T13137
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TASMANIAN INDUSTRIAL COMMISSION
Industrial Relations Act 1984
Garry Lynton Duffield
and
The Crown in Right of State of Tasmania
Industrial dispute - severance pay in respect of termination of employment as a result of redundancy - jurisdiction - industrial dispute relating to termination of employment of a former employee - redundancy - jurisdiction found - presumption against retrospective application of a Statute - Act found to operate prospectively so as not to impair accrued rights - parties directed to confer
REASONS FOR DECISION
[1] On 23 April 2008, Garry Lynton Duffield (the applicant) applied to the President, pursuant to Section 29(1A) of the Industrial Relations Act 1984, for a hearing before a Commissioner in respect of an industrial dispute with the State of Tasmania, arising out of a dispute over severance pay in respect of termination of employment as a result of redundancy and the entitlement to pro rata long service leave.
[2] This matter was listed for hearing on 15 May and 10 July 2008. Mr Michael O'Farrell, barrister, with Mr Phillip Kimber, solicitor, Butler, McIntyre & Butler, appeared for the applicant. Mr Paul Turner, Assistant Director of Public Prosecutions, appeared for the respondent.
Background
[3] The Printing Authority of Tasmania [PAT] was established on 1 April 1994 under the Printing Authority of Tasmania Act 1994. In 1995 the PAT became a Government Business Enterprise [Statutory Authority] pursuant to the Government Business Enterprises Act 1995 [GBE Act].
[4] On 14 December 1998 Mr Duffield was appointed as Chief Executive Officer of the PAT by His Excellency the Governor-in-Council[1]. According to Mr Duffield, he was "head hunted" from Western Australia[2].
[5] On 4 July 2003 the Government Businesses Enterprises [Sale] Act 2003 [Sale Act] received Royal Assent and commenced on the same day. Section 3 Objects of Act reads:
"The objects of this Act are to enable the Crown to do any one or more of the following:
(a) sell the whole or part of a prescribed Government Business Enterprise;
-"
[6] At the time the prescribed GBEs were the Civil Construction Services Corporation, the Stanley Cool Stores Board and the Tasmanian Grain Elevators Board.
[7] Sections 39(3) and (5) of the Sale Act reads:
"[3] On repeal of a Portfolio Act, the appointments of each member of the Board of the Government Business Enterprise and the chief executive officer of the Government Business Enterprise are terminated.
[5] A chief executive officer of a Government Business Enterprise whose appointment is terminated under subsection (3) is not entitled to any compensation or other payment in respect of that termination if, consequent on the sale of the business of the Government Business Enterprise under section 7(1) or the transfer of the business of the Government Business Enterprise to a company under section 17 -
(a) the chief executive officer is offered employment by the purchaser or company to which the business is sold or transferred on terms no less favourable than his or her terms of employment as chief executive officer; or
(b) the chief executive officer takes up employment with the purchaser or company to which the business is sold or transferred regardless of whether the terms of that employment are the same, more favourable or less favourable than his or her terms of employment as chief executive officer."
[8] On 15 December 2003 Mr Duffield was reappointed on a further five year contract i.e. expiring on 14 December 2008[3].
[9] Mr Duffield's evidence was that in both the initial appointment and subsequent reappointment, the contracts were drafted entirely by the Government and accepted by him[4].
[10] Both the 1998 and 2003 Instruments of Appointment contained a Schedule 5 relating to an "eligible termination payment". The terms of the 2003 schedule, which in all material respects, is identical to the 1998 document, are set out below.
"1 The CEO is entitled to an eligible termination payment of -
(a) during the first (1st) year of the term of his appointment, the amount referred to in Clause 1 of Schedule 1 and twelve months of the superannuation contribution specified in Clause 3 of Schedule 1; or
(b) during the second (2nd) and third (3rd) years of the term of this appointment, 75% of the amount referred to in Clause 1 of Schedule 1 and nine months of the superannuation contribution specified in Clause 3 of Schedule 1; or
(c) during the fourth (4th) and fifth (5th) years of the term of this appointment, 50% of the amount referred to in Clause 1 of Schedule 1 and six months of the superannuation contribution specified in Clause 3 of Schedule 1.
2 As interstate relocation was required as a result of the initial appointment in 1998, reimbursement of reasonable actual expenses incurred within six (6) months of the date of termination in interstate relocation up to an amount equivalent to the benefit provided under Clause 2 of Schedule 2 of the original appointment instrument as if the CEO had returned to his original place of recruitment."
[11] Clause 8 and Schedule 4 of the instrument detail circumstances in which the employer may terminate the employment contract without the payment of a termination payment. Suffice to say, these circumstances embrace behavioural, performance and legal issues, which are not relevant to the matter before the Commission.
[12] On 7 June 2007 the Treasurer announced the Government's intention to sell the PAT. The Department of Treasury and Finance was responsible for oversighting the sale process, which was to be conducted by public tender.
[13] On 1 August 2007 the Government Business Enterprises [Sale] Amendment Act 2007 [Sale Amendment Act], commenced operation. The effect of this amendment was to designate the PAT [and the Southern Regional Cemetery Trust], as a "prescribed Government Business Enterprise" under the Sale Act. Presumably this was a necessary precondition to facilitate the sale of the PAT. By such designation the PAT was, for the first time, subject to the Sale Act in its entirety, including, arguably, s.39(3) and (5) referred to above.
[14] On 14 December 2007 the Treasurer announced that the PAT business had been sold to a Victorian family owned company named PrintLinx Pty Ltd.
[15] The sale contract apparently placed obligations on PrintLinx to provide all existing PAT staff with an offer of employment at least 15 business days before 31 January 2008. This included Mr Duffield.
[16] On 11 January 2008 Mr Duffield wrote to Mr Lovett of Crown Law in the following terms[5]:
"Sale of Printing Authority of Tasmania business to PrintLinx: employment
I refer to this sale and my appointment of the 15th December 2003 by the Premier as CEO of the Printing Authority of Tasmania, accepted by me on the 16th December 2003 ('my contract').
My contract provides me with the benefits set out in schedule 5.1(c) and 5.2 of the written contract, of certain 'eligible termination benefits' ('ETD'), and potential interstate relocation reimbursement ('IRR').
These ETD and IRR benefits apply in the event of termination of my appointment.
Termination of my appointment is apparently an inevitable result of the sale of the business either because of the impact of s39(3) of the Government Business Entity (Sale) Act 2003 ('Sale Act') or the simple fact of the intended repeal of the Portfolio Act by application of s39(1) of the Sale Act.
In weighing up my options, one possibility is that the Purchaser will offer me employment on terms no less favourable than the current terms of my employment as CEO.
As the Sale Act was amended in July 2007 to include only from that date the Printing Authority of Tasmania as a prescribed GBE, and as that amendment and prescription is subsequent to my appointment as CEO, it seems to me that the provisions of s39(5) and specifically s39(5)(a) of the Sale Act do not apply to my employment. If the provisions did apply, they would do so in a retrospective manner, without my consent having been obtained, and to my detriment by effectively impacting on my contract of employment.
That would be a repugnant result, in terms of usual statutory interpretation, without the Sale Act explicitly and certainly stating that these provisions were to apply to my contract, which the Sale Act does not so state.
I would be obliged if you would consider this issue, and confirm that the Government accepts my interpretation, so that when and if I am offered employment by PrintLinx, I can be confident I know how my existing contract will be treated.
Obviously this is urgent, as the potential for an offer to me which might be considered to be an offer meeting the criteria in s39(5) is likely to be received within the next few days (settlement of the sale is due 31st January 2008), and in all probability that offer will need immediate consideration and acceptance or rejection.
I look forward to your reply."
[17] Mr Lovett responded on 15 January 2008 as follows[6]:
"I refer to your letter of the 11th January 2008. I am unable to give you advice on your personal employment as I am instructed by the Department of Treasury and Finance on this matter.
You should seek your own legal advice from your own legal advisor."
[18] On 18 January 2008 Mr Duffield was given a document signed by Mr Todisco, Managing Director of PrintLinx[7]. It was accepted by all parties that this document was a "cut and paste" version of Mr Duffield's existing Instrument of Appointment. In essence the document amounted to an offer for Mr Duffield to be the CEO of the business purchased by PrintLinx. The salary and general conditions of employment were essentially the same as that which applied to Mr Duffield in his capacity of CEO of the PAT.
[19] On 21 January 2008 Mr Duffield wrote to Mr Inglis of the Department of Treasury and Finance in the following terms[8]:
"Sale of the Printing Authority of Tasmania - CEO Employment
As you are aware Mr Lovett from Crown Law, in response to my correspondence of the 11th January 2008, has elected not to assist me and asserts that he acts for Department of Treasury and Finance and that I should take my own advice on the impact of me not electing to take up a new employment contract with the new owner of the PAT business, Printlinx Pty Ltd.
Such a response is very disappointing and unfortunate, as input from my existing employer who was responsible for drafting my current employment contract would in my opinion have been a most appropriate and a responsible consideration to undertake.
All I had attempted to do was to try and obtain an appreciation from my current employer on the impact of legislation the Government has enacted for circumstances specifically encompassing my cessation of employment with PAT as a consequence of the sale of the business, yet the opportunity to provide me with information on what is intended, or my employers view of the impact of the legislation has been refused.
In the time critical circumstances I now face, I am now obliged to make a decision without input from my existing employer.
I have elected not to take up employment with PrintLinx Pty Ltd and consequently expect that my employment with the Printing Authority of Tasmania will be terminated by the Government on the 31st January 2008.
Consistent with my reasons implicit in my request for advice from your solicitor (Mr Lovett) I ask that you indicate that you will make up my final contract payment including benefits as set out in schedule 5.1(c) and 5.2 of my contract.
I look forward to your advice that you agree to that course."
[20] Mr Challen, Secretary of the Department, responded by letter dated 24 January as follows:[9]
"I refer to your correspondence of 21 January 2008 informing the Department of Treasury and Finance of your decision not to accept an offer of employment from PrintLinx Pty Ltd.
I understand that the offer of employment from PrintLinx Pty Ltd was on terms no less favourable than the terms of your current position as Chief Executive Officer of the Printing Authority of Tasmania.
As you are aware, the sale of the Printing Authority of Tasmania to PrintLinx Pty Ltd is being progressed in accordance with the provisions of the Government Business Enterprises (Sale) Act 2003. The GBE (Sale) Act provides for the arrangements by which both employees and the Chief Executive Officer transfer or terminate their positions upon a sale of a government business enterprise.
I have been advised by the Crown Solicitor's Office that given your decision to not accept the offer of employment made by PrintLinx Pty Ltd, that the relevant provisions of the GBE (Sale) Act will apply (section 39(5)(a)). This means that your current position of employment will cease upon the repeal of the Printing Authority of Tasmania Act 1994. It is anticipated that the repeal of the PAT Act will occur by late March 2008."
[21] By letter dated 11 April 2008[10], the Treasurer, Michael Aird MP, advised that the Printing Authority of Tasmania Act 1994 would be repealed on 16 April 2008 and that Mr Duffield's appointment would cease on that day.
[22] Payment made to Mr Duffield on the cessation of his employment did not include an Eligible Termination Payment as provided in Schedule 5 of his Instrument of Appointment. At the time of termination Mr Duffield was in the fifth year of the term of his appointment.
Questions to be Determined
[23] There are potentially three questions that require determination. They are:
[24] The answer to each question in turn will determine whether the subsequent question needs to be determined.
Jurisdiction
The application was lodged pursuant to s.29(1A) of the Act, which relevantly reads:
"(1A) 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"
[25] Mr Turner submitted that the Commission lacked the jurisdiction to hear the matter under either subsection. I will deal firstly with subsection (a).
[26] Under the scheme of the Act an industrial dispute is a dispute about an industrial matter (s.3).
The general jurisdiction of the Commission is found in s.19, which reads:
"(1) Subject to this Act, the Commission has jurisdiction to hear and determine any matter arising from, or relating to, an industrial matter."
[27] However the words "Subject to this Act" are of critical importance. It is well established that the general jurisdiction found in s.19 does not allow organisations, employers, employees, the Minister and former employees to make applications at large. Each relevant section of the Act is quite specific as to who may lodge applications or do certain things.
[28] Mr Turner contended that Mr Duffield, as a former employee, was precluded from pursuing an application under s.29(1A)(a) in that the matter was not "an industrial dispute relating to the termination of employment of the former employee".
[29] In support of this contention Mr Turner relied upon the judgement of Crawford J in R v Tasmanian Industrial Commission Ex Parte Farrell[11] in which he said:
26 Section 29(1) authorises an organisation, employer, employee or the Minister to apply to the President for a hearing before a Commissioner in respect of an industrial dispute. However, when he made his application on 29 November 2000, Mr Farrell was not an employee so far as concerned any industrial dispute he wished to have heard. The relevant employment had been terminated over two years before, on or about 14 September 1998. He therefore had no right to invoke the Commission's jurisdiction under s29(1).
27 Mr Farrell submitted to me that his application of 20 November 2000 to the President was authorised by s29(1A)(a) as an application by a former employee for a hearing before a Commissioner of an industrial dispute relating to the termination of employment of the former employee. I do not agree. The dispute did not relate to the termination of his employment. There was no dispute between him and his former employer relating to the termination. I find support for my view in the judgment of Zeeman J as a member of the Full Court in New Town Timber & Hardware Pty Ltd v Gurr [1995] TASSC 79; (1995) 5 Tas R 71 at 113. His Honour was considering the extended meaning of 'industrial dispute' as it then was in s3(1) and the question whether a disputed claim of a former employee for compensation consequent upon his dismissal amounted to 'a dispute relating to … the … dismissal'. His Honour held: "The dispute concerns a demand for a payment of a sum of money made subsequent to the dismissal. The dispute does not relate to the dismissal because it does not seek to call the dismissal into question.' "
[30] Mr O'Farrell submitted that there was clearly a termination, and the matter in dispute, the non payment of contractual entitlements, squarely relates to that termination. [31] Mr O'Farrell submitted that Farrell was dealing with a quite different set of factual circumstances, and must be read subject to Crawford J's subsequent judgement in Blue Ribbon Products Pty Ltd v TIC and Another[12], a decision of the Full Court.
[32] Mr O'Farrell further submitted that reference to the observations of Zeeman J in Gurr was an extremely difficult analogy given that the form of the Act when Gurr was decided was quite different.
[33] In Blue Ribbon Products Crawford J, [Evans J agreeing], said:[13]
"There may be industrial disputes relating to termination of employment involving unfair dismissal, and there may be industrial disputes relating to termination of employment resulting from redundancy. There may also be industrial disputes relating to termination of employment that is not brought about by unfair dismissal or redundancy. In other words, s31 identifies three different categories of industrial disputes relating to termination of employment. For the third category, not involving unfair dismissal or redundancy, plainly the general power to make orders in subs31(1) applies. Although subs(1A) requires compliance with the provisions of s30, there is nothing in those provisions that prescribes the orders that may be made."
[34] Whilst on one level there might appear to be some tension between Farrell and Blue Ribbon Products, the factual circumstances are important. Mr Farrell was a Ministerial Advisor, engaged under an Instrument of Appointment which set out in clear terms the circumstances under which the employment would come to an end. The termination of Mr Farrell occurred consistent with those terms, that is, the resignation of the then Government. Mr Farrell did not lodge his application with the Commission until more than two years later.
[35] In Mr Duffield's case the matter in dispute was very much alive prior to his termination. The actual termination, which occurred before the contractual term had expired, provided the trigger for the dispute to manifest itself. But for the termination, it would not have arisen. On the plain meaning of the words, the circumstances of Mr Duffield fit very comfortably with "an industrial dispute relating to … the termination of employment of the former employee."
[36] The observations in Blue Ribbon are persuasive for two reasons. Firstly, it is more recent than Farrell, and secondly, it has the authority of a unanimous decision of the Full Court.
[37] I am satisfied that the Commission has jurisdiction to hear Mr Duffield's application under s.29(1A)(a) of the Act.
[38] For the sake of completeness, I turn now to the jurisdictional argument concerning s.29(1A)(b).
[39] Mr Turner submitted that there must be a causal relationship between termination and redundancy. He contended that the termination of Mr Duffield's contract of employment was not as a consequence of redundancy, but rather a consequence of the operation of law, specifically the dissolution of the PAT following the repeal of the PAT Act.
[40] Mr Turner referred to a number of authorities which have considered the meaning of the term redundancy. These included R v Industrial Commission of South Australia; ex parte Adelaide Milk Supply Co-operative Ltd[14]; Dibb v Commissioner of Taxation[15]; Ryan Jones v Department of Energy and Minerals[16] and Quality Bakers of Australia Ltd v Goulding[17]. The principles identified in these authorities are succinctly captured in Labour Law, Fourth Edition, Creighton and Stewart[18].
"A dismissal can be attributed to redundancy when it occurs 'not on account of any personal act or default of the employee dismissed or any consideration peculiar to [the employee], but because the employer no longer wishes the job the employee has been doing to be done by anyone'. This may happen because the employer has introduced new technology, or restructured its organisation in such a way that the work in question is no longer needed, or is to be done in a different way. Or it may simply be a matter of financial stringency which compels the employer to reduce the size of its workforce. The mere fact that an employer does not 'wish' to dismiss a worker in this situation, but is forced to do so by economic circumstances which may be beyond the employer's immediate control, does not take the dismissal out of the category of redundancy. In some cases the employer may dismiss a worker and distribute their work to those who remain, or replace a worker's job with a new position that involves some but not all of their former duties and give that job to someone else. In these situations, too, there is a dismissal by reason of redundancy: for even if some or all of the work is still being done, the position occupied by the dismissed worker has been eliminated."
[41] The term redundancy is not defined in the Act notwithstanding that it is now prescribed as a minimum condition of employment (s.47AH). Nonetheless it is a concept well understood in industrial terms. For there to be a redundancy the following elements must be present.
[42] There may be other considerations such as employment status [casual v part-time], seasonal factors, the expiry of fixed term contracts etc. However these are essentially merit rather than jurisdictional considerations.
[43] Beyond these elements it is unnecessary, in my view, to complicate the definitional question further.
[44] Applying these principles to Mr Duffield's case I have reached the following conclusions.
[45] The owner of the business [the Tasmanian Government] made a conscious decision to exit the printing business. At the conclusion of the process the Printing Authority of Tasmania Act 1994 was repealed, the PAT ceased to exist and Mr Duffield's position as CEO of the PAT disappeared. Whilst the final event giving rise to the termination was, in Mr Turner's words, "a consequence of the operation of law", how is this different to a private sector company being wound up, either voluntarily or otherwise, in accordance with Corporations Law? The effect on the employees is the same. They no longer have a job.
[46] It is important to clearly distinguish between jurisdiction and merit. In my view the existence of Schedule 5 is not particularly relevant to the question of whether the Commission has jurisdiction. The Commission does not have power to enforce the terms of a common law contract but it does have power to issue an order in settlement of an industrial dispute. In some situations they may even coincide, but that is essentially a merit argument.
[47] Similarly the question of whether an offer [and rejection] of "suitable alternative employment" might militate against the payment of redundancy entitlements which would otherwise apply is again an issue of merit, not jurisdiction.
[48] There is no obligation under the Sale Act to arrange for the transfer of employees to the purchaser of the business (s.10(1)(b)). In the hypothetical event that the employees of the PAT were not transferred to PrintLinx, the final act in the process would have still been the repeal of the PAT legislation, and with it, the termination of the employees. If I am to accept Mr Turner's contention, this would have been a termination as a consequence of the operation of law, and not a redundancy situation. In my view such an outcome would be, industrially, quite unrealistic and an unnecessarily legalistic qualification of a well understood term.
[49] I am satisfied that the Commission has jurisdiction to hear Mr Duffield's application pursuant to s.29(1A)(b) of the Act.
Retrospectivity v Prospectivity
[50] The chronology of events is set out in the Background section of this decision. There are three key dates:
[51] Mr O'Farrell submitted that Mr Duffield was appointed pursuant to s.18(2) of the GBE Act. Under s.18(3) of that Act, Mr Duffield was entitled to be paid the "remuneration and allowances" specified in his instrument of appointment.
[52] Clause 7 of the instrument provides:[19]
"Save as provided in clause 8, the CEO shall upon termination of this instrument receive the entitlements set out in Schedule 5."
[53] It was common ground that the exceptions set out in Clause 8 do not apply.
[54] Schedule 5 provides for a liquidated sum described as an eligible termination payment. Relevantly, Mr Duffield was, at the time of termination, in his fifth year of his term of employment.
[55] The position of the respondent is that Mr Duffield, in declining the offer of employment with PrintLinx, forfeited any entitlement to "compensation or other payment in respect of that termination…" in accordance with s.39(5) of the Sale Act. This, according to the respondent, included the eligible termination payment specified in Schedule 5 of the instrument.
[56] The Sale Amendment Act, which potentially brings s.39(5) into play, commenced well after the appointment of Mr Duffield, and consequently well after the terms of employment as specified in the instrument, including Schedule 5, came into effect. Mr O'Farrell submitted, that for the Sale Amendment Act to have legislative force so as to affect the terms and conditions of Mr Duffield's appointment as CEO of the PAT, entails an impermissible result; namely s.39 of the Sale Amendment Act has retrospective effect.
[57] Mr O'Farrell submitted that the applicant also relies on the principle that legislation is presumed not to invade common law rights. In this case the rights under the instrument of appointment were contractual rights, and although authorised by statute, arose at common law.
[58] Mr O'Farrell referred to a number of authorities relevant to these principles.
[59] In Maxwell v Murphy, Dixon J said:[20]
"The general rule of the common law is that the statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to past events."
[60] A similar observation is found in Mathieson v Burton:[21]
"… a retrospective operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards matter of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only."
[61] In Fisher v Hebburn Ltd Fullager J said:[22]
"There can be no doubt that the general rule is that an amending enactment – or, for that matter, any enactment - is prima facie to be construed as having a prospective operation only. That is to say, it is prima facie to be construed as not attaching new legal consequences to facts, or events which occurred before its commencement."
[62] In Robertson v City of Nunawading the court said:[23]
"It is to be observed that this principle [ie., the presumption against retrospectivity] is not concerned with the case where the enactment under consideration merely takes account of antecedent facts and circumstances as a basis for what is prescribes for the future, and it does no more than that … The principle is concerned with the case where the enactment would apply to these antecedent facts and circumstances in such a way 'as to impair an existing right or obligation' or 'as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to past events'.
As Fullagar, J said in Ku-Ring-Gai Municipal Council v Attorney General (NSW) … 'What the rule really means is that prima facie a statute must not be construed so as to change the legal character or the legal consequences, of past events and transactions."
[63] In Carr v Finance Corp of Australia the Court observed:[24]
"The common law presumption against imputing to the legislature an intention to interfere retrospectively with rights which have already accrued does not call for a narrow conception of a right. If it were otherwise, the essential justice of the rule would be eroded."
[64] It is accepted that provisions which are merely procedural may operate retrospectively. However the issue of whether a provision is merely procedural:[25]
"… is not whether it can be broadly characterised as a procedural provision. It is whether the provision's operation is merely procedural in the sense that it would not, if given unconfined operation, affect pre-existing substantive rights or liabilities."
[65] Mr O'Farrell submitted that a Statute should not be construed to affect the common law rights of an individual, in the absence of an express provision, or necessary implication. He referred to Buck v Comcare, in which Finn J said:[26]
"… it is a right of sufficient significance to the individual … that, where there may be doubt as to the parliament's intention, the courts should favour an interpretation which safeguards the individual. To confine our interpretative safeguards to the protection of 'fundamental common law rights' is to ignore that we live in an age of statutes …"
[66] Mr O'Farrell submitted that by applying these principles to the instant case, the following picture emerges:
[67] In summary, Mr O'Farrell submitted that the Sale Amendment Act exhibits none of the features which would rebut the presumption that it is not to be taken to operate retrospectively. Therefore the presumption is that the statute is only to operate prospectively.
[68] Mr O'Farrell contended that a decision in favour of the applicant does not render s.39(5) nugatory. The PAT is only one of five GBEs that have been sold. It may well have application to the other CEOs. If the PAT sale did not proceed until after Mr Duffield's employment came to an end, then s.39(5) would apply to any new CEO appointed. It would also apply if Mr Duffield was reappointed.
[69] Mr Turner submitted that no right, however defined, has relevantly been affected by the amendment to the Sale Act. At the time of the amendment [August 2007], Mr Duffield had precisely the same entitlements, or rights, as he had prior to the amendments being made. It is only upon a subsequent event occurring [sale of PAT and repeal of the Act], that there is an impact. However this is a prospective, rather than retrospective, application of the statute.
[70] Mr Turner contended that there is no right reposing in anyone to enjoy forever the status quo unaffected by statutory change[s]. In Robertson v City of Nunawading the Full Court said:[27]
"There cannot, in any relevant sense, or perhaps in any sense, be a "right" to exemption from or immunity from legislative action. The taking of legislative action in a field where previously there was none cannot be treated as an impairment of a right for the purpose of the principle."
[71] Further illustrations of this concept are to be found in Buck v Comcare, Carr & Anor v Finance Corporation of Australia, Victrawl Pty ltd v Telstra Corporation[28] and Chang v Laidley Shire Council[29].
[72] Mr Turner said the facts of Chang are pertinent to the instant case. The relevant planning scheme in Queensland allowed land to be subdivided in a certain manner. A subsequent change to the planning regime changed the arrangements. However a discretion resided in the Council whereby, for a limited period, a subdivision application could be processed under the pre existing arrangements, or alternatively if processed under the new scheme and rejected or modified, pay compensation. Subsequent legislation [IPOLA] and attendant regulations not only removed the capacity of the landowner to lodge a competent application, but at the same time effectively removed the avenue for compensation.
[73] The Full Court determined, not without criticism of the Queensland legislature, that the IPOLA amendments altered the law that was to apply to development applications made after the date on which those provisions came into effect.
[74] Mr Turner submitted that this is precisely what the Sale Amendment Act does. It speaks only to the future. The amendment does not change the nature of the transaction that has already occurred, i.e. the appointment, but it does have an effect in the event of things being done in the future. Mr Duffield's rights are not affected by the amendment, but may be affected by events, permitted but not mandated, by the Sale Amendment Act, in the future.
Findings
[75] The language of Schedule 5 is clear and unambiguous. It provides for a liquidated entitlement to be paid in circumstances whereby the contract of employment is terminated before the expiry of the term of employment. The preamble uses the expression "is entitled to" rather than "may be entitled to". The payment of the entitlement is not subject to application and/or approval. On its face there is no capacity for modification of the entitlement. E.g. a termination one day prior to the expiry of the term would still attract the full fifth year entitlement. It seems to me that it has all the characteristics of an "as of right" entitlement, no different in a sense to the right to take "20 working days recreational leave per year".[see clause 4 of the instrument].
[76] It is true that payment of the entitlement had not occurred at the time the Sale Amendment Act came into force. But this in my view does not affect the existence of the entitlement or right. An analogy again might be drawn with annual leave, which undoubtedly is an accrued entitlement or right, notwithstanding that it may not have been taken.
[77] This position may be contrasted with the right to subdivide land issue which has featured in a number of the authorities. The fact that an individual may be entitled to lodge an application to subdivide property does not, on the authorities, amount to an accrued right. That "right" only manifests itself when an application has been lodged and approved by the relevant planning authority. In Robertson the Full Court said[30]:
"The mere locus standi of a member of the community to take advantage of an enactment is not a right within the principle being discussed, for otherwise there could be no effective repeal or amendment of any such enactment: cf. Abbot v. Minister of Lands, [1895] A.C. 425, (at p. 431). There must be a specific right. Resort to the enactment by the making of an application under it which looks to an expectancy of benefit from the application is not itself productive of such a right. The applicant, by reason of the mere launching of the application, acquires no vested right to have the application determined irrespective of the repeal of the enactment. The making of the application sets in train a procedure, but in the absence of some right otherwise existing, there is no right to have the procedure continued in the face of the repeal of the enactment under which it was instituted."
[78] It is for this reason that Chang must be distinguished from the matter before the Commission. The facts of Chang clearly show that the landowner did not lodge an application of any kind until after the IPOLA and attendant regulations took effect. This had the effect of rendering the very subject matter of the application, as filed, impermissible because it was expressly prohibited. Accordingly their Honours concluded that "no question of retrospective operation of the legislation arises".
[79] There is no doubt in my mind that at the point immediately prior to operation of the Sale Amendment Act, Mr Duffield enjoyed a substantive accrued right in the form an eligible termination payment as specified in Schedule 5.
[80] Mr Turner contends that the Sale Amendment Act did not in any way impact on Mr Duffield's rights. He asserted that the Sale Act did no more than permit certain events to occur in the future. It was these events, namely the sale of the PAT and subsequent repeal of the Act which impacted on Mr Duffield's rights. However this was a prospective operation, rather than retrospective.
[81] I am unable to accept Mr Turner's construction of events.
[82] The object of the Sale Act is to "sell the whole or part of a prescribed Government Business Enterprise…"…(s.3).
[83] That was the whole purpose of the Sale Amendment Act. The Government wished to sell the business and the passing of the Sale Amendment Bill was the only way this could be facilitated. Section 39 provides for the repeal of Portfolio Acts and describes what happens to a member of the Board and the CEO. In my view the events are connected by statute and the process is set in train by the passage of the Sale Amendment Bill.
[84] If I am to accept the respondent's contention that s.39(5) applied to Mr Duffield, then that would have the same impact as amending clause 8 of the instrument to read that the termination benefits in Schedule 5 are not payable if the business is sold and Mr Duffield was offered a position with the purchaser "on terms no less favourable".
[85] If that was to be the case it would amount to an impairment of an existing right and, absent a clear intent of the Parliament, be contrary to the presumption against retrospectivity.
[86] In Statutory Interpretation in Australia[31] the following commentary relevant to the intent of Parliament is found:
"[10.12] The presumption against retrospectivity can, of course, be excluded by a direct statement to the contrary in the relevant Act. This was the situation, in effect, in Kidman's case and Millner's case; [10.9] - there the coming into operation of the Act was clearly backdated. However, it is not necessary for the legislature to make its intention as plain as this. A court will regard the presumption as being rebutted if it can spell out a necessary intendment that the Act is to operate retrospectively. What will be regarded as a necessary intendment must of necessity depend on the circumstances of the particular case and the words of the particular statute. The closest one can perhaps come to a working rule is provided by Worrall v Commercial Banking Co of Sydney Ltd (1917) 24 CLR 28 at 32 per Barton J delivering the judgment of the High Court (Barton, Isaacs and Rich JJ): 'Necessary intendment only means that the force of the language in its surroundings carries such strength of impression in one direction, that to entertain the opposite view appears wholly unreasonable'."
[87] Section 39(5) has been in the Sale Act since it came into operation in 2003. The PAT was not subject to the Act at that time and hence s.39(5) is certainly not specific to the PAT. There is no clear statement in the legislation that existing rights are in some way to be impaired. Further, I accept Mr O'Farrell's contention that a decision in favour of the applicant does not render s.39(5) nugatory.
[88] I am unable to find anything in the statute which indicates that the presumption against retrospectivity should not apply.
[89] Accordingly I find that s.39(5) applies prospectively and does not impair Mr Duffield's accrued rights arising out of schedule 5 of his instrument of appointment. I so order.
[90] Given this finding, it is unnecessary to address the third question going to the matter of the offer of alternative employment.
[91] Both parties requested that I refrain from issuing an order pending further negotiations.
[92] Accordingly I direct the parties to confer. The file will remain open pending further advice from the applicant.
Tim Abey
Appearances:
Date and place of hearing: [1] Exhibit A3 [2] Exhibit A17 [3] Exhibit A5 [4] Exhibit A17 [5] Exhibit R1 [6] Exhibit R2 [7] Exhibit A16 [8] Exhibit R3 [9] Exhibit A10 [10] Exhibit A12 [11] [2002] TASSC 28. [12] [2004] 13 Tasmanian Reports [13] Supra PN 41 [14] [1977] 16 SASR 6 [15] [2004] 136 FCR 388 [16] [1995] 60 IR 304 [17] [1995] 60 IR 327 [18] [15.36] [19] Exhibit A5 [20] [1957] 96 CLR 261 at 267 [21] [1971] 124 CLR referring to Re Althumney; Ex parte Wilson 1898 [1898] 2 QB 547 at 551-2 [22] [1960] 105 CLR 188 at 194 [23] [1973] VR 819 at 825 [24] [1982] 42 ALR 29 at 38 [25] Victrawl Pty ltd v Telstra Corporation Ltd & Ors [1995] 131 ALR 465 at 479-480 citing Rodway [26] [1996] 137 ALR 335 at 340 [27] P. 825 [28] 131 ALR 465 [29] 237 ALR 482 [30] P. 825 [31] Pearce and Geddes. Sixth edition. 10.12 |