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T9442 and T9443

 

TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s70(1) appeal against an order

Australian Municipal, Administrative, Clerical and Services Union
(T9442 of 2001)

and

The Community and Public Sector Union
(State Public Services Federation Tasmania)

AND

The Community and Public Sector Union
(State Public Services Federation Tasmania)

(T9443 of 2001)

and

Australian Municipal, Administrative, Clerical and Services Union

 

FULL BENCH:
PRESIDENT P L LEARY
COMMISSIONER P A IMLACH
COMMISSIONER P C SHELLEY

HOBART, 26 SEPTEMBER 2001

Appeal against order handed down by Commissioner T J Abey on 16 February 2001 in Matter T9153 of 2000 - jurisdiction of Commission in respect of a former employee - appeal dismissed - decision confirmed

REASONS FOR DECISION

[1] In Matter T9153 of 2000, Commissioner Abey found that the termination of the applicant Ms Carole Medcalf had been unfair and determined an award of twelve weeks' salary.

[2] Appeals against the decision of the Commissioner were lodged, pursuant to s.70(1)(b) of the Industrial Relations Act 1984 (the Act), by the Administrative, Clerical and Services Union (ASU) on behalf of Ms Medcalf and by the Community and Public Services Union (CPSU) as the employer.

[3] In considering the appeal, the Commission was 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 JJ] 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."

[4] We consider the grounds of the ASU appeal which were filed following a request for further particulars pursuant to s.71(2A) of the Act.

ASU APPEAL

[5] Appeal ground 1. The Commissioner erred by ordering a remedy that is unjust based on the weight of evidence before him.

[6] Mr Hanlon, for the ASU representing Ms Medcalf, submitted that the Commissioner should have ordered reinstatement, rather than compensation in lieu of reinstatement.

[7] The Act, s 31(1B), stated, at the relevant time:

"If a Commissioner, in hearing an industrial dispute relating to termination of employment, considers that an employee or a former employee has been unfairly dismissed but reinstatement is impractical, the Commissioner, if of the opinion that it is appropriate to do so, may make an order requiring the employer to pay to the employee or former employee compensation of any amount, which the Commissioner determines appropriate."

[8] Mr Hanlon said that reinstatement is the primary remedy and that the impracticability had to be real and of some substance. There needs to be something substantial that prevents it.

[9] Mr Greuber, representing the CPSU, submitted that there was no indication that the Commissioner acted on a wrong principle in awarding compensation rather than reinstatement. Commissioner Abey was emphatically satisfied that reinstatement was impracticable.

[10] The Commissioner in the proceedings below had the advantage of hearing the witnesses and has exercised his discretion as to remedy. He has stated most cogently his reasons for electing the remedy he did, he was in the best position to make such an assessment of the likelihood of a possible working relationship being re-established. It was his assessment that such was not possible and he provided clear and concise reasons why the relationship could not be restored. He said:

"The evidence of Ms Medcalf was that she felt a working relationship could be re-established. The view of Ms Strugnell was diametrically opposed to this position. My own view is that there would be no prospect of recreating a workable relationship. In fact I would go so far as to say that this case represents the most profound breakdown of an employment relationship that I have yet encountered.",

and further:

"In everyday parlance, the organisation was not big enough to accommodate them both and something would inevitably have had to give."

[11] We detect no error in his reasoning and his assessment of the evidence before him. We disagree with the claim in appeal ground one that the Commissioner erred by ordering a remedy that was unjust on the weight of evidence before him. Appeal ground one is rejected.

[12] Appeal ground 2. The Commissioner failed to give adequate regard and weight to management's behaviour. In particular, to the `rude and inappropriate manner' in which the applicant was dismissed and escorted from the premises and to the obligation on the employer to provide employees with an unbiased representative of the employer to deal with such matters. The Commissioner gave inadequate weight to management's refusal to provide access to and implement the discipline process, and access to a grievance system and that as a consequence of the manner of the dismissal the termination was harsh, unjust and unreasonable.

[13] Appeal ground two relates to procedural fairness and the Commissioner found that there had been breaches of procedural fairness inasmuch as Ms Medcalf had not been made aware of the possible consequences of her actions in not complying with the employer's requirements. Further, that she had not been provided with copies of the offending e-mails nor given adequate time to respond to the allegations about those e-mails. He considered that the breaches to which he referred were `serious' rather than `technical'. We are satisfied that the Commissioner did give weight to all of the evidence and issues surrounding the termination of Ms Medcalf. The Commissioner in fact did find that the process undertaken by the CPSU in effecting the termination was unfair. We see no merit in this ground of appeal.

[14] Appeal ground 3. The Commissioner's findings that the employer had proven that a valid reason existed for the termination was not reasonably open to the Commissioner based on the evidence. Further the Commissioner did not determine or identify what the valid reason was that met the essential requirement.

[15] The Commissioner found that a valid reason existed for the termination of Ms Medcalf's employment and he identified the reason in his decision. He has referred to the allegations leading to the dismissal as falling into three (3) categories being: administrative/management, performance related and activities designed to undermine the union. Further, the Commissioner comments that:

"It follows that if the termination of Ms Medcalf was based solely on category 2 issues, or indeed category 1 and 2 combined, then I would find that the termination was unfair.

This takes me to the category 3 allegations. The issues involved here could be broadly described as activities calculated to undermine the union. Unlike categories 1 and 2, this takes us into an area which, if proven and procedural fairness was seen to be followed, would almost certainly constitute misconduct."1

He then summarises the conduct to which he refers in the following terms:

"derogatory towards management,

prima facie evidence that Ms Medcalf provided confidential documents to a newly elected member of the Council, and

prima facie evidence that Ms Medcalf was involved in inciting protests and encouraging members to resign."2

[16] Whilst not explicitly stated, it is clear from the decision that the valid reason the Commissioner refers to is misconduct and that the misconduct was activities undertaken which were calculated to undermine the union. We are of the view that there was ample evidence before the Commissioner to enable him to come to such a conclusion. We reject the ground of appeal.

[17] Appeal ground 4. The order in failing to reinstate Ms Medcalf is manifestly unjust and the conclusion that the reinstatement was impractical could not reasonably have been reached on the evidence before the Commission.

[18] Appeal ground four raised the issue of the Commissioner concluding that reinstatement was not a practicable relief for Ms Medcalf. This has been dealt with in appeal ground 1. The Commissioner, as we have noted earlier, had the benefit of hearing the witnesses at first hand and expressed the view that there would be no prospect of recreating a workable relationship. We reject appeal ground four.

[19] Appeal ground 5. The Commissioner's findings in regard to the future duration of Ms Medcalf's employment relationship were based on a number of assumptions not reasonably open to the Commissioner on the evidence.

[20] Next it was argued that the Commissioner's finding in respect to the future duration of Ms Medcalf's employment was based on assumption and not open to him on the evidence. We disagree; he had first hand experience as to the demeanour and behaviour of the parties, and, together with the evidence, his determination was open to him. Likewise, his observations about the type of employment in dispute and his comment that: "In everyday parlance, the organisation was not big enough to accommodate them both and something would inevitably have had to give", demonstrates an appreciation of the circumstances and are relevant to his considerations. Appeal ground five is rejected.

[21] Appeal ground 6. The Commissioner gave insufficient weight to the failure of the employer to adequately direct management and provide for an employee to be dealt with in accordance with the terms and conditions of their employment, the rules of the CPSU and the standards applying in the State Public Service.

[22] In appeal ground six it is claimed that the Commissioner did not give sufficient weight to the employer not providing for the terms and conditions of employment, the rules of the CPSU and standards applying in the State public sector. The Commissioner found that it was not clear which instrument in fact applied to Ms Medcalf's employment and said he had been guided generally by the spirit and intent of the disciplinary procedure applicable to the public sector. Such a conclusion was open to him in consideration of the evidence before him and the inconsistent nature of that evidence.

[23] Insofar as the claim that the employer did not adequately direct management - the Commissioner found that Rule 10 was sufficiently broad to enable the Executive to delegate the power to "hire and fire" and that the Executive had passed a resolution that was quite specific and validly made. In our view, it was open to the Commissioner, on the evidence, to form such a conclusion. We reject ground six.

[24] Appeal ground 7. The Commissioner erred by failing to adequately exercise the Commission's jurisdiction in accordance with the requirements of s.20 in regard to the prima facie evidence of the existence of the staff agreement. In addition the Commissioner failed to exercise the Commission's power under s.31 (1) exercising the obligation to ensure fair and full consideration is given to the parties.

[25] It is unclear to us exactly what is meant by this ground of appeal. The Commissioner determined that it was not clear which instrument of employment applied to Ms Medcalf and provided his reasons for so deciding . However, he said that he was inclined to think that the 1996 Agreement had some level of currency, but that it had not had a pivotal impact upon his ultimate findings on the fairness or otherwise of the termination of Ms Medcalf's services.

[26] Section 31.(1) requires a Commissioner presiding at a hearing to give the parties a reasonable opportunity to make any relevant submissions. After reviewing the evidence, the decision and the submissions during the appeal, we are satisfied that the Commissioner did afford the parties such an opportunity.

[27] We reject the terms of appeal ground seven. We can detect no error of jurisdiction in respect to s.20 of the Act. Likewise, the Commissioner has discharged his obligation under s.31(1) of the Act and has given full and fair consideration to the views expressed by the parties.

[28] Appeal ground 8. The Commissioner erred by mistaking and misapplying the facts in finding that there was authority to terminate the employment of Ms Medcalf other than in accordance with the process and practices required under the terms of her contract of employment.

[29] Appeal ground eight claims that the Commissioner erred by finding that there was no authority to terminate other than in accord with her contract of employment. Ms Medcalf's letter of appointment does not specifically provide a process for the termination of the employment relationship, however does state "that other terms and conditions are similar to those that apply in the state public sector generally". The Commissioner considered the termination in the following context:

"My conclusions are based on the well established rules of natural justice with particular regard to the procedures the CPSU would presumably expect to apply to their own members in similar circumstances. In this context I have been guided by the spirit and intent (but not the literal word) of the disciplinary procedural guide applicable to the Tasmanian public sector".

[30] Considering that the letter of appointment states that state public sector conditions will apply generally, other than where specified, the Commissioner has made no error and has applied the proper tests by considering public sector practices. We reject the ground of appeal.

[31] Appeal ground 9. The Commissioner erred by giving insufficient weight to and overlooked the principles in cases of unfair termination, the requirements of s.31 of the Act, the standards and practices of the State Service and the requirements of Article 8 of the ILO convention.

[32] In cases of alleged unfair termination the Commission must determine whether or not there was a valid reason for the termination and whether there was procedural fairness. The Commissioner has adequately canvassed these issues.

[33] We have already found (see appeal ground 7) that the requirements of s.31.(1) were met.

[34] Article 8 of the ILO Convention requires that a person who considers that his employment has been unjustifiably terminated shall be entitled to appeal against that termination to an impartial body, such as a court, labour tribunal, arbitration committee or arbitrator. The proceedings before this Commission meet the requirements of that Convention.

[35] Whilst the CPSU is not the public service and Ms Medcalf was not a state public servant, the Commissioner has adopted, as a guide only, the terms and conditions that apply in the state public sector as provided in Ms Medcalf's letter of employment. We consider this approach to be appropriate in the circumstances.

[36] We do not agree with the claims in appeal ground nine that the Commissioner overlooked and gave insufficient weight to the principles applied in unfair dismissal applications, the requirements of s.31, standards and practices of the state public service and article 8 of the ILO convention. We reject the appeal ground.

[37] Appeal ground 10. The Commissioner requested the representatives of the parties to address the Commission in regard to ownership of emails and the use of emails by employees. The Commissioner erred in exercising his jurisdiction in finding that the employer had a legitimate right to intercept private emails for which no evidence or authority was submitted."

[38] The Commissioner noted in his decision that this matter was "venturing into previously uncharted waters" (in his experience) in respect to the "ownership and privacy of e-mails". He found that "in the absence of any clear guidance that private e-mails, sent from an employer's computer, remain the property of the employer and in this context have the same standing as a hard copy file

[39] We agree that the Commissioner exceeded his jurisdiction in deciding that private emails, sent from an employer's computer, remain the property of the employer and have the same standing as a hard copy file. We express no view as to who the "owners" of such emails might be, other than to say that the Commissioner was not required to make any finding. No doubt this question will be the subject of litigation in jurisdictions other than this one. We uphold this ground of appeal, however, the ownership, or otherwise, of the private emails does not materially affect the Commissioner's substantive findings - that there was a valid reason for the termination and that there were breaches of procedural fairness.

[40] In response to the appeal grounds lodged by the ASU on behalf of Ms Medcalf, the CPSU submitted that appeal grounds one, four and five, addressed the remedy and the Commissioner's decision to award compensation instead of reinstatement. Further, that appeal grounds two, three, six, seven, eight, nine and ten all criticised the decision, notwithstanding that the Commissioner had found that Ms Medcalf's termination was unfair. Much of the submission of the ASU had been devoted to the issue of who was in fact the employer and whether Ms Medcalf had been terminated in the proper way by the organisation which had employed her.

[41] The CPSU in response submitted that the respondent to the ASU's application below was the CPSU (SPSFT Group Tasmania) and that the General Secretary has the power in respect to employment generally including the termination of employment. The Commissioner considered the submissions and evidence before him in respect to the termination being within the rules of the CPSU and found that it was not improperly made by reason that it was effected by the General Secretary rather than the Branch Council. We agree with the submission of the CPSU that if the Commissioner was wrong on that point, and we don't accept that he was, it would lead to absurd results such as none of the CPSU employees, other than elected officials, being properly employed, likewise there would have been no employment of Ms Medcalf which could be terminated.

[42] The CPSU further submitted that the Commissioner made no error, did not act on a wrong principle, did not rely on any irrelevant or extraneous matters in awarding compensation instead of reinstatement. "There was no mistake of fact and there were no material considerations that were not taken into account." Mr Grueber referred to the statement of the Industrial Relations Court in Nicholson v Heaven & Earth Gallery Pty Ltd where Chief Justice Wilcox, as he then was, said:

"It is important to note that Parliament stopped short of requiring that, for general compensation to be available, reinstatement be impossible. The word `impracticable' requires and permits the court to take into account all the circumstances of the case, relating to both the employer and the employee, and to evaluate the practicability of a reinstatement order in a commonsense way. If a reinstatement order is likely to impose unacceptable problems or embarrassments, or seriously affect productivity, or harmony within the employer's business, it may be `impracticable' to order reinstatement, notwithstanding that the job remains available".3

[43] We have indicated that the determination of the Commissioner to award compensation rather then reinstatement was open to him.

CPSU APPEAL

[44] Appeal ground 1. The Commissioner erred in failing to find that Ms Medcalf's employment had been lawfully terminated by notice pursuant to s.47 of the Act.

[45] Section 47(2) of the Act applies only where an employee's conditions of employment are not regulated by an order, award, determination or agreement having effect under any Act. The relevant part in relation to notice is subsection (2), which specifies minimum notice periods, based upon the pay periods .

[46] The Commissioner found that there was some contradiction about what instrument of appointment actually applied to Ms Medcalf and determined that on the evidence before him, which he conceded was not conclusive, that the 1996 agreement had some level of currency. The Commissioner, in effect, made no determination as to which, if any, unregistered agreement applied. It was not his finding that no agreement applied.

[47] He did find that a clinical application of s.47 would have been an incorrect approach to adopt and referred to comments made by Robinson DP in the Ryan case which said: "In adopting the terms of settlement of the dispute I would strongly advise the TPSA to have regard for the provisions they would expect to apply to their own members who were made redundant in similar circumstances....."

[48] The CPSU chose to give Ms Medcalf the four weeks' notice as specified in her termination letter. It does not fall to the Commission to interfere with that action on the part of the employer, and the Commissioner made no Order as to notice. In our opinion, it was not necessary for the Commissioner to make a finding that Ms Medcalf's employment had been lawfully terminated by notice pursuant to Section 47 of the Act. That was not a question he was asked to determine, nor was it necessary given the fact that the employer chose to terminate the employment by notice otherwise than that provided for in s.47.

[49] We do not think that a finding that Ms Medcalf's employment was terminated in accord with the terms of an agreement the employer observed, albeit a non registered agreement, rather then in accord with s.46 and s.47 of the Act is fatal to the Commissioner's decision.

[50] Mr Grueber, for the CPSU, referred to a number of authorities which considered s.46 and s.47 of the Act, however the relevance of those are limited in light of our findings. Mr Hanlon, for the ASU, relied on the decision in Australian National Hotels Pty Limited v Jager,4 where it was said at page 6:

"However, the authority does not preclude the finding that a term can be implied by virtue of the conduct of the parties and that if such a term can be found it is not vitiated by the Act, s47".

[51] Commissioner Abey also made the observation that the submission that Ms Medcalf's employment was not bound by an agreement, leaving it subject to s.47 of the Act "does not sit comfortably with the evidence."

[52] We reject appeal ground 1.

[53] Appeal ground 2. The Commissioner erred in finding that the termination of Ms Medcalf's employment was unfair by reason of the employer's failure to make clear to Ms Medcalf the consequences of not complying with the employer's requirements.

[54] Appeal ground two relates to the Commissioner finding that the termination was unfair due to the employer's failure to inform Ms Medcalf of the consequences of not complying with its requirements. The CPSU argued that it had afforded Ms Medcalf more than adequate procedural fairness, that as an experienced industrial officer it should have been obvious to her that her behaviour and activities could result in her termination. The elements of procedural fairness are a moveable feast and depend on the facts of each case, that procedural fairness should be expected; not procedural perfection. We agree with Mr Grueber's concept, but, in consideration of the matter before us we are satisfied that the finding of the Commissioner was one that was reasonably open to him in the circumstances of this matter.

[55] The unchallenged sworn evidence of Mr Paterson confirms the Commissioner's finding. Mr Paterson testified:

"Nothing was raised at that point in time that indicated there was any cause for concern held by the employer that would warrant termination, so in those terms at the end of that meeting, I had two things. I had an assurance that the employment was not at risk and there hadn't been any matters identified by the CPSU, as the employer, that would have given me reason to believe that a disciplinary process potentially resulting in termination was about to be initiated."

[56] We detect no error in the Commissioner's finding in respect to this ground of appeal.

[57] Appeal ground 3. The Commissioner erred in finding that the termination of Ms Medcalf's employment was unfair by reason of the employer's failure to provide Ms Medcalf with hard copies of the offending e-mails.

[58] In respect to appeal ground three, the Commissioner found that it was unfair for the employer not to have provided Ms Medcalf with the offending e-mails to allow her the opportunity to offer some response to the allegations made by the employer. As a matter of procedural fairness an employee should be given adequate time and an opportunity to respond to allegations made by an employer and should be fully informed as to those allegations. The finding by the Commissioner that the employer had acted unfairly in not providing the offending e-mails was unfair was one that was open to him in the circumstances of this matter and we reject the ground of appeal.

[59] Appeal ground 4. The Commissioner erred in finding that the termination of Ms Medcalf's employment was unfair by reason of the employer's failure to provide Ms Medcalf with adequate time to respond to the e-mail.

[60] Appeal grounds two, three and four are similar and our general comments are relevant to each ground of appeal. Appeal ground four is rejected as we are of the view that the finding was one reasonably open to the Commissioner on the evidence before him.

[61] Appeal ground 5. The Commissioner erred in finding that Ms Medcalf had made serious efforts to mitigate her loss.

[62] The Commissioner found that Ms Medcalf had made serious efforts to mitigate her loss, appeal ground five claims that there was no evidence to support such a finding and accordingly that the Commissioner had erred in such finding. Mr Hanlon, for the ASU, agreed that there was no evidence in the proceedings below to support the finding.

[63] We uphold appeal ground five as we are unable to discern any evidence on the record to support the finding that Ms Medcalf had made serious efforts to mitigate her loss. We are not prepared, however, to interfere with the compensation ordered because in determining an appropriate remedy, mitigation of loss is only one of the considerations that Commissioner Abey took into account. He refers to "all of the circumstances".

[64] Appeal ground 6. The award of twelve weeks salary was excessive in all the circumstances.

[65] Having found that the termination of Ms Medcalf was unfair the Commissioner decided that reinstatement was not a practical option and elected the remedy of compensation. In so doing he was of the view that there was little likelihood of the employment relationship, had it not been severed, of being long term and awarded twelve weeks' salary be paid to Ms Medcalf. The Commissioner, with the first hand advantage of the proceedings below, was able to make such finding, he also found that Ms Medcalf was not entirely blameless for the ultimate dismissal.

[66] The CPSU submitted that Ms Medcalf was entitled only to two weeks' notice as provided by s.47 of the Act, she had received payment in excess of that and accordingly the Commissioner's award was excessive.

[67] We have already considered the question of notice and s.47 of the Act in appeal ground 1.

[68] The amount of compensation to be awarded is discretionary. The Commissioner has referred to the factors he took into account when determining the amount of compensation to be awarded. Mr Greuber submitted that the amount of compensation was inflated by what the Commissioner referred to as Ms Medcalf's efforts to mitigate her loss. There is nothing in the decision of the Commissioner to indicate what weight he gave to each of the factors he took into account when determining compensation.

[69] This appeal ground is rejected.

[70] We confirm the decision of Commissioner Abey; however we do so acknowledging that there were errors detected in his decision and approach. Nevertheless those errors were not of such a nature to cause us to reduce the amount of compensation he awarded. In upholding the ASU appeal ground 10 we have said such error did not materially affect the Commissioner's findings. Likewise in upholding CPSU appeal ground 5 that Ms Medcalf had made efforts to mitigate her loss we did so as there was no evidence on the record to support such a finding. We note that the transcript of the appeal proceedings discloses that the matter was discussed in conference and we agree with the submission of Mr Grueber that "it's not fair for the Commissioner to have taken into account matters which were put to him in conference."

[71] We agree with the Commissioner that the allegations in this matter were unusual and serious. He supports his award of twelve week compensation by expressing the view that it would be expected that unions, as employers, would treat their own employees in the same way that they would expect their members to be treated by any other employer, nevertheless he found that Ms Medcalf had been denied procedural fairness and that the breaches were "serious rather than technical."

[72] Whilst it may not be clear precisely how the Commissioner reached the amount of compensation set out in his order, it does not appear to us to be unjust or unreasonable in all of the circumstances of this case.

[73] Accordingly we confirm the decision of Commissioner Abey.

 

P L Leary
PRESIDENT

Appearances:
Mr D Hanlon for the Australian Municipal, Administrative, Clerical and Services Union with Ms C Medcalf
Mr R Grueber, legal practitioner, with Ms S Strugnell and Mr T Lynch, for The Community and Public Sector Union (State Public Services Federation Tasmania)

Date and place of hearing:
2001
May 28
July 13
Hobart

1 T9153 of 2001 at 18
2 T9153 of 2001 at 18
3 (1994) 126 ALR 233; (1994) 57 IR 50; (1994) 1 IRCR 199
4 Australian National Hotels Pty Ltd v Jager [2000] TASSC 43