TASMANIAN INDUSTRIAL COMMISSION

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

Ken Farrell
(T9620 of 2001)

and

The Crown in Right of State of Tasmania
Department of Premier and Cabinet
Office of the Premier

Appeal against order handed down by Commissioner P C Shelley on 30 May 2001 in Matter T9288 of 2001 - jurisdiction of Commission in respect of a former employee - appeal dismissed - decision confirmed

REASONS FOR DECISION

Introduction

(1) These proceedings concern an appeal against a decision of Commissioner Shelley on 30 May 20011. The hearing at first instance dealt with an application, lodged by Mr Kenneth James Farrell, pursuant to Section 29[1A] of the Act, concerning a dispute with the Crown in Right of State of Tasmania, Department of Premier and Cabinet [the respondent], arising out of severance pay in respect of termination of employment as a result of redundancy.

Background

(2) The background to the dispute is described in Commissioner Shelley's decision as follows:

"[4] Mr Kenneth James Farrell was appointed to the position of Economic Adviser, Office of the Premier, for a period specified in an Instrument of Appointment ("the Instrument") dated 24 June 1996, which states inter alia:

"1(a) The appointment shall be for a term expiring on the thirty-first day of May two thousand or on the resignation or other termination of the Government whichever shall occur earlier (hereinafter called 'the termination date').2

[5] Schedule 4 of the Instrument states that should the termination of appointment be by expiration of its term, or by the Premier or his delegate, Mr Farrell would be paid a severance payment calculated on a formula based on years of service multiplied by "two weeks pay".

[6] Mr Farrell's appointment was terminated on 14 September 1998 when the state Liberal government was not returned to office.

[7] Mr Farrell was paid twelve weeks pay by way of a separation payment. The dispute concerns the quantum of that payment. Mr Farrell claims that superannuation should also have been paid, and, in addition, an amount for private telephone costs and the value of a car parking space, on the basis that his remuneration/pay/salary, however described, included those components, and therefore, he argues, so too should his severance payment.

[8] His claim has been the subject of lengthy correspondence and dispute. At various times Mr Farrell has corresponded with the Director of Corporate Services, Department of Premier and Cabinet, the Ombudsman and the Premier. To date, his claim has been unsuccessful.

[9] Mr Farrell is seeking an Order that he be paid an amount for superannuation, telephone and the value of the car parking space as part of his severance payment."

(3) The Commissioner proceeded to hear the merits of the application. However part way through the proceedings the respondent raised a number of jurisdictional points. The first of these contentions questioned whether the application was properly before the Commission pursuant to Section 29[1A] of the Act. The second contention was that the Commission lacked jurisdiction to hear and determine an alleged breach of Mr Farrell's Instrument of Appointment. As it turned out, Commissioner Shelley did not rule on the second contention.

Findings of the Commissioner

(4) Section 29[1A] of the Act read at the relevant time [date of termination], as follows:

"A former employee may apply to the President for a hearing before a Commissioner in respect of an industrial dispute relating to -

(a) the termination of employment of the former employee; or

(b) severance pay in respect of employment of the former employee terminated as the result of a redundancy; or

(c) a breach of an award or registered agreement involving the former employee."

(5) Mr Farrell's application had been lodged pursuant to subclause [b] above. In short summary, the respondent's contention was that the severance pay did not arise from a termination "... as the result of a redundancy" and hence the Commission lacked jurisdiction to hear and determine the application.

(6) A related issue before the Commissioner was whether Mr Farrell may have inadvertently "ticked the wrong box" in that the Commission's application form was misleading and did not comprehend the precise nature of Mr Farrell's dispute with the Government.

(7) The finding of Commissioner Shelley on this latter issue was as follows:3

"[42] Mr Farrell argued that he may have ticked the wrong box when filling out the pro forma application for a hearing and that the failure or otherwise of an applicant to tick the "right" box should not preclude them from having their case heard because the Commission has the jurisdiction to hear and determine an industrial dispute, and because s20 says that the Commission should exercise its jurisdiction without regard to technicalities or legal form. Mr Farrell also argued, as I understand it, that, even if I were to find that he had not been made redundant, I should fall back upon the provisions of the Act in relation to "industrial disputes" and "industrial matters" and not limit my decision only to the redundancy aspect, because it was still, in any event, a dispute about an industrial matter.

[43] Whilst I agree with Mr Farrell to the extent that an applicant should not be prevented from having their case heard merely because they have ticked the wrong box, it would, in my opinion, be necessary for the applicant to seek leave to have the application amended in order to bring it within jurisdiction. I note that Mr Farrell was given the opportunity, during the hearing, to decide whether or not he wished to proceed according to the application he had made, ie, a dispute in relation to s29(1A)(b), or to seek to amend his application. He elected to proceed on the basis of the application he had submitted, that is, a hearing in respect of an industrial dispute relating to severance pay in respect of employment of a former employee terminated as a result of redundancy. That is the basis on which I make the findings that follow.

[44] For the reasons set out below I reject the proposition that, should Mr Farrell fail in his application under s29(1A)[b], then he should still have his case determined on the basis of it being a dispute in relation to an industrial matter."

(8) On the question of redundancy, Commissioner Shelley said:4

"[54] In my opinion, the displacement of political appointees at the time of a change of government can be characterised as "the ordinary and customary turnover of labour". There can be little or no expectation on the part of such an employee that their employment would continue with the new administration. I think it likely that Mr Farrell was just such a person who would have had no expectation of continuing to be employed as an Adviser to a Labor Premier, having previously been appointed as Adviser to a Liberal Premier. Indeed, that turned out to be the case and Mr Farrell's employment was terminated when the Liberal government was not returned to office.

[55] Such a situation was obviously anticipated by the parties when the contract was entered into. A part of the contract was a severance payment calculated on the basis of years of service and level of wages. In my view the payment was precisely that - a severance payment. It was not, however, a severance payment arising out of a redundancy.

[56] I find that Mr Farrell's employment was not terminated as the result of redundancy and that therefore the severance payment he received was not severance pay in respect of employment terminated as the result of redundancy."

(9) Mr Farrell advanced a third argument which is inextricably woven into the matters determined above. In short summary Mr Farrell contended that even if the Commissioner was against him on the question of redundancy, the Commission could [and should] hear and determine the matter on the basis that it was still an industrial dispute, as defined in s.3, and s.19 gives the Commission jurisdiction to hear it. The finding of Commissioner Shelley on this question was as follows:5

"[67] Section 29 - Hearings for settling disputes - clearly differentiates between the applications that may be made by organisations, employers, employees, the Minister and those that may be made by former employees. Section 29(1) allows an organisation, an employer, an employee or the Minister to apply for a hearing in respect of an industrial dispute, without limitation, apart from the fact that it must be an "industrial dispute". Section 29(1A) lists those matters in relation to which a former employee may apply to the President for a hearing before a Commissioner in respect of an industrial dispute. Former employees are, in my opinion, confined only to those three matters specified in s29(1A).

[68] I reject Mr Farrell's argument that s29(1A) refers only to those matters that the Commission must hear and does not prevent the Commission from hearing other matters in relation to former employees. I do so on the basis that, had the Parliament intended the Commission to extend its jurisdiction beyond those matters, the Act would say so. It does not. It is instead very specific as to just which matters a former employee may bring before the Commission.

[69] I find that I have no jurisdiction to hear a dispute in relation to the severance payment Mr Farrell received upon the termination of his employment The reason for this is that, as a former employee, he is limited to those matters referred to in S29(1A) of the Act, which do not include a dispute in relation to severance pay excepting where the severance pay is as a result of redundancy. I have already found that Mr Farrell's employment was not terminated as the result of redundancy."

Grounds of Appeal

(10) The appellant originally listed five grounds of appeal but this was reduced to four during proceedings. The grounds are as follows:

"1. The Commission erred in concluding that my job as an economic adviser in the Office of the Liberal Premier was not made redundant when the Liberal Government fell and a Labor Government was appointed.

2. The Commission erred in concluding that it does not have jurisdiction to hear the matter. It is incorrect to conclude that the Commission does not have jurisdiction to consider my rights as an employee in a clearly established industrial relationship, notwithstanding that the raising of an obligation of the employer in respect of those rights may not have been triggered until my employment was terminated. There is no statutory limitation on the matters on which a hearing and determination of the Commission may be sought. There is no statutory limitation on the matters which the Commission may hear and determine provided it is a matter arising from or in relation to an industrial matter. However, there are statutory requirements concerning what matters the Commission must hear and determine. There are statutory limitations and requirements concerning how the Commission must exercise its jurisdiction and hear and determine any industrial matter, regardless of whether or not the Commission has a statutory obligation to hear and determine the matter.

3. The Commission failed in its statutory obligation to exercise its jurisdiction without regard to technicalities in finding reason not to consider the matter which the average person in the street regards as a basic industrial matter, that is, correct payment of severance pay on termination of employment.

4. During the hearing the Commission provided me with a Hobson's choice of proceeding with the hearing based on either the form of my original application or amending the form of the application. Neither option was appropriate: the Commission's form of Application for Hearing is defective and misleading in that it does not fully cover in its part B1 all the possibilities covered by section 29(1A) of the Industrial Relations Act 1984, in particular in that it refers to 'unfair termination of employment' where the Act refers more widely to 'termination of employment' encompassing both fair and unfair termination of employment. Nonetheless, the Commission has based its decision on that Hobson's choice."

(11) 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.

(12) As the decision of Commissioner Shelley related solely to jurisdictional questions, the overriding consideration for this Bench is whether or not the Commissioner made a legal error.

Ground 1

(13) The submissions before this Bench were very similar to those before the Commission in first instance and are well summarised in the Commissioner's decision. In this matter the facts are not at issue. The question is whether these facts represent a redundancy which would in turn invoke the jurisdiction of s.29[1A][b].

(14) On the question of what is a redundancy? Commissioner Shelley made the following observations:6

"[46] Whilst tribunals have been reluctant to attempt an exhaustive definition of "redundancy", it is generally accepted that a redundancy is a dismissal, that is, a termination of employment at the initiative of the employer, where there is a valid reason based on the operational requirements of the undertaking, establishment or service.

[47] This approach recognises that it is the job that becomes redundant, not the person who occupies the position.

[48] Generally, it is not considered to be a redundancy where the termination is due to the "ordinary and customary turnover of labour", for example, when a contract comes to an end, although, if there was a reasonable expectation of ongoing employment [for example, that the contract would be renewed] then that could constitute a redundancy.

[49] It can also constitute a redundancy when an employer redistributes the work of an employee to other employees, in which case the position disappears."

(15) In our view the Commissioner did not fall into error in making these observations.

(16) Mr Farrell argued that in any event the circumstances of his termination were consistent with the observations of Commissioner Shelley. He said that, as the Government of the day decided to put its future to the people and that that included the future of [his] employment, then it was very much at the initiative of the employer that [his] employment was terminated.7

(17) Mr Farrell further contended that there was a valid reason based on operational requirements in that advisers on Liberal Party political policy are not capable of filling adviser roles in Labor Party political policy.

(18) We acknowledge that there are aspects of Mr Farrell's termination which have the characteristics of a redundancy. Through no fault of his own Mr Farrell's position ceased to exist and more often than not, such a situation would give rise to a redundancy. However these circumstances must be viewed in the context of Mr Farrell's Instrument of Appointment.

(19) Schedule 4 of the instrument provided for a severance payment calculated on the basis of years of service and payable "Should this appointment be terminated by expiration of its term, or by the Premier, or his delegate ...". In Mr Farrell's case the severance payment amounted to 12 weeks' pay. Mr Farrell submitted, both before this Bench and Commissioner Shelley, that the fact that the contract foreshadowed a redundancy was unusual, but did not change the fact that it was a redundancy. He went on to speculate that to conclude otherwise would open up the prospect of similar anticipatory clauses being written into contracts of employment generally, for the sole purpose of avoiding redundancy payments.

(20) We of course can only properly deal with the facts of this case rather than hypothetical possibilities. We would however observe in passing that a clause which amounted to no more than a device to avoid redundancy payments would be seen for what it was.

(21) Clause 1[a] of the instrument states:

"1(a) The appointment shall be for a term expiring on the thirty-first day of May two thousand or on the resignation or other termination of the Government whichever shall occur earlier (hereinafter called 'the termination date')."

(22) It is clear under this clause that the appointment comes to an end of its own volition when either of two events occur:

1. The Government ran its full term, presumably on 31 May 2000; or

2. The Government resigned or was otherwise terminated at an earlier date.

(23) At law both events have exactly the same standing in terms of bringing the contract to an end. In our view it is not open to argue, as Mr Farrell did, that point 1 above would not give rise to redundancy whereas a termination arising from the fall of the government at an earlier date, would. In both cases it is a termination which comes about because of the expiry of the contract in accordance with its terms.

(24) On this point Commissioner Shelley said:8

"[51] His employment ceased according to the terms of the Instrument. This, in my view, was not a termination at the initiative of the employer, but simply a situation where a contract has come an end in circumstances in which it was agreed between the parties that it would end."

(25) And later:9

"[56] I find that Mr Farrell's employment was not terminated as the result of redundancy and that therefore the severance payment he received was not severance pay in respect of employment terminated as the result of redundancy."

(26) We agree with the finding of Commissioner Shelley. Appeal Ground 1 is rejected.

Ground 2

(27) The substance of this argument was essentially the same before this Bench as it was before Commissioner Shelley. In summary, Mr Farrell's argument is as follows:

• Section 29[1][A] defines the matters for which the Commission has a mandatory obligation to hear and determine. However former employees are not limited to the matters contained in this section in that the Commission has an unfettered discretion to hear any matter, provided it is an industrial matter.
  

• The jurisdiction of the Commission is defined, not by s.29, but by s.19, which states:

"19.(1) Subject to this Act, the Commission has jurisdiction to hear and determine any matter arising from, or relating to, an industrial matter."

• Industrial matter is defined in s.3 and reads as follows:

"'industrial matter' means any matter pertaining to the relations of employers and employees and, without limiting the generality of the foregoing, includes -

(a)   a matter relating to -

(i)  the mode, terms and conditions of employment; or"

• The matter before Commissioner Shelley was "... a matter which pertains to the relations of an employer and employee albeit a past relationship".10 This position was supported by Cox J in Newtown Timber and Hardware11:

"... the Tasmanian definition does not require that the dispute be between the employer and employee, merely that the dispute should relate to a matter pertaining to the relations of employers and employees, including terms and conditions of employment. That in my view, is wide enough to encompass disputes relating to the termination of the employment and consequently of the relationship between this employer and this employee."

• When an Act refers to relations between employers and employees, it refers to relations as at the point of time where that relationship subsisted. That the relationship has ended, is only relevant to the extent that it triggered something that pertained while the relationship actually existed.
  

• There is nothing in the Act which prevents an application being lodged. If the subject matter of the application clearly falls within s.29[1A], the Commission must hear and determine the matter. If the subject matter falls outside s.29(1A], but nonetheless is an industrial matter, the Commission has an absolute discretion as to whether or not the application is heard.

(28) The proposition advanced by Mr Farrell has quite far reaching implications and to our knowledge is as yet untested. As such, an historical review of the Act as it relates to former employees is useful.

(29) Mr Willingham submitted that between 1992 and 1994, the Government of the day held the view that a former employee had access to the Commission in relation to termination of employment, "quite expressly unfair dismissal"12.

(30) A decision of Robinson DP in Marshall v The Minister Administering the Tasmanian State Service Act 198413 cast doubt on this belief and moved the Government to introduce the 1994 amendments.14 This amendment introduced a new s.29[1A] in the following terms:

"[1A] A former employee may apply to the President for a hearing before a Commissioner in respect of an industrial dispute relating to the termination of the employment of that employee."

(31) The 1997 amendments15 further clarified the position by conferring explicit access to former employees to lodge applications in respect of redundancy and Award breach matters.

(32) To complete the picture the 2000 amendments16 further extended this access to include disputes relating to Long Service Leave entitlements but this of course is not relevant in the instant matter.

(33) The above history in our view demonstrates a very clear pattern whereby the Parliament has conferred quite explicit but limited access to former employees to pursue certain matters. Mr Farrell acknowledges the explicit nature of s.29[1A] but contends that this does no more than define the matters that must be heard by the Commission and does not in any way fetter the discretion available to the Commission pursuant to s.19. He said:17

"Moving on to paragraph [68] of the commission's report, the commission has reasoned that the Act is very specific as to just which matters a former employee may bring before the commission. That is incorrect. A former employee can bring any matter they like before the commission and there is nothing, absolutely nothing, to prevent them from doing so. Where the Act is very specific in prescribing those matters so brought before the commission on which the commission is bound by law to hear and determine them and on those three matters the commission has no option. It must, by law, hear and determine them."

(34) We disagree with Mr Farrell's contention. The scheme of the Act is such that the broad jurisdiction of the Commission is found in s.19 read in conjunction with the definition of industrial matter in s.3. As Commissioner Shelley noted, s.19 is prefaced by the words "Subject to this Act" and concluded [correctly in our view] that this section must be read in conjunction with the whole of the Act.

(35) Having established the broad jurisdiction the Act then goes on in numerous areas to identify which organisations and/or persons may make the various applications to the Commission. We instance the following as examples:

• s.24[2) Application to vary an award before a single Commissioner
• s.25[2] Application for a Full Bench hearing
• s.27 Intervention
• s.29 Hearings for settling disputes
• s.43 Interpretation of awards
• s.55 Making of industrial agreements
• s.61 Private arbitration
• s.70[1] Rights of appeal

(36) In each and every case the Act clearly specifies who may bring an application before the Commission and it differs in each case. We can only conclude that this represents the conscious will of the Parliament. There would be force in Mr Farrell's contention if it could be shown that the Commission has a discretion to determine which matters it will actually hear but we are unable to see where such a discretion exists. In our view any application which is validly made must be heard. This does not of course mean that the Commission will continue to hear a matter where there is a lack of jurisdiction.

(37) We also note that the decision of Cox J in Newtown Timber and Hardware was subsequently overturned by the Full Court18 and is therefore to be largely disregarded in terms of relevance to this case.

(38) We have no difficulty with the notion that the subject matter of Mr Farrell's application would constitute an industrial matter if it had been lodged by, say, an existing employee or an organisation. We consider however that Commissioner Shelley was correct in her finding:19

"[63] It is my opinion that "the relations of employers and employees" cannot be taken to mean the relations of former employers and former employees, excepting where the Act itself specifies its application to former employees."

(39) On this question we consider that Commissioner Shelley has correctly applied the law and Ground 2 is rejected.

Grounds 3 and 4

(40) It is convenient to consider both these grounds together.

(41) The genesis for these two grounds can be found in the pro forma application form which Mr Farrell completed. It is common ground that this is a form designed by the Commission for its own internal purposes and does not have a statutory basis.

(42) At Part B, headed Purpose of Application for a Hearing, the form says:

"Does your dispute with the former employer relate to any one or more of the following?-

• alleged unfair termination of employment-section 29(1A)(a)  Yes No
  

• severance pay in respect of termination of employment as a result of redundancy-section 29(1A)(b) Yes No
  

• alleged breach of an award or registered agreement-section 29(1A)[c] Yes No"

(43) During the initial hearing and before this Bench, Mr Farrell submitted that the form was deficient in that it did not fit his particular circumstances. He freely conceded that there was nothing unfair about his actual termination, the only dispute related to a disagreement as to how the severance payment should be calculated.

(44) Mr Farrell said that he ticked the second box because, of the three options, it was the best fit for his particular circumstances. There was, he said, a need for a fourth box in that the first box only referred to unfair termination of employment, whereas s.29[1A][a] referred to:

"... an industrial dispute relating to-

[a] the termination of employment of the former employee; or"

(45) It followed, Mr Farrell argued, that a termination did not need to be unfair for there to be dispute about a term of the termination and thus invoke the jurisdiction of s.29[1A][a].

(46) Mr Farrell submitted that in the circumstances whereby he freely admitted that he was unsure as to which box to tick, Commissioner Shelley failed to follow the statutory duty found in s.20[1][a] of the Act, viz:

"20.(1) In the exercise of its jurisdiction under this Act, the Commission -

(a) shall act according to equity, good conscience, and the merits of the case without regard to technicalities or legal forms;"

(47) If we were to find that the application form was deficient or misleading, then there would be force in this ground. We accept without hesitation, as did Commissioner Shelley, that an applicant should not be prevented from having their case heard by reason only of the fact that they may have ticked the wrong box. Indeed we would go a step further. In circumstances whereby jurisdiction clearly exists but the applicant, through either inexperience or lack of knowledge [which Mr Farrell freely admitted to], is struggling to frame the application in appropriate terms, then we consider a duty falls to the Commissioner to assist. In saying this we clearly distinguish jurisdictional questions from issues going to merit.

(48) Commissioner Shelley went on to say that in the circumstances it would be necessary for the applicant to seek leave to have the application amended to bring it within jurisdiction. We agree that this is the procedurally correct approach.

(49) This question was pursued through an extended exchange between Mr Farrell and Commissioner Shelley which can be found at pages 68 to 74 of the original transcript. We are quite satisfied that Commissioner Shelley carefully explained the options which were available to Mr Farrell. Indeed, a short adjournment was granted to allow Mr Farrell the opportunity to consider his position. Mr Farrell subsequently chose to pursue his application under s.29[1A][b], albeit under protest in that he considered the form to be defective and that the Commission had the wider jurisdiction under s.19 in any event.

(50) The question of the alleged defectiveness of the form is, in this case, an important one. Mr Farrell's contention is that the first option refers to an alleged unfair termination whereas s.29[1A][a] refers only to an industrial dispute arising out of a termination, and there is no requirement for unfairness to invoke the jurisdiction.

(51) This section must of course be read in the context of the definition of industrial matter in s.3. This says in part:

"[iii] the reinstatement or re-employment of an employee or a former employee who has been unfairly dismissed; or"

(52) We have already found that a former employee cannot rely on the broad "catch all" in the preamble of "any matter pertaining to the relations of employers or employees". We therefore conclude that the only industrial dispute that may be considered under s.29[1A][a] is a dispute relating to an alleged unfair termination.

(53) Our view on this is strengthened by the Full Court decision in Newtown Timber and Hardware. This decision is clear authority for the proposition that a Commissioner has jurisdiction to order a payment of compensation by an employer to an employee who has been dismissed only when reinstatement is being sought by the applicant. Whilst Mr Farrell arguably did not seek compensation in the accepted sense of the word, he certainly did not pursue reinstatement and that, in our view, is a prerequisite to invoke the jurisdiction of s.29[1A][a].

(54) We are satisfied that Mr Farrell could not have found jurisdiction in s.29[1A][a] even if his application had been amended accordingly.

(55) The requirement in s.20[1][a] for the Commission to act "... without regard to technicalities or legal forms" cannot be read to say that the Commission can act without jurisdiction.

(56) We are satisfied that Commissioner Shelley acted properly in terms of both procedure and the application of the law.

(57) We reject both Grounds 3 and 4.

(58) Pursuant to Section 71[13] the appeal is dismissed and the decision of Commissioner Shelley is confirmed.

P L Leary
PRESIDENT

Appearances:
Mr K Farrell representing himself.
Mr C Willingham for The Crown in Right of State of Tasmania, Department of Premier and Cabinet, Office of the Premier.

Date and place of hearing:
2001
August 21
Hobart

1 T9288 of 2000
2 Exhibit F1
3 Original decision paras 42 to 44
4 Supra paras 54 to 56
5 Original decision paras 67 to 69
6 Original decision paras 46 to 49
7 Transcript para 410
8 Original decision para 51
9 Supra para 56
10 Transcript para 175
11 Judgement No. A96/1994 Industrial Law Tasmania
12 Transcript para 995
13 T4401 of 1993
14 Industrial Relations Amendment Act 1994
15 Industrial Relations Amendment Act 1997
16 Industrial Relations Amendment Act 2000
17 Transcript para 725
18 FCA100/1994 Green CJ Underwood and Zeeman JJ
19 Original decision para 63