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Tasmanian Industrial Commission

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T8415

 

TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s.70 appeal against an order

Gateway Tasmania Limited
(T8415 of 1999)

and

Tricia Lette

 

FULL BENCH:
DEPUTY PRESIDENT B R JOHNSON
COMMISSIONER R J WATLING
COMMISSIONER P C SHELLEY

HOBART, 29 June 2000

Appeal - decision and order of President F D Westwood dated 23 April 1999 to award severance pay - decision and order of President confirmed - appeal dismissed

REASONS FOR DECISION

Introduction

On 15 July 1998 the appellant wrote to the respondent-one of three employees so notified-informing her that, because of a proposal to "implement a new organisational structure effective 1 September 1998", her "position as Industry Liaison Officer will be redundant, most likely by September 1998".1 The letter also informed the respondent that, in the event she should not obtain a position in the new structure, "you will become redundant and appropriate arrangements would be made in accordance with the award".2 At the time of receiving the letter, the respondent was employed as Industry Liaison Officer in the company's marketing section, a position she had held since 7 September 1995.

The respondent, having formed the opinion that she was not likely to get a position in the new structure, obtained a better paid position-albeit initially a temporary three months contract-with another employer. For that reason, the respondent resigned her employment with the appellant, effective from 29 July 1998, and immediately commenced work with her new employer.

The respondent, believing the proposed restructure should not have resulted in the loss of her job, applied to the President on 20 August 1998 for a hearing pursuant to Section 29(1A) of the Industrial Relations Act 1984. In her application, the respondent (a) alleged unfair termination of employment, in respect of which she sought reinstatement, and (b) claimed three months severance pay in respect of her termination.

The President, having allocated the matter to himself, heard the parties on 16 December 1998. As a consequence of that hearing, the President made the following findings and orders:

  • That it would be fair and equitable and in the public interest to extend until 20 August 1998 the period within which the respondent was required to lodge her application pursuant to Section 29(1)(B) of the Act;3
  • That the respondent's employment was terminated at the initiative of the employer;4
  • That the respondent was not unfairly dismissed because the appellant genuinely considered the position of Industry Liaison Officer to be redundant;5
  • That the claim for reinstatement should be rejected and that part of the respondent's application dismissed, because there was a valid reason for the termination of her employment based on the operational requirements of the appellant's undertaking;6 and
  • That a severance payment of $3,100.80 should be made to the respondent by 14 May 1999.7

Appeal Grounds

On 12 May 1999 Gateway Tasmania appealed the President's decision and order, alleging he erred:

"1.  In finding that there was a termination of employment at the initiative of the employer.

2.  By assuming facts that were not in evidence.

3.  By ignoring principles of general law.

4.  In his application of the decision of the Full Bench in Matter No. T125 of 1995 to the facts of this case.

5.  In not deducting from the compensation ordered income derived by the applicant.

6.  In granting an extension of time in relation to a claim for compensation contrary to the provisions of Sections 29(1A)(b) and 29(1B) of the Industrial Relations Act 1984.

7.  By failing to take into proper account the provisions contained in Part II of the International Labour Organisation's Convention concerning Termination of Employment at the Initiative of the Employer (the ILO Convention) as required by Section 31(1A) of the Industrial Relations Act 1984.

8.  In that the evidence before the [President] did not support the finding made.

9.  In that the compensation ordered by the [President] was excessive in the circumstances.

10.  Any other grounds the Commission think(s) appropriate."

When the matter came on for hearing, however, the appellant did not pursue Appeal Grounds 6 and 10.

Appeal Principles

In determining these appeal proceedings we apply, where relevant, the well-known principles established by Dixon, Evatt and McTiernan JJ in the High Court case of House v The King (1936) 55 CLR 499 at 504-505. In that regard Mr Cameron was at pains to counsel us that the appellant's case did not rest on a misjudgment of discretion because the primary appeal ground did not concern an error of discretion on the part of the President, but an error of fact in that he found there was a termination at the initiative of the employer.

Mr Cameron submitted that a substantial wrong had occurred. He submitted that in the context of House v The King the President, in concluding as he did, acted upon wrong principles; mistook the facts; allowed extraneous matters to guide or affect him; took into account information or claimed facts that were not before him in evidence; and failed to take into account a material consideration, in particular, the letter of resignation.

Jurisdiction

Because Appeal Ground 1 raises an issue concerning the jurisdiction of the Commission to deal with the respondent's application we commence our considerations with that matter, ie: that the President erred "In finding that there was a termination of employment at the initiative of the employer".

Andrew S Cameron for the appellant:

For this Commission to have jurisdiction to hear a claim concerning dismissal or redundancy there must be a termination at the initiative of the employer. In the instant case the President correctly noted in his decision that the respondent, by letter dated 21 July, resigned her employment from close of business on Wednesday 29 July 1998.8

During the hearing at first instance the appellant submitted that there was no termination at the initiative of the employer. All the appellant did, through its chairman, was hold a meeting with the respondent for the purpose of informing her that the company "has decided to implement a new organisational structure effective 1 September 1998".9 At the meeting the respondent was also given a letter, dated 15 July 1998, relating to the proposed restructure.10

That letter, after giving reasons for the Board's decision, went on to inform the respondent that:

"The effect of the restructure is that your position as Industry Liaison Officer will be redundant, most likely by September 1998.

Position descriptions for the new positions are being prepared and you are encouraged to apply for any of these positions as and when they are advertised.

In the event of you not being offered a position in the new structure then you will become redundant and the appropriate arrangements would be made in accordance with the award.

A copy of the new structure and the timetable for the restructuring process is attached for your information."

The President found that the meeting between the respondent and the appellant's chairman and the letter of 15 July 1998 constituted termination of employment at the initiative of the employer, ie:11

"Ms Lette's employment as the Industry Liaison Officer came to an end because the company decided her position was no longer wanted and, despite encouraging her to apply for the new positions, which I have already determined were unlikely to produce a job for her, the employer made her no genuine offer of alternative employment. Accordingly, I consider that her employment was terminated at the initiative of the employer."

But notwithstanding that finding the President, at the same time and elsewhere in his decision, suggested that the respondent's employment "was about to be terminated".12 To the contrary, the letter of 15 July 1998 shows the only indication given to the respondent about her employment was that the position of Industry Liaison Officer would become redundant. That is an entirely different proposition from an indication that her employment was about to be terminated-see Strachan v Liquorland (Australia) Pty Ltd (1996)13 in which Moore J of the Industrial Relations Court of Australia observed that both the ILO Convention and Recommendation "concern the loss of employment by an employee".14

Although the appellant told the respondent that her position as Industry Liaison Officer would not be part of the company's new structure, it did not terminate her employment-she was in fact still employed. The appellant informed the respondent that it proposed to create new positions and encouraged her to apply for any of them. In addition, when the respondent asked which position the company had in mind for her, the appellant suggested that she might look at a public relations job. The company put nothing definite to her regarding termination of her employment and said nothing about a date upon which termination might take place.

The President made it plain in his decision that he based his assumption of termination at the initiative of the employer on the face-to-face meeting between the appellant's chairman and the respondent:15

"Although Ms Lette was told her application for the position would be welcome, it is obvious to me that that was a polite way of letting her know that she had little or no prospects of ongoing employment with the company. As a consequence of that advice Ms Lette, in my opinion understandably, felt insecure, particularly as she considered she would not 'be able to fill' the other adult positions. In effect that discussion with the Chairman convinced her that her employment with Gateway was about to end."

Later in his decision the President went on to say that:16

"However I must record that if Ms Lette had not had the discussion with the Chairman of the Board which led her to believe she would not get one of the restructured jobs and she had simply left after she had obtained alternative employment without testing the job prospects at Gateway, it is unlikely that I would have reached such a conclusion [that her employment was terminated at the initiative of the employer]."

During the course of the hearing it was not put to Ms Lette that her understanding was that her employment was about to come to an end. Indeed, there was nothing in the evidence of Ms Lette, who was the only witness at the hearing, suggesting that the appellant had indicated to her that she had to leave or that her employment had come to an end at that time.

The President also remarked in his decision that:17

"... Ms Lette basically had two options. They were:

(1) to work on with Gateway until 31 August 1998 and try for the PR media coordinator job, or

(2) to leave Gateway before September to secure, as best as possible, her livelihood."

The President's remarks, in light of his finding that there was a termination at the initiative of the employer, indicate there must have been present some form of constructive dismissal-that the employer gave the respondent no alternative other than to resign. At no time, either at the meeting with the respondent or in the letter of 15 July 1998, did the company indicate that her employment would not continue. Clearly, it is not the case that the employer put the respondent in a position where she had to resign.

In that context, the President's decision shows that "at least three people in the travel section" received a letter similar to that dated 15 July 1998 given to the respondent.18 The respondent's evidence was that although the other employees concerned were moved around, they remained in the company's employment.

In accordance with the decision of the Full Bench of this Commission in the Job Protection, Termination and Change Case,19 the appellant informed its employees as soon as reasonably possible that a restructure would occur. The respondent was told of the proposed new positions and given a new organisational structure chart and the short job descriptions then available-the evidence shows that the respondent discussed some of those positions at the meeting with the company's chairman. The respondent was encouraged to apply for any of the positions and she was also told which job might suit her in particular, ie that of PR media coordinator.

The President's decision in this matter is inconsistent with a decision taken some three weeks earlier in Loosmore v Pitt & Sherry Holdings Pty Ltd. In that case the employer was "rapped over the knuckles" for not advising an employee as soon as possible that there was a likelihood of redundancies in the organisation.20 Yet, in the present case, where the employer has given as much notice as possible, the President nevertheless found that the particular circumstances constituted a termination of employment at the initiative of the employer.

In that regard, in the current matter, the evidence does not support the conclusions drawn by the President concerning the belief held by the respondent as a consequence of her discussion with the company's chairman. Ms Lette's evidence-in-chief in relation to what occurred at the meeting was that:

  • She took the appellant's letter of 15 July 1998 to mean that her job was being made redundant and that her position of Industry Liaison Officer would no longer be required.21
  • During her discussion with the company's chairman, which she recalled took probably 20 to 25 minutes, she said "I was told that the position would no longer exist, the current position that I held. I was also told that I was most welcome to apply for any of the new positions."22
  • She "... did specifically ask, during that conversation, as to where he would see me fitting in this structure and he said, if I was to fit anywhere it would be in the position of the PR media coordinator."23
  • She said that, as to the sort of person the company was looking for, "He told me at the time that they were looking for somebody with a journalistic background".24

In cross-examination, Ms Lette's relevant evidence was that:

  • Regarding whether anyone advised her in person of an actual date for termination she said "No. I did question that when I spoke to Mr Forsyth [the chairman] and he said that there wasn't a definite date but I would be redundant when they found someone to fill the new role."25
  • She acknowledged that she was welcome to apply for any of the new positions.26
  • She acknowledged that she did not believe she had the accounting skills necessary to fill the "business manager finance person type role"; that, in respect of the office junior role, "at 25 years of age I'm past junior rates"; and that as to the sales and marketing manager position "I really didn't think I had the skills or the experience to fill a role at that level".27
  • When asked if she had taken it upon herself to decide that she wasn't suitable for the other proposed positions, she said "I was told in my conversations by Mr Forsyth that the role that would most suit me would be the PR media role but, yes, looking at the position description for the other positions, I made the decision myself that I would not be able to fill those, yes."28

The above summary records the only evidence provided by the appellant as to what took place at her meeting with the chairman. Consequently, the inference the President drew in his decision that "the discussion with the Chairman of the Board which led her to believe she would not get one of the restructured jobs"29 is wrong and was not available to him on the evidence. The President appears to have extrapolated on the available evidence and to have also taken into account submissions on behalf of the respondent that went to matters that were not in the evidence, for the purpose of enabling him to conclude that her meeting with the chairman itself confirmed to the respondent that her employment was being terminated. There is nothing in the respondent's evidence that supports such a conclusion.

The evidence is clear that it was the respondent herself who decided to leave her employment with the appellant. At the time she had viewed only the position descriptions for the other positions. The evidence is that she did not see the full position description for the PR media coordinator's role until three weeks after she had left the company's employment.30 There was no evidence before the President regarding the employer's views as to whether the appellant could or could not do the particular job and she never indicated at any time that the employer representatives to whom she had spoken told her they did not believe her to be capable of fulfilling any of the available jobs.

The appellant put nothing more to the respondent than a general notice of likely redundancy because her position was to be made redundant. Nothing definite was said in relation to her employment, the letter of 15 July 1998 stating only that "In the event of you not being offered a position in the new structure then you will become redundant and the appropriate arrangements would be made in accordance with the award". The letter clearly shows that at that time the employer had not made up its mind to terminate the respondent's employment. However, notwithstanding all the evidence to the contrary, the President concluded that there had been a termination at the initiative of the employer the effective date of which, he found, was 29 July 1998, the date of her resignation. That date was fixed by the respondent, not by the appellant. Even in the case of a constructive dismissal it must be the employer who sets or controls the date of termination by, for example, forcing the employee to resign within a certain time frame.

In coming to his decision, the President failed to distinguish between the contract of employment and the employment relationship¾see Brackenridge v Toyota Motor Corporation Australia Limited (1996) 67 IR 162.31 The basic thrust of that case, which confirms decisions of other industrial tribunals and courts, is that for there to be a termination of employment in accordance with the ILO Convention there must be not only a termination of the contract of employment but also a cessation of the employer and employee relationship. It is not enough that a particular contract of employment relating to a certain position and the duties performed by an employee in that position are the subject of change.

In the present case, the letter of 15 July 1998 advised of possible future change to the respondent's position and her contract of employment, but not to her employment relationship with the company unless, of course, she should be unsuccessful in filling one of the new positions. The respondent took it upon herself to resign, even though she did not see the full position description until some three weeks later.

The respondent's evidence was that the chairman told her the company was looking for someone with a journalistic background. The President, in his decision, concluded that the chairman's advice "was a polite way of letting her know that she had little or no prospects of ongoing employment with the company".32 Nothing in the evidence supports such a conclusion. According to the respondent's evidence, all the chairman told her was that the company was "looking for somebody with a journalistic background".

There was, obviously, a letter of resignation. At the time the respondent may not have been sure what was happening because of the company restructure and as a consequence she elected to accept another job offer. But, that was her decision. Nothing was put to her by the appellant suggesting that her employment was to be terminated. In the circumstances, it was unreasonable for the President to conclude that the respondent's employment was terminated at the initiative of the employer. Consequently, since there was no such termination, the question of redundancy did not arise and the President's order to that effect is incorrect.

D Durkin for the respondent:

The respondent's decision to resign her employment was a reasonable decision in all the circumstances. The company's letter of 15 July 1998 did not contain terminology referring to contracts of employment or common law contracts, no doubt because it was addressed to a lay person. The basic content of the letter informed the respondent that "The effect of the restructure is that your position as Industry Liaison Officer will be redundant, most likely by September 1998".33 The respondent took that statement to mean that her employment would cease on or about the end of September, unless an alternative position could be found.

The respondent concedes that if a clear indication had been given to her that her employment would continue even though her current position was to become redundant, then there would have been a continuation of the employer and employee relationship. However, the appellant did not give a clear indication of alternative employment, merely a vague description of what might happen at some future time. The onus is on an employer to indicate that employment will continue and, in the event that additional competencies should be required, to assist the employee in acquiring those competencies within a reasonable period of time-see Mitchell-Collins v The Latrobe Council (1995).34

There is no doubt that the position of Industry Liaison Officer was to become redundant. However, there was no prior consultation with the respondent about the proposed restructure in accordance with the requirements of Article 13 of the ILO Convention.35 In that regard the respondent's evidence was that the first she heard of the proposed restructure was when the company chairman handed her the letter of 15 July 1998. The respondent said that, at the time, she discussed the letter with the chairman "for probably 20 to 25 minutes" and "I asked a lot of questions because this was the first time that I'd been told that we were having a restructure ..."36 Those discussions obviously occurred after the event.

It is equally plain that, during the same discussions, the chairman also told the respondent, regarding the proposed PR media coordinator position, that the company was looking for somebody with a journalistic background37 and that full position descriptions for each of the proposed positions would be available on 17 July.38 However, when the respondent rang the chairman on that day, the position descriptions were not available-"he indicated to me that they were with the consulting company ... and he would hope that they would be available to us early in the week"-and they were still not available towards the end of the following week when she again rang the chairman.39

It was the appellant's responsibility to give the respondent a clear indication that her employment would continue. On the facts available to her at the time, as disclosed in the evidence, it was open to the respondent to conclude that, since there was no clear indication of continued employment, it was highly unlikely that she would obtain, by application, one of the proposed new positions.

The respondent concedes that she sent in a letter of resignation. In doing so, she was acting no differently from any other employee who had elected to leave early during a period of termination notice. The respondent saw her letter of resignation as simply a means of providing the employer with a date upon which she intended to leave in what was otherwise a rather extended and vague notice period.

Concerning the proposed position descriptions, the respondent's evidence was that the second time she telephoned him about the matter and after she had tendered her notice, she requested the chairman to send her a copy of the documents.40 The appellant never sent her the position descriptions41-a fact that supports the respondent's belief that it was never the company's intention to employ her in the PR media coordinator position.

In an attempt to determine whether there was any basis upon which there could be a continuing employer and employee relationship, the respondent took all reasonable steps to deal with the advice given her by the company about her position. She requested information about the proposed positions but, when it was not made available to her the respondent elected, having regard to her circumstances, to notify the company that she would leave. Asked why she did not "wait around to see what was to eventuate with the new positions" the respondent said in examination-in-chief that:42

"Well, I had asked on the two occasions for the position description and they weren't forthcoming. The short position description that I had been given, I truly felt that there wasn't anything in there that was-there was only, probably a small percentage in there of what I was currently doing and the rest of the percentage of the job I didn't have the skills to fill so I felt quiet insecure in the fact that I wouldn't get the job had I applied for it."

In taking the action she did the respondent was attempting to mitigate her loss. She had made it plain that she was still interested in getting the full position description, but she could not wait around for that event without looking at other options in order to protect her interests. The onus was on the employer to make sure the respondent was not left up in the air. In that regard the appellant had the job descriptions but chose not to send them to the respondent.

Findings

We begin our considerations with the letter of 15 July 1998, as addressed to the respondent. For present purposes the document contains two relevant statements. The first, after informing the respondent that the appellant had decided to implement a new organisational structure effective from 1 September 1998, advised her that:43

"The effect of the restructure is that your position as Industry Liaison Officer will be redundant, most likely by September 1998."

The second relevant statement, which appears two paragraphs later, informed the respondent that:44

"In the event of you not being offered a position in the new structure then you will become redundant and the appropriate arrangements would be made in accordance with the award."

The President found in respect of the first statement that "that advice ... was effectively general notice of the company's intention to terminate Ms Lette's employment".45 However, while the President mentioned the second statement in his recital of the facts of the case,46 his Reasons for Decision do not disclose what weight he gave to it in relation to his finding as to the meaning and purport of the first statement.

After reading the two statements together, we are unable to share the President's opinion that the first effectively constituted general notice on the part of the appellant of an intention to terminate the respondent's employment. In our view, taking into account the second statement, the first declares only that the position of Industry Liaison Officer would become redundant. The statement contains nothing at all about any intention on the part of the company to terminate the respondent's employment. That is a matter that, as we see the facts, received attention in the second statement, ie in the event the respondent should be unsuccessful in obtaining one of the new positions, she would become redundant. The statement was not, however, a notice of termination.

In our opinion, reading the two statements together, the only finding open to the President regarding the first statement of the letter of 15 July was that it was general notice of the company's intention to make the position of Industry Liaison Officer redundant. In the circumstances we find that it was not open to the President as matter of fact to find, as he did, that the first statement effectively constituted general notice on the part of the appellant of an intention to terminate the respondent's employment. Consequently, we find the President erred in making that finding, although it will become clear shortly that he made it on the basis of evidence of what the chairman told the respondent in discussions that followed her receipt of the letter.

It follows from the above finding that the respondent was not at the time of receiving the letter of 15 July under any notice of termination, specific or otherwise. That finding however, in our opinion, does not prejudice the President's decision that the respondent was terminated at the initiative of the employer because that decision did not rely on the letter but on what occurred during the subsequent discussions between the respondent and the company chairman.

The evidence shows that, immediately after receiving the letter, the respondent discussed it at some length with the company's chairman. What occurred at that meeting is fundamental to the whole case. That is because the President found that had it not been for the respondent's discussion with the company chairman, which "convinced her that her employment with Gateway was about to end" and "led her to believe she would not get one of the restructured jobs", it is unlikely he would have found that she was terminated at the initiative of the employer-a finding which, the appellant argues in any event, is not supported by the evidence.47

In the circumstances, the issue before the President (and before us) is this: Whether, notwithstanding that the appellant did not in its letter of 15 July put the respondent on specific notice of termination, the chairman by actions or statements at his meeting with her, did do so.

The respondent was the only person to give evidence in the proceedings at first instance and her evidence, in both examination-in-chief and in cross-examination, appears in convenient summary form above in the submissions of the appellant (pages 6 and 7). Concerning the question of notice of termination, the following exchange occurs in cross-examination:48

"MR FLOOD: Did anybody tell you in person whether¾did anyone advise you in person of an actual date for termination?

MS LETTE: No. I did question that when I spoke to Mr Forsyth [the chairman] and he said that there wasn't a definite date but I would be redundant when they found someone to fill the new role."

In the proceedings before us Mr Cameron suggested that the statement assigned to the chairman was a reference to the position becoming redundant.49 We do not construe the statement that way. The respondent's unchallenged evidence is that she was told "I would be redundant when they found someone to fill the new role"-a plain indication, we think, that the respondent's employment was about to be terminated. The appellant was in a position to call the chairman to rebut that evidence if the company believed it was wrong, but it did not do so. In the circumstances it was open for the President to accept the evidence, which he did, since there was no contradictory evidence before him and no reason to doubt its veracity.50 As mentioned earlier, the President relied on the evidence as indicating an intention on the part of the appellant to terminate the respondent's employment.

In the next following paragraph of his decision the President then went on to remark that while the company was encouraging her to apply for any of the proposed new positions, the chairman's advice was that only one of the positions would suit her-the PR media coordinator position-in respect of which the company "was looking for someone for that job with skills which were different from those she possessed".51 The President then concluded his consideration of these issues with the statement that "it is obvious to me that that was a polite way of letting her know that she had little or no prospects of ongoing employment with the company".

Mr Cameron asserted that there was no evidence before the President concerning skills and duties required or competencies to be gained. In a narrow pedantic sense that is correct, but we do not see how it helps the appellant. That is because, in our opinion, the context of his decision shows that what the President was there referring to was the respondent's uncontradicted evidence that the chairman told her that in respect of the one job that would suit her, the company "was looking for somebody with a journalistic background".

The structure of the President's decision leaves us in no doubt that in coming to his conclusion he also had in mind the evidence of the respondent as emphasised above. He then went on to find that "In effect that discussion with the Chairman convinced her that her employment with Gateway was about to end"52-a finding he repeated in somewhat different form when he later observed that, had it not been for the fact that the discussion with the chairman "led her to believe she would not get one of the restructured jobs", he would not have found that there was a termination at the initiative of the employer.53 Those are the facts that, in our opinion, distinguish this case from Loosmore.

Having regard to the above discussion we find, contrary to the appellant's assertions, that it was open to the President on the evidence to conclude that the respondent's employment was terminated at the initiative of the employer because the chairman told her that, while there was no definite date of termination, she would be redundant when they found someone to fill the new role. In our opinion the President, in coming to his conclusion, did not and did not need to rely on the concept of constructive dismissal. We accordingly dismiss Appeal Ground 1.

In so concluding we have not found it necessary to consider the implications of Brackenridge, to which Mr Cameron referred us, since in this case the evidence clearly discloses an intention on the appellant's part to terminate both the particular contract of employment and the employer and employee relationship. Nevertheless, we are disposed to add a caution because Mr Cameron suggested that Brackenridge "is a confirmation of previous decisions of the industrial tribunals and courts".54 The general accuracy of that statement is arguable, in our opinion, given that in Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia (1999) 90 IR 211 a Full Court of the Supreme Court of South Australia distinguished Brackenridge on the grounds that "the Commonwealth Act is restricted in its meaning by the meaning given to the relevant phrase in the Convention" (p. 229).

Other Appeal Grounds

Appeal Ground No 2: This ground of appeal asserts that the President erred "by assuming facts that were not in evidence". The respondent did not put any submissions to us concerning the issue. Consequently, the recital below records only the appellant's submissions. For convenience we insert our findings after each particular point.

Mr Cameron submitted that there are a number of areas in the President's decision where he took into account matters that were not in the evidence. In the first place, Mr Cameron said, concerning the evidence before him in relation to Appeal Ground No 1:

  • The President concluded that there was a termination at the initiative of the employer in circumstances where there was nothing in the evidence to indicate that the appellant put anything to the respondent, regarding the termination of her employment, that she had to leave or that her employment had come to an end.55

Finding

The respondent's unchallenged evidence that the chairman told her she "would be redundant when they found someone to fill the new role" is sufficient evidence, in our opinion, to indicate an intention on the part of the company to terminate her employment.56

  • The President made remarks about the respondent's options, after her receipt of the letter of 15 July 1998 and meeting with the chairman, that suggest some form of constructive dismissal on the appellant's part, even though there was nothing in the evidence to indicate that the company had put the respondent in a position where she had to resign.57

Finding

In our opinion there is nothing in the President's decision that suggests he relied or needed to rely in any way on constructive dismissal as a basis for concluding that the respondent's termination was effected at the initiative of the employer.58

  • The President found or inferred that the company chairman had led the respondent to believe she would not get one of the restructured jobs, when there was no evidence to indicate that the meeting with the chairman confirmed for the respondent that the company was about to terminate her employment.59

Finding

  • The evidence that the chairman told the respondent the company was looking for someone with a journalistic background and his statement that she would become redundant when the company found someone to fill the new role, to which we add the advantage the President had of seeing and hearing the witness, is in our opinion sufficient evidence to support the President's finding that "the Chairman convinced her that her employment with Gateway was about to end".60

  • The President concluded that the chairman's advice to the respondent-that the company was looking for someone with a journalistic background-was a polite way of informing the respondent that she had little or no prospects of ongoing employment with the company, when nothing in the evidence supported such a conclusion.61

    Finding

    In our opinion the fact that (a) the President had the advantage of seeing and hearing the witness and (b) her unchallenged evidence that the chairman told her-in addition to advising her that the company was looking for someone with journalistic skills-that she would become redundant when the company found someone to fill the new role provided sufficient evidentiary support for the President's conclusion.

Second, after recording that "Ms Lette said she was told there was no definite date but she 'would be redundant when they found someone to fill the new role' ", the President went on to say:62

"That was confirmed at a face to face meeting she had the same day with the Chairman of the Board."

The President's decision clearly implies that there were two meetings: one meeting at which the respondent was told she would be redundant when someone was found to fill the new position and another at which that statement was confirmed. There was no evidence before the President to suggest that there were two meetings between the respondent and the chairman-to the contrary, there was only ever the one meeting. The implication in the President's decision is that the chairman's statement to the respondent was made and confirmed on more than one occasion. That was not the case.

Finding

We accept the appellant's submissions that, on the evidence, there was only one meeting between the respondent and the company chairman. Accordingly, if the President intended to convey that there was more than one meeting then we would be prepared to find he erred in that regard. However, even if we were to make such a finding, we do not see how it could help the appellant because, as we have already found, on the evidence of what occurred at the only meeting between the respondent and the chairman it was open, in our opinion, for the President to conclude that the respondent's employment was terminated at the initiative of the employer.63 For that reason and because the President's statement is not without ambiguity, we do not find it necessary to make a finding on this issue.

Third, the President recorded in his decision that "My reading of the letter [of 15 July 1998] leads me to believe that the redundancy could have been effected at any time between 15 July and 31 August 1998". The statement stretches the point. There was no evidence from the respondent or any other evidence that suggested her understanding was that the termination would take place, if it ever did occur, on those dates. The letter did not refer to 1 September but said "most likely by September 1998" however, there was nothing in the document to suggest that termination, if it did occur, could not have taken place after that date. The President read into the letter something that was not in it and was never put to him in evidence.

Finding

It seems to us that the President's understanding of the letter of 15 July 1998 in this context has its origin in his earlier finding that it was "effectively general notice of the company's intention to terminate Ms Lette's employment". In that regard we have already found that the letter of 15 July 1998 did not disclose an intention to terminate the respondent's employment.64 Consequently, in drawing the conclusion that he did, we find the President erred in reading into the letter something that was not there. We are not persuaded, however, that our finding prejudices the President's decision that the respondent was terminated at the initiative of the employer because, as we have already said, that decision did not rely on the letter but on what occurred during subsequent discussions between the respondent and the company chairman.

Fourth, at page 6 of his decision the President stated that:

"It was claimed in evidence, which was unchallenged and which I accept, that although Ms Lette was encouraged to apply for the new jobs she was told that only one of them might suit her but that the employer was looking for someone for that job with skills which were different from those she possessed."

All that the appellant ever indicated to the respondent was that the company was looking for someone with a journalistic background-the company never said it was looking for someone with journalistic skills or even that it preferred someone with a journalistic background. There was no evidence before the President that the company was looking for any particular skills-merely that it was looking for someone with a journalistic background. In the circumstances, by his use of the term "skills", the President embellished the chairman's observation when there was no evidence to support such a conclusion.

Finding

We have already observed that the appellant's submission regarding the President's use of the word "skills" is correct in a narrow, pedantic sense.65 However, we believe the matter is an argument without substance because the President's observation, read in context, can have no meaning other than as an alternative expression for the chairman's statement that the company "was looking for somebody with a journalistic background".

Fifth, the President concluded in his decision that the respondent "was also entitled to think that the termination could happen at any time before 1 September 1998".66 There was no evidence before the President regarding what was in the respondent's mind as to her expected date of termination. All that was before him in that regard was the general situation that the company proposed to change the respondent's position but was not terminating her employment entirely. Accordingly, the President took into account something that was not before him in the evidence.

Finding

The evidence shows, in our view, that there were three relevant matters at least in the respondent's mind: (1) that she was encouraged by the appellant to apply for any of the proposed new jobs; but (2) if she were to fit in anywhere in the new structure, according to the chairman, it would be as PR media coordinator in respect of which, again according to the chairman, the company was looking for someone with a journalistic background; and (3) there was no definite date of termination but, according to the chairman, she would be redundant when they found someone to fill the new role. In the circumstances, we are of the opinion that there was ample evidence before the President upon which he could conclude, as he did, that the respondent "was also entitled to think that the termination could happen at any time before 1 September 1998", that is, whenever the appellant "found someone to fill the new role", whether that might be before or after 1 September 1998. Consequently, we are of the view that the President did not take into account something that was not before him in the evidence.

Sixth, the President found that the content of the appellant's letter of 15 July 1998 constituted "general notice of the company's intention to terminate Ms Lette's employment".67 There is nothing in that document that says the respondent's employment would be terminated. The intention of the document is clear: only if the respondent does not get one of the new positions will her employment be terminated.

Finding

We have already found that the President erred in this regard but that error did not prejudice his decision that the respondent was terminated at the initiative of the employer because the decision did not rely on the letter but on what occurred during subsequent discussions between the respondent and the company chairman.68

Seventh, the President agreed with the submissions for the respondent that "there is an obligation on the employer to provide or assist a redundant employee to find alternative employment".69 In this case, however, the appellant was given no chance to offer such assistance because the respondent arranged another job for herself and resigned within one week of receiving the letter of 15 July 1998. Even if the respondent's situation was one of termination, it is difficult in the circumstances of this case for an employer to provide assistance of the kind accepted by the President.

Finding

We cannot see how this contention reflects an assumption by the President of facts that were not in evidence, although it may arguably relate to Appeal Ground No 4.70 For that reason, in the context of Appeal Ground No 2, we do not find it necessary to make any findings in respect of the matter at the present time.

Findings re Appeal Ground No 2

To the extent that the President erred in relation to two findings of fact-points three and six above-we are not persuaded for reasons noted that those errors prejudiced his substantive decision. Consequently, having regard to the above findings we are of the view that, even though the President erred in two cases by assuming facts that were not in the evidence, those errors in our opinion do not operate to the prejudice of his substantive decision. Accordingly, we dismiss Appeal Ground No 2.

Appeal Ground No 3: In this ground of appeal the appellant asserted that the President erred "by ignoring principles of general law". The respondent did not put any submissions to us concerning the issue. Consequently, the recital below records only the appellant's submissions.

At page 8 of his decision the President rejected the submissions of the appellant at first instance that "because she had found immediate alternative employment and had not suffered any financial loss she should not be entitled to any redundancy payment". In doing so, the President ignored general principles of law concerning both mitigation of loss and the basis of redundancy.

The basis of redundancy essentially rests in circumstances where an employer has labour in excess of requirements of the business. In the present case the appellant foresaw that the respondent's position would become redundant. In that regard, at first instance, the President was referred to a 1983 decision of Fisher P of the New South Wales Industrial Commission in Labour Council of New South Wales & Others re Dismissal of Employees, Redundancy and Retrenchment.71 The President indicated he did not accept that the reasons relied on in that case were relevant to the present circumstances.

In so doing the President ignored principles of general law. He distinguished both cases on their facts instead of addressing the principles of law that were put to him. The case was not put to the President as a precedent or on the basis that the fact situation was relevant and, consequently, the same result should flow in the present matter. What the appellant put to the President was that the case was authority for principles surrounding mitigation of loss, but the President ignored those principles by simply concluding that the facts of the particular case were not relevant.

In any event, even in taking the approach he did, the President erred because he distinguished the New South Wales case by concluding that, in the present matter, the circumstances were not those where "the burden of economic recession has fallen on employers and employees alike", but are more closely aligned to the situation where "the prospect of change is to the company's commercial advantage". Yet, there was no evidence before the President suggesting that that was the reason for the company's restructure.

In effect, the President suggested there are classes of redundancy: one class where the redundancy situation affects everyone and there is no choice and another situation in which redundancy arises because a corporation decides to improve profitability. It is clear on the authorities, however, that a company may decide, and is entitled to decide, to make a position redundant irrespective of whether it is in a situation of economic loss or merely wishes to increase profitability-Quality Bakers of Australia Ltd v Goulding and the Transport Workers Union of Australia (1995).72

The President also dismissed a second authority put to him at first instance by the appellant-a decision of Madgwick J of the Industrial Relations Court of Australia in MT Bechara v Gregory Harrison Healey & Co (1996).73 While that case dealt with a particular provision of the federal Industrial Relations Act 1988 that does not appear in the Tasmanian Industrial Relations Act 1984, it was not put to the President on that basis-the basis upon which the President rejected its relevance-but as a guide to this Commission concerning general principles of law regarding mitigation of loss.

The appellant acknowledges that the Commission is not bound by the precedents of other courts. Nevertheless, the relevant authorities were not put to the President as precedents but as general principles of law that the Commission should follow. To do otherwise would be akin to ignoring the principles of House v The King simply because of a different fact situation.

The President also erred in relation to the general law in that he misunderstood and misinterpreted the distinction between the employment relationship and the contract of employment as set out in Brackenridge v Toyota Motor Corporation. That case highlighted that there must be an end to both relationships before there can be a termination of employment and, consequently, an entitlement to a redundancy payment.

Furthermore, in relation to the Commission's decision in the Job Protection, Termination and Change Case74, the President emphasized in Loosmore that an employer must give as much notice of redundancy as is reasonably possible. In the present case however, where the employer has done just that, the President is saying in effect that "upon notice that a position will become redundant, the position will become redundant, therefore there's a termination and you're entitled to a redundancy payment".75

The guiding principles of the Commission must be one way or the other-the Commission should not issue guiding principles setting out what employers must do, but then penalize employers when they follow those principles. At the time, no decision had been made by the employer to terminate the respondent's employment. In the circumstances, the President's decision is erroneous.

Finally, in terms of ignoring principles of general law and mitigation of loss, the President in rejecting the authorities previously referred to, did not take into account that the respondent left the company's employment of her own volition and obtained employment elsewhere at a higher rate of pay. Notwithstanding those facts the President found that the respondent was entitled to a redundancy payment of approximately 5.8 weeks' pay which was in excess of her period of unemployment.

Findings

It is clear from recent decided authorities-of which MT Bechara v Gregory Harrison Healey & Co (1996) is one-that, according to Madgwick J referring to the federal Industrial Relations Act 1988 in that case, "it is inherent in the notion of 'compensation' in the unfair termination provisions of the Act that there is a duty on an employee whose services have been terminated to mitigate the loss for which he/she seeks compensation under [the Act]". There is no suggestion in that case that such a duty is inherent in the notion of "severance pay".

In the present case the President expressly found at first instance that the applicant was not unfairly dismissed because the company genuinely considered the position of Industry Liaison Officer to be redundant. In the Industrial Relations Act 1984 "compensation", in the context of termination of employment, arises only in respect of an employee who has been unfairly dismissed and in respect of whom the Commission has determined reinstatement is impractical-Sections 3 and 31(1B). "Compensation" is not used in the context of "severance pay".

The scheme of the Act in that regard is that Section 29(1A)(b) provides that a former employee may apply for a hearing in respect of an industrial dispute relating to "severance pay in respect of employment of the former employee terminated as a result of redundancy". Section 31(1C), which appears to reflect the International Labour Organisation's Convention concerning Termination of Employment at the Initiative of the Employer (the ILO Convention), provides that in such a hearing a Commissioner may make an order in respect of severance pay. There is no suggestion of "compensation" in either provision.

The same dichotomy of expression appears in the ILO Convention. Article 12 of the Convention (Severance Allowance and Other Income Protection), relevantly for present purposes, provides for the payment of a "severance allowance or other separation benefits", none of which are expressed in terms of "compensation". That expression, in the ILO Convention, only appears in relation to Article 10, which concerns unjustified termination and Article 11, which concerns a reasonable period of notice or compensation in lieu.

In our opinion the distinction we make between "compensation" as a remedy for unfair termination of employment and "severance pay" (the expression used in the Tasmanian legislation) as a specific entitlement available to workers terminated at the initiative of the employer as a consequence of redundancy draws support from the decision of a Full Bench of this Commission in Corrigan v Kelair Pumps Australia Pty Ltd, which adopted a similar approach.

In the circumstances we reject the appellant's contention that the notion of mitigation of costs has application to severance pay ordered pursuant to provisions of the Industrial Relations Act 1984 as distinct from an order of compensation made in relation to unfair termination of employment.

In passing we mention the decision of Fisher P of the New South Wales Industrial Commission in Labour Council of New South Wales & Others re Dismissal of Employees, Redundancy and Retrenchment in order to note that the case was determined some time before incorporation into legislation or enactment of the principles contained in the ILO Convention. In any event, we observe that Fisher P was also inclined to distinguish the term "compensation":

"There seems no rational way that any averaging of loss of the kind being discussed [hardship] can be attempted. As in the Steel Industry Redundancy Case [1983 AILR 154] the concept of a solatium or consolation for loss seems a more appropriate concept than compensation."

Having regard to the above discussion we find that the President did not err by ignoring general principles of law in deciding to reject the authorities put to him concerning "mitigation of loss", even though he did so on grounds somewhat different from those that we have adopted. The outcome is the same, we think, irrespective of the method of approach.

Regarding Brackenridge and Loosmore we have already expressed our opinions above.76 Finally, we believe that what the President should or should not have taken into account in determining the amount of severance pay is a matter that falls more properly for consideration in relation to Appeal Ground No 5 (not deducting from compensation income derived by the applicant) and/or Appeal Ground No. 9 (compensation excessive in the circumstances).77

For all the reasons outlined above we dismiss Appeal Ground No 3.

Appeal Ground No. 4: According to the appellant the President erred in "his application of the decision of the Full Bench in Matter No T125 of 1985 to the facts of this case". The following discussion records only the appellant's submissions because, once again, the respondent put no submissions to us regarding this ground of appeal.

T125 was an application by the Tasmanian Trades and Labor Council to vary the Retail Trades Award regarding job protection, termination and change. In the course of setting out guidelines for the parties to follow in relation to such matters, the Full Bench observed that:78

"Our intention is to ensure that where reasonably practicable as much notice as possible is given of technological or other change likely to either result in redundancy or otherwise significantly impact on the nature of the work - including the character of that work - of existing employees.

It means that an employer will have a moral, if not legal obligation to consult following a decision to introduce change that will significantly affect employees. A change, say, from hand written ledgers to machine accounting involving automated and non-automated programmes designed to perform many additional functions would be but one example if it meant that the persons concerned had to acquire new skills in a new work environment or be replaced altogether.

We believe it is only fair that an employer should give to those employees who will be affected or are likely to be affected as much forward advice as is, in the circumstances of the particular case, reasonably possible, bearing in mind the nature of his business."

That was the principle outlined in Loosmore, in which the President found that an employer had made a decision about an employee's employment some months before telling the employee concerned, whose employment was subsequently terminated.

In the present case, however, the appellant applied the Full Bench principle. The company met the respondent on 15 July 1998 and gave her a letter advising of the proposed restructuring and its likely effect for her from 1 September that year. The respondent was told her position would become redundant and that other positions were being created for which she might apply. The company did not tell the respondent she was being terminated or give her any particular termination date. All she was told is what was set out in the letter of 15 July.

The evidence shows clearly that, unlike the facts in Loosmore, the company in this case gave the respondent general notice of the possibility of her employment being affected by the proposed restructure. But, notwithstanding that evidence, the President read the letter as a general notice of intention to terminate the respondent's employment and, as a consequence, found there was an entitlement to a redundancy payment.

The President's conclusion and finding was not, on the evidence, in accordance with the guidelines set down in T125 and did not constitute a termination at the initiative of the employer.

In T125 the Full Bench also decided against making specific provisions for redundancy or retrenchment generally in favour of a case-by-case approach. The Bench gave an example in support of its conclusions:79 an automotive electrician retrenched from a large motor firm in a city compared with a similar tradesperson retrenched from the only motor garage in a country town. The former, the Bench said, might find another job with a similar firm, perhaps in the same neighbourhood, within a relatively short time. The latter, however, might have to sell the family home and move to the city and even take less skilled employment. "No fair minded person" the Bench observed "would argue that the degree of disability was the same for both employees". In short, the view of the Bench was that "different considerations apply in different cases".

The evidence in the present case shows that the respondent obtained alternative employment at a higher rate of pay, although she said it cost her more to drive to and from work because the job was some distance from her residence. However, at the end of the day the position, in which the respondent was still employed at the time of the hearing, became permanent But, notwithstanding that evidence, the President ordered that a redundancy payment be made to her on the basis of 2 weeks per year of service for each complete year and proportionately for any incomplete year of service.

It is true that Article 12 of the ILO Convention obliges the Commission to assess "a severance allowance or other separation benefits" on the basis of inter alia "length of service and the level of wages". However, Article 12 also takes into account other alternatives, ie "benefits from unemployment insurance or assistance or other forms of social security" or a combination of "such allowance and benefits". If those alternatives, or any of them are met, there then arises alternatives to ordering payments based simply on length of service and the level of wages.

T125 allows for similar considerations in that it specifically states that "different considerations apply in different cases". In the present case, the different considerations are that the respondent obtained other work and suffered no real loss even though the new position was some distance from her former position. The respondent was not looking at the problem of finding another job. Those facts are especially relevant in circumstances where, as in the present case, the employee's change of circumstances arose from her own volition.

In looking at the level of compensation that should be paid in this case, it is clear that the President did not take into account the provisions of T125 in that he did not distinguish the particular circumstances of this matter on a case-by-case basis. In so acting, he demonstrated a reluctance to apply the guiding principles of T125 in assessing what was suitable compensation.

Findings

As our first point in considering this issue we note our earlier finding that the President did not err in finding that the respondent's employment was terminated at the initiative of the employer. However, Mr Cameron argued that even if, contrary to the appellant's view, we were to come to such a conclusion the evidence shows that, for the reasons set out above, the President failed to properly apply the principles of T125 to the facts of this case.

The President's decision, relevantly for present purposes, shows that he discussed the submissions of the parties and, in respect of the authorities put to him by the employer, concluded they were not relevant.80 In that regard we found earlier, for reasons there advanced, that the President was under no obligation of general law to consider the notion of mitigation of costs in relation to severance payments as distinct from compensation arising from unjustified termination of employment.81 The President also recorded in his discussion the submissions of the employer that:82

"... if I found Ms Lette was 'made redundant' that because she had found immediate alternative employment and had not suffered any financial loss she should not be entitled to any redundancy payment. If I determined that Ms Lette was entitled to a redundancy payment ... that the payment should be based on two weeks' pay for each year of service which would result in a total of four weeks' pay".

The President further noted the submissions put on behalf of the then applicant that:83

"... there is an obligation on the employer to provide or assist a redundant employee to find alternative employment. ... that was not done in this case and [Mr Durkin] sought a redundancy payment of six weeks' pay based on two weeks' pay for each year of service or part thereof."

The President subsequently went on to refer to T125 and express his intention to deal with the matter on "that general case by case approach".84 In that regard the President's decision shows he "agreed with Mr Durkin's view" and also took into account that:85

"... some recognition should be given to the fact that an employee whose position is made redundant suffers a loss of service which impacts on the accrual of award and other statutory requirements, the loss of seniority in an organisation, and the benefits which can flow from that. Those factors are relevant in this case. It is not possible to quantify those items separately but the length of service and level of wages are known."

By reason of the submissions put on behalf of the employer, it is clear the President also had before him the fact that the applicant "had found immediate alternative employment".

We have quoted from the President's decision at some length to show in detail the factors that he took into account in considering the case-by-case approach required by T125. In our opinion, the President considered all the relevant evidence that was before him for purposes of applying the dictum of T125 that "different considerations apply in different cases".

We are minded to recall, in this context, the earlier submission of the appellant that, regarding the employer's obligation "to provide or assist a redundant employee to find alternative employment", it was difficult for the appellant to meet that obligation in this case since the respondent found another job for herself and resigned within one week of receiving the letter of 15 July 1998.86 In acknowledging the employer's difficulty we believe, nevertheless, that the issue was a relevant consideration because the company chairman, in telling the respondent that she would become redundant as soon as someone was found to fill the new role, made no offer to her of alternative employment or of assistance to find such employment. What weight should have been given to that consideration is, of course, a matter for a later ground of appeal.

In the outcome, the fact that the President came to a conclusion somewhat different from that put to him by the employer does not support the contentions put to us by the appellant that the President failed to take into account the provisions of T125 by not distinguishing the particular circumstances of this matter on a case-by-case basis. To the contrary, we are of the view that his decision shows he was at pains to ensure compliance with the requirements of T125. In the circumstances, we dismiss Appeal Ground No 4.

Appeal Ground No 5: In this ground of appeal the appellant contended that the President erred "in not deducting from the compensation ordered income derived by the applicant". We record only the appellant's submissions because the respondent did not put any submissions to us on this issue.

It was put to the President at first instance, concerning claims for compensation (or damages in a judicial context) in relation to the breach of any contractual relationship, that there is a common law duty or obligation on the parties to the contract to mitigate the losses that might flow from such a breach. In support of that general principle rather than as similar fact precedents, the President was referred to MT Bechara v Gregory Harrison Healey & Co and Goodings v Megabus Pty Ltd (1997).87 The relevant facts, which were also before the President, are that the respondent obtained alternative employment at a higher rate of pay as a consequence of which she suffered no real loss in terms of compensation.

Decisions taken by the federal Commission in relation to the Termination, Change and Redundancy Case take into account the obligation of the parties to mitigate losses. For example, in cases regarding transmission of business, it has been held that there is no redundancy because the employees concerned, having been employed by the successor to the business, suffered no loss of employment.

In the present case, the fact that the respondent resigned her position and obtained alternative employment at a higher rate of pay should have been taken into account in assessing the quantum of any redundancy payment because there was no period when she was not employed. In the circumstances, in coming to the decision he did, the President erred because (a) he distinguished the cases put to him on erroneous grounds-different fact situations-rather than applying them as general principles of law and (b) he did not take into account, in determining the quantum of redundancy payment, the fact that the applicant was otherwise employed.

Findings

In our consideration of Appeal Ground No 3 we rejected the appellant's contention that the notion of mitigation of costs has application to severance pay ordered pursuant to the Industrial Relations Act 1984 as distinct from an order of compensation made in relation to unfair termination of employment.88 The arguments put to us by the appellant in respect of this appeal ground appear to be a re-run of submissions put to us on the earlier occasion. In the circumstances and for the same reasons, we again reject the appellant's contentions regarding relevance of the notion of mitigation of costs in relation to severance pay ordered pursuant to the Industrial Relations Act 1984.

As to the two authorities to which the appellant referred us, we note simply that they concern federal industrial legislation that, in our opinion, is not at all identical with the scheme of industrial legislation that applies in Tasmania, particularly in relation to severance payments. In any event, both cases concerned claims for compensation in respect of unlawful termination of employment. For reasons already advanced, we believe the Tasmanian legislation distinguishes between "compensation" as a remedy for unfair termination of employment and "severance pay" as a specific entitlement available to workers terminated at the initiative of the employer as a consequence of redundancy. Accordingly, we reject the appellant's contention that the President wrongly distinguished those authorities.

Concerning principles established by relevant cases decided in relation to the federal Termination, Change and Redundancy Case, we are unable to accept the appellant's contention that these are somehow relevant to the Tasmanian industrial jurisdiction. In the first place the Industrial Relations Act 1984, unlike the federal industrial legislation, contains no generally applicable transmission of business provisions other than those that relate to Part IVA enterprise agreements, which is not a relevant consideration in the present circumstances.

Second, and in any event, it is not surprising that in some of those cases there are findings of no redundancy. We would assume that is because of the operation of the transmission of business provisions which, as we understand them, have the effect of ensuring that the employees concerned retain their accrued entitlements notwithstanding that there is a transmission of the business into the hands of a successor.

In the absence of such legislation in Tasmania those are the very entitlements, or more accurately loss of entitlements, that the President specifically identified in his decision at first instance in the present matter, ie "a loss of service which impacts on the accrual of award or other statutory requirements, the loss of seniority in an organisation, and the benefits which can flow from that". As the President pointed out, that list is not exhaustive.89 In the circumstances, we do not accept the appellant's contention that cases decided in accordance with federal industrial legislation and the Termination, Change and Redundancy Case were a relevant consideration that required the President's attention.

For all the reasons discussed above we reject the appellant's contention that the President erred "in not deducting from the compensation ordered income derived by the applicant" and dismiss Appeal Ground No 5.

Appeal Ground No 7:

In this appeal ground the appellant alleged that the President erred "by failing to take into proper account the provisions contained in Part II of the International Labour Organisation's Convention concerning Termination of Employment at the Initiative of the Employer (the ILO Convention) as required by Section 31(1A) of the Industrial Relations Act 1984". The respondent did not put any submissions to us on this issue. The appellant's submissions follow.

In the decision of Moore J of the Industrial Relations Court of Australia in Strachan v Liquorland (Australia) Pty Ltd referred to previously,90 His Honour held that the expression "termination of employment" as used in the federal industrial legislation must be given the same meaning that it has in the ILO Convention and the recommendation, ie termination at the initiative of the employer. Moore J observed that the words "concern the loss of employment by an employee".91

Looking at the ILO Convention in that light, which flows through to the question of whether there was or was not a redundancy, the Commission must look at termination of employment and not merely at some change in a particular contract of employment. As already stated, Brackenridge confirms that there is a difference between the contract of employment and the employment relationship.92 Section 31(1A) of the Act requires the Commission to take the ILO Convention into account before deciding whether or not to make an order relating to dispute concerning termination of employment.

In considering the evidence before him the President only looked at the fact that the respondent's position was to become redundant, as indicated by the letter of 15 July 1998. The ILO Convention, however, required that he take into account the full employment relationship-had he done so, the President would have found there were no indications in the evidence or in the letter of 15 July 1998 to say that, at any time, there was a definite decision by the employer that termination of employment would be the outcome. In coming to his decision the President placed weight on the indication that the respondent's position would be changed in that it would cease to exist, but he placed no weight on the fact that there was nothing in the evidence indicating that the employment relationship would be terminated.

In the circumstances, the President did not take into proper account the provisions of the ILO Convention, as he was required to do by Section 31(1A) of the Industrial Relations Act 1984.

Finding

After considering the parties' submissions regarding Appeal Ground No 1 we found it was open to the President on the evidence to conclude that the respondent's employment was terminated at the initiative of the employer.93

In the light of that finding we believe this appeal ground is without substance since, contrary to the appellant's assertion, there was on our finding uncontradicted evidence before the President that indicated an intention on the part of the employer to terminate the respondent's employment or, assuming Brackenridge to be applicable, both the particular contract of employment and the employer and employee relationship.94 In the circumstances, we find that the President did not fail to properly consider the relevant provisions of the ILO Convention. Accordingly, we dismiss Appeal Ground No 7.

Appeal Ground No 8: The appellant asserts in this ground of appeal that the President erred in that the evidence before him did not support the finding he made. We were not given the advantage of any submissions from the respondent regarding this issue. The appellant's submissions follow.

The statement of agreed facts recorded at page 2 of the President's decision shows that, among other things, it was agreed between the parties that "on 21 July 1998 Tricia Lette notified Gateway by letter of her resignation". The President ignored that fact. Instead, in coming to his decision that the respondent had been terminated at the initiative of the employer, he read into evidence matters that were not there and formed an opinion as to her belief when there was no evidence before him to that effect.

The only evidence before the President concerning the alleged termination of employment were (a) the letter of 15 July 1998; (b) the respondent's recollections of what took place during her meeting with the company chairman; and (c) some subsequent telephone calls the respondent made requesting the position description for the PR media coordinator role. Nothing in that evidence indicated that the company was terminating the respondent's employment, yet the President decided nevertheless that her termination was effected at the initiative of the employer.

To support that conclusion there must have been present some evidence of constructive dismissal, ie that the company put her in such a position that the respondent had to resign. There was no such evidence before the President. To the contrary, the evidence shows that the company put no pressure on the respondent whatsoever.

There was nothing in the evidence, for example, that supported the President's conclusion that the chairman's advice to the respondent "was a polite way of letting her know that she had little or no prospects of ongoing employment with the company".95 All the evidence shows is that the respondent was simply given an indication that her position would change because of the restructure.

In reply, the respondent took her own decision to find employment with someone else as a consequence of which she tendered her resignation. There was no pressure put on the respondent, she was not given to understand "we want you out of here" and she was not squeezed out. Indeed, at the time, other employees received what was essentially the same letter, but nothing was put to the President by the respondent to suggest that they were told anything more than what was said to her. Consequently, the President was incorrect in concluding that the letter of 15 July 1998 and the discussion with the company chairman put the respondent in a position where she had no option other than to resign.

The evidence also discloses that the respondent decided for herself that she could not do the duties of the proposed new position, even though at the time she did not know in detail what they would be-she did not see them until three weeks later. The employer did not give her a job description knowing that she could not do the duties because there was no job description as such at the relevant time. In that regard there was no pressure put on the respondent by the company.

The evidence clearly suggests that there was a resignation by the employee during a period of general notice that her position, not her employment, would be redundant. Consequently, the President erred in finding that there was a termination at the initiative of the employer.

Finding

In considering the submissions put to us in relation to Appeal Ground No 1 we concluded, for reasons set out earlier, that it was open to the President on the evidence to conclude that the respondent's employment was terminated at the initiative of the employer.96 In respect of Appeal Ground No. 2 we found, after considering the issues put to us, that the President did not err in relation to his substantive decision by assuming facts that were not in the evidence.

After taking those findings into account in relation to the issues raised in connection with the current ground of appeal, all of which appear to us to simply repeat issues argued earlier in relation to Appeal Grounds 1 and 2, we are satisfied that the appellant has not made out a case in respect of this ground of appeal because:

  • Contrary to the appellant's contentions, the evidence before the President included the respondent's unchallenged statement that the chairman said "there wasn't a definite date [of termination] but I would be redundant when they found someone to fill the new role". We have already found that it was open to the President to accept that evidence and to rely on it in concluding that the respondent's employment was terminated at the initiative of the employer.97 Consequently, in our opinion, the President did not read into evidence matters that were not there.
  • In our opinion there is nothing in the President's decision that suggests he relied or needed to rely in any way on constructive dismissal as a basis for concluding that the respondent's termination was effected at the initiative of the employer.98
  • In our opinion the evidence concerning the respondent's knowledge of the duties of the proposed PR media coordinator position does not help the appellant. That is because, in our view, it was open to the President on the evidence to conclude, as he did, that "in effect that discussion with the Chairman convinced her that her employment with Gateway was about to end".99

In light of the above findings and observations we conclude that the President did not err in his substantive decision by making findings that were not supported by the evidence that was before him. Accordingly, we dismiss Appeal Ground No 8.

Appeal Ground No 9

Andrew S Cameron for the appellant:

The President erred in that the compensation he ordered was excessive in the circumstances. In the event that the Appeal Bench should confirm the President's decision that there was a termination at the initiative of the employer, his subsequent order of compensation was excessive in light of (a) the respondent's period of employment; and (b) the fact that she found subsequent employment which the President was required to take into account in accordance with the provisions of the Full Bench decision in the Job Protection, Termination and Change Case.100

In the current matter the President ordered:101

"... 2 weeks' pay, at her level of wages, for each complete year of service and proportionately for any incomplete year of service. The formula to be used therefore is 2.9 [years of service] multiplied by 2 multiplied by $534.62; an amount of $3,100.80."

That order, in the circumstances of the present case, was excessive. The respondent obtained alternative employment at a higher rate of pay in a position that ultimately became permanent, a fact known by the President at the time of his decision. Bearing in mind the example mentioned in T125-the retrenched city automotive electrician compared with a similar tradesperson retrenched in a country town-an order of two weeks' pay for each year of service was excessive and a smaller amount would have been more appropriate having regard to natural justice and a "fair go all round".

In addition, in considering what amount to order, the President was also obliged to consider the employer's position. In that regard no evidence was put to him concerning "the financial consequences or the direness of the employer's position".102

Notwithstanding the Commission's case-by-case approach to redundancy matters, the President failed to take into account or make any reference to the fact that he had taken into account the circumstances mentioned above. He simply took his decision based on an unsubstantiated calculation and without mentioning that, in doing so, he had regard to the Full Bench decision in T125. If the Commission does not uphold the appellant's primary grounds of appeal then it should issue an order for a lesser amount of compensation than that ordered by the President.

D Durkin for the respondent:

Regarding the appellant's submission for a reduction in the amount of the President's order, the respondent's position is that she has had to incur further costs in defending her position on appeal. Those costs will obviously reduce her net return from the sum ordered by the President.

Findings

The structure of the President's decision concerning remedy is abundantly clear. He began by recording the substance of the parties' respective submissions, including the employer's submission that the respondent should not receive any redundancy payment because "she had not suffered any financial loss"; he then discussed the case authorities put to him on behalf of the employer and made findings rejecting their relevance; he then referred to the Commission's Job Protection, Termination and Change Case (T125) and indicated that "I intend to follow that general case by case approach in dealing with this matter"; he then identified the factors he proposed to take into account, observing that "It is not possible to quantify those items separately but the length of service and level of wages are known"; he then made a finding, based on all those circumstances, that a severance payment should be made to the respondent; he then decided that the severance payment should be based on the known criteria, ie length of service and level of wages, which he proceeded to calculate; and, finally, he made an order to reflect his calculations.103

Having regard to that structure we answer the appellant's contentions regarding this ground of appeal in the following manner. First, the President's decision, in our opinion, shows he was aware of and took into account all the respondent's circumstances, those favouring her and those favouring the employer, because he acknowledged, in appropriate context:

  • Submissions on behalf of the respondent that in redundancy circumstances employers have a duty to assist employees to find alternative work, to which the President added his own considerations that included (without being exhaustive) "a loss of service which impacts on the accrual of award and other statutory requirements, the loss of seniority in an organisation, and the benefits that flow from that".104
  • Submissions on behalf of the company that "... because she had found immediate alternative employment and had not suffered any financial loss she should not be entitled to any redundancy payment".105

The fact that, in the context of his deliberations regarding severance pay, nothing was put to the President regarding the employer's financial position is, in our opinion, a failure of advocacy rather than an error on the part of the President. Simply put, we do not see how the President could reasonably have taken into account a consideration concerning "the financial consequences or the direness of the employer's position" when no submissions of that nature were put to him on the employer's behalf.

In the circumstances, we do not accept the appellant's contention that the President somehow failed to act according to natural justice or the notion of "a fair go all round" or that he failed to take into account or misapplied the case-by-case approach by not considering all the relevant circumstances. In coming to that conclusion, we cannot see how the fact that the respondent's alternative position subsequently became permanent-an admittedly agreed fact106-assumes relevance since it was an unknown factor at the relevant time, ie when the chairman's remarks convinced the respondent that her employment with Gateway was about to end and she decided to find alternative employment.

Finally, we believe the appellant's assertion that the President's calculation was "unsubstantiated" is wholly without substance. The President's decision plainly disclosed all the criteria he took into account in considering remedy; he noted that it was not possible to quantify some of those items, but length of service and level of wages were known factors; and he made it clear that, in quantifying the proposed severance payment, he took into account all those criteria but based his calculations on the known factors.

Having regard to the above discussions and conclusions we find, for the reasons advanced, that the President in exercising his discretion in quantifying the amount of severance payment that he proposed to order, did not err by ordering compensation that was excessive in all the circumstances. Accordingly, we dismiss Appeal Ground No 9.

Disposition of Appeal

Having considered and dismissed, for reasons outlined above in each case, the eight grounds of appeal put to us by the appellant at the hearing, we confirm the President's decision at first instance and dismiss the appeal in its entirety.

 

B R Johnson
DEPUTY PRESIDENT

Appearances:
Mr A Cameron of the Tasmanian Chamber of Commerce and Industry Limited for Gateway Tasmania Limited.
Mr D Durkin for Ms T Lette.

Date and Place of Hearing:
2000
May 10
Hobart

1 Exhibit D2.
2 Supra.
3 T7924 of 1998, Reasons for Decision 23 April 1999, p. 5.
4 Supra, p. 6.
5 Supra, p. 7.
6 Supra.
7 Supra, p. 9.
8 T7924 of 1998, Reasons for Decision 23 April 1999, p. 2.
9 Exhibit D2.
10 Supra.
11 T7924 of 1998, Reasons for Decision 23 April 1999, p. 6.
12 Supra, for example.
13 Unreported. No NI 1266R of 1995 (960048).
14 Supra, p. 7.
15 T7924 of 1998, Reasons for Decision 23 April 1999, p. 6.
16 Supra.
17 Supra.
18 T7924 of 1998, Reasons for Decision 23 April 1999, p. 2.
19 T125 of 1985.
20 T7863 of 1998, Reasons for Decision 1 April 1999, p. 8.
21 T7924 of 1998, transcript 16/12/98, p. 9.
22 Supra.
23 Supra.
24 Supra, p. 10.
25 Supra, p. 12.
26 Supra.
27 Supra.
28 Supra.
29 T7924 of 1998, Reasons for Decision 23 April 1999, p. 6.
30 T7924 of 1998, transcript 16/12/98, p.10.
31 Industrial Relations Court of Australia per Beazley J.
32 T7924 of 1998, Reasons for Decision 23 April 1999, p. 6.
33 Exhibit D2.
34 Industrial Relations Court of Australia No TI 95/1039 per Spender J.
35 Part III Supplementary Provisions Concerning Terminations of Employment for Economic, Technological, Structural or Similar Reasons.
36 T7924 of 1998, transcript 16/12/98, p. 9.
37 Supra, p. 10.
38 Supra.
39 Supra.
40 Supra.
41 Supra.
42 Supra.
43 Exhibit D2.
44 Supra.
45 T7924 of 1998, Reasons for Decision 23 April 1999, p. 5.
46 Supra, p. 2.
47 T7924 of 1998, Reasons for Decision 23 April 1999, p. 6.
48 T7924 of 1998, transcript 16/12/98, p. 12.
49 Supra, p. 9.
50 See, for instance, Jones v Dunkell (1959) 101 CLR 298.
51 T7924 of 1998, Reasons for Decision 23 April 1999, p. 6.
52 Supra.
53 Supra.
54 T8415 of 1999, transcript 10/5/00, p. 14.
55 Above, p. 5.
56 Above, p. 12.
57 Above, pp. 4 and 5.
58 Above, p. 13.
59 Above, p. 7.
60 Above, p. 13.
61 Above, p. 8.
62 T7924 of 1998, Reasons for Decision 23 April 1999, p. 5.
63 Above, p. 13.
64 Above, p. 12.
65 Above, p. 13.
66 T7924 of 1998, Reasons for Decision 23 April 1999, p. 6.
67 Supra, p. 5.
68 Above, p. 12.
69 T7924 of 1998, Reasons for Decision 23 April 1999, p. 8.
70 Below, p. 25.
71 25 Australian Industrial Law Review 387.
72 (950285) RWIR No 142 and 154 of 1994.
73 NI 1129 of 1994.
74 T125 of 1985.
75 T8415 of 1999, transcript 10/5/00, p. 23.
76 Above, p. 14.
77 See below pp. 26-27 (Appeal Ground No 5) and pp. 31 (Appeal Ground No 9).
78 Reasons for Decision 13 September 1985, p. 28.
79 Reasons for Decision 13 September 1985, p. 36.
80 T7924 of 1998, Reasons for Decision 23 April 1999, p. 8.
81 Above p. 22.
82 T7924 of 1998, Reasons for Decision 23 April 1999, p. 8.
83 Supra.
84 Supra.
85 Supra.
86 Above, p. 18.
87 Industrial Relations Court of Australia VI-2417 of 1996, 3 September 1997 per Ryan JR.
88 Above, p. 21.
89 T7924 of 1998, Reasons for Decision 23 April 1999, p. 8.
90 Above, pp. 4-5.
91 Supra.
92 Above, pp. 8 and 13.
93 Above p. 14.
94 Above, pp. 12-13.
95 Above, p. 9.
96 Above p. 14.
97 Above, pp. 13 and 14.
98 Supra.
99 Supra, pp. 13
100 T125 of 1985.
101 T7924 of 1998, Reasons for Decision 23 April 1999, p. 9.
102 T8415 of 1999, transcript 10/5/00, p. 43.
103 T7924 of 1998, Reasons for Decision 23 April 1999, pp. 8 and 9.
104 Supra, p. 8.
105 Supra, p. 8.
106 Supra, p. 2.