[2007] AIRCFB 35

PR975821
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[Note: a correction has been issued to this document - see 2007AIRCFB35 PR987551 signed 24 June 2009]


AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 1996
s.120 appeal against decision [PR974111]
issued by Commissioner Hingley on 20 September 2006

Village Cinemas Australia Pty Ltd
(C2006/3107)

s.643 – Application for relief re (HUU) termination of employment

Carter

and

Village Cinemas Australia Pty Ltd
(U2006/5326)

SENIOR DEPUTY PRESIDENT DRAKE

 

SENIOR DEPUTY PRESIDENT KAUFMAN

 

COMMISSIONER EAMES

SYDNEY, 15 JANUARY 2007

Appeal – termination of employment - redundancy – sections 643(8), 643(9) and 649 - genuine operational reasons – respondent bears evidentiary onus – discretion - irrelevant considerations – consideration of alternatives to termination of employment - whether termination of employment for genuine operational reasons synonymous with termination for a valid reason based on operational requirements.

REASONS FOR DECISION

[1] Pursuant to s.643(1)(a) of the Workplace Relations Act 1996 (the Act) an employee whose employment has been terminated may apply to the Commission for relief in respect of the termination of that employment. Its relevant provisions read:

643 Application to Commission to deal with termination under this Subdivision

[2] However, s.643(8) limits the circumstances in which such an application for relief may be made. It reads:

[3] Operational reasons are defined in s.643(9) as follows:

[4] Section 649, insofar as is relevant, provides:

649 Dismissal of application relating to termination for operational reasons

[5] Although several members at first instance have dealt with motions to dismiss applications for relief on the basis that it had been alleged that the termination of the employee’s employment was for genuine operational reasons, this is the first occasion upon which these provisions have been considered by a Full Bench.

[6] The facts in this matter are relatively uncontroversial. They were conveniently recited by Mr M. Bromberg, SC, who appeared for Mr Carter, at paragraphs 407-409 of the transcript. Those paragraphs read:

[7] Consequent upon the termination of his employment, Mr Carter brought proceedings under s.643 of the Act claiming that the termination of his employment was harsh, unjust and unreasonable and also alleging that Village Cinemas Australia Pty Ltd (Village) had breached s.659 by reason of discrimination or other prohibited reasons.

[8] Village filed a notice of motion for dismissal of the application, insofar as the ground referred to in s.643(1)(a) is concerned, asserting that the application is outside the jurisdiction of the Commission because the employee’s employment was terminated for genuine operational reasons, or for reasons that include genuine operational reasons. Section 649 of the Act was thereby triggered and the matter came before a single member of the Commission for the jurisdictional objection to be dealt with.

[9] On 20 September 2006 the notice of motion was dismissed. i After reciting the facts as he found them, the Commissioner reached the following conclusions, which, as they are brief, are set out in full:

[10] On 4 October 2006, Village lodged an appeal against that determination.

[11] On the appeal, Mr C. O’Grady of counsel appeared for Village. Mr T. Ginnane, of Senior Counsel, intervened on behalf of the Minister for Employment and Workplace Relations and Mr Bromberg of Senior Counsel appeared for Mr Carter.

Appeal Principles

[12] Section 120(1) of the Act provides that an appeal lies to a Full Bench only with the leave of the Full Bench. Further, s.120(2) requires that a Full Bench grant leave to appeal if in its opinion, the matter is of such importance that, in the public interest, leave should be granted.

Alternatively, a grant of leave is governed by the conventional considerations for the grant of leave to appeal, including whether the decision is attended with sufficient doubt to warrant reconsideration or whether substantial injustice may result if leave is refused ii. As was noted by a Full Court of the Federal Court of Australia, these grounds for a grant of leave:

[13] There being no opposition to the grant of leave, and we being of the view that the matter is of such importance that, in the public interest, leave to appeal should be granted, we grant leave. Accordingly, the appeal proceeds by way of rehearing.  iv

[14] As the appeal is from a decision involving the exercise of a discretion, to succeed the appellant must show that the decision was affected by error in the manner explained in House v The King:

[15] The “discretion” that the Commissioner exercised is affected by s.649(2). After holding a hearing under s.649(1) dealing with the operational reasons issue and if, as a result of the hearing, the Commission is satisfied that the operational reasons relied on by the respondent were genuine, the Commission must make an order dismissing the application to the extent that it is made on the ground referred to in s.643(1)(a) (the allegation that the termination was harsh, unjust or unreasonable).

[16] The nature of such a discretion was considered by the High Court in Coal and Allied Operations Pty Ltd and Australian Industrial Relations Commission.  vi Gleeson CJ, Gaudron and Hayne JJ held:

[Footnotes omitted]

We have extracted the relevant extract from House earlier in our reasons.

[17] The exercise of the discretion by the Commissioner in the matter before us was quite narrow. He was required to make a particular decision if he formed a particular opinion or value judgment. It is thus incumbent upon us to determine whether there was error in the decision-making process at first instance.

[18] For Village it is put that the position is straightforward. The Doncaster cinema complex closed, with the result that there was no position available for a theatre manager, the job that Mr Carter had been performing. The reason for the termination of Mr Carter’s employment was the closure of the cinema. Thus, there was a genuine operational reason for the termination of Mr Carter’s employment. This, it is said, falls squarely within the definition of “operational reasons” in s.643(9) of the Act.

[19] In failing to find that there were genuine operational reasons, or reasons that included genuine operational reasons, for the termination of Mr Carter’s employment it is said that the Commissioner erred in the House v The King sense in that he acted upon a wrong principle or allowed extraneous or irrelevant matters to guide or affect him.

[20] The so-called irrelevant matters appear at paragraphs 18 to 23 of the Commissioner’s decision.

[21] The essence of Mr Bromberg’s case is that the closure of the Doncaster cinema complex was not a reason for the termination of Mr Carter’s employment. It merely created the circumstances which provided a justification for the termination of Mr Carter’s employment. He submitted that the reason for the termination of Mr Carter’s employment was the refusal by Village to allow him to take his long service leave. Additionally, the failure by Village to redeploy or attempt to redeploy Mr Carter to another cinema centre as manager, or offer him a lower classified position, were said to be relevant to the assessment of the genuineness of the operational reasons.

[22] In order to make out his case Mr Bromberg took us to the Termination of Employment Convention¸ and then the history of the legislation since the time that the harsh, unjust and unreasonable termination provisions first appeared in the Act. He, as well as Mr O’Grady and Mr Ginnane, referred us to the Explanatory Memorandum vii at the time of the introduction of the present provisions. Mr Bromberg placed considerable emphasis on cases decided during the short period that he contended the Act was most closely akin to its present form. He also relied on cases relating to the freedom of association provisions of the Act in order to draw an analogy between the expressions for a prohibited reason or for reasons that include a prohibited reason and for genuine operational reasons, or reasons that include genuine operational reasons.

[23] We have not found these submissions to be helpful. The “Workchoices” amendments to the Act wrought a significant alteration to the termination of employment regime. At the time that Mr Bromberg contends the Act was in the form most analogous to its present form it relevantly read:

[24] Mr Bromberg submitted that because at that time there was no reference to harsh, unjust or unreasonable ix the then Act was relevantly the same as it is now. We do not accept that proposition. Under the Act, in its present form, it is a bar to the bringing of proceedings if the employee’s employment was terminated for genuine operational reasons or for reasons that include genuine operational reasons. When s.170DE(1) applied, the provision was as set out in the paragraph above. There was no bar to bringing proceedings in such circumstances. In the course of determining whether an employer had breached s.170DE(1) the Commission had to determine whether there was a valid reason, or there were valid reasons, for the termination based on the operational requirements of the undertaking, establishment or service. The jurisprudence to which we have been referred, particularly Nettlefold v Kym Stoker x and Selvechandran v Peteron Plastics Pty Ltd,xi developed when it was necessary to determine whether a reason for termination was valid in the context of operational requirements. The present Act speaks of a termination of employment for genuine operational reasons. Had the Parliament intended the present provision to bear the same meaning as s.170DE(1) then it could have used those words.

[25] To make good his contention that the current provisions differ significantly from those that preceded them the Minister took us to various dictionary definitions. Although “operational reasons” are defined in the Act, the word “genuine” is not. Dictionary definitions define it thus:

[26] We agree with Mr Ginnane that a reason for the termination of the employment of a particular employee can be genuine in the sense that it is real, true or authentic, not counterfeit, whilst it may not have been valid, meaning sound, defensible or well founded in the Selvechandran xiv sense. The enquiry as to validity does not arise at the stage of the Commission determining whether a reason for termination was based on genuine operational reasons.

[27] Dictionary definitions also assist in determining whether basing the exclusion from jurisdiction on operational reasons has the same effect as the previous defence - that the employment was for a valid reason related to the employer’s operational requirements - to an allegation that a termination of employment was harsh, unjust or unreasonable.

[28] We agree with Mr Ginnane that the operational reason relied upon by the employer need only be a ground or cause for the termination of the employment of an employee. It need not be something that demands or brings about an obligation to terminate the employment of a particular employee. The termination of employment of the particular employee does not have to be an unavoidable consequence of the operational reason for the limitation in s.643(8) to operate. Consequently, whether the employer could have done something other than terminating the employee’s employment will generally be irrelevant in deciding whether the termination was for genuine operational reasons, or reasons that include genuine operational reasons. To pose the question whether the termination was a “a logical response to” the employer’s operational requirements xvii will also not necessarily assist in determining whether the termination was for genuine operational reasons. This may also be an appropriate question to pose in a consideration as to whether or not the operational reason advanced by the employer for the termination of employment of the particular employee was a sham or not. However, that question does not arise in this application.

[29] The jurisprudence, to which we were referred, that has developed in relation to the freedom of association provisions, dealing with different matters, in a different context, and where there is a reverse onus of proof, is of little assistance. We do however adopt the words of Finkelstein, J in Greater Dandenong City Council v Australian Municipal, Administrative, Clerical and Services Union: xviii

[30] Mr Bromberg referred us to ss.15AA and 15AB of the Acts Interpretation Act 1901.  Section 15AA provides:

[31] Section 635(1)(e) of the Act, provides that the principal object of Division 4 – Termination of Employment, is, by the procedures and remedies set out in sub-paragraphs (a) to (d), to assist in giving effect to the Termination of Employment Convention. xix

[32] The part of the Termination of Employment Convention upon which Mr Bromberg relied is Article 4 which reads:

[33] It can readily be seen that the pre-reform Act more closely approximated the Termination of Employment Convention than does the Act in its present form.

[34] To interpret s.643(8) in the manner contended for by Mr Bromberg would, in effect, be to revert to the pre-reform position.  It would be to equate the expression “for genuine operational reasons or for reasons that include genuine operational reasons” with “a valid reason ...based on the operational requirements of the undertaking, establishment or service” . This is something that the Parliament has deliberately eschewed by using the words that it has in s.643(8).  In our view the construction contended for by Mr Bromberg is not open.

[35] In our view, the expression genuine operational reasons should be given its natural meaning, taking into account the context in which the words are used. That context is, that if a termination of employment of a particular employee was for genuine operational reasons, or reasons that include genuine operational reasons, no application may be made to the Commission for relief in respect of such a termination. The operational reason must exist but we do not find it helpful to analyze the expression further or to determine whether the test is subjective, as Mr O’Grady contended, objective, as Mr Bromberg contended, or somewhere in between as Mr Ginnane contended.

[36] Nor do we accept Mr Bromberg’s submission that whilst a position redundancy may constitute a proximate reason for a termination it will be an operative reason for the termination where the position is redundant but the worker is not. To accept such an interpretation would, in our view, require an inquiry into the circumstances of the termination such that the Commission is required to determine the appropriateness of the termination rather than ascertaining whether the termination of the employment of the particular employee was for genuine operational reasons or reasons that included genuine operational reasons. This, it seems to us, is precisely the type of inquiry that the Parliament sought to avoid when it created the statutory bar to bringing applications for relief in s.643(8).

[37] Whilst different members of the Commission have used different expressions in determining whether a termination was for genuine operational reasons, in our view, care should be taken not to go beyond the plain meaning of the words as they appear in the Act, including its definition of operational reasons.

[38] Here the situation was clear. The cinema complex was closing and there was no longer a position for a manager. That circumstance led to the termination of Mr Carter’s employment. The closure of the cinema was at least one of the operational reasons for the termination of Mr Carter’s employment. Indeed, it seems to us that it was the reason. We reject Mr Bromberg’s submission that the reason was the failure by Village to allow Mr Carter to avail himself of long service leave and thereby remain employed for at least another six months. That decision by Village was a refusal to allow Mr Carter to take long service leave and thereby delay the implementation of its decision to terminate his employment. The refusal of Mr Carter’s request by Village, did not convert what was otherwise a termination of employment of a particular employee for genuine operational reasons into one that was not for such reasons.

[39] Whilst there will no doubt be cases where it will be necessary to examine the circumstances of a termination of employment of a particular employee said to be for genuine operational reasons, to determine whether or not the alleged operational reasons relied on by the employer were genuine, this is not such a case. In having regard to the matters set out in paragraphs 19 to 23 of his decision the Commissioner erred by allowing extraneous or irrelevant matters to guide him. As we have said, the termination of Mr Carter’s employment was a direct consequence of the closure of the Doncaster cinema complex. In this case there was no suggestion that his employment was terminated for any other reason.

[40] It is appropriate that we comment on paragraph 24 of the Commissioner’s reasons. An applicant for relief bears the onus of proving all the elements necessary to establish his claim. This includes satisfying the Commission that it has jurisdiction to deal with the matter. Where, as in this case, the respondent asserts that the application is precluded by operation of s.643(8), the respondent bears the evidentiary onus of persuading the Commission that the termination of employment of a particular employee was for genuine operational reasons or for reasons that include genuine operational reasons. It is in that context that a mere assertion by an employer to that effect will usually not be sufficient to discharge the evidentiary onus. What evidence will suffice will vary from case to case depending on the circumstances.

[41] Where, as in this case, it can be clearly established that the termination of employment was for operational reasons it is not necessary to have regard to such matters as the refusal of Mr Carter’s request for long service leave in order to ascertain whether the reasons relied on by the employer for the termination of the employee were genuine.

[42] Having granted leave to appeal, we allow the appeal and quash the Commissioner’s determination.

[43] Pursuant to 649(2) of the Act, as we are satisfied that the operational reasons relied on by Village for the termination of Mr Carter’s employment were genuine, we dismiss his application for relief to the extent that it is made on the ground referred to in s.643(1)(a).

BY THE COMMISSION:

SENIOR DEPUTY PRESIDENT



Appearances:

C O’Grady of Counsel for the Appellant

M Bromberg of Senior Counsel for the Respondent

T Ginnane of Senior Counsel for the Minister for Employment and Workplace Relations

Hearing details:

2006

Sydney

November 21



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 i   PR974111

 ii   CFMEU v AIRC (1998) 89 FCR, 200, 220.

 iii   Wan v Australian Industrial Relations Commission [2001] 116 FCR 481 @ [30]

 iv   Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission, (2000) 203 CLR 194

 v   1936 55 CLR 499 at para 505

 vi   (2000) 203 CLR 194 at paras 19-21

 vii   Workplace Relations Amendment (Workchoices) Bill 2005 (Cth) 321-324

 viii   Workplace Relations Act 1996 s.170DE(1)

 ix   The High Court in Victoria v Commonwealth (1996) 187 CLR 416 had ruled beyond the Parliament’s power s.170DE(2) which referred to a reason for termination of employment not being valid if the termination was harsh, unjust or unreasonable.

 x   (1996) 68 IR 370

 xi   (1196) 62 IR 371

 xii   The Macquarie Concise Dictionary (3rd ed) (1998), page 465 (emphasis added).

 xiii   The New Shorter Oxford English Dictionary (1993), page 1078 (emphasis added).

 xiv   Selvechandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 @ 373

 xv   The Macquarie Concise Dictionary (3rd ed) (1998), page 965 (emphasis added).

 xvi   The New Shorter Oxford English Dictionary (1993), page 2495 (emphasis added).

 xvii   Perry v Savills (Vic) Pty Limited Print PR973103, Watson SDP 20 June 2006 at para 41

 xviii   (2001) FCR 232 at para 212

 xix   ILO Termination of Employment Convention, 1982 (No. 158)