration/pay/salary, however described, included those components, and therefore, he argues, so too should his severance payment.

[8] His claim has been the subject of lengthy correspondence and dispute. At various times Mr Farrell has corresponded with the Director of Corporate Services, Department of Premier and Cabinet, the Ombudsman and the Premier. To date, his claim has been unsuccessful.

[9] Mr Farrell is seeking an Order that he be paid an amount for superannuation, telephone and the value of the car parking space as part of his severance payment.

Jurisdiction

[10] A number of jurisdictional points were raised by both parties, at various stages of the proceedings.

[11] Mr Farrell made an application to this Commission pursuant to s29 (1A)(b) of the Industrial Relations Act 1984 ["the Act"]. Section 29 (1A) read at the relevant time, ie at the time of application:

"A former employee may apply to the President for a hearing before a Commissioner in respect of an industrial dispute relating to -

(a) the termination of employment of the former employee; or

(b) severance pay in respect of employment of the former employer terminated as the result of a redundancy; or

[c] a breach of an award or registered agreement involving the former employee."

[12] Mr Willingham said that the Commission would need firstly to determine whether or not the claim before the Commission is in fact a claim in relation to severance pay arising from redundancy. If it is not severance pay relating to redundancy then the Commission has no jurisdiction to hear and determine the case, because a former employee is limited to only those matters set out in s29(1A) of the Act, and therefore has no jurisdiction to hear a dispute in relation to severance pay, excepting where the severance payment arises as a result of redundancy.

[13] Mr Farrell had completed a pro forma application form, which, at Part B, headed Purpose of Application for a Hearing, says:

"Does your dispute with the former employer relate to any one or more of the following?

  • alleged unfair termination of employment-section 29(1A)(a)  Yes No

  • severance pay in respect of termination of employment as a result of redundancy-section 29(1A)(b) Yes No

  • alleged breach of an award or registered agreement-section 29(1A)[c] Yes No"

[14] Mr Farrell had ticked "No" to the first and third dot points, and "Yes" to the second.

[15] During the hearing he claimed that he may simply have ticked the wrong box, but that he was unsure what the right one was. He said that there was a need for a fourth box which covers circumstances not covered in the three sets of circumstances explicitly identified in s29(1A) of the Act. Mr Farrell said that s19 of the Act [actually s20] requires the Commission to hear matters without regard to technicalities.

[16] Therefore, Mr Farrell argued, even if I were to find that he had not been made redundant, I should still hear and determine his case because it is still a dispute in relation to an industrial matter.

[17] A further jurisdictional question raised by Mr Willingham is whether or not it is beyond the Commission's jurisdiction to determine what, he said, is "a claim for breach of contract"2 and not a breach of an industrial agreement as defined under the Act.

[18] I agree with Mr Willingham that I should first determine whether or not Mr Farrell's termination was as a result of redundancy. If it is not a redundancy then I would need to determine whether or not a former employee, whose termination was not as a result of redundancy, is able to bring a dispute before the Commission in relation to the quantum of severance pay. If the answer is in the affirmative, I would then need to consider the further point, which is, does the Commission have the power to hear and determine an alleged breach of the Instrument.

Submissions

Mr Willingham for the Respondent

[19] Mr Willingham submitted that, as Mr Farrell's application was made under the provisions of section 29(1A)(b), in order for the Commission to be able to proceed to determine the matter Mr Farrell would need to establish that his application does fall within those provisions, ie the Commission would need to find that, in fact, Mr Farrell's employment was terminated as a result of redundancy.

[20] The application and the argument can only be about severance pay arising from redundancy. "It cannot be severance pay per se."3 It can only be that kind of severance pay which arises where employment has been terminated as the result of redundancy, he said.

[21] Mr Willingham said that the Supreme Court of this state had held that the word "employee" in s29(1) could not be held to be a former employee, and that s29(1A) had been inserted:

"wholly and solely so that it could differentiate those matters which a former employee, as distinct from an employee, could bring before this commission."4

[22] Mr Willingham argued that Mr Farrell's contract of employment had ended precisely in accordance with one of its specified and agreed terms. The contract provided for the termination of employment under certain circumstances. An election resulted in a change of government. The reason for the termination was a change of government. A payment in these circumstances was provided for in the contract of employment. The fact that there was a severance payment was no more nor less than that. It was a severance payment but not a redundancy payment. Mr Willingham said that the reason for termination:

"could not and should not and is not characterised as a redundancy or a retrenchment."5

[23] Mr Willingham said that the government changed and most, if not all, of the jobs from one administration had to be filled by the new administration. The employer remained the same and the work of the employer remained the same. What the contract contemplated was not redundancy but the fact that in certain circumstances the appointed government may choose not to serve its prescribed term. He said that Mr Farrell had every opportunity to continue with the new government. There were no less jobs with the new government.

"Under no sensible, logical construction can the end of one government and the bringing in of another be regarded as a redundancy..."6

[24] In Mr Willingham's submission, Mr Farrell's appointment ended according to the terms of the Instrument.

[25] The Commission would be exceeding its jurisdiction in dealing with an alleged breach of an agreement such as the Instrument of Appointment between the government and Mr Farrell, he said.

The Applicant - Mr Farrell

The Act

[26] Mr Farrell argued that it is not s29 which defines the Commission's jurisdiction, it is s19.

[27] Section 19 - Jurisdiction of Commission - says:

(1) Subject to this Act, the Commission has jurisdiction to hear and determine any matter arising from, or relating to, an industrial matter.

(2) For the purposes of subsection (1), the Commission may -

...

(c) conduct hearings for settling industrial disputes."

[28] Section 3 - Interpretation - says that an "industrial dispute" is a dispute in relation to an industrial matter and "industrial matter" includes a matter relating to the termination of employment of a former employee.

[29] Section 3(1) says:

" "industrial matter" means any matter pertaining to the relations of employers and employees".

[30] Section 3(1) lists particular matters that fall within the definition of an industrial matter, he said, and whilst it could be argued that this matter does not fall within any of those specified categories, that does not matter because the list of specified matters is preceded by the words:

" - without limiting the generality of the foregoing, -"

[31] Mr Farrell said that the Commission is able to hear any industrial matter, that is, anything relating to relations between employers and employees, therefore the Commission has the power to hear this matter. The government of the day was his employer and he was one of their employees, therefore, he said, there can be no argument about whether or not this is an industrial matter.

[32] Section 29(1A) states that:

"A former employee may apply to the President for a hearing before a Commissioner in respect of an industrial dispute relating to

(a) the termination of employment of the former employee"

[33] He was a former employee and he had applied for a hearing and there was an industrial dispute. The amount he was paid on the termination of his employment with the Premier relates to the termination of his employment, Mr Farrell said.

[34] Mr Farrell argued that there is nothing in the Act which states that he cannot bring the matter before the Commission. The Act does not say that a former employee may not apply for a hearing in respect of an industrial dispute excepting in relation to the three matters outlined in s29(1A) of the Act.

[35] Mr Farrell said that as far as a former employee is concerned, section 29(1A) deals with the matters which the Commission is required by law to hear, which is a very different matter from the matters which it is jurisdictionally capable of hearing under the Industrial Relations Act. He said that all section 29 does is to:

"...define the hard, inner core, of those matters which the commission must hear but it does not say that the commission cannot hear matters which are not prescribed in section 29".7

[36] He claimed that:

"This is obviously part of the industrial relations folk lore in this state"8

that a former employee may not apply for a hearing before a Commissioner in respect of an industrial dispute excepting in relation to those things [as set out in S29(1A)]. He said that there is no obligation at law for the Commission to hear other matters, but that it was a matter of [the Commission's] choice.

Redundancy

[37] Mr Farrell said that the essence of the matter was that there was a job there [in the Premier' Office]. It was a job that he held and that he would reasonably have expected to continue to hold while the government stayed in power. Once the government fell the jobs were abolished; they became redundant with no reasonable expectation of continued employment because of the political nature of the job. Therefore, the job was made redundant, as were all the jobs in the Premier's Office, he said.

"I am saying that the job ceased to exist and that's to my mind what you mean by redundancy."9

[38] New jobs were created in the new Premier's Office, though not the same jobs. They were jobs with a Labor government. He said that there is a difference between Labor jobs and Liberal jobs.

[39] Mr Farrell said that the fact that the contract foreshadowed a redundancy [in the event that the government fell] was unusual, but did not change the fact that there was a redundancy.

[40] Conceivably, he said, every employment contract for every employee in this state could have a redundancy clause included in it:

"Does that mean that if such a clause were universally written into all employment contracts, then there would be no longer any employment redundancies? Of course not."10

[41] In Mr Farrell's submission, a position existed and once it ceased to exist, he became redundant.

FINDINGS

[42] Mr Farrell argued that he may have ticked the wrong box when filling out the pro forma application for a hearing and that the failure or otherwise of an applicant to tick the "right" box should not preclude them from having their case heard because the Commission has the jurisdiction to hear and determine an industrial dispute, and because s20 says that the Commission should exercise its jurisdiction without regard to technicalities or legal form. Mr Farrell also argued, as I understand it, that, even if I were to find that he had not been made redundant, I should fall back upon the provisions of the Act in relation to "industrial disputes" and "industrial matters" and not limit my decision only to the redundancy aspect, because it was still, in any event, a dispute about an industrial matter.

[43] Whilst I agree with Mr Farrell to the extent that an applicant should not be prevented from having their case heard merely because they have ticked the wrong box, it would, in my opinion, be necessary for the applicant to seek leave to have the application amended in order to bring it within jurisdiction. I note that Mr Farrell was given the opportunity, during the hearing, to decide whether or not he wished to proceed according to the application he had made, ie, a dispute in relation to s29(1A)(b), or to seek to amend his application. He elected to proceed on the basis of the application he had submitted, that is, a hearing in respect of an industrial dispute relating to severance pay in respect of employment of a former employee terminated as a result of redundancy. That is the basis on which I make the findings that follow.

[44] For the reasons set out below I reject the proposition that, should Mr Farrell fail in his application under s29(1A)[b], then he should still have his case determined on the basis of it being a dispute in relation to an industrial matter.

Redundancy

[45] Leaving aside the question of whether the Commission is able to hear and determine an alleged breach of the Instrument, I will first consider the question of whether or not Mr Farrell's employment was terminated as a result of redundancy, because, if the answer is in the affirmative, then the Commission has, in my view, jurisdiction to hear the matter. The question, therefore, of whether or not a former employee can be heard on matters not specified in s29(1A) would not arise

What is a redundancy?

[46] Whilst tribunals have been reluctant to attempt an exhaustive definition of "redundancy", it is generally accepted that a redundancy is a dismissal, that is, a termination of employment at the initiative of the employer, where there is a valid reason based on the operational requirements of the undertaking, establishment or service.

[47] This approach recognises that it is the job that becomes redundant, not the person who occupies the position.

[48] Generally, it is not considered to be a redundancy where the termination is due to the "ordinary and customary turnover of labour", for example, when a contract comes to an end, although, if there was a reasonable expectation of ongoing employment [for example, that the contract would be renewed] then that could constitute a redundancy.

[49] It can also constitute a redundancy when an employer redistributes the work of an employee to other employees, in which case the position disappears.

Mr Farrell's contract

[50] Mr Farrell had entered into a contract [the Instrument] with his employer in which it was agreed that his appointment as Economic Adviser, Office of the Premier, would expire either on a particular date [31 May 2000] or in the event of the resignation or other termination of the government.

[51] His employment ceased according to the terms of the Instrument. This, in my view, was not a termination at the initiative of the employer, but simply a situation where a contract has come an end in circumstances in which it was agreed between the parties that it would end. This is clearly expressed in the Instrument:

"1(a) The appointment shall be for a term expiring on the thirty-first day of May two thousand or on the resignation or termination of the Government whichever shall occur earlier..."11

[52] Both Mr Willingham and Mr Farrell, in effect, said that in cases where there is a change in government the new administration would fill positions such as Mr Farrell's with their own choice of personnel. Mr Farrell said:

"...there's a difference between Labor jobs and Liberal jobs and so it ought to be".12

[53] Mr Willingham said:

"...A government changed...most, if not all of the jobs from one administration have to be filled by the new administration.."13

[54] In my opinion, the displacement of political appointees at the time of a change of government can be characterised as "the ordinary and customary turnover of labour". There can be little or no expectation on the part of such an employee that their employment would continue with the new administration. I think it likely that Mr Farrell was just such a person who would have had no expectation of continuing to be employed as an Adviser to a Labor Premier, having previously been appointed as Adviser to a Liberal Premier. Indeed, that turned out to be the case and Mr Farrell's employment was terminated when the Liberal government was not returned to office.

[55] Such a situation was obviously anticipated by the parties when the contract was entered into. A part of the contract was a severance payment calculated on the basis of years of service and level of wages. In my view the payment was precisely that - a severance payment. It was not, however, a severance payment arising out of a redundancy.

[56] I find that Mr Farrell's employment was not terminated as the result of redundancy and that therefore the severance payment he received was not severance pay in respect of employment terminated as the result of redundancy.

Jurisdiction in relation to a former employee

[57] Mr Farrell's application was brought under s29(1A)(b). S29(1A) says:

"A former employee may apply to the President for a hearing before a Commissioner in respect of an industrial dispute relating to:

(a) the termination of employment of the former employee; or

(b) severance pay in respect of employment of the former employee terminated as a result of redundancy: or

[c] a breach of an award or a registered agreement involving the former employee."

[58] Although on the basis of my finding above [that Mr Farrell's employment was not terminated as the result of redundancy], it would appear that there is no need for me to consider the matter any further, Mr Farrell did argue that, even if I were to find there was not a redundancy, the Commission should still hear and determine the application. His argument was that he should still be able to have the matter determined, on the basis that it was still an industrial dispute as defined in s.3 and that s.19 gives the Commission jurisdiction to hear it. As stated earlier, I reject this proposition, and I do so for the following reasons:

[59] Section 19 - Jurisdiction of Commission - states:

(1) Subject to this Act, the Commission has jurisdiction to hear and determine any matter arising from, or relating to, an industrial matter. [my emphasis].

[60] The term "subject to this Act" indicates that the section should not be read alone but should be considered in conjunction with the whole of the Act. Accordingly, I must also take account of the limitations imposed by s29(1A) and, indeed, any other relevant sections.

(61) I do not believe the term "industrial matter" can be given the very liberal interpretation argued by Mr Farrell.

[62] Section 3 - Interpretation - defines "Industrial matter" as:

"...any matter pertaining to the relations of employers and employees, and, without limiting the generality of the foregoing, includes -"

[63] It is my opinion that "the relations of employers and employees" cannot be taken to mean the relations of former employers and former employees, excepting where the Act itself specifies its application to former employees.

[64] If it had been intended that the words "employers and employees" are to be read to include former employers and employees then the Act would not distinguish between the two. The Act does make such a distinction, in that it specifies those matters which the Commission can deal with that relate to former employers and employees. The fact that the Act makes such distinctions leads me to the view that former employees are confined to the matters where they are specifically referred to.

[65] Section 3 - Interpretation - "Industrial matter" lists inter alia the industrial matters (about which a dispute can be brought) in respect of former employees:

(ii) the termination of employment of an employee or former employee;

(iii) the reinstatement of an employee or a former employee who has been unfairly dismissed;

(iv) the payment of compensation to an employee or a former employee if the Commission determines reinstatement is impractical; or

(v) severance pay for an employee or a former employee whose employment is to be, or has been, terminated as a result of redundancy.

[66] Other matters which do not make reference to former employees include:

(i) the mode terms and conditions of employment

[67] Section 29 - Hearings for settling disputes - clearly differentiates between the applications that may be made by organisations, employers, employees, the Minister and those that may be made by former employees. Section 29(1) allows an organisation, an employer, an employee or the Minister to apply for a hearing in respect of an industrial dispute, without limitation, apart from the fact that it must be an "industrial dispute". Section 29(1A) lists those matters in relation to which a former employee may apply to the President for a hearing before a Commissioner in respect of an industrial dispute. Former employees are, in my opinion, confined only to those three matters specified in s29(1A).

[68] I reject Mr Farrell's argument that s29(1A) refers only to those matters that the Commission must hear and does not prevent the Commission from hearing other matters in relation to former employees. I do so on the basis that, had the Parliament intended the Commission to extend its jurisdiction beyond those matters, the Act would say so. It does not. It is instead very specific as to just which matters a former employee may bring before the Commission.

[69] I find that I have no jurisdiction to hear a dispute in relation to the severance payment Mr Farrell received upon the termination of his employment The reason for this is that, as a former employee, he is limited to those matters referred to in S29(1A) of the Act, which do not include a dispute in relation to severance pay excepting where the severance pay is as a result of redundancy. I have already found that Mr Farrell's employment was not terminated as the result of redundancy.

[70] Having so found, there is no need for me to consider the further question of whether or not the Commission has jurisdiction to hear and determine the alleged breach of the Instrument of Appointment.

(71) The application is dismissed and I so Order.

 

P C Shelley
COMMISSIONER

Appearances:
Mr Ken Farrell, representing himself
Mr Clive Willingham for Crown in Right of State of Tasmania, Department of Premier and Cabinet, Office of the Premier

Date and place of hearing:
2000
December 13
2001
January 5
February 15
Hobart

1 Exhibit F1
2 Transcript p.40
3 Transcript p.42
4 Transcript p.72
5 Transcript p.52
6 Transcript p.111
7 Transcript p.91
8 Transcript p.72
9 Transcript p.77
10 Transcript p.90
11 Exhibit F1
12 Transcript p.77
13 Transcript p.111