T9287
TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Kenneth James Farrell and The Crown in Right of State of Tasmania
Appeal against order handed down by Commissioner P C Shelley on 1 November 2001 in Matter T9147 of 2000 - identification of employer - jurisdiction to enforce instrument of appointment - period of notice - hearsay evidence - procedural fairness - appeal dismissed - decision confirmed REASONS FOR DECISION Introduction (1) These proceedings concern an appeal against a decision of Commissioner Shelley on 1 November 2000.1 The hearing at first instance dealt with an application lodged by Kenneth James Farrell alleging that he had been unfairly dismissed by his employer, the Crown in Right of State of Tasmania, through Office of the Leader of the Opposition. In the case at first instance, Mr Farrell was represented by Mr R Young, a legal practitioner. In the appeal proceedings Mr Farrell represented himself. Background (2) The background to this dispute was described in Commissioner Shelley's decision as follows:2
Commissioner Shelley's Findings (3) Commissioner Shelley initially determined a jurisdictional question and an application for extension of time. Neither of these decisions are subject to the appeal proceedings. In dealing with the merits of the application the Commissioner made a number of findings which can be summarised as follows: Valid Reason (4) The requirement of a senior politician to obtain one kind of advice, in preference to another, falls within the test of what "operational requirements" means. The work performed by Mr Farrell was no longer required in the restructured environment. (5) Mr Farrell was dismissed for a valid reason, which was a genuine redundancy situation arising out of the operational requirements of the Office of the Leader of the Opposition, and in this respect the dismissal was not unfair. Severance Pay (6) The six weeks' severance pay calculated in accordance with Schedule 3 of Mr Farrell's Instrument of Appointment equated to four weeks' pay for each year of service or part thereof. The schedule was consistent with Article 12 of ILO Convention 158 and in the circumstances the amount of severance pay was fair. The "Contract" of Employment (7) Because the Instrument of Appointment contains a clause which gives the unqualified right to either party to terminate the contract at any time upon the giving of two weeks' notice without reason, and it contains a term which provides for severance pay in the circumstances, Mr Farrell's contract is not a fixed term contract. The date of expiry [i.e. 31 October 2002) or the termination of the Government, does no more than state the maximum duration of the contract. The Martin Case3 (8) There are many more differences between Martin and the instant case than there are similarities. In particular, Mr Martin was immediately removed from his employment and hence given no opportunity to persuade his employer to reconsider his termination. This can be contrasted with Mr Farrell's situation in that he had five months in which to try and influence the final outcome. Notice (9) The ILO Convention requirement for a worker to be given a reasonable period of notice applies to the commonsense every day understanding of what notice is. It should not be vague or equivocal and should clearly specify what it is that is going to happen. The Commissioner was of the view that Mr Farrell knew that his employment was going to be terminated five months prior to the date of termination, and that he accepted this as notice. In the circumstances Mr Farrell was given reasonable notice consistent with the terms of the ILO Convention. The Formal Notice Required by the Instrument of Appointment (10) The Commission does not have jurisdiction to enforce the terms of the Instrument of Appointment. (11) It is accepted that the formal notice given by letter dated 22 June 2001 fell short of the two weeks required by the Instrument of Appointment. Whilst there was no evidence either way as to whether Ms Hornsey had a delegation from the Premier, it was a reasonable assumption that she had been instructed to so act by the Premier. (12) The contention that a deficiency in the formal notice meant that there is no notice, is rejected as the Commissioner had already found that reasonable notice had been given consistent with the requirements of the ILO Convention. Procedural Fairness (13) Mr Farrell was given clear reasons for his termination and ample opportunity to try to persuade Mrs Napier to reconsider her position. The evidence was that Mr Farrell did not indicate an intention to challenge the decision until after the date of termination. There was therefore no breach of procedural fairness. (14) The only aspect of Mr Farrell's dismissal which was unfair was that he did not receive an additional week of employment in accordance with the formal notice requirements of the Instrument of Appointment. Apart from that the dismissal itself was not unfair, either procedurally or substantively. Other Issues (15) Comments attributed to other members of the Liberal Party, to the effect that they disagreed with Mrs Napier's decision, were hearsay only and not relevant to the industrial questions to be decided. Remedy (16) In settlement of the industrial dispute, Mr Farrell should be paid one weeks' wages. Mr Farrell was dismissed for a valid reason, paid reasonable severance pay, given reasonable notice and given the opportunity to put his case prior to his dismissal. The only unfairness to Mr Farrell was the failure in timing, by one week, in the issuing of his formal notice under the terms of the Instrument of Appointment. Grounds of Appeal (17) Mr Farrell lodged eight grounds of appeal but during proceedings withdrew one of them. The grounds for the consideration of this Bench are as follows:
(18) To be successful in an appeal, the appellant is required to demonstrate that the Commissioner at first instant: 1. made a legal error; 2. acted on a wrong principle; 3. gave weight to an irrelevant matter; or 4. gave insufficient weight to a relevant matter; or 5. made a mistake as to the facts; 6. or the decision was plainly unreasonable or unjust. (19) The guiding principles for the determination of appeals are found in the High Court judgement in House v The King [1936] 55 CLR 499, at 504-505 per Dixon J, Evatt J and McTiernan J which provides:
(20) On the authority of House v The King it is clear that it is not enough that members of an appellate bench, had they been hearing the matter in the first instant, may have formed a different view. There must be some error in the exercise of discretion in the first instance. (21) Similarly it is very clear that appeals in this jurisdiction do not proceed by way of re-hearing. The appellant must show where the Commissioner at first instance fell into error. This is an important consideration in this case as elements of the appellant's case certainly strayed into the area of a re-hearing. (22) A further difficulty is that the appellant chose to argue the grounds in a global sense with a number of contentions and themes recurring in more than one ground. (23) For these reasons we have chosen to depart from the normal procedure of considering each ground as a separate entity. Instead we have looked at the totality of Mr Farrell's submissions and summarised his major contentions. We have then considered a number of key questions which go to the heart of the original application and the appeal. Having determined those questions we then address the appeal grounds. The Appellant's Submissions (24) Having looked at the totality of Mr Farrell's submissions we have summarised his main contentions as follows: (25) Section 4[a] of the Instrument of Appointment requires the giving of two weeks' notice of termination. Mr Farrell was only given six or seven days' notice and therefore the termination was unfair. (26) Fairness does not have a dimension. It is either fair or it is not fair. There is no middle ground as it is impossible to know the outcome had the unfair event not occurred. The Commissioner erred in that she stated:4
(27) It is not open to the Commissioner to find that one aspect of the termination to be unfair, but that the termination overall was not unfair. (28) What might be seen as a small administrative glitch can have serious consequences. There was no evidence that Ms Hornsey was the Premier's delegate in purporting to effect the termination, and in any event the letter from Ms Hornsey5 did not actually terminate his employment. Just because an administrative glitch may appear minor does not make it any less unfair. In the absence of evidence the Commissioner erred in finding that Ms Hornsey did have a proper delegation from the Premier. (29) There is ambiguity in the Instrument of Appointment. Clause 1[a] states:
(30) Whereas Clause 4(a) states:
(31) In 1[a] shall can only be read as must. There is clearly ambiguity between the two clauses and we don't know which takes precedence. In these circumstances the doctrine of contra preferentum is important. This doctrine states:6
(32) It follows that as the instrument was drafted by the Government, any ambiguity should be resolved in favour of Mr Farrell. The two clauses are in conflict and therefore 4[a] should be ignored and 1[a] relied upon. (33) The actions of Mrs Napier on 1 February, and subsequently, were contrary to ILO Convention 158 and in particular the absence of procedural fairness. Mr Farrell was not given any advance warning as to the subject matter of the meeting and was therefore denied the opportunity to prepare his response. He was not consulted on the proposed restructure nor was he given an opportunity to demonstrate his own capacity to perform in the restructured role. He was effectively presented with a fait accompli and talks or exchanges after the event could not be construed as consultations as the Commissioner seemed to suggest. (34) The letter of 2 February was no more than a statement of intent that something would happen in the future and the law distinguishes between an intent and the actual implementation of that intent. Mrs Napier did not have the power to implement a termination as the Instrument of Appointment made it clear that it was only the Premier, or his delegate, who had such authority. A notice of intention to do something carries no weight unless that person has the power and authority to deliver on that intention. Moreover the letter did not give any reasons for his termination. (35) It was not the actions of Mrs Napier which were important but rather the actions of the Government, and in particular the role of the Premier. There can be no doubt that the Government perceived itself as Mr Farrell's employer as evidenced by the rejection of his application for unpaid leave. (36) The Crown had a clear duty of care to ensure that the termination was fair and reasonable and in accordance with the law and the Instrument of Appointment. This would involve ensuring that the office restructure was genuine, that there was a revised Position Description, and then an assessment as to whether Mr Farrell was capable of filling that role. This did not occur and the Commissioner fell into error because she did not assess whether the Premier had exercised a proper duty of care. (37) Because this case involved two political parties who are diametrically opposed, then the formalities ought to be observed with scrupulous care. There is no room for error or the tiniest bit of uncertainty. Mr Farrell expressed it in these terms:7
(38) It followed that any tribunal to be scrupulously fair should err on the side of the weaker party in the proceedings. (39) The Commissioner erred in finding that there had been no breach of procedural fairness. (40) The Commissioner erred in that the whole tenor of the decision was that Mrs Napier had the authority to terminate Mr Farrell's employment. Any deficiency in the process is the responsibility of the Government, not Mrs Napier. (41) Employers, including political leaders, do have the right to choose who they wish to employ. They do not, however, have the right to fire people for no apparent reason. The law relating to termination of employment applies, not just the Instrument of Appointment. If there were different rules applicable to Mr Farrell's contract of employment, they would have been spelt out in the Instrument of Appointment. The Commission erred in not concluding that Mr Farrell's rights as an employee were protected and should have been applied by the Government. (42) The decision was defective in that it does not explain why it has apparently chosen to give little weight to some aspects and heavy weight to others. To use the term "in all the circumstances" is not good enough. (43) The decision contained a number of inconsistencies or factual errors. The following are examples:
(44) The 2 February letter from Mrs Napier was vague and equivocal in that it did not specify when and what action would be taken by whom to terminate Mr Farrell's employment. In fact there is no evidence that Mrs Napier ever did take action to terminate his employment. Even if she had done so, there was no certainty that the employer (the Government) would have accepted Mrs Napier's recommendation. (45) The Commissioner erred in not putting the onus firmly on the Government [as the employer] to show that the termination was fair. The Key Issues (46) The original application and this appeal turn on a number of critical issues. In this section we identify and consider these key questions. 1. Who was Mr Farrell's Employer? (47) There can be no doubt that the decision to terminate Mr Farrell's services was taken and initiated by Mrs Napier. (48) Mr Farrell's Instrument of Appointment was signed by the Governor. Clause 4[a] of this document states:
(49) Mr Farrell submitted that his employer was clearly the Crown, meaning either the Premier or his delegate. Mrs Napier did not have the power to terminate his services and Commissioner Shelley was wrong in finding that she did have such power. It followed that the Crown had a clear duty of care to ensure that the termination was fair and reasonable and in accordance with the law and the Instrument of Appointment. (50) Relevant to this question Commissioner Shelley said:11
(51) In dealing with this question Commissioner Shelley was required to have regard for the ILO Convention together with the underpinning notion of a fair go all round. In our view the Commissioner was correct in finding that Mrs Napier had the authority to commence the process. Mr Farrell is also correct in his contention that only the Premier [or his delegate] could formally terminate his employment. (52) The question before Commissioner Shelley was not one of who was the employer in a strict legal sense, but rather, whether Mr Farrell was unfairly dismissed. In our view the over-riding consideration must be the realities of the employment arrangements. (53) Even if we accept that in a strict legal sense Mr Farrell's employer was the Premier, the reality is that he took his day-to-day work instructions from Mrs Napier. He would not have been employed in the first instance if Mrs Napier [or her predecessor] had not taken the initiative to do so. Mr Farrell would not be terminated if Mrs Napier had not initiated the action. (54) For the Premier to inquire into the veracity of the office restructure and the revised Position Description, and then assess Mr Farrell's suitability for the position, not only flies in the face of reality, but could also give rise to a major political incident. (55) In assessing whether Mr Farrell's termination was unfair, the over-riding consideration must be the actions taken by, and the behaviour of, Mrs Napier. 2. Is There Ambiguity in the Instrument of Appointment? (56) Clause 1[a] of the Instrument of Appointment reads as follows:
(57) Clause 4[a] of the same document reads:
(58) Mr Farrell submitted that there is a clear ambiguity between these two clauses and in accordance with the doctrine of contra preferentum, any ambiguity should be resolved in his favour. Indeed Mr Farrell asserted that we should ignore clause 4[a] and rely on 1[a] alone.13 (59) To adopt Mr Farrell's position of ignoring 4[a] would of course lead to the untenable position whereby Mr Farrell's ability to resign his own position on the giving of two weeks' notice would be removed. This clearly would be contrary to the intent of the contract as freely entered into by the parties. (60) We do not consider there is any ambiguity between the two clauses. We concur with the finding of Commissioner Shelley14 whereby she said that the term of appointment in clause 1[a] does no more than state the maximum duration of the contract. When that event occurs, the contract automatically comes to an end without any action required on the part of the employer. Clause 4[a] sits quite comfortably in that it simply allows either party the option to terminate the contract part way through the term specified in Clause 1[a]. Where the termination is initiated by the employer, a severance payment is also required. 3. Does the Commission Have Jurisdiction to Enforce the Terms of the Instrument of Appointment? (61) Much of the argument at first instance revolved around alleged breaches of the Instrument of Appointment and administrative procedures arising from this document. The question of unfairness was raised by the applicant very late in the proceedings, largely in response to questioning from Commissioner Shelley. (62) In these proceedings Mr Farrell submitted that "fairness" does not have a dimension. It is either fair or it is not fair and there is no middle ground. He instanced the fact that the formal notice required by the Instrument of Appointment fell short by approximately one week. This was both unfair and meant that the contract was a nullity. It followed that damages were at large. (63) In the earlier proceedings counsel for Mr Farrell contended that in such circumstances the appropriate remedy would be payment of salary for the balance of the contract, plus a component for loss of opportunity to renew the contract. In the case of Mr Farrell this amounted to a sum in the order of $200,000. (64) The notion of a quite minor administrative breach leading to damages being at large is something which is quite foreign to this jurisdiction. Commissioner Shelley found that the enforcement of the Instrument of Appointment was outside the jurisdiction of this Commission. We agree with this finding. This does not mean that the Commission could not deal with an industrial dispute, an element of which is an alleged breach of the Instrument of Appointment. Indeed Commissioner Shelley did just this in ordering, pursuant to s.31[1], that an amount equivalent to one week's pay be made in settlement of the shortcoming in the formal notice given. (65) We do not accept Mr Farrell's submission to the effect that there are no degrees of fairness. This Commission will for example view a minor and inadvertent procedural defect quite differently from, say, a gross denial of natural justice and will structure its remedies accordingly. (66) To a point there is some force in Mr Farrell's contention that, but for the unfair act, it is impossible to know what the outcome might have been. It is not difficult to envisage a situation whereby a minor administrative oversight might lead to a grossly unfair outcome. However we can only deal with facts of the given situation. In the instant case the administrative breach amounted to less than the required formal notice being given. We are quite satisfied that this administrative shortcoming did not in any way impact on the final outcome, that being the termination of Mr Farrell's contract of employment. 4. Was Mr Farrell Given Reasonable Notice of Termination? (67) The crux of this question is Mr Farrell's contention that notice of an intention to do something is not the same as actually doing it. He argued that Mrs Napier's letter of 2 February was no more than a statement of an intention to do something in the future. He asserts that there was no evidence that Mrs Napier ever actually did anything to activate this intention. We are unable to accept this. The letter from Ms Hornsey of 22 June did not materialise in a vacuum. Clearly Mrs Napier took some action at some point in time to give effect to her earlier stated intention. (68) Even allowing for what he saw as the defective nature of the 22 June letter, Mr Farrell contended that at best he was only given six or seven days' notice and the termination was therefore unfair. (69) On this question Commissioner Shelley said:15
(70) Later in the decision the Commissioner identified a number of examples from the evidence indicating that Mr Farrell accepted that his employment would be terminated. (71) In the hearing before Commissioner Shelley Mr Young said:16
(72) Whilst we accept that a distinction can be drawn between a statement of an intention to do something and actually doing it, the weight that should be given to this distinction must inevitably turn on the facts of any given situation. Importantly in this case there is no evidence at all that Mrs Napier at any stage between February and June 2000 may have been reconsidering the position. (73) We conclude that the approach and finding of Commissioner Shelley was correct and properly applied the provisions of the ILO Convention. 5. Was There Any Inconsistency in the Treatment of Hearsay Evidence? (74) Under the heading of "Other Issues" Commissioner Shelley expressed the view that comments attributed to certain members of the Liberal Party were hearsay only, and not relevant to the industrial questions to be decided. (75) Mr Farrell contended that the Commissioner was inconsistent in that she accepted, without supporting evidence, the word of Ms Hornsey to the effect that the Premier had approved the termination [letter of 22 June]. Mr Farrell also instanced the acceptance of his own recollection of the 1 February meeting with Mrs Napier [see letter of 13 February]. (76) In our view it was the two letters, rather than the comments contained therein, which Commissioner Shelley accepted into evidence. This is quite different from accepting as evidence comments which certain members of the Liberal Party had purportedly made. The veracity or otherwise of the contents of the letter is another question. The degree to which a Commissioner should pursue supporting evidence will depend on the substance of any challenge and the relative importance of the issue. (77) In relation to the Hornsey letter, there was no evidence either way as to whether the Premier had approved the termination, and Commissioner Shelley said that as Ms Hornsey was the most senior officer in the Department of Premier and Cabinet, it was reasonable to assume that the Premier had instructed her to issue the notice of termination. In relation to Mr Farrell's own recollection of events, no challenge had been issued by anyone as to their accuracy. In the circumstances we find that the approach of Commissioner Shelley to these issues was reasonably open to her. (78) We conclude that the Commissioner did not fall into error or apply an inconsistent approach in relation to the consideration of hearsay evidence. 6. What was the status of Mr Farrell's employment during the period 2 June to 3 July 2000? (79) By letter of 9 May Mr Farrell repeated his earlier request for leave without pay for the above period. The evidence suggests that Mrs Napier initially approved this application. However on 25 May Mrs Napier wrote to Mr Farrell in the following terms:
(80) In our view the extension of the period of employment was entirely conditional on Mr Farrell either providing details of "exceptional circumstances" or submitting an application for [paid] recreation leave. Mr Farrell chose to do neither but proceeded to travel interstate with his family in any event. (81) In the circumstances we consider that the subsequent treatment of this period as paid recreation leave is not unreasonable. 7. Was Mr Farrell Denied Procedural Fairness? (82) On this question Commissioner Shelley found as follows:17
(83) In the proceedings before this Bench Mr Farrell contended that procedural fairness had been denied in that he had no advance warning, was not consulted on the restructure which was presented as a fait accompli, and was not given the opportunity to apply for the new position. (84) In the normal course of alleged unfair dismissal applications, a submission along these lines would have considerable force. We also accept that the existence of Clause 4[a] in the Instrument of Appointment does not mean that the employer may act without reason and ignore procedural fairness. (85) Procedural fairness must of course be judged in the context of the environment in which the employment contract subsists. The standards of procedural fairness may well be different for a short term casual employee than it would for an employee of long standing with a soundly based expectation of ongoing employment until retirement. This is particularly so in respect of prior consultation. This was acknowledged by Commissioner Shelley when she said:18
(86) Arguably this very issue appears to be contemplated in the Instrument of Appointment in that a severance payment automatically applies when notice of termination is given. This is not something which is widely found in contracts of employment applying in more "normal" workplaces. (87) A further difficulty is that the aspects of procedural fairness advanced by Mr Farrell in the appeal proceedings appear to have been barely touched upon in the original hearing. Indeed Mr Young said:19
(88) We have little doubt that Mr Farrell told Mrs Napier that he considered her decision to be unfair. We are however unable to find where the submissions put to this Appeal Bench were made to Mrs Napier. Mr Farrell's letter of 13 February consists of a re-statement of what had occurred at the 1 February meeting. It did not challenge the validity of the termination or seek the opportunity to be considered for the restructured role. Indeed Mr Farrell agreed that this letter did not challenge the validity or the justness of the decision to terminate his employment.20 (89) That Mr Farrell did not wish to "rock the boat" whilst he was still in employment is understandable. Nonetheless, on the material that is before us, Mrs Napier could quite reasonably have been of the view that Mr Farrell, whilst unhappy with the turn of events, accepted the validity of the decision. (90) In all the circumstances we conclude that the approach and finding of Commissioner Shelley on this question was reasonably open to her. Conclusion (91) We are unable to conclude that any of the grounds of appeal have been made out. (92) Pursuant to Section 71[13] of the Act, the appeal is dismissed and the decision of Commissioner Shelley is confirmed.
P L Leary Appearances: Date and place of hearing: 1 T9147 of 2000 |