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T9569 and T9577

 

TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s70 appeal against decision

Launceston Linen Service Pty Limited
(T9569 of 2001)

and

Loraine May Hawksley
(T9577 of 2001)

 

FULL BENCH:
PRESIDENT P L LEARY
DEPUTY PRESIDENT R J WATLING
COMMISSIONER P C SHELLEY

HOBART, 25 September 2001

Appeals - decision by Commissioner Abey on 8 May 2001 in matter T9428 of 2001 - appeals dismissed - decision confirmed

REASONS FOR DECISION

[1] On 23 February 2001 Ms Lorraine May Hawksley, a former employee of Launceston Linen Service Pty Ltd (the employer), initiated proceedings in this Commission concerning her alleged unfair dismissal on 21 February 2001 from the position of laundry hand.

[2] The background to the dispute which gave rise to that application, is best described in the Decision of Commissioner Abey, wherein he stated:

"Ms Hawksley commenced employment on 10 July 1996 as a Laundry Hand employed on a full-time basis.

Whilst there was some debate as to the nature of duties outlined during the interview process, it was common ground that very shortly after commencement, the task of feeding larger items into the ironing machine occupied a significant proportion [at least 50%] of her overall duties.

In December 1996 Ms Hawksley experienced pain to her right arm which continued "on and off" through to June 1997.

In July 1997 Ms Hawksley took annual leave and the symptoms gradually improved. Upon return to work the symptoms became worse.

On 9 September 1998 the symptoms intensified and Ms Hawksley consulted her General Practitioner, Dr Allen.

Dr Allen issued a sickness certificate for the period 11 to 21 September. Ms Hawksley returned to work on 21 September on "light duties". Whilst it was not tabled as evidence it is understood that Dr Allen had specified that Ms Hawksley should not work on the ironing machine or lift above shoulder height. This requirement was largely accommodated by the employer. Ms Hawksley submitted a workers' compensation claim.

On 20 January 1999 the Workers' Rehabilitation and Compensation Tribunal found a genuine dispute to her claim on the basis that causation and a precise diagnosis was an issue.

In February 1999 Ms Hawksley experienced sudden left shoulder pain when lifting sheets onto a shelf above shoulder height.

On 19 March 1999 Ms Hawksley consulted Dr Hilton Francis, a Consultant Rheumatologist, who subsequently provided a written medical report1.

The symptoms continued throughout 1999 although Ms Hawksley continued to work her normal hours, albeit on the modified duties.

Ms Hawksley was unfit for work from 18 to 23 November 1999 as a consequence of symptoms experienced in her left arm.

On 13 February 2001 Ms Hawksley experienced increasing pain in her right arm. She consulted Dr Allen who provided a sickness certificate2 for the period 13 to 15 February. This certificate had the following notation in relation to modified duties:

"As before, no heavy lifting or activity which increases pain."

[3] This notation covered the period 16 February to 16 April 2001.

Immediately following the medical consultation Ms Hawksley telephoned Mr Young. The substance of this conversation is covered later in the decision.

Ms Hawksley returned to work on 16 February. She was called to a meeting with Mr Young. Mr Vocke was also present. Mr Young asked Ms Hawksley to get a "certificate of clearance" by 20 February.

Ms Hawksley worked normally on 19, 20 and 21 February. Towards the end of the shift on 21 February, Ms Hawksley was called to a further meeting with Mr Young in the presence of Mr Vocke. Mr Young asked whether Ms Hawksley had obtained the certificate of clearance from the doctor, to which she replied, "No". Mr Young then said:3

"I told her that as she couldn't perform the duties that she was contracted to, I was terminating our contract."

Ms Hawksley was paid wages and accrued entitlements up to the time of termination."

[4] Commissioner Abey, after hearing the matter, determined the issues put to him by way of decision dated 8 May 20014. In brief, he rejected the employers preliminary argument that Ms Hawksley's employment came to an end as a consequence of the doctrine of frustration and found:

(a) the termination was at the initiative of the employer;

(b) it was the employers responsibility to determine staffing requirements;

(c) the inability of Ms Hawksley to feed items into the ironing machine constituted a valid reason for termination;

(d) there was no serious fault insofar as procedural fairness;

(e) the termination of Ms Hawksley in such a summary manner was unfair and, as a result, ordered the employer to pay Ms Hawksley, what he described as modest compensation, the sum of $2500.00.

[5] Subsequently, the employer and Ms Hawksley appealed the decision. Those are the appeals that comprise the subject-matter of the current proceedings in which, by leave of the Commission, Mr R Collinson, a solicitor, appeared for Ms Hawksley and Mr A Cameron of the Tasmanian Chamber of Commerce and Industry Limited, appeared for the employer.

[6] The parties agreed that we should hear and determine both appeals at the same time.

Appeal Principles

[7] When deciding this appeal, it was Mr Collinson's view that the relevant principles to be applied were found in the decision of the High Court in House v The King5 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] He said there appeared to be two types of errors that can be relied upon in overturning a decision (1) a specific error - ie there has been a wrong principle or irrelevant matter taken into account and (2) a general error - ie the decision or the result of the decision is plainly unjust or outside the norm.

[9] Mr Cameron submitted that the provisions of House v The King6 had relevant application prior to 1 January 2001, at which time the Act was varied and specific provisions as to appeals were inserted in s.70(1A) which states that an appeal will not be upheld unless a Full Bench is of the opinion that the Commissioner, against whose decision is appealed:

1. made a legal error; or

2. acted on a wrong principle; or

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; or

6. the decision was plainly unreasonable or unjust.

[10] As the parties did not present us with detailed submissions on this issue we are somewhat reluctant to travel too far along this path. However we do make the observation that an order which depends on the application of a very general principle - eg. what is just and equitable - which calls for value judgments in respect of which there is room for reasonable differences of opinion, no particular opinion being uniquely right, involves the exercise of a discretion. This of course contrasts with an order which is dictated by the application of a fixed rule to the facts on which its operation depends.

[11] In our view the principles contained in House v The King centre around the exercise of a discretion and are consistent with s. 70(1A) of the Act.

Employers Grounds of Appeal

Ground 1, 2 and 4

[12] In the original hearing, Mr Cameron argued the Commission had no jurisdiction to hear the application as there had been no termination at the initiative of the employer. Instead, he maintained the contract of employment was frustrated given the circumstances in existence at the time of termination. This was rejected by Commissioner Abey.

[13] Mr Cameron's first, second and fourth ground of appeal were that the Commissioner:

1. "made a legal error in finding that the contract of employment had not been frustrated."

2. "did not give sufficient weight to the evidence that the employee could not perform over one-half of the duties required of her under the contract of employment and that such was not a radical departure from the agreed terms of the employment."

4. "made a mistake as to the fact in stating that the duties of dry-cleaning were a normal task of a laundry hand and within the scope of the employment contract."

[14] Mr Cameron's submissions in support of these Grounds of Appeal can be summarised as follows:

[15] He was of the view that Commissioner Abey had selectively used the five factors considered by Donaldson J. in Marshall v Harland & Wolff Ltd,7 as described in Finch v Sayers,8 when applied to the circumstances surrounding the termination of the employment of Ms Hawksley.

[16] Mr Cameron submitted there was a need to look at the total contract and what could be frustration of the contract.

[17] He said the evidence showed that Ms Hawksley, in the last two and a half years, only had 19 days of absence on sick leave. However, he continued, "just because somebody's attending at work does not mean that the contract of employment is not frustrated because in attending at work they may be doing duties substantially different to those that they were contracted to do."9

[18] Mr Cameron was of the view that a person had to be able to undertake all or the substantial part of their duties they were employed to do prior to the injury, or show reason for the inability. He said the evidence showed that Ms Hawksley had the opportunity and was specifically asked to provide to the employer evidence as to when she would be able to return, and in particular, if it was in the foreseeable future

[19] Mr Cameron contended the authority of Finch v Sayers10 showed that frustration would not be a likely outcome if there was a reasonable chance of the employee returning to work in the foreseeable future. In Ms Hawksley's case, he said, there was no evidence before the Commission to suggest that she could fulfil that requirement.

[20] Mr Cameron submitted that Commissioner Abey accepted Mr Collinson's contention that where the employment was ongoing and indefinite, a court is less likely to apply frustration. This, he said, maybe the case, but less likely did not mean that the concept of frustration did not exist whatsoever.

[21] Mr Cameron further submitted that, if Ms Hawksley had been employed for a number of years and was capable of performing all the duties, her employment may have continued for a number of years, however, the employer did not want the employee to continue doing the limited duties she was undertaking at the time of her dismissal because, in the long term, that caused problems within the workplace.

[22] Mr Cameron explained that there were six or seven laundry hands employed at Launceston Linen Service and most of them rotated through the various tasks throughout the day. Because of Ms Hawksley's incapacity to feed the ironing machine, she was not part of the rotation and the employer was required to find other things for her to do and that included pressing in the dry cleaning section of the business. However, he said, the evidence showed that that was not normally part of her duties and it was never intended to be her duties when she was originally employed.

[23] Mr Cameron contended that Ms Hawksley, whilst not in a unique position within the company was, nevertheless, a key figure in the system of the employer's operation.

[24] In terms of Ms Hawksley's injury, Mr Cameron submitted that it happened some two and a half years prior to termination. He said that, whilst the medical report of Dr Francis stated the injury was minor, it did however go on to say the injury had "the potential for ongoing minor injury"11.

[25] Mr Cameron said the main consideration arising out of Finch v Sayers12 was set out in the decision of Donaldson J. in Marshall v Harland & Wolff Ltd.13 That is:

"Was the employee's incapacity, looked at before the purported dismissal, of such a nature, or did it appear likely to continue for such a period, that further performance of his obligations in the future would either be impossible or would be a thing radically different from that undertaken by him and agreed to be accepted by the employer under the agreed terms of his employment?"

[26] He said the main point was, if it did not involve total incapacity, "are the duties radically different than what the employee was contracted to do?".

[27] Mr Cameron said the evidence of the employer and Ms Hawksley established that more than half of Ms Hawksley's daily duties involved feeding the ironer and that task could not be performed by her. Mr Cameron contended that, as Ms Hawksley was not able to perform that task, it constituted a substantial change to her duties and was a radical change to that undertaken by her prior to the injury and agreed under the terms of her contract.

[28] Mr Cameron acknowledged that Ms Hawksley had not used all of her sick leave entitlements, however, the manner in which she was using them was of concern to the employer.

[29] Mr Cameron also maintained that Commissioner Abey was wrong in concluding "that tasks in the dry cleaning section of the business could also be contemplated in Ms Hawksley's contract of employment."14 He said the evidence clearly established that, whilst it was not impossible for laundry hands to work in the dry cleaning area, nevertheless, it was not a task that would normally have been performed by Ms Hawksley.

Mr Collinson's Response

[30] Mr Collinson stated that the principles in Finch v Sayers,15 which undoubtedly were relied on by Commissioner Abey, were not being challenged by Mr Cameron as the wrong principles.

[31] Mr Collinson submitted that, unlike the Workplace Relations Act, there was no statutory provision, regulation, industrial award, enterprise agreement, governing the employment relationship in relation to frustration, therefore it was entirely a creature of the common law, and the common law invented the doctrine of frustration to excuse parties from further performance of a contract without termination being at the initiative of either party.

[32] He said, simply stated, there were two limbs to that test of frustration - the first being was future performance impossible? and the second, was the work performed radically different from that contemplated? He maintained the second limb was relevant to this case

[33] Mr Collinson further narrowed the test by submitting the second limb had two components. The first - to ascertain what were in fact the agreed terms of the employment, and secondly, to assess what the worker was able to perform and whether that was radically different.

[34] This approach, Mr Collinson submitted, was consistent with the test in Finch v Sayers,16 which he urged the Commission to affirm as the governing principle regarding frustration in this jurisdiction.

[35] Mr Collinson was of the opinion that Mr Cameron placed undue weight on the five factors considered by Donaldson J. in Marshall v Harland & Wolff Ltd,17 as described in Finch v Sayers,18 He said they were relevant but not conclusive factors and not any one of them was a determining factor.

[36] Mr Collinson had no issue with Mr Cameron's view emanating from Denny, Mott & Dickson, that is, if the doctrine of frustration applies, the worker would be entitled to her existing statutory entitlements and there would be no need for provision of notice.

[37] Mr Collinson contended that there were three clear cut instances where the doctrine of frustration could confidently apply, although he hastened to add the Commission should exercise caution because the effects of it were quite harsh, as it removed the need to give any consideration to procedural fairness - a matter underpinning the industrial relations system in this country.

[38] He said, the first situation would be where the worker was absent from the workplace for a lengthy period of time with no prospect of returning to the workplace; secondly, the situation exampled in Taleviski19 where the worker was performing supernumerary duties; and thirdly, where the worker was in a key or unique position and was unable to perform the work at all.

[39] It was Mr Collinson's submission that Commissioner Abey did not err in applying the principles to the facts and finding the contract was not frustrated. However, he was of the view that he did err in not finding that there had been a variation to the terms of the contract. If there had been a variation, he said, then there was no evidence to suggest that future performance was impossible or radically different and there was also no evidence to suggest there had been a valid termination.

[40] In respect to Appeal Ground 2 Mr Collinson said:

"At first blush I would agree that if the feeding of the sheets into an ironer constituted over half the duties and you couldn't perform that task, then it would be reasonable to suppose that there had been a radical departure from the agreed terms of the employment. I think at first blush that does have some attraction."20

[41] But, he said:

"the problem in this case is the situation is far from clear cut and I think the authority from the courts is that you need to be very careful when applying the doctrine of frustration; it's not something to be applied lightly and this is not a clear cut decision. It's not clear cut exactly what the agreed terms of the contract were. It's not clear what the precise amount of time was required to be performed feeding the ironer. The evidence of the roster is vague and uncertain. It is open to find what was agreed to be accepted by the employer, were the duties that the employee was actually performing at the time of the termination. That was open on the evidence for the commissioner to find that."21

[42] In respect to appeal ground 4, Mr Collinson submitted that it was reasonably open to the Commissioner, on the evidence, to conclude that the duties of dry-cleaning fell within the scope of Ms Hawksley's employment contract, although, he said, he was not suggesting that it was a substantial part but only one of the duties that formed part of the contract.

FINDING

[43] We note the reference of Wootten J in Finch v Sayers (1976) NSWLR at 540 to the judgment of Donaldson J in Marshall v Harland & Wolff Limited22 wherein he said a tribunal must ask itself:

"Was the employee's incapacity, looked at before the purported dismissal, of such a nature, or did it appear likely to continue for such a period, that further performance of [her] obligations in the future would either be impossible or would be a thing radically different from that undertaken by [her] and agreed to be accepted by the employer under the agreed terms of [her] employment?"

[44] In considering the answer to that question it is also appropriate to take into account:

(a) The terms of the contract, including the provisions as to sickness pay;

(b) How long the employment was likely to last in the absence of sickness;

(c) The nature of employment;

(d) The nature of the illness or injury and how long it has already continued and the prospects for recovery;

(e) The period of past employment.

[45] Applying the test to Ms Hawksley's situation, we find that her future work performance was not impossible, therefore there was a need to consider whether the work performed by her was radically different from that contemplated under her agreed terms of employment. In our view, Commissioner Abey rightly concluded that to be the critical issue.

[46] In respect to that issue he went on to find that:

  • the task of feeding the ironing machine was neither specifically included or excluded from Ms Hawksley's contract of employment, however, that task did form a substantial part of her duties soon after commencement.
  • that task was contemplated within the range of duties normally associated with that of a laundry hand.
  • feeding the ironing machine was a duty which could reasonably form part of Ms Hawksley's contract of employment.
  • on the same rationale [ie the task of dry-cleaning was neither specifically included or excluded from Ms Hawksley's contract of employment] the tasks in the dry cleaning section of the business could also be contemplated in Ms Hawksley's contract of employment.
  • Notwithstanding her inability to feed heavy items into the ironing machine, the evidence was that Ms Hawksley was an otherwise productive employee.
  • there is no evidence to suggest that her work was supernumerary in nature or that the employer had suffered economic damage as a consequence of the revised duties.
  • but for the action taken by the employer, Ms Hawksley would still be performing her work role today in the same manner as she had for at least the previous two years.
  • he was unable to conclude that Ms Hawksley's contract of employment came to an end as a consequence of the doctrine of frustration.

[47] After carefully examining the transcript of the original hearing and the evidence presented during this appeal, we would have to conclude, given the facts and circumstances of this case, that each of the above mentioned findings were reasonably open to the Commissioner and we decline to interfere with them.

[48] We have also noted that the Laundry and Dry Cleaning Award does not refer to "laundry hand" [a phrase often referred to in the original hearing and the appeal] but only the classification of "laundry and dry cleaning employee". The award also contains classification standards which identify a range of duties within each of the four grades.

[49] The grade to which Ms Hawksley was appointed would determine the duties she could be called upon, by the employer, to undertake. The award does not require a certain proportion of time to be spent on any or all of the duties contained in each grade of the classification standards.

[50] In the absence of any precise contract or position description spelling out what the duties were and the proportion of time to be spent performing each of those duties, we are unable to objectively ascertain whether the duties undertaken by Ms Hawksley, at the time of her termination, were so radically different, from that agreed between the parties, that it automatically brought the contract of employment to an end.

[51] For those reasons we dismiss appeal Grounds 1, 2, and 4.

Ground 3

[52] It was submitted by Mr Cameron that "the Commissioner erred by distinguishing the relevant legal authorities on factual circumstances and thus acted on wrong principles."

[53] Mr Cameron submitted the decision of Taleviski23 was tendered in the original hearing to establish the need for the Commission to consider the employees normal contract of employment, as apposed to the duties performed on light duties or on restricted duties, ie the position the employee was originally contracted to do. This, he said, was the comparison that the Commission should look at when deciding whether the employment contract has been frustrated.

[54] It was Mr Cameron's view that, because the Commissioner distinguished that decision on the facts, he was in error in ignoring the principle that requires consideration of the position the employee originally contracted to do rather than the altered position as a result of the injury.

[55] Mr Cameron submitted that, when looking at the termination of employment the facts that needed to be taken into account were similar to that in Taleviski24. There was an employment relationship. There was an injury to the employee that restricted their capacity to do all their duties and there was a termination of employment.

[56] He said, in Taleviski25 the Judicial Registrar highlighted the fact that an employee could do other tasks, be they deemed light duties or whatever, but they couldn't do the original task, and that was the main purpose of providing that decision to Commissioner Abey.

[57] He said that case was submitted not to say they were the same case and must have the same result; it was to say, these are the underlying principles that must be applied.

[58] Mr Cameron submitted that the same argument applied in respect to the Longford Meat Company26 case.

[59] In summary, it was his submission that Commissioner Abey in his decision distinguished those cases and didn't take into account the relevant principles that they were setting out and those principles are that you have to look at the job contracted, not what they were doing immediately prior on light duties or restricted duties.

Mr Collinson's Response

[60] Mr Collinson submitted that in Taleviski27 the applicant was a labourer at an abattoir who was on workers' compensation performing light duties and the test, pursuant to the now repealed federal Industrial Relations Act 1988, was under section 170(DF) whether there was an inability to meet the inherent requirements of the position and if so the Commission was still obliged to go on and consider whether in the circumstances the termination was harsh, unjust or unfair.

[61] He contended that was a statutory test and no such test applied in this jurisdiction. That statutory test, he said, was not formulated in the same terms as the common law test, and in fact the statutory test related to a termination at the initiative of the employer where the words of the statute had to be followed.

[62] Further, Mr Collinson submitted:

"that decision also relied upon section 170(DE) of the Act which referred to operational requirements and it was found that the position that was being performed by the worker had to be kept available because it was essentially a twofold reason. The first was, it was kept open for people on workers' compensation performing light duties. Secondly, it was important for rotating the other members of the workforce to lessen the likelihood of injuries."28

[63] In summary he submitted the principles that were referred to in Taleviski29 were extracted directly from the statute and a statutory test in another jurisdiction was not the same as a common law test in this jurisdiction.

[64] In respect to the Longford Meat Company30 decision, Mr Collinson contended the facts were similar to Taleviski31. He said it was an application to pay redundancy entitlements and it was held that there was not in fact a termination at the initiative of the employer, therefore the job still existed, the job was being performed by somebody else, therefore there was no redundancy entitlement.

[65] Mr Collinson submitted there was no legal principle in relation to frustration to be derived from that decision. In fact, he said, there is no legal principle of any description to be derived from that case. He said it was an application for redundancy that was dismissed because the job had not been made redundant.

FINDING

[66] We agree with the general thrust of Mr Collinson's submission on this ground of appeal.

[67] Although we may have distinguished Longford Meat Company32 and Taleviski33 for slightly different reasons, nevertheless, we are unable to conclude that the Commissioner acted on wrong principles.

[68] As we have found in dismissing appeal ground 1, 2 and 4 the Commissioner correctly identified the critical issue arising out of Finch v Sayers34 as being the appropriate principles when dealing with the doctrine of frustration in this jurisdiction.

[69] For those reasons we dismiss appeal ground 4.

Ground 5,

[70] Mr Cameron's fifth ground of appeal was:

"5. the decision was plainly unreasonable and unjust in that the Commissioner found that there was a valid reason for the termination and there was not any serious fault insofar as procedural fairness was concerned.

[71] Mr Cameron submitted that the Industrial Relations Act, as amended, requires at s. 30 (2):

    "In considering an application in respect of termination of employment, the Commission must ensure that fair consideration is accorded to both the employer and employee concerned and that all of the circumstances of the case are fully taken into account."

[72] He suggested that provision was not observed, in the circumstances of this case, in that the duties of Ms Hawksley, were not taken into account. He highlighted issues such as:

  • whether the dry cleaning was part of her normal task;
  • the evidence of the employer was basically ignored;
  • selectively quoting out of context;
  • stating that the employer had a moral obligation to do certain things for the employee to mitigate her loss.

[73] Mr Cameron submitted that the employer had fulfilled his obligations under the provisions of the Act - there was procedural fairness - there was a valid reason and the commissioner had found accordingly. He said, there was no serious defect in the procedures and the procedures as set out at s. 33 and s. 37 of the Act.

[74] That being the case, he said, then finding that compensation was payable to the employee goes against the Commissioners own decision.

FINDING

[75] We have difficulty matching the submissions to this ground of appeal. It seems to us that some of the issues raised by Mr Cameron when dealing with this ground were covered by other grounds of appeal. The question of compensation will be considered in later grounds of appeal. In any case we are unable to find that the "decision was plainly unreasonable and unjust in that the Commissioner found that there was a valid reason for the termination and there was not any serious fault insofar as procedural fairness was concerned."

[76] Appeal ground 5 is dismissed.

Ground 6 and 7

[77] Mr Cameron's sixth and seventh ground of appeal were:

6. the decision was plainly unreasonable and unjust in that the Commissioner relies on a "moral obligation" contrary to the employer satisfying the requirements of the legislation.

7. the Commissioner acted on a wrong principle in relying upon the employer having a "moral obligation" to mitigate the loss of an employee, and the Commissioner's personal beliefs having standing.

[78] Mr Cameron submitted that the Commissioner, in his decision, stated:

    "The existence however of a valid reason does not necessarily lead to the automatic conclusion that the termination was fair. In this particular case Ms Hawksley was blameless and I consider the loss of employment in the circumstances in which it occurred to constitute a particularly harsh outcome and the applicant is entitled to an appropriate remedy."35

[79] Mr Cameron suggested that both the employer and Ms Hawksley were blameless. He said the employer had a business to run and in fairness to both parties, as required under s.32 of the Act, there was a need to consider the employer's position.

[80] But, Mr Cameron contended, the outcome was in accord with the decision of Finch v Sayers on which the Commissioner relied. Finch v Sayers, he said, provides, if there was no frustration, the employment contract could still come to an end, in accordance with the contract or in this case the award, by the employer accepting that the employee could no longer do the job.

[81] If it was found that there was no frustration, Mr Cameron contended, then the employer's obligation arose under the award and an order of one weeks pay in lieu of notice would have been the appropriate remedy.

[82] He said, on the one hand Commissioner Abey found there was a valid reason for termination; it was procedurally fair; the outcome was one he was not going to interfere with; but at the same time he found Ms Hawksley needed extra compensation because the termination was a harsh outcome.

[83] Mr Cameron strongly contended the decision to grant $2,500 in compensation was merely to satisfy the Commissioner's moral view on what should happen to Ms Hawksley, not what was legally required.

[84] He submitted the Commission acted on a wrong principle in finding that the employer had a moral obligation to mitigate the loss of an employee. He said the award and the Act were there to regulate the parties obligations and they should not come before the Commission to be subjected to the Commissioner's moral views as to what should happen.

Mr Collinson's Response

[85] Mr Collinson submitted that the phrase "moral obligation" was perhaps an "infelicitous expression" and an unhelpful phrase.

[86] He said he was not submitting that "moral obligation" was a principle that the Commissioner was to apply but there was a need to look at what was behind that phrase to see what it was that the Commissioner actually saying.

[87] Mr Collinson suggested that, just because the word "moral obligation" was used, it did not mean that was the principle that had been applied. He said the principle that was actually applied was that of the "fair go all round".

[88] He further submitted that, whilst it was found that there was procedural fairness regarding the actual dismissal and there was no serious fault, nevertheless, the Commissioner concluded "the termination of Ms Hawksley in such a summary manner was unfair."36 He said, in this case, no notice period was given whatsoever nor any payment in lieu of notice, not even one week in accordance with the award.

FINDING

[89] We are of the view that the Commissioner did not make a finding that "the employer had a moral obligation to mitigate to the extent possible the loss that Ms Hawksley faced,"37 it was merely an observation - nor can we find where he relied on that observation to award compensation But at the same time we agree with Mr Collinson that the use of such a phrase was unnecessary.

[90] It can be gleaned from a closer look at the decision the Commissioner awarded what he described as modest compensation because he found "the termination of Ms Hawksley in such a summary manner was unfair,"38 not because of any moral obligation.

[91] The Commissioner, having found that Ms Hawksley's employment was terminated at the initiative of the employer without notice, concluded, rightly in our view, that it was a summary termination and it was unfair.

[92] In the circumstances we would have to conclude that the awarding an amount of $2500, by the Commissioner, was compensation in lieu of notice.

[93] For those reasons we dismiss appeal ground 6 and 7.

Ground 8,

[94] Mr Cameron's eighth ground of appeal was:

8. the decision was plainly unreasonable and unjust in that the compensation ordered by the Commissioner was excessive in the circumstances."

[95] Mr Cameron submitted that in the summary of Finch v Sayers39 at point 3 on page 541 it was held:

"Applying this criterion, the proper conclusion in a case such as this is that an employee is, first, entitled to any sick leave defined in his contract of employment; and, in the event of illness further prolonged, the employee's incapacity excuses him from his obligation to work, and the employer from his obligation to pay salary or wages, and gives the employer the right to terminate the contract of employment."

[96] He said, in the particular circumstance of that case, Mr Finch was incapacitated to attend work at all and therefore the use of sick leave, et cetera, became apparent. But, Mr Cameron contended, Justice Wootten was saying that if it is the case that the employee cannot do the job, then the employer has the right to terminate the employment and if he terminates the contract of employment he does it in accordance with the legal requirements at the time. The legal requirements at the time, in the case of Ms Hawksley, he said, was for one week's notice under the terms of the award.

Mr Collinson's Response

[97] Mr Collinson submitted there was a need, on the part of Mr Cameron, to address whether there was a specific error in the Commissioner arriving at the sum of $2,500 or if he took account of an irrelevant matter or whether he gave excessive weight to another matter in arriving at that sum. It was his contention that no specific error was demonstrated.

[98] In terms of a general error, Mr Collinson maintained there was nothing put to the Commission by the employer's representative in this appeal to demonstrate the amount awarded was so far outside the tariff that it was an error.

[99] He said, the $2,500 equated to about six weeks' pay and if one week was notice pursuant to the award, then it left five weeks' compensation.

[100] Mr Collinson submitted that five weeks' compensation in a situation where a worker has been employed for four and a half years - a productive worker - with accommodated modified duties for the past two and a half years was hardly excessive.

FINDING

[101] We are of the view that the amount awarded by the Commissioner, to Ms Hawksley, was not compensation as envisaged by s.31(1B)(a) of the Act but was compensation in lieu of notice after her employment was summarily terminated.

[102] When considering the question of notice to be given to an employee where there has been a termination at the initiative of the employer, we believe it is appropriate to have regard for the International Labour Conference, Convention 158, concerning Termination of Employment at the Initiative of the Employer wherein Article 11 it states:

"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, that is, misconduct of such a nature that it would be unreasonable to require the employer to continue his employment during the notice period."

[103] Given all the circumstances of this case and the fact that Ms Hawksley was summarily dismissed, we would conclude the compensation awarded by Commissioner Abey was not excessive. Therefore we dismiss appeal ground 8.

Employee's Ground of Appeal

[104] The appeal brought by Ms Hawksley was on the following ground:

"The Commissioner erred in law in failing to determine whether the appellant's contract of employment had been varied so as to no longer include feeding sheets into an ironer and therefore that was a valid reason for termination."

[105] Mr Collinson submitted that "if the appellant's appeal is dismissed, that is, the employer's appeal,...... I would submit that the only necessary action is to confirm the decision of the commissioner."40

[106] In view of our findings on the employers grounds of appeal, we see no need to address the appeal lodged by Ms Hawksley, therefore we dismiss this ground of appeal.

Conclusion

[107] Having dismissed all grounds of appeal, we confirm the original decision made by Commissioner Abey on 8 May 2001 in matter T9428 of 2001.

 

P L Leary
PRESIDENT

Appearances:
Mr R Collinson, a solicitor, appeared for Loraine May Hawksley
Mr A Cameron of the Tasmanian Chamber of Commerce and Industry Limited, for the Launceston Linen Service Pty Limited

Date and Place of Hearing:
2001
August 1
Hobart

1 Original Hearing Exhibit A2
2 ibid A4
3 Original Transcript p. 29
4 T No 9428 of 2001
5 (1936) [55 CLR 499, at 504-505 per Dixon, Evatt and McTiernan]
6 (1936) [55 CLR 499, at 504-505 per Dixon, Evatt and McTiernan]
7 [1972]1 WLR 899
8 (1976) NSWLR 540
9 Appeal transcript p.3
10 (1976) NSWLR 540
11 Appeal Transcript p.6 line 221
12 (1976) NSWLR 540
13 [1972] 1 WLR 899
14 Original Decision p.9
15 (1976) NSWLR 540
16 ibid
17 [1972] 1 WLR 899
18 (1976) NSWLR 540
19 Dimitre Taleviski v R. J. Gilbertson Proprietary Limited - IR Court of Aust - VI 5902 of 1995 - Farrell JR
20 Appeal transcript p.26 line 1084
21 ibid p.27 line 1089
22 [1972] 1 WLR 899
23 Dimitre Taleviski v R. J. Gilbertson Proprietary Limited - IR Court of Aust - VI 5902 of 1995 - Farrell JR
24 ibid
25 ibid
26 Walter Bye, Paul Lee and Marie Thomas v Longford Meat Company AIRC Print P1351 Leary C
27 Dimitre Taleviski v R. J. Gilbertson Proprietary Limited - IR Court of Aust - VI 5902 of 1995 - Farrell JR
28 Appeal transcript p.21
29 Dimitre Taleviski v R. J. Gilbertson Proprietary Limited - IR Court of Aust - VI 5902 of 1995 - Farrell JR
30 Walter Bye, Paul Lee and Marie Thomas v Longford Meat Company AIRC Print P1351 Leary C
31 Dimitre Taleviski v R. J. Gilbertson Proprietary Limited - IR Court of Aust - VI 5902 of 1995 - Farrell JR
32 Walter Bye, Paul Lee and Marie Thomas v Longford Meat Company AIRC Print P1351 Leary C
33 Dimitre Taleviski v R. J. Gilbertson Proprietary Limited - IR Court of Aust - VI 5902 of 1995 - Farrell JR
34 (1976) NSWLR 540
35 Original Decision p.14
36 Original Decision p.15
37 ibid p.15
38 Original Decision p.15
39 (1976) NSWLR 540
40 Appeal transcript p.38