T368
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IN THE TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984
REASONS FOR DECISION APPEARANCES:
DATES AND PLACES OF HEARING: 23.04.86 Hobart
This is an application by the United Firefighters' Union for interpretation of Clause 24 (Termination of Service) of the Fire Brigades Award1, which is cast in the following terms: "24. TERMINATION OF SERVICE Employment may be terminated by the employee on giving not less than one week's notice or by the employer on giving not less than one weeks' notice, or by the forfeiture of payment of one week's wages as the case may be, but this shall not affect the right of the employer to dismiss any employee without notice for misconduct or neglect of duty in which case the wages shall be paid up to the time of dismissal only." The circumstances that prompted this application were as follows:- Mr. Lowe, a Senior Fire Fighter, was taken ill on 3 February 1984. He was paid sick leave up to and including 8 May 1984, at which time his paid entitlement was exhausted. He was still on unpaid sick leave on 13 July when the State Fire Commission was advised by Mr Lowe's doctor that he was permanently unfit for work. At that stage the Fire Commissioner considered the options open to him. In the words of Mr Crew those options were: "Now receipt of that letter, stating that Mr Lowe was permanently unfit for work, created two options for the Commission. The first option was that we could terminate Mr. Lowe's employment by giving one week's notice2 and terminate him on the grounds of ill health/early retirement - based on that evidence. And the second option was that we could leave Mr. Lowe on the payroll as unpaid, so that he would be eligible for total, but temporary, disabled benefit. Now this is a benefit not payable by the State Fire Commission, but by the superannuation scheme under which the United Firefighters' Union operate. The Commission opted out for option B - that is to allow Mr. Lowe to stop on the payroll as unpaid, so that he would receive this benefit under the superannuation scheme. And the reason for that was that the Commissioner considered that this provided the greatest potential benefit to Mr. Lowe in view of his circumstances."
And later, Mr Crew stated: "So really it's been a question of, not of a formal termination of notice [sic.] at all; it has always been the case that Mr. Lowe, because of his ill health, was going to retire. It was just a question of when he would finally retire and whether he would retire on the grounds of ill health/early retirement or under the total and permanent situation. So there's never been any doubt in our mind that termination would occur. It was just a question of when and under what circumstances that termination would take place. Now when the decision by the managers of the superannuation scheme was finally made, and that decision was that he would be retired on the grounds of ill health and early retirement, the Commission then calculated with the managers the entitlements due to him and provided the letter of termination to him with his entitlements under that scheme."
It is clear therefore that some eleven months after receipt of medical advice the managers of the superannuation scheme to which Mr. Crew referred, and of which Mr. Lowe was a contributing member, decided he should be retired on grounds of ill health. This advice was duly communicated to the Fire Commissioner. On 27 June 1985 a special meeting was held at the headquarters of the Launceston Fire Brigade where Mr. Lowe was employed. Present were the Chief Officer, Deputy Chief Officer, Personnel Officer, representatives of the U.F.U. and Mr. Lowe himself. Apparently it was at that meeting that he was advised that his services were to be terminated with immediate effect. He was then offered his final "retirement cheque" and his final "salary cheque". These he refused to accept. On the following day (28 June) the Fire Commissioner wrote to Mr. Lowe in the following terms: "Dear Mr. Lowe I refer to your recent meeting at the Launceston Fire Brigade where Mr. Lowe was employed. Present were the Chief Officer, Deputy Chief Officer, Personnel Officer, at which you refused to accept your retirement cheque and final salary cheque. After discussions of some length, I now advise that the State Fire Commission's position is unaltered. We have been advised by National Mutual, the managers of the Superannuation Scheme, that medical reports they have received indicated that, although they do not consider your condition to be Totally and Permanently Disabling under the definition of the Scheme, you are, however, permanently unfit for duties with the Fire Service. I acknowledge that you have received a copy of Dr. Wilson's report dated 6th April 1985. I therefore advise that your date of termination stands, as advised, as the 27th June 1985. Notwithstanding this advice, National Mutual will advise you of a date for a final review of your medical condition. Enclosed please find a cheque for $52,875.50 being the amount of your Ill-Health Early Retirement Benefit. This benefit is paid without prejudice to any further claims you may wish to pursue. Also enclosed is a salary cheque for your outstanding balance of 93 days annual recreational leave and 51 days long service leave, being an amount of $9,244.80 less taxation. Following a check of your payments of Total but Temporary Benefits as per Regulation 12, sub-regulation 14 of the Fire Service Regulations, it would appear that all payments due have been paid, however, due to the exceptional circumstances, an ex gratia payment has been made in your case of one full months benefit. I would like to take this opportunity to formally convey my personal appreciation and the appreciation of the Fire Service for all the years of loyal service you have given to the Launceston Fire Brigade.
There is no doubt that the Fire Commissioner's letter provided confirmation that Mr Lowe's service had been terminated with effect from 27 June 1985. Not without interest, however, is the observation contained in the letter that his disability was not regarded as medically, totally and permanently disabling. Nevertheless it was considered by the managers of the superannuation scheme, and no doubt the Fire Commissioner, to be sufficiently serious as to render him permanently unfit for duties with the Fire Service. The U.F.U. therefore submitted that because Mr. Lowe was not given the required week's notice, he was, under the terms of Clause 24 of the award, entitled to a week's pay in lieu. Mrs Herbert tendered a legal opinion in support of that contention. The Fire Commissioner, on the other hand, refuted the claim, having earlier obtained advice from the Secretary for Labour to the effect that as Mr. Lowe knew he would have to retire for health reasons sooner or later, and having regard for the fact that he had made application to be admitted to the superannuation pension scheme, albeit on a temporary basis, that action by him constituted notice of resignation. A subsequent legal opinion obtained by the Commission confirmed this viewpoint. It seems to me that neither the Secretary for Labour nor the Commission's legal advisers have given close attention to the actual language used to describe the circumstances in which the services of an employee may be terminated for reasons other than misconduct or neglect of duty. In the Social Trainers' case3 the Commission set out a number of guidelines relating to the procedure to be observed in dealing with questions of interpretation. Guideline 7 was stated thus:
In the instant case it is obvious that Clause 24 intends that when an employer wishes to terminate an existing employment contract for reasons other than misconduct or neglect of duty he has two options. He may either give the employee concerned one week's notice and require the employee to work out the time, or he may summarily dispense with the employee's services after first paying him a week's pay in lieu of notice. The clause of course is silent on the contentious question of whether or not a week's pay should be given in circumstances where the employee was not at the time of termination being paid for work done; or otherwise entitled to remuneration in his capacity as an employee. An employment contract exists and is binding upon the parties until terminated. Except in the circumstance of summary dismissal for misconduct or neglect of duty, the Termination of Service clause makes it clear that in order to sever the contract existing between employer and employee, one side or the other must give to the other one week's notice of termination and allow the contract to run on for that period. Alternatively one side or the other must surrender one week's pay in the nature of damages. Had Mr. Lowe been given one week's notice of termination it is unlikely he would have been able to work it out. Having regard for the state of his health it is probable he would have been obliged to waive his right to serve out notice. In those circumstances he would have been entitled to receive no pay for the period. But the Commissioner, acting on advice, offered Mr. Lowe no formal period of notice. He was instead informed on 27 June that his services were terminated as of that date. On 28 June this was confirmed by letter. On the balance of probabilities it is reasonable to assume that Mr. Lowe knew his services would need to be terminated sooner or later because of ill health. But the fact remains he was not formally given the required week's notice. In those circumstances the award is clear: The employer forfeits a week's wages. Accordingly I declare that on the proper construction of Clause 24 of the Fire Brigades Award, an employee, whose services are terminated without the required week's notice, and for reasons other than misconduct or neglect of duty, is entitled to be paid in compensation therefore one week's wages. In the absence of any award definition of "wages", the amount payable should be calculated on the basis of one week at the employee's classified rate excluding overtime, shift or other like penalties. I would venture one concluding observation: Had this matter been left to me to decide on merit I would have found against the employee. It seems to me that his employer did all in his power to ensure that he had every possible advantage in the circumstances. In return for his humanitarian actions the Commissioner has had to face up to this application. But the law is the law. The U.F.U. application is entitled to succeed for the reasons given. And neither this Commission nor the parties can consider matters involving interpretation of awards on grounds predominantly relating to merit.
L. A. Koerbin 1 P031 |