C2758 Dec 1533/98 S Print R0234
AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Workplace Relations Act 1996
s.45 appeal against decision Print Q6109
issued by Commissioner Harrison on 16 September 1998
Construction, Forestry, Mining and Energy Union
(C No. 25031 of 1998)
COAL MINING INDUSTRY (PRODUCTION AND ENGINEERING) CONSOLIDATED AWARD 1997
(ODN C No. C00623 of 1989)
[Print P7386 [C2758]]
s.170GB application for order where employer fails
to consult trade union about terminations
Construction, Forestry, Mining and Energy Union
and
The Newcastle Wallsend Coal Company Pty
(C No. 23533 of 1998)
Various employees |
Coal industry |
VICE PRESIDENT ROSS |
|
SENIOR DEPUTY PRESIDENT MACBEAN |
|
COMMISSIONER DEEGAN |
SYDNEY, 21 DECEMBER 1998 |
Appeal against decision refusing orders to consult.
DECISION
1. The Newcastle Wallsend Coal Company Limited operates Gretley Colliery, an underground mine near Newcastle. The Company's geological estimates are that current coal reserves will be exhausted in two to three years. As a result of the mine having been used over a long period of time it is very costly to extract as the coal working face is approximately four kilometres from the surface entrance and most of the mining equipment is old.1 The mine was on a month to month review as to its continued operation since January 1998.2
2. In February 1998 a restructuring took place at the Gretley mine in order to try and achieve efficiencies and approximately 15 CFMEU members were retrenched.3
3. In May 1998 the cost to produce a tonne of saleable coal at the Gretley mine was $50.14 and the budgeted cost was $41.95. The total cost to get the coal out of the ground and onto a ship was $58.28. The price for which coal was sold in the year to May 1998 was $46.06 against a budgeted price of $45.67. The Company made a loss of $12.22 for each tonne of coal sold. On an annualised basis this represented a loss of approximately $2.4 million.4
4. The CFMEU and the respondent had been negotiating an enterprise agreement in respect of the Gretley mine for some months prior to July 1998. On 23 June 1998 a meeting was held at Gretley between members and officers of the CFMEU and representatives of the Colliery. At that meeting the CFMEU was advised the Company's draft enterprise agreement was essential to the continued operation and viability of the mine.5
5. By the end of June agreement had not been reached on a new enterprise agreement. The Company's position at that time was that agreement with the union on the terms proposed by the Company would be an essential element for the future operation of the mine.6 On 29 June the Company advised the CFMEU that it could not continue to operate under the conditions which prevailed and further that all employees would be issued with retrenchment notices. On the same day the employees affected were sent a letter dated 29 June 1998, in the following terms:
"Due to the inability of the mine to meet the required cost structures for the operation to remain viable in today's continuing increasingly competitive market place the Company has decided to downscale the mine to care and maintenance.
You are hereby given notice of Retrenchment which will take effect on 3 August 1998. Due to an Industrial Agreement with the Construction, Forestry, Mining and Energy Union, the following will apply to your period of notice:
You will not be required to attend for work until Monday 13th July and you will continue to be paid weekly for the next two weeks on a projected roster basis which includes average mine bonus.
On Monday 13th July all persons remaining in employment at the mine will attend a meeting to formally vote on acceptance or rejection of The Gretley Colliery Enterprise Agreement Draft 8.
If you vote to accept the agreement then your notice of retrenchment will be withdrawn and you will commence work on your normal shift. The first shift shall be Night Shift on Monday 13th July Conditions of employment will be in accordance with the new Agreement.
If you vote to reject the agreement then the company will be prepared to pay out the remaining applicable weeks of notice and other entitlements. The remainder of entitlements will be paid as soon as you advise the pay office of your options in relation to eligible termination payments. (the two weeks from 29th June to 13th July 1998 is part of the period of notice).
The document Gretley Colliery Enterprise Agreement Draft 8 presented 29th June 1998 will remain unchanged."7
6. The notice of termination contained in the letter of 29 June 1998 was subsequently held to be void and of no effect because it was uncertain and ambiguous.8
7. On 2 July 1998 solicitors for Gretley sent a letter to the CFMEU in which the Company offered to consult with the union about trying to avoid redundancies.
8. On 3 July 1998 a meeting was held between the Managing Director of the Colliery's parent company, the Director of Organisational Service for the American parent company and various representatives of Newcastle Wallsend. The purpose of the meeting was to review the Northern Districts Mines. At that meeting the financial position of the Colliery was reviewed in some detail. This information is set out in the affidavit of John Patrick Casey dated 10 July 1998 at paragraphs 8 to 17 and annexures A, C, D and E.9 The position was found to be much worse than previously appreciated. In particular:
· the net cash flow year to date at Gretley Colliery was minus $3 million and not the minus $1.075 million as first thought in June;
· the June financials, although not yet finalised, would show a negative cash flow of minus $4 million;
· the operating profit was $400,000 below budget for the year to date. The indications were that this figure would worsen due to miniwall delays; and
· in the month of June there had been no reduction in the anticipated delay on miniwall production.10
9. As a result of discussions at the 3 July meeting a decision was taken to close the mine as soon as possible and place it on care and maintenance. The CFMEU was advised on the same day. A letter in the following terms was sent to all employees:
"After many months of discussions and attempts to maintain Gretley as a viable operation, the Company has decided to place the mine on indefinite care and maintenance. You will not be required to vote on the Gretley Colliery Enterprise Agreement Draft 8, and your remaining payments will be made to you shortly.
This decision has not been taken lightly and is as a result of the recent June results and current market conditions."11
10. On 7 July the CFMEU filed an application pursuant to s.170GB of the Workplace Relations Act 1996 (the Act). One of the orders sought was an order that the respondent consult with the CFMEU concerning the terminations of employment that the Company intended to effect.
11. On 8 July 1998 the Colliery's solicitors sent a letter to the Applicant stating, among other things:
"We refer to the AIRC proceedings served on us on 7 July 1998. Our client was surprised to receive these proceedings as you have not taken advantage of the offer to discuss the proposed terminations as set out in our letter of 2 July, 1998, a copy of which is attached. Our client is still prepared to consult with the CFMEU."12
12. On 10 July 1998 the s.170GB application was listed before Commissioner Harrison. At the hearing the Colliery's representatives stated:
"In regard to what my friend proposes about the information that's required to be presented for proper and full consultation I have now with me the General Mine Manager, the Director of Operational Services for the company, the Human Resources representative from the mine; we can provide any information that you want now, we are here, ready, willing and able to do so."13
13. The Commissioner then adjourned the proceedings into private conference. After the conference the Colliery's solicitors wrote to the CFMEU confirming the matters discussed in private conference.14 The affidavit of John Patrick Casey, which became Exhibit I2, was also served on the union. This affidavit contains information concerning the financial position of the Colliery, the evaluation of that information and the decision to place the mine on care and maintenance.
14. On Tuesday, 14 July 1998 Gretley's solicitors again wrote to the CFMEU stating:
"We refer to the conciliation held last Friday before Commissioner Harrison .... We are again before Commissioner Harrison tomorrow at 1.30 p.m. for report back. Despite raising the matters with you at Court yesterday, to date we have had no correspondence from you, telephone call or otherwise to seek further information. We are happy to meet with you prior to the report back tomorrow at the Commission or arrange a meeting at North Sydney to view any documents you wish to inspect. Could you please contact us as soon as possible."15
15. On the same day the Company sent further notices of termination to its employees. We discuss the contents of these notices later in our decision.
16. Late on 14 July 1998 the CFMEU requested further documentation concerning the financial position at the Colliery. This material was subsequently provided on 20 July 1998.16
17. On 15 July 1998 the matter was again before Commissioner Harrison. The Commissioner was informed by the CFMEU that there had been some discussions between the parties. At the conclusion of the report back it was agreed that the parties would meet on 20 July 1998 to allow the union access to any data they wished to view and for further consultation to take place. A meeting subsequently took place on 20 July 1998. Further information was provided to the CFMEU on 29 July 1998.17
18. On 17 August 1998 at the CFMEU's request the matter was relisted before Commissioner Harrison. On that occasion counsel for the CFMEU advised that the matter had not been resolved and her client wished to press for the orders sought in the application. The proceedings on that day were adjourned into conference. On 1 September 1998 the parties led evidence and made submissions in respect of the s.170GB application. On 16 September 1998 Commissioner Harrison handed down his decision. After canvassing the material and submissions before him the Commissioner concluded in the following terms:
"Having considered the evidence and submissions in this matter, I am not satisfied that Gretley has breached its obligation in respect of providing relevant information and the opportunity to consult within an adequate time frame.
I find that the date of termination was 11 and/or 18 August depending on the employee's length of service and not 14 July as submitted by the union...
During this period I am satisfied the union was informed of the reasons for the termination, was provided with the relevant information which gave rise to the decision to terminate and was provided adequate opportunities to consult with Gretley on measures to avert or minimise the impact of the terminations.
Furthermore, on the material before me I can find no evidence to support the claim that the mine is to recommence operations by using contractors. Under cross-examination, Mr Murray was unable to substantiate the claim and Mr Caseys evidence on this point was unswerving.
The union stressed it was disadvantaged during this period because the employees were not working and Gretleys decision was a fait accompli. In the circumstances of this matter I believe this is not an issue in terms of section 170GA. The evidence shows that Gretley was suffering from significant losses and that it would have placed further economic strain on it to operate the mine rather than retain it on a care and maintenance basis."18
19. The union subsequently appealed the Commissioner's decision and that is the matter before us.
20. The grounds of appeal are as follows:
"1. The Commissioner erred in finding that the date of termination of the employees' employment was not 14 July 1998;
2. The Commissioner erred in finding that Newcastle Wallsend Coal Company Pty Ltd had complied with its obligations under s170GA(1) of the Workplace Relations Act 1996;
3. The Commissioner erred in finding and/or giving weight to the fact that there was no evidence that the mine is to recommence operations using contractors;
4. The Commissioner erred in giving weight to the fact that Newcastle Wallsend Coal Company Pty Ltd was suffering significant losses and it would have placed further economic strain on it to operate the mine rather than retain it on a care and maintenance basis.
5. The Commissioner erred in refusing to grant the orders sought by the appellant."
21. In essence the CFMEU is challenging the Commissioner's conclusion that the respondent had not failed to provide relevant information and an opportunity to consult before the terminations occurred. The broad basis of the challenge was that the respondent did not provide either the information referred to in s.170GA(1)(a), or an opportunity to consult as envisaged by s.170GA(1)(b), before the employees were given notice of termination. The giving of notice on 14 July 1998 was said to constitute termination of employment in the context of s.170GA.
22. In the event that we concluded, contrary to the CFMEU's submissions, that the terminations occurred when the notice periods expired, on either 11 or 18 August 1998, then the CFMEU maintained that the respondent had still failed to provide the relevant information and opportunity to consult within the prescribed time.
23. The points advanced by the appellant requires a consideration of the proper construction of s.170GA. Section 170GA states:
"(1) Subsection (2) applies if the Commission is satisfied that an employer has, on or after 26 February 1994, decided to terminate the employment of 15 or more employees for reasons of an economic, technological, structural or similar nature, or for reasons including such reasons, and that:
(a) the employer did not, as soon as practicable after so deciding and in any event before terminating an employee's employment pursuant to the decision, inform each trade union of which any of the employees was a member, and which represented the industrial interests of such of those employees as were members, about:
(i) the terminations and the reasons for them; and
(ii) the number and categories of employees likely to be affected; and
(iii) the time when, or the period over which, the employer intended to carry out the terminations; or
(b) the employer did not, as soon as practicable after so deciding and in any event before terminating an employee's employment pursuant to the decision, give each such trade union an opportunity to consult with the employer on:
(i) measures to avert the termination, or avert or
(ii) measures (such as finding alternative employment) to mitigate the adverse effects of the termination or terminations.
(2) The Commission may make whatever orders it thinks appropriate, in the public interest, in order to put the employees whose employment was terminated pursuant to the decision, and each such trade union, in the same position (as nearly as can be done) as if:
(a) if paragraph 1(a) applies - the employer had so informed the trade union; and
(b) if paragraph 1(b) applies - the employer had so given the trade union such an opportunity.
(3) Subsections (1) and (2) do not apply in relation to a trade union if the employer could not reasonably be expected to have known at the time of the decision that one or more of the employees were members of the trade union."
24. The power to make the orders contemplated in s.170GA(2) is dependent on the establishment of certain jurisdictional facts:
1. The employer must have, on or after 26 February 1994, decided to terminate the employment of fifteen or more employees for reasons of an economic, technological, structural or similar nature, or for reasons including such reasons.
2. In addition to the above requirement, one of two circumstances must be established:
2.1 the employer did not, as soon as practicable after so deciding and in any event before terminating an employee's employment pursuant to the decision, inform each trade union of which any of the employees was a member, and which represented the industrial interests of such of those employees as were members, about:
· the terminations and the reasons for them; and
· the number and categories of employees likely to be affected; and
· the time when, or the period over which, the employer intended to carry out the terminations [s.170GA(1)(a)]; or
2.2 the employer did not, as soon as practicable after so deciding and in any event before terminating an employee's employment pursuant to the decision, give each such trade union an opportunity to consult with the employer on:
· measures to avert the termination, or avert or minimise the terminations; and
· measures (such as finding alternative employment) to mitigate the adverse effects of the termination or terminations [s.170GA(1)(b)].
25. The Commission must not make an order under s.170GA unless it has received an application for the making of an order from an employee or trade union whose position is to be affected by the order as mentioned in subsection 170GA(2); or a trade union whose rules entitle it to represent the industrial interests of such employees [s.170GB].
26. In this case there is no issue about the first jurisdictional requirement or about the fact that an appropriate application has been made within the meaning of s.170GB. The issue here concerns the second of the jurisdictional facts referred to above. In order to establish the existence of the circumstances identified the applicant must show that the employer did not:
· provide certain information to the CFMEU [s.170GA(1)(a)]; or
· give the CFMEU an opportunity to consult with the employer about measures to avert or minimise the terminations and to mitigate the adverse effect of the terminations [s.170GA(1)(b)].
27. In determining this issue an important consideration is the time frame within which he employer was to provide the specified information and the opportunity to consult. Section 170GA(1) provides that the Commission will have power to make an order under s.170GA(2) unless these steps were taken `as soon as practicable after so deciding and in any event before terminating an employee's employment'.
28. It seems to us that the effect of this provision is that the end of the time frame for the provision of the specified information and the opportunity to consult is `before terminating an employee's employment'. The reference in s.170GA(1) to taking certain steps `as soon as practicable' after making a decision to terminate the employment of fifteen or more employees, is qualified by the expression `and in any event before terminating an employee's employment'. It is the latter which defines the end of the time period. It follows that it is necessary to establish when the terminations in question took place.
29. At common law a valid notice of termination will operate according to its terms and will bring the contract of employment to an end when the notice expires.19 But the question for determination in the present case is not the meaning of the expression `terminating an employee's employment' in an abstract sense, but its meaning in s.170GA.
30. `Termination or termination of employment' is defined in s.170CD(1) to mean termination at the initiative of the employer. Further, s.170CD(2) provides that an expression used in subdivision C, D or E of Division 3 of Part VIA of the Act has the same meaning as in the Termination of Employment Convention (the Convention). Section 170GA appears in Subdivision E of Division 3 of Part VIA.
31. Accordingly, it is relevant to consider the meaning of the expression `termination at the initiative of the employer' as it appears in the Convention.
32. In this case each employee was given notice of termination by letter dated 14 July 1998. Depending on the length of an employees' service the notice period expired on either 11 or 18 August 1998. In the decision under appeal the Commissioner concluded:
"I find that the date of termination was 11 and/or 18 August depending on the employee's length of service and not 14 July as submitted by the union." 20
33. The appellant contends that the above conclusion was an error of law which tainted the rest of the decision. It was argued that the date of termination was not the date on which the notice period expired but the date on which notice was given, that is 14 July 1998.
34. The question of when a termination of employment occurs has been discussed in the context of the provisions relating to individual dismissal. Given the terms of s.170CD these decisions are relevant to the determination of this issue in the context of s.170GA.
35. In Siagian v Sanel Pty Ltd Wilcox CJ discussed the effect of payment in lieu of notice and concluded that where such payment was made the date of termination was, in the absence of evidence of a contrary intention, the date on which the notice was given, not the date on which the period of notice for which payment was made expired.21 In that case the respondent had made a payment on 29 March 1994 to the applicant in lieu of notice. The applicant contended that the employment was not terminated until the expiration of the period for which payment was made, being 15 April and as a consequence relief was available under Division 3 of Part VIA of the former Industrial Relations Act 1988 (the former Act).
36. After reviewing the relevant authorities his Honour concluded:
"It seems to me that in the absence of evidence of a contrary intention, it should usually be inferred that the employer intended the termination to take effect immediately. This conclusion not only reflects the more accurate meaning of the phrase `payment in lieu of notice'; it accords with common sense. An employer who wishes to terminate an employee's services, and is prepared to pay out a period of notice without requiring the employee to work, will surely usually wish to end the relationship immediately. If the employee is not to work, there is no advantage to the employer in keeping the relationship alive during the period for which payment is made; and there is the disadvantage that the employer will be burdened with employment related costs, such as workers' compensation insurance, payroll tax, liability for leave payments etc. The employer also incurs the risk that some new burden will be imposed in respect of the employment during the period.
I see nothing in the presence case to suggest that Sanel intended that its employment relationship with Mr Siagian should continue until 15 April. The statement of account given by Mr Bryant to Mr Siagian might be called back to work before the expiration of the period of notice. Mr Bryant supplied a separation certificate on 31 March, an action that would have been premature if the employment had not then terminated.
I conclude that the payment made to Mr Siagian in lieu of notice did not have the effect of extending his employment until 15 April." 22
37. In the course of his judgment his Honour also observed:
". . . given that the courts have sometimes recognised the possibility of a difference between a termination of employment and a termination of the contract of employment, it seems preferable to treat the words `termination of . . . employment' in Div 3 of Pt VIA of the Industrial Relations Act as including any act that brings to an end the employer-employee relationship, whether or not the act, or any acceptance of it, also brings to an end and the contract of employment".23
38. In APESMA v Skilled Engineering24 Gray J considered whether the giving of notice amounted to termination of employment within the meaning of ss.170EA and 170EE of the former Act. At 246 his Honour concludes:
"The giving of notice is the unilateral exercise of a right by a party to a contract. A notice is not capable of being withdrawn by the party giving it, without the consent of the other party. Such consent may create new contractual rights. If notice is not withdrawn by consent, it operates inexorably to bring the contract to an end, as long as it is notice in accordance with the contract and is not in contravention of any external provision with legislative force. (See Birrell v Australian National Airlines Commission (1984) 9 IR 101 at 109-111; 5 FCR 447 at 457-459 and the authorities there cited. Thus, in general, notice given by an employer will inevitably bring the contract of employment to an end at the expiry of the notice. There is nothing more the employer can or needs to do to produce this result. It is therefore appropriate to view the giving of notice as the `termination' for the purposes of ss170EA and 170EE of the IR Act.
For present purposes, the consequence of the construction which I have adopted is that any act of an employer bringing to an end or purporting to bring to an end a contract of employment, which occurred prior to 30 March 1994, is not a `termination' for the purposes of s170EA of the IR Act. No application under that section can therefore be made in respect of such an act. Early in these reasons for judgment, I identified three categories into which it was said that the 10 proceedings before me fell. It follows from what I have said that cases in each of those categories will be outside the jurisdiction of the Court given by s170EA. In each category, the relevant act of the employer occurred prior to the coming into operation of s170EA, which does not apply to it."
39. This approach appears to have been accepted without comment by Keely J in TWU v National Dairies Ltd where his Honour pointed out that the termination by way of notice did not occur when the employer posted the notice but rather on the date that the employee received the notice. 25
40. The appellant submitted that the reasoning of Gray J in APESMA relating to ss170EA and 170EA of the former Act applies with equal force to s170GA of the Act. It is consistent with the terms of the statute, and with the Convention from which the relevant provisions are derived: see Article 13 of the Convention Concerning Termination of Employment at the Initiative of the Employer. It was argued that in the context of this case once the notice of termination was given on 14 July 1998 the employment of the relevant employees terminated by the effluxion of time. No further action by the employer was required.
41. It is apparent that in Siagian and APESMA Wilcox CJ and Gray J adopt different propositions in relation to the meaning of the expression `termination of employment' in Division 3 of Part VIA of the former Act. In Siagian Wilcox CJ treated the expression as including any act that brings to an end the employer-employee relationship, whether or not the act, or any acceptance of it, also brings to an end the contract of employment. It is also apparent from his Honour's reasoning that the factual circumstances of a particular case may result in a finding that the effect of a payment in lieu of notice was that the date of termination was the date on which the period of notice for which the payment was made expired.
42. In APESMA Gray J takes a different view. His Honour concluded that any act of an employer bringing to an end or purporting to bring to an end a contract of employment amounted to a termination for the purpose of the former Act. As a consequence the giving of notice was viewed as the `termination' for the purpose of ss.170EA and 170EE of the former Act on the basis that the notice given would inevitably bring the contract to an end on the expiry of the notice and there was nothing more the employer can or needs to do to produce that result.
43. We are, with respect, unable to agree with the test formulated by Gray J in APESMA. Two particular factors count against the acceptance of the proposition advanced by his Honour.
44. First, the statutory context in which we are to consider the meaning of `termination' in s.170GA is different from that which confronted Gray J. In APESMA his Honour noted that the construction he proposed was supported by the provisions of s.170EA(3) which imposed a time limit in relation to applications under s.170EA. Section 170EA(3) provided that an application for relief had to be made `within 14 days after the employee receives written notice of termination' or within such further period as the Court allowed. His Honour dealt with the significance of this provision in the following terms:
"The time allowed is 14 days, although provision exists for the Court to allow a further period. Written notice might be for a long period. It would be strange if an employee who had received written notice was expected to make an application within 14 days, when the notice had not expired, and could not be given a remedy at the time of commencement of the proceeding (or even at the time when the Court tries the proceeding), because the "employment had not been terminated" (s 170EE(1)). If the giving of notice is regarded as the termination, and as giving rights immediately it occurs, the difficulty vanishes."26
45. The current provision in respect of the time within which an application for relief is to be filed is in different terms. Section 170CE(7) states:
"An application under subsection (1) or (3) must be lodged within 21 days after the day on which the termination took effect."
46. The differences between the former s.170EA(3) and s.170CE(7) are clear.27 Under s.170CE(7) the time period for the lodgment of applications for relief operates from when `the termination took effect'. The former s.170EA(3)(a) provided that the time period operated from when the employee `receives written notice of the termination'.28 This change in the statutory context weakens the force of the argument in support of his Honour's proposition.
47. Second, the approach taken in Siagian is consistent with subsequent Full Court authority. In Mohazab v Dick Smith Electronics (No. 2) the Court considered the ordinary meaning of the expression `termination at the initiative of the employer' and concluded:
"Viewed as a whole, the Contravention is plainly intended to protect workers from termination by the employer unless there is a valid reason for termination. It addresses the termination of the employment relationship by the employer. It accords with the purpose of the Convention to treat the expression "termination at the initiative of the employer" as a reference to a termination that is brought about by an employer and which is not agreed to by the employee. Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship. We proceed on the basis that the termination of the employment relationship is what is comprehended by the expression "termination of employment": Siagian v Sanel (1994) 1 IRCR 1 at 19; 54 IR 185 at 201. In many, if not most, situations the act of the employer that terminates the employment relationship is not only the act that puts in train the process leading to its termination but is, in substance, the entire process."29
48. It is important to note that the Court did not simply focus on the act of the employer which initiated the process leading to termination but on the entire process. Such an approach is at odds with that adopted by Gray J in APESMA.
49. The distinction between the employment relationship and the contract of employment was referred to in Brackenridge v Toyota Motor Corporation Australia Limited30. In that case the Court made it clear that there was a conceptual difference between the two situations and cited Siagian in support of that proposition. The Court held that where an employee is demoted but continues to work for the employer albeit in a different classification, although there is a termination of the contract of employment there is no termination of the employment relationship. For the employee to have a remedy the employment relationship must have come to an end.
50. In our view the expression `terminating an employee's employment' in s.170GA means the termination of the employment relationship by the employer. The question for determination in this case is when did the employment relationship terminate.
51. The question of whether or not an employment relationship continues to exist is a question of fact.31 In this regard it is important to note that the circumstances here are quite different to those in Siagian. In that case Wilcox CJ found that the employer-employee relationship terminated on 29 March when the respondent made a payment to the applicant in lieu of notice. His Honour noted that the question of whether a payment in lieu of notice immediately terminates the employment is always one of fact. In relation to the factual circumstances of that case his Honour concluded:
"I see nothing in the present case to suggest that Sanel intended that its employment relationship with Mr Siagian should continue until 15 April. The statement of account given by Mr Bryant to Mr Siagian was headed `Statement of Earnings on Termination'. His key was taken from him. Mr Bryant had no thought that Mr Siagian might be called back to work before the expiration of the period of notice. Mr Bryant supplied a separate certificate on 31 March, an action that would have been premature if the employment had not then terminated."32
52. In this case the respondent gave notice of termination by letter dated 14 July 1998. The terms of the letter are as follows:
"As you are aware you were given notice of retrenchment by way of a letter on 29 June 1998.
The CFMEU has raised an issue about the effectiveness of this retrenchment notice. Your employer does not agree with the CFMEU's view and says that the notice of retrenchment already issued to you is effective. However, we hereby give you notice of your retrenchment, effective 18 August 1998, which will take effect in the event that it is held (contrary to our submissions) that the earlier notice of retrenchment is ineffective.
This notice is without prejudice to our rights in relation to our earlier notice of retrenchment.
You will continue to be employed until the effective date of retrenchment and until then be paid weekly in accordance with the terms of the 29 June 1998 letter to you."
53. As we noted earlier in this decision O'Connor J subsequently decided that the notice of retrenchment given on 29 June 1998 was void and of no effect.33
54. The notice of termination clearly states that the employees would `continue to be employed until the effective date of retrenchment'. During the notice periods the employees received their payments weekly, and the company continued to contribute to superannuation and to pay employment on-costs such as workers' compensation. All employees' annual leave and long service leave calculations were made as at the end of the notice period.34
55. In this regard we note that in Siagian Wilcox CJ regarded the test of a continuing right or obligation as a useful one in determining whether a payment in lieu of notice immediately terminates a person's employment.35
56. Counsel for the CFMEU submitted that the situation in this case was analogous to that in Siagian in that the employees were not required to or permitted to attend for work. We do not agree with this submission. As we have noted the termination notice makes it clear that the respondent's intention was that the employees would continue to be employed until the effective date of termination. The fact that the respondent did not exercise its option of requiring the employees to attend and perform work is not to the point. As Dixon J said in Automatic Fire Sprinklers Pty Ltd v Watson:
"Some difficulty has been felt in saying what is the service which carries wages. The wages are an incident to the subsisting relationship of master and servant. A master who sends his servant upon a holiday upon full pay can be sued for wages under the contract, although not on a common county for work and labour done. They also serve who only stand and wait."
57. The appellant also argued that the approach contended for by the respondent and accepted by Commissioner Harrison in the proceeding below would defeat the purpose of s.170GA. It would negate the right of employees and their unions to have the opportunity for genuine consultation about avoiding or mitigating the effects of redundancies before an irrevocable and legally binding decision had been made. This submission requires a consideration of the legal effect of a valid notice of termination.
58. A valid notice cannot be withdrawn without the consent of the party to whom it is given, even where the period specified in the notice has not expired. As Gray J pointed out in Birrell v Australian National Airlines Commission36 if unilateral withdrawal of notice was allowed, most inconvenient results could follow: for example, an employee given notice might then enter into a fresh contract of employment with another to commence duty on the expiration of the notice from the present employer. If the notice could then be withdrawn by the first employer, the employee would find himself bound by two concurrent contracts of employment. But the fact that notice cannot be unilaterally withdrawn does not mean that the giving of notice is irrevocable. It is clear that such a notice could be withdrawn by the consent of both parties to the contract. In Riordan v War Office Diplock J said:
"The giving of a notice terminating a contractual employment, whether by the employee or employer, is the exercise of the right under the contract of employment to bring the contract to an end, either immediately or in the future. It is a unilateral act, requiring no acceptance by the other party, and, like a notice to quit a tenancy, once given it cannot in my view be withdrawn save by mutual consent."37
59. As a valid notice of termination may be withdrawn by consent it cannot properly be regarded as `legally binding and irrevocable' in the manner contended by the appellant. After consultation parties may agree on measures to avert some or all of the redundancies and as a consequence may agree to the withdrawal of the termination notices. We later discuss the specific circumstances of this case and the appellant's claim that the respondent had made an irrevocable decision on 3 July 1998 to terminate the employee's employment.
60. For the reasons given we have reached the same conclusion as the Commissioner below, namely that the terminations of employment in this case took place when the notice periods expired, that is on either 11 or 18 August 1998 depending on the length of an employee's service.
61. Contrary to the appellant's submission the Commissioner did not err in finding that the date of termination of the employees' employment was not 14 July 1998.
62. We now turn to consider the appellant's alternative submission, namely that the respondent failed to provide the relevant information, or an opportunity to consult, before the terminations occurred on 11 August 1998.
63. As mentioned earlier in our decision s.170GA(1) provides that before the Commission has power to make the orders contemplated in s.170GA(2) one of two circumstances must be established, among other things. The first relates to the provision of relevant information. In the circumstances of this case the applicant had to show that the employer did not, before 11 August 1998, inform the CFMEU about:
· the terminations and the reason for them; and
· the number and categories of employees likely to be affected; and
· the time when or the period over which, the employer intended to carry out the terminations.
64. In our view it is clear from a review of the material in the proceedings below that the respondent did inform the CFMEU about the matters referred to above, before the terminations occurred on 11 August 1998.38
65. The Commissioner did not err in concluding that the respondent had provided the CFMEU with the information referred to in s.170GA(1)(a) before 11 August 1998.
66. The second circumstance which may provide the Commission with the power to make orders pursuant to s.170GA(2) relates to the provision of an opportunity to consult about certain matters. In this regard the applicant had to show that the employer did not, before 11 August 1998 give the CFMEU an opportunity to consult with the employer on:
· measures to avert the termination, or to avert or minimise the terminations; and
· measures (such as finding alternative employment) to mitigate the adverse effect of the terminations [s.170GA(1)(b)].
67. The respondent contended that on at least seven occasions from 2 July 1998 it had offered to consult the CFMEU about the pending redundancies.
68. The appellant argued, in essence, that no opportunity for genuine consultation was provided because on 3 July 1998 the respondent made an `irrevocable decision' to place the mine on care and maintenance and consequently to terminate the employee's employment. To the extent that the respondent purported to offer an opportunity for consultation after 3 July 1998 such an opportunity was not genuine and could not have affected the outcome. We think that there is some substance in the appellant's submissions on this point.
69. It is clear from Mr Casey's evidence in the proceedings below that on 3 July the Company had made an `irrevocable decision' to put Gretley Colliery on care and maintenance indefinitely. The following exchange took place during the course of Mr Casey's evidence:
"Mr Casey: ... On 29 June a decision was made to retrench the employees and those retrenchments would be withdrawn if an agreement was reached with respect to an acceptable cost structure for the mine. On 3 July, after examining the financial and operational figures, but predominantly the financial figures that came out at the end of June, a decision was taken to put the mine on care and maintenance indefinitely.
Ms Howell: You say that was an irrevocable decision at that stage, do you?
Mr Casey: That's correct, yes."39
70. It is also apparent from Mr Casey's evidence that the Company did not consider any option - such as contracting out, selling or re-opening - other than putting the mine on indefinite care and maintenance. It was said that there was insufficient management time available to consider other options.40
71. The chronology of events tendered by the respondent in the proceedings below41 shows that the respondent first provided the CFMEU with an opportunity to consult on 2 July 1998. The letter sent by the solicitors for Gretley to the CFMEU on that day stated, among other things:
"... we wish to advise you that our client is ready to talk to the union at any time about avoiding retrenchments at Gretley Colliery and that there has been a long history of consultation with your union relating to issues at Gretley."42
72. We do not think that the discussions which took place prior to 2 July 1998 can properly be characterised as constituting an opportunity to consult within the meaning of s.170GA(1)(b). The earliest it can be said that the Company decided to terminate anyone's employment was on 29 June 1998. No opportunity to consult was provided between 29 June 1998 and the letter of 2 July 1998.
73. In circumstances where the respondent had made an `irrevocable decision' to place the mine on care and maintenance indefinitely and consequently to terminate the employee's employment, any subsequent offer to consult cannot be said to satisfy the requirements of s.170GA(1)(b).
74. Section 170GA(1)(a) speaks in terms of providing an opportunity to consult with the employer on, among other things, `measures to avert ... the terminations'. After 3 July 1998 any consultation with the respondent about measures to avert the terminations was rendered nugatory by the fact that the respondent had already made an `irrevocable decision' to terminate the employees' employment.
75. In our view the opportunity to consult envisaged by s.170GA(1)(b) must be a real opportunity not simply an after thought. As the Privy Council said in Port Louis Corporation v Attorney General of Mauritius:
"The requirement of consultation is never to be treated perfunctorily or as a mere formality."43
76. In the context of a case concerning the statutory obligation to consult in relation to decisions regarding variations in public transport routes Sachs LJ observed:
"Consultations can be of very real value in enabling points of view to be put forward which can be met by modifications of a scheme and sometimes even by its withdrawal. I start accordingly from the viewpoint that any right to be consulted is something that is indeed valuable and should be implemented by giving those who have the right an opportunity to be heard at the formative stage of proposals - before the mind of the executive becomes unduly fixed."44
77. We are also supported in this regard by the decision of Munro J in PKIU v Federal Capital Press of Australia Ltd.45 In that case his Honour was dealing with an application under s.170GB for an order under s.170GA. At p5 of the decision his Honour observes:
"... Mr Cahill contended that subparagraph (b) had not been complied with by the company. Before terminating an employee's employment pursuant to the decision, the employer had not given the PKIU an opportunity to consult with it on measures to avert the termination, or about measures to mitigate the adverse affects of the termination or terminations.
On a provisional basis I incline to the view that there is substance in the contention made by Mr Cahill. However, that substance derives almost entirely from my reading of subsection 170GA(1)(b)(i) to require that in this instance FCP consult with the PKIU about measures "to avert the termination" to the extent of consulting about averting the decision to contract out.
In other words, I read subsection 170GA(1)(b) as requiring the employer to discuss in effect the commercial decision in consequence of which the need for redundancies has arisen. If I am correct in reading subsection 170GA(1)(b) as going that far, then it could be said properly that in this instance the employer has not consulted about that decision in any meaningful way, and certainly not in a way which could be said to have been designed to avert it. It is common ground that the employer has outright refused to discuss the decision and has indicated that it is irreversible."
78. Unlike the Federal Capital Press case the respondent in the proceedings before us did not refuse to discuss the decision to terminate the employee's employment. But any offer to consult in relation to the matter was in the context that the respondent had already made an irrevocable decision. In these circumstances the respondent had not, to use his Honour's words, consulted about the decision in any meaningful way.
79. Nor do we think that the offer to consult made on 2 July 1998 satisfied the requirements of s.170GA(1)(b). An offer made the day before an irrevocable decision is taken to terminate the employees' employment does not, in the circumstances of this case, constitute a real or meaningful offer to consult.
80. In this regard we wish to emphasise that to establish that a real or meaningful opportunity to consult has been provided it is not necessary to show that consultation actually took place. It is only necessary to show that there was a real or meaningful opportunity to consult. A union could not refuse to take up an offer to consult and then claim that the employer did not satisfy s.170GA(1)(b). Nor is it necessary for the consultation process to result in any change in the employer's decision. Section 170GA(1)(b) relates to consultation not co-determination.
81. In the decision below it is apparent that the Commissioner had regard to the numerous offers to `consult' made by the respondent after 3 July 1998. This led the Commissioner to conclude that the respondent had provided an opportunity to consult about the matters set out in s.170GA(1)(b) before 11 August 1998. In our view the offers to `consult' made after 3 July 1998 were irrelevant as they were not real or meaningful. In that regard the Commissioner took into account an irrelevant consideration. In relation to the offer to consult made on 2 July 1998 we are not satisfied that that offer provided a reasonable basis upon which to base the conclusion reached in the decision below.
82. We think that the Commissioner erred in concluding that the respondent had provided an opportunity to consult about the matters set out in s.170GA(1)(b). It follows that the Commisioner also erred in concluding, in effect, that he had no power to make the orders sought as the necessary jurisdictional facts had not been established. In our view the Commissioner did have jurisdiction to make the orders sought.
83. In the event we concluded that the requirements of s.170GA(1) had been met the appellant submitted that it was appropriate for the Commission to make the orders sought by the CFMEU in the proceedings below. It was argued that the Commission as presently constituted was in as good a position as the Commissioner below to make an assessment as to the appropriateness of orders.
84. The orders sought are set out at schedule A to the applicant's statement of contentions in the proceedings below and are in the following terms:
"1. That Newcastle Wallsend Coal Company Pty Ltd withdraw all notices of retrenchment issued to its employees at Gretley Colliery who are members of the CFMEU.
2. That Newcastle Wallsend Coal Company Pty Ltd reinstate those CFMEU members employed at Gretley Colliery whose employment was terminated on about 14 July 1998 or subsequently to their former employment with continuity of all entitlements.
3. That Newcastle Wallsend Coal Company Pty Ltd provide full disclosure to the CFMEU within one week of the date of this order of:
a. any proposals it may have; or
b. any steps it has taken;
to make arrangements for a workforce other than the employees to perform the work which was until about 29 June 1998 performed by the employees.
4. That Newcastle Wallsend Coal Company Pty Ltd be restrained from issuing notices of retrenchment to its employees at Gretley Colliery who are members of the CFMEU until further order of the Commission.
5. That Newcastle Wallsend Coal Company Pty Ltd have consultations with CFMEU regarding:
a. the reasons for the terminations;
b. measures which might be implemented to avert the terminations;
c. measures which might be implemented to avert or minimise the terminations;
d. measures (such as the offering of alternative employment, or assistance in finding alternative employment) to mitigate the adverse effects of the terminations."
85. In the event that we were not persuaded to grant the orders sought it was submitted, in the alternative, that we should order the respondent to pay each of the employees whose employment was terminated an amount equivalent to six weeks remuneration. This amount was sought on the basis that the proper provision of information and an opportunity to consult could reasonably have been expected to take at least six weeks.
86. We are satisfied that we have power to make the orders sought, the question is whether we should exercise our discretion in the manner sought by the appellant. In this regard s.170GA(2) provides:
"The Commission may make whatever orders it thinks appropriate, in the public interest, in order to put the employees whose employment was terminated pursuant to the decision, and each such trade union, in the same position (as nearly as can be done) as if:
(a) if paragraph (1)(a) applies - the employer had not informed the trade union; and
(b) if paragraph (1)(b) applies - the employer had so given the trade union such an opportunity."
87. We note here that the respondent argued that the Commissioner had `in effect' concluded that it was not in the public interest to issue orders sought by the Union and we should not interfere with that decision. A reading of the decision subject to appeal does not support the respondent's submission. In our view the Commissioner did not address the public interest considerations in s.170GA(2), nor did he need to in light of his conclusion in relation to s.170GA(1).
88. We do not think it is appropriate, in the public interest, to make the orders sought by the appellant. In reaching this conclusion we have had regard to:
· all of the events which have taken place since February this year;
· the time that has elapsed since the termination of the employees' employment;
· the efficacy of any orders that may be made46 ; and
· the possible effect of the orders sought on the viability of the respondent.
89. In relation to the last ppoint the effect of an order requiring the respondent to reinstate the former Gretley employees was addressed in the evidence of Mr Casey in the proceedings below. According to Mr Casey the reinstatement of the relevant employees would place a significant drain and place at risk the financial position of both Newcastle Wallsend and Oakbridge.47
90. We find that:
1. The Commissioner did not err in finding that the date of the termination of the employees' employment was on 11 or 18 August 1998 and not 14 July 1998.
2. The Commissioner did not err in concluding that the respondent provided the CFMEU with the information referred to in s.170GA(1)(a) before 11 August 1998.
3. The Commissioner erred in concluding that the respondent had provided an opportunity to consult about the matters set out in s.170GA(1)(b).
4. The Commissioner erred in concluding, in effect, that he had no power to make the orders sought as the necessary jurisdictional facts had not been established.
91. We grant leave to appeal. As we have reached the same conclusion as the Commissioner in the proceedings below we dismiss the appeal.
BY THE COMMISSION:
VICE PRESIDENT
Appearances:
C. Howell of counsel with I. Murray and A. Slevin for the Construction, Forestry, Mining and
Energy Union.
H. Dixon of counsel with F. Inverarity for Newcastle Wallsend Coal Company Pty Ltd.
Hearing details:
1998.
Sydney:
December 8.
Decision Summary
Industrial dispute - termination of employment - retrenchments - consultation - appeal - full bench - various employees, coal industry - submitted Commissioner incorrectly determined date of termination - Commissioner erred in finding under s170GA(1) - held - date of termination was correctly determined - relied on Siagion v Sanel Pty Limited (1994) 1 IRCR 1 - s170GB - distinguished Gray J judgement in APESMA V Skilled Engineering (1994) 54 IR 236 - terminations took place when notice periods expired - agreed a failure to consult with unions under s170GA(1)(b) - Commissioner took into account irrelevant considerations - Commissioner had jurisdiction to make orders sought in first instance - Full Bench decided not in public interest to make orders sought - grant leave to appeal - appeal dismissed. | ||||
Appeal against decision refusing orders to consult re Coal Mining Industry (Production and Engineering) Consolidated Award 1997 | ||||
C No 25031 of 1998 |
Print R0234 | |||
Ross VP MacBean SDP Deegan C |
Sydney |
21 December 1998 | ||
Printed by authority of the Commonwealth Government Printer
<Price code F>
1 Affidavit of John Patrick Casey sworn on 10 July 1998, Exhibit I2 at para 3.
3 Statement of Ian Malcolme Murray, Exhibit H1 at para 3.
4 See Exhibit I2 at paragraphs 8 to 17 and Annexures A, C, D and E.
6 Exhibit H2, letter from the Company to the CFMEU dated 29 June 1998.
8 See Thickbroom v Newcastle Wallsend Coal Company Pty Ltd, per O'Connor J, NG 665 of 1998, 27 July 1998.
13 Transcript 10 July 1998 at p6.
17 Exhibit I1 at para 7 and 8 on p2.
19 Hull v Parsons [1972] 1 Ch 305 at 313-314 per Lord Denning; Birrell v Australian National Airlines Commission [1984] 9 IR 101 at 109; Grout v Gunnedah Shire Council (1994) 125 ALR 355 at 365. See generally McCarry G.J., `Termination of Employment Contracts by Notice' in (February 1986) 60 Australian Law Journal 78-86.
25 VI 153/94 22 August 1994. We note that in that case his Honour held that the mere posting of a letter of termination does not in itself amount to a termination of the employment of the employee concerned until its contents are communicated to the employee. The application of that proposition to the facts of the case meant that it was unnecessary for his Honour to express a view on the correctness of the conclusion reached by Gray J in APESMA.
27 See generally Kornicki v Telstra-Network Technology Group, Print P3168, 22 July 1997 at 9-10.
28 We note the time period in s.170CE(7A) operates `after the employee is given notice of the decision to terminate the employee's employment'. However s.170CE(7A) only applies to applications under ss.170CE(2) or (4). Subsections 170CE(2) or (4) deal with applications for relief on the ground of an alleged contravention of s.170CL. Subsection 170CE(2) provides that an application may be made by `an employee whose employment is proposed to be terminated'. Subsection 170CE(4) provides that an application may be made `if an employee's employment has been terminated or is proposed to be terminated'.
30 Unreported, Industrial Relations Court of Australia per Wilcox CJ, von Doussa and Marshall JJ, NI 1507 of 1996, 13 December 1996. See further David Jack Strachan v Liquorland (Australia) Pty Ltd, Industrial Relations Court of Australia per Moore J, NI 1266R of 1996, 6 February 1996.
31 Byrne v Australian Airlines Limited (1995) 185 CLR 410 at 428; Siagian v Sanel Pty Limited (1994) 1 IRCR 1 at 21.
33 Thickbroom v Newcastle Wallsend Coal Company Pty Ltd, per O'Connor J, NG 665 of 1998, 27 July 1998.
34 See affidavit of Mr John Patrick Casey, Exhibit I1 at paragraph 16.
35 (1994) 1 IRCR 1 at 22. Citing in support Stamp LJ in Lees v Arthur Greaves (Lees) Ltd [1974] ICR 501 and in Clayton v Lavender (1965) 42 TC 607 at 611.
37 [1959] 1 WLR 1046 at 1054 per Diplock J (affirmed on appeal [1961] 1WLR 210). Also see Harris & Russell Ltd v Slingsby [1973] ICR 454 at 455.
38 See the letter sent by the Company's solicitor to the union dated 10 July 1998 - p5 of Exhibit I1 - and the affidavit of John Patrick Casey - Exhibit I2 - which was served on the union on 10 July 1998.
39 Transcript of 1 September 1998, p35 at lines 24-32.
40 Transcript of 1 September 1998 at pp38-40.
43 [1965] AC 1111 at 1124. Cited with approval in TVW Enterprises Ltd v Duffy (1985) 60 ALR 687 at 694 per Toohey J.
44 Sinfield v London Transport Executive [1970] 1 CH 550 at 558.
46 See ALHMWU v Dixon Industries Ltd, Print N7811, 3 January 1997 per Bacon C.
47 Transcript of 1 September 1998, p44 at lines 23-36 and p45 at lines 1-2.
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