T9360
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act, 1984 The People Source Ltd and Paulina Martin
Appeal - decision by Abey C in Matter T9185 of 2000 - Appeal Grounds 1, 2 and 3 dismissed - Appeal Ground 4 upheld - Order revoked - new Order issued [1] This is a notification of appeal, pursuant to s. 70(1)(b) of the Industrial Relations Act, 1984 (the Act), by the Tasmanian Chamber of Commerce and Industry (TCCI), on behalf of The People Source Ltd trading as North Western Group Training (the employer), against a decision of Commissioner Abey in Matter T9185 of 2000. That matter was an application, pursuant to s.29(1)(A)(a) of the Act, by Paulina Martin alleging that her termination by the employer was unfair and unjust. Ms Martin sought re-instatement or, if the Commission determined that re-instatement was not practical, an appropriate payment by way of compensation. [2] Commissioner Abey found: 1. That an offer of full time employment was made to Ms Martin and was made in precise terms of a $34,500 per annum salary, a car with petrol and a telephone. The commencement date of that employment was to be the 22 August 2000. 2. All the essential elements of a valid contract of employment had been satisfied. 3. The contract, though validly made in terms of the law, did not in practical terms commence. 4. The CEO of the People Source became involved on or about 1 September 2000 and challenged the financial viability of employing Ms Martin in any capacity. 5. The employer did have a valid reason for terminating Ms Martin. That reason was, the employer had formed the view that it was not financially viable to continue her employment in any capacity. 6. The termination was both unfair and unjust and the applicant was entitled to an appropriate remedy. 7. Given the employer had determined that it was not financially viable to maintain any additional position in the Hobart office, the primary remedy of reinstatement was not practical nor possible. 8. There was a clear case for compensation. 9. As Ms Martin was not given any notice, six weeks pay was reasonable, [which equated to an amount of $3,980.00]; and a further $2,220.00 for losses incurred by Ms Martin. [3] The grounds of appeal, as filed, were as follows: It was claimed that the Commissioner: 1. Erred in mistaking the facts as presented. 2. Erred in taking into account some information presented to him. 3. Erred in making a finding not reasonably open to him. 4. Erred in the amount of compensation determined and was excessive in light of the circumstances. [4] On 15 January, 2001, Solicitors for Ms Martin wrote to the TCCI in the following terms: "I refer to the appeal lodged in the Tasmanian Industrial Commission on 2nd January, 2001. Further particulars of the grounds of appeal are required to enable the respondent to adequately prepare her case when the appeal is heard. Accordingly, within 7 days, would you please provide the following further particulars: 1. In relation to ground 1 of the appeal, please advise what facts presented did the Commission mistake; 2. In relation to ground 2 of the appeal, please advise what information presented to the Commissioner was wrongly taken into account" [5] The TCCI responded as follows:
The Commissioner erred inasmuch as: [6] 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. [7] Mr Mazengarb, appearing for the TCCI on behalf of the employer, referred to the principles established in the decision of the High Court in House v The King (1936) [55 CLR 499, at 504-505 per Dixon, Evatt and McTiernan] which provides: "It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts if he does not take into account some material consideration, then hi determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure to properly exercise the discretion which the law reposes in the court of first instance. In such case although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred." [8] Appeal Grounds 1 and 2: the Commissioner erred in mistaking the facts as presented; and (b) erred in taking into account some information presented to him. [9] Mr Mazengarb dealt with Appeal Grounds 1 and 2 together. He submitted that the Commissioner had erred by taking into account what he believed was `in the mind of the parties' and referred to that part of the Commissioner's findings which state: "The only formal documentation in relation to an offer of employment is the letter dated 21 August, 2000 and received by Mrs Martin on 25 August. This is an offer of employment of three days per week for two weeks to a maximum of 42 hours in total. In my view it defies rational thought that this was all that was in the minds of the parties when Mrs Martin commenced on 22 August. I say this for the following reasons....."1 [10] We do not accept that submission. It is clear from the decision that the Commissioner has made this comment taking into account all of the evidence and has not relied on one single issue. The Commissioner said in his decision that "to suggest that it [the offer of employment letter] should stand alone as the only material consideration flies in the face of the evidence."2 [11] Further it was submitted that the Commissioner had erred by saying that the letter of employment contemplates something more than it states, which was a contract for a specified period of casual employment which was to cease on 1 September, 2000. It was said that the letter of employment was a "standard pro-forma template or letter"3 and was an inherent part of the employment procedures used by the employer. [12] We do not dispute that such is the case but the letter has to be considered with all of the other evidence and not in isolation. Ms Martin's potential employment had been the subject of a number of meetings with both Mr Wells and Mr Ellis, to the point that she had resigned from one of her other positions on the basis that to continue with that other employment would give her less time to "commit and do justice to this [new] position......in the hope of building it into a profitable business and career"4. [13] Further it was the evidence of Ms Martin that she was offered a full time position as there was no longer a part time position available. She also testified that she had been introduced to clients as the person taking over from the previous Manager [Mr Ellis]. It was her evidence that initially however she would work in a casual/part-time position to "shadow" Mr Ellis, but also that there had been discussion about the salary and conditions which would apply when she commenced her full time position. [14] The evidence of Mr Ellis supports Ms Martin in that discussion took place as to when she was to commence work. [15] The offer of employment was initiated by the employer as the workload in the Hobart office had increased to the stage where assistance was required. There was then a series of events which changed fundamentally the original position which prevailed when the initial offer of employment was made to Ms Martin. Nevertheless the evidence supports Ms Martin's view that there was an expectation of work into the future. We reject Mr Mazengarb's submission that the evidence does not reveal an expectation of future work for Ms Martin. [16] The Commissioner had the advantage of hearing the evidence of the witnesses and has preferred the sworn evidence of Mr Ellis as to the offers of employment made to Ms Martin. Mr Wells testified that "I think it went astray as a result of somebody making a job offer when they weren't authorised to do so"5 which would suggest that an offer of employment, over and above the two week arrangement referred to in the letter of offer, had in fact been made to Ms Martin. [17] For the above reasons we dismiss Appeal Grounds 1 and 2. [18] Appeal Ground 3: the Commissioner erred in making a finding not reasonably open to him. [19] We are not satisfied that Mr Mazengarb has established that the Commissioner erred in making a finding not reasonably open to him. Having considered the submissions and after reviewing the transcript, we are of the view that the particular findings made by him were reasonably open to him on the evidence and in balancing the range of considerations arising from that evidence. Therefore, we dismiss this ground of appeal. [20] Appeal Ground 4: the Commissioner erred in the amount of compensation determined and was excessive in light of the circumstances. [21] The appellant contended the Commissioner erred in the amount of compensation determined and was excessive in light of the circumstances. [22] Mr Mazengarb contended the Commissioner erred in determining that six weeks was reasonable notice and he said it was excessive. [23] He said the Commissioner had not taken into consideration the fact that Mrs Martin was engaged under a fixed term casual contract from 22 August to 1 September 2000. [24] He submitted it was inappropriate to award Mrs Martin compensation based on her resigning from one of her part-time jobs, which resignation was not as a consequence of the approach by The People Source. [25] Mr Mazengarb requested the order be revoked pursuant to s71(13)(a) of the Act. [26] Mr Bronstein in response, submitted there was no legal limit on the maximum or minimum amount of compensation that can be awarded by the Commissioner. [27] He said the amount of compensation awarded by the Commissioner correctly identified the actual loss in weekly amounts in that the employee resigned one of her part-time positions. In support of this contention he relied on Whelan v National Mine Management6 and Johnstone v Woodward7. [28] In support of his submission that six weeks notice was reasonable in the circumstances of this case, Mr Bronstein took comfort from Fellows v Lloyds North8; Loosemore v Pitt & Sherry Holdings9; and Allie v Island Block & Paving10. [29] When dealing with the issue of a "global award" of 25 weeks determined by the Commissioner, Mr Bronstein submitted there was no limit imposed by law and it was up to the Commissioner to exercise his discretion accordingly and he cited Smith v Classic Video Pty Ltd11. This decision resulted from a finding that there was no valid reason for termination. [30] Mr Mazengarb's submission only concentrated on Mrs Martin's very short casual contract of employment from 22 August to 1 September 2000 and failed to reflect on the finding of the Commissioner that the offer, in respect of full-time employment, had satisfied "all the essential elements of a valid contract of employment...."12 [31] In our view, the contract of employment the Commissioner found was terminated by the employer and which gave rise to the order under appeal, was the "offer of full-time employment .....made to Mrs Martin..... in the precise terms of a $34500 per annum salary, a company car with petrol and telephone."13 [32] The Commissioner at first instance found that "the employer did have a valid reason to terminate Mrs Martin" as "the employer had formed the view that it would not be financially viable to continue her employment in any capacity, let alone in a full-time role."14 [33] Having made that finding, we would have to conclude that the valid reason for termination was based on the operational requirements of the employer and therefore should have be treated as a redundancy. [34] The ILO Convention concerning Termination of Employment at the Initiative of the Employer provides in Article 11, Period of Notice, that: "A worker whose employment is to be terminated shall be entitled to a reasonable period of notice or compensation in lieu thereof, unless he is guilty of serious misconduct ..." and in Article 12 that: "A worker whose employment has been terminated shall be entitled, in accordance with national law and practice, to: (a) a severance allowance or other separation benefits, the amount of which shall be based inter alia on length of service and the level of wages..........." [35] In Geoffrey Gerald Corrigan v Kelair Pumps Australia Pty Ltd15 a Full Bench of the Commission stated: "We do not think that the Act or the ILO Convention envisages that an employee whose employment is terminated as the result of redundancy is entitled to compensation. The wording of Article 12 when compared with Article 10, which deals with unjustifiable or unfair termination, is directed at a payment based on length of service and the level of wages whilst Article 10 provides for reinstatement or, if reinstatement is found not to be practicable, compensation. Section 31 of the Act is at pains to reflect the ILO Convention and it too confines an order for compensation to the situation where an employee has been unfairly dismissed and where reinstatement is impractical (see s.31(1B)). As we have mentioned previously s.31(1C), which deals with orders in respect of industrial disputes relating to termination resulting from redundancy, allows for orders to be made only in respect of severance pay, not compensation." [36] As the decision appealed against was made prior to the proclamation of the Industrial Relations Amendment Act 2000, we concur with the finding in Corrigan v Kelair Pumps Australia as being relevant in this matter. [37] When determining the amount to be awarded to Mrs Martin, Commissioner Abey considered (a) notice and (b) compensation for losses he found she incurred. [38] In respect to the first component, we believe he correctly applied the ILO Convention, Article 11 Period of Notice, and the appellant failed to satisfy us that the he erred in the exercise of his discretion. We have considered the references, relied on by Mr Bronstein, going to reasonable notice and conclude that six weeks, in the circumstances of this case, is appropriate. Therefore we are not prepared to interfere with that part of Commissioners order. [39] With regard to the second component, however, we are of the view that the Commissioner misdirected himself on the question of compensation. Given his finding, that is, there was a valid reason for termination as it would not be financially viable to continue Mrs Martin's employment, he should have directed his attention to the ILO Convention, Article 12 Severance Allowance. [40] Therefore it must follow that the Commissioner erred in awarding compensation for losses incurred by Mrs Martin and we find accordingly. [41] We also reject the submission of Mr Bronstein going to the question of calculating loss of earnings for the purpose of compensation and applying the tests in Whelan v National Mine Management16 and Johnstone v Woodward17. [42] In the case of Whelan, we do not believe it has relevance, as the applicant in that matter had his contract of employment reinstated. Similarly with Johnstone, the applicant in that matter was awarded compensation where it was found that reinstatement was impractical, in which case there was a reliance on ILO Convention, Article 10. [43] As stated earlier, Article 12 provides that a worker whose employment has been terminated shall be entitled to a severance allowance based, among other things, "inter alia on length of service and the level of wages". When that principle is applied to the unique circumstances of the applicant in the original hearing, she would not have been entitled to any severance allowance because service with the employer had not commenced. [44] Therefore it must follow that we uphold Appeal Ground 4 and, pursuant to s.71(13)(a), revoke the order of Commissioner Abey dated 7 December 2000, arising out of application T9185 of 2000, and substitute it with the following order, which grants the six weeks pay in lieu of notice as determined by Commissioner Abey. ORDER [45] PURSUANT TO the powers conferred on the Commission by Section 71(13)(b) of the Industrial Relations Act 1984 WE HEREBY ORDER that The People Source Ltd trading as North Western Group Training, 14A Industrial Drive, Ulverstone 7315 pay to Mrs Paulina Martin of 27 Mellifont Street, West Hobart 7000 an amount of three thousand nine hundred and eighty dollars [$3980]. We further order that such payment is to be made within 7 days of the date of this decision.
P L Leary Appearances: Date and Place of Hearing: 1 Original Decision p15 |