Dec 711/00 M Print S7235
AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Workplace Relations Act 1996
s.45 appeal against part of decision Print S3304
issued by Commissioner Simmonds on 16 February 2000
(C No. 31422 of 2000)
s.170CE application for relief re termination of employment
JB Hi Fi
(U No. 32884 of 1999)
VICE PRESIDENT ROSS
SENIOR DEPUTY PRESIDENT WATSON
MELBOURNE, 22 JUNE 2000
Alleged unlawful termination.
 This decision deals with an appeal by Mr A Kenley (the appellant) against part of the decision and order of Commissioner Simmonds made in transcript on 16 February 2000 and set out in Print S3304. In his decision the Commissioner concluded that the termination was "harsh, unjust and unreasonable".1 The Commissioner then considered the question of remedy and decided that an order for reinstatement with maintenance of continuity of employment was appropriate. The order giving effect to the Commissioner's decision is in the following terms:
"For the reasons given in proceedings in transcript on Wednesday, 16 February 2000:
1. I order that the respondent re-instate the applicant by reappointing him to the position to which he was employed immediately before the termination.
2. That the respondent maintain the continuity of the applicant's employment.
3. This order is to come into effect from 9:00 am, 17 February 2000."
 The Commissioner declined to make an order in respect of lost remuneration. It is that aspect of the Commissioner's decision which is the subject of the proceedings before us. Before we turn to examine the decision subject to appeal and the grounds advanced in support of the appeal we propose to briefly set out some of the background to the termination of Mr Kenley's employment.
 Mr Kenley worked for JB Hi Fi Camberwell Pty Ltd (the respondent) as a retail salesperson selling televisions and hi fi equipment. He commenced employment on 3 September 1997. Shortly before the store closed on Saturday 17 July 1999 Mr Kenley noticed two customers looking at headphones and he asked them if they wanted help. One of the customers, a Mr Glennie, wanted to try a Sennheisser headphone set. This equipment was factory sealed and could not be trialled in the shop. Mr Kenley informed Mr Glennie of this fact. He then turned away and completed a sale with another customer. As he was leaving Mr Kenley noticed the two customers he had previously spoken to in the headphones section. According to Mr Kenley's evidence the following then took place:
"As I was passing them, I asked them if they wanted any further help. One started to aggressively complain about the service I had given him. He was abusing me and shouting and swearing in my face. He inadvertently spat in my face. He turned away from me and left the shop swearing and waving his arms pushing people aside as he left the shop. As he passed the counter he yelled `sack Andrew - he's an arsehole'."2
 Mr Glennie and the person accompanying him then left the store. Mr Kenley, who was proceeding in the opposite direction, then turned and followed Mr Glennie and the other customer out of the store. On his way out Mr Kenley took off his identification badge and gave it to the security officer. According to Mr Kenley's evidence this was standard practice when leaving the store.3 During the course of his cross examination Mr Kenley was asked why he followed the customers out of the store and he replied in the following terms:
"To try and clarify and pacify the situation. It's - at the time it was always JB's policy to do whatever was needed to be done to actually try and get the dollars into the till, to try and get the sale."4
 Mr Kenley also said that he was concerned that the customers comment may threaten his employment security as he had been given an earlier written warning in respect of unsatisfactory performance.
 According to Mr Kenley's evidence the following then took place:
"I quickly walked out of the front door and spoke to the customer on the footpath beyond the edge of the store . . .
I approached the customer and asked him if there was anything I could [do] to fix the problem. He immediately became very aggressive and said: `you weedy little cunt I'll punch your lights out.' I said to him that if he really wanted to try the headphones I'd see if we could arrange that the next day. I thought I could save myself and sell him something as well. He continued to threaten and abuse me. Another sales representative Michelina came up to me, told me not to bother and we went back into the shop where I made another sale."5
 The following Monday Mr Kenley was interviewed by Mr Bruce Thierback, the Assistant Store Manager, and Mr Steve Hansford. At the conclusion of the interview Mr Kenley's employment was summarily terminated.
Decision at First Instance
 Mr Kenley's s.170CE application for relief arising from the termination of his employment was heard on 16 February 2000. At the conclusion of the proceedings on that day the Commissioner gave his decision in transcript in which he found that the termination of Mr Kenley's employment was "harsh, unjust and unreasonable". For present purposes it is relevant to note that the Commissioner made a number of findings in relation to Mr Kenley's conduct on Saturday 17 July 1999, in particular:
". . . the discussion became quite heated and it is quite possible that people became abusive to each other, but I am satisfied that the aggressor in the situation from go to whoa was the customer and there is no question of Mr Kenley having been the aggressor at any stage in the proceedings.
He was, however, at the very least stupid in following the customer out of the store and I am satisfied that that behaviour in following the customer out of the store was improper although done as I find for the best of intentions, namely, the intention that the applicant claims. To the extent that it was necessary to make a finding of the facts there, the two findings are that the intention of the applicant was to resolve the problem and not to threaten or physically tangle with the customer in any way and that the aggressor in the whole process was the customer."6
 Later in his decision the Commissioner characterised Mr Kenley's actions in the following way:
"I have indicated it was stupid, it was potentially quite dangerous, it was not the action of a professional salesperson and it most certainly in the circumstances where there was no reliance on prior warnings would have warranted a final warning. It certainly warranted significant counselling as well to ensure that it didn't happen again, but it did not warrant the termination that occurred."7
 After concluding that the termination of Mr Kenley's employment was "harsh, unjust and unreasonable" the Commissioner turned to deal with the question of remedy:
". . . there is no evidence to suggest that reinstatement is not appropriate. I therefore propose an order that the respondent reinstate the employee by reappointing him to the position which he was employed immediately prior to the termination. I also propose to make an order that the respondent do what is necessary to maintain the continuity of the employee's employment. In view of the circumstances of this matter, and I've already said about the applicant's behaviour, I do not believe that it is appropriate to make any order in respect of the amount of money lost in the period between the termination and the date of reinstatement, which should be tomorrow."8
Submissions on Appeal
 The appellant contended that the Commissioner erred in failing to make an order in respect of lost remuneration pursuant to s.170CH(4)(b). There are two limbs to the appellant's case. The first turns on the construction of s.170CH(4)(b). The appellant submits that if the Commission makes an order reinstating an employee (pursuant to s.170CH(3)) then in the normal course orders of the type contemplated by s.170CH(4)(a) and (b) would also be made. Indeed it was argued that it would only be in exceptional or unusual circumstances that such orders would not accompany an order of reinstatement. During the course of oral argument counsel for the appellant, Mr Gray, provided the following illustration of an exceptional circumstance which would lead the Commission to decline to make an order for lost remuneration:
" . . . for instance, if an employee fails to turn up to answer an allegation and then the employer makes a decision to dismiss in the absence of all the information, and part of the reason for that is the employee's own conduct has contributed - has, if you like, assisted the employer to make an illegal decision."9
 We note here that the illustration provided by Mr Gray is inconsistent with another point advanced on behalf of the appellant namely that the common law principles pertaining to breach of contract should guide the matter. In that regard the appellant argued that the Commissioner's reliance on Mr Kenley's conduct was erroneous because it smacked of contributory negligence and those principles have no application in the context of s.170CH(4)(b).
 It was said the conduct of an applicant was irrelevant to the determination of whether an order in respect of lost remuneration ought to be made. In the alternative it was argued that only serious misconduct or misconduct should be taken into account. In the circumstances of this case counsel for the appellant contended that Mr Kenley's conduct amounted to a mistake that fell short of being misconduct.
 In support of the proposition that it would only be in exceptional or unusual circumstances that an order for lost remuneration would not accompany a reinstatement order the appellant relied on a number of judgments of the Industrial Relations Court of Australia including Klingenberg v IR Cootes Pty Ltd10 and Ferry v Minister for Health of Western Australia.11
 The appellant advanced two further points in relation to the proper construction of s.170CH(4)(b). First, it was argued that s.170CH(4)(a), providing for an order for continuity of employment, is expressed as being conjunctively related to s.170CH(4)(b). It was said that the two types of orders contemplated in s.170CH(4)(a) and (b) were cumulative, inextricably linked and did not form a class of alternatives. As such it was said that the two types of orders should be made together, not as alternatives. In the circumstances of this case a s.170CH(4)(a) order had been made and accordingly the Commissioner was required to also make an order pursuant to s.170CH(4)(b) for lost remuneration.
 The second construction point was that the words "any order that the Commission thinks appropriate" which appear in s.170CH(4)(b) must be read in the context of the provision as a whole. In particular these words should not be seen as conferring a general unfettered discretion. Rather, the discretion is to be exercised in a manner which is consistent with the appellant's primary proposition, that is that it would only be in unusual or exceptional circumstances that a s.170CH(4)(b) order would not follow an order for reinstatement.
 It was submitted that the words "any order that the Commission thinks appropriate" were only designed to give some "mechanical flexibility" to the Commission in the framing of an order, for instance, whether the order should be expressed in gross terms or net of taxation.
 The other limb to the appellant's case is that the outcome in this case was so plainly unjust as to warrant correction on appeal pursuant to the principles in House v King.12 In this regard Mr Gray said:
"I would suggest that what has happened in this case is that the dismissal has been found to be harsh and unjust and unreasonable. The Commissioner was in no doubt whatsoever that this was an unfair dismissal and the effect of the orders below were that the fellow sustained the equivalent of over a seven months period of suspension without pay. Now that, of course, there is no right at common law to suspend and a seven months suspension when the person is found to be an innocent party is plainly unjust in my submission."13
 The appellant seeks an order requiring the respondent to pay Mr Kenley the sum of $19,633, less applicable tax. This amount is calculated on the following basis:
· the period between the termination of Mr Kenley's employment (19 July 1999) and his reinstatement (17 February 2000) is thirty weeks;
· Mr Kenley's weekly wage was $940, hence his notional loss was $26,633 gross;
· the notional loss is then reduced by $7,000 being the sum earned by Mr Kenley during the relevant period.
 In reply Mr O'Grady, counsel for the respondent, argued that the appellant's construction of s.170CH(4)(b) is incorrect. The provision confers a general discretion and it was open to the Commissioner to have regard to Mr Kenley's conduct and on that basis the aspect of the decision at first instance which is subject to appeal was reasonably open and ought not be interfered with. In particular it was argued that there is no warrant for applying the common law principles with respect to breach of contract to the discretion reposed in the Commission pursuant to s.170CH(4). It was said that such a fetter on the Commission's discretion has no foundation in the language of the statute and would be unworkable.
 Mr O'Grady also contended that the Commissioner's characterisation of Mr Kenley's conduct as "stupid", "improper" and "warranting a final warning and counselling" was reasonably open on the evidence.
Consideration of Submissions
 The appellate jurisdiction conferred on us by s.45 in relation to an appeal concerning an order arising from the arbitration of an application under s.170CE is conditioned by s.170JF(1) which limits the grounds of an appeal. The only ground is that the member of the Commission who conducted the arbitration was in error in deciding to make an order. That can be an error of fact or an error of law.14 As the order subject to appeal is a discretionary one, the appeal is to be determined in accordance with the principles stated in House v The King.15 In House v The King, Dixon, Evatt and McTiernan JJ stated these principles as follows:
"The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred."16
 In the light of the principles applicable to an appeal from a discretionary order, we now turn to consider whether an error within these principles was made by the Commissioner in the exercise of his discretion.
 We turn first to the construction argument advanced on behalf of the appellant. Subsection 170CH(4) is in the following terms:
"(4) If the Commission makes an order under subsection (3) and considers it appropriate to do so, the Commission may also make:
(a) any order that the Commission thinks appropriate to maintain the continuity of the employee's employment; and
(b) subject to subsection (5)-any order that the Commission thinks appropriate to cause the employer to pay to the employee an amount in respect of the remuneration lost, or likely to have been lost, by the employee because of the termination."
 At the outset we note that the terms of s.170CH(4) are different to those in the comparable section at the time the cases relied on by the appellant were decided. At that time s.170EE of the then Industrial Relations Act 1988 said:
"(1) In respect of the contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, the court may make the following orders:
(a) an order requiring the employer to reinstate the employee by:
(i) reappointing the employee to the position in which the employee was employed immediately before the termination; or
(ii) appointing the employee to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination; and
(b) if the Court makes an order under paragraph (a):
(i) any order that it thinks necessary to maintain the continuity of the employee's employment; and
(ii) an order requiring the employer to pay the employee the remuneration lost by the employee because of the termination."
 Two differences are particularly relevant for present purposes.
 First, s.170CH(4) provides that orders in respect of continuity of employment and lost remuneration may only be made if the Commission "considers it appropriate to do so". There is no comparable expression in the former s.170EE(1). Hence an order in respect of lost remuneration would only be made where the Commission considered it "appropriate to do so". In our view the use of this expression in s.170CH(4) suggests the exercise of a discretion which is separate and distinct from the decision to reinstate the employee. The use of such language is, we think, contrary to the proposition that it would only be in exceptional or unusual circumstances that such an order would not follow an order of reinstatement.
 Second, s.170CH(4)(b) speaks of the making of an order "to cause the employer to pay to the employee an amount in respect of the remuneration lost . . . by the employee" (emphasis added). The former s.170EE(1)(b)(ii) is quite different. The words "in respect of" do not appear. The order to be made is simply one "requiring the employer to pay the employee the remuneration lost by the employee". We think that the words "in respect of" confer a broader discretion than that which operated under s.170EE(1). These words would enable the Commission, in appropriate cases, to order an amount less that the remuneration lost by the employee. Whether the Court had such a power under the former s.170EE(1) is, at least, open to doubt.
 Given the differences in the language used in the relevant statutory provisions we think that the cases relied on by the appellant are distinguishable. We turn now to the particular points of construction advanced by the appellant.
 In relation to the appellant's primary contention we see no proper basis for fettering the discretion conferred by s.170CH(4) in the manner proposed. The proposition that it would only be in exceptional or unusual circumstances that an order in respect of lost remuneration would not automatically follow an order for reinstatement is, we think, too limiting. As we have noted, s.170CH(4) provides that an order in respect of lost remuneration "may" be made if the Commission "considers it appropriate to do so". In our view there is no sound basis for limiting the operation of the words used in s.170CH(4). Contrary to the appellant's submission we do not think that the words referred to are merely designed to give the Commission some "mechanical flexibility" in framing an order, rather they go to the question of whether an order should be made at all. Nor do we think that the considerations which the Commission may take into account in deciding whether to make such orders are somehow limited by the common law principles relating to breach of contract. We agree with Mr O'Grady's submissions on this point.
 The final construction point advanced by the appellant was that the word "and" linking s.170CH(4)(a) and (b) is used conjunctively. As a consequence it was said that if one of the orders contemplated was made then the other must also be made - they should be made together not as alternatives.
 In ordinary parlance the word "and" is used conjunctively and the word "or" disjunctively. But the courts have on occasion been prepared to read "and" as "or" or vice versa. The circumstances in which the courts have been prepared to modify the usual meaning of these words fall into two categories:
- where the court has been persuaded that the legislature has made a mistake in the Act and the wrong conjunction has been used;17 or
- where reading the word in context results in a conclusion that word "and" is intended to have the effect of "or", and vice versa.
 In relation to the second category of cases Blackburn J, in Re: The Licensing Ordinance, said:
". . . [those cases] in which there was a list of items, the items being joined by `and' and the list being governed or affected by words which showed that the list was a list of alternatives. In such a case, the word `and' which is used to join the items in the list, is truly cumulative; it links the members of a class and its function is to indicate that the whole class is to be considered together. Governing the words which enumerate the members of the class are other words which categorize the class, as a whole, as a class of alternatives . . . the word `and' inside the class does not have dispersive or alternative force; its force is wholly cumulative; it is the words outside the class which give the dispersive effect."18
 The appellant contends that the two types of orders contemplated in s.170CH(4)(a) and (b) are "inextricably linked" and hence did not form a class of alternatives. We do not agree with the proposition that the two types of orders contemplated are inextricably linked. They are directed to quite different things. An order for lost remuneration seeks to compensate an employee for loss of remuneration between their termination of employment and reinstatement. An order to provide for continuity of employment is referable to the same period, but its benefits are more prospective. It ensures that the period specified is taken into account in determining any entitlement to service related benefits. Different considerations may bear on whether orders of the types contemplated are made. In a particular case an order in respect of continuity of employment may be unnecessary, perhaps because of undertakings given by the employer, but the making of an order in respect of lost remuneration is contested and must be determined. The converse may also apply. An applicant may obtain alternative employment immediately after the termination of their employment and as a consequence not lose any remuneration. In these circumstances an order under s.170CH(4)(b) would not be appropriate, but an order under s.170CH(4)(a) may be. It seems to us that there is no logical reason to require that the orders must be made together or not at all. Rather considerations of convenience and commonsense point in the opposite direction. If the Commission had the discretion to refuse to make any such orders or to grant either or both of the orders contemplated it would enable the orders made to be fashioned in a way which was just and appropriate to the circumstances of the case.
 Our consideration of this issue leads us to the tentative conclusion that the legislature has made a mistake and the wrong conjunction has been used, it should be "and/or". We say tentative conclusion because it is not necessary for us to express a concluded view on this issue given the decision we have reached in relation to the second limb of the appellant's case.
 In summary we think that the discretion conferred by s.170CH(4) is general in nature and it is to be exercised having regard to the context in which it appears and the scheme of the Workplace Relations Act 1996 as a whole. In deciding whether or not it is appropriate to make an order in respect of lost remuneration we think that the Commission may properly take into account all of the circumstances of the case, including the conduct of the applicant which led to the termination of employment in question. On the construction of s.170CH(4)(b) we have adopted, it was open to the Commissioner to have regard to Mr Kenley's conduct, but whether the result arrived at was plainly unjust, as contended by the appellant, remains to be decided.
 In the decision subject to appeal the Commissioner described the conduct of the applicant in following Mr Glennie out of the store as "stupid"; "improper"; "potentially quite dangerous"; and "not the action of a professional salesperson". The Commissioner also found that "there is no question of Mr Kenley having been the aggressor at any stage of the proceedings" and that he had been motivated by the best of intentions - namely, to "clarify and pacify the situation, to defuse the situation"19. The Commissioner concluded that Mr Kenley's conduct warranted a final warning and significant counselling but it did not warrant the termination that occurred.
 We think that these findings and the Commissioner's characterisation of Mr Kenley's conduct were reasonably open on the material in the proceedings at first instance. Having regard to those circumstances the question for determination on appeal is whether the Commissioner's decision not to make an order in respect of lost remuneration was so unreasonable or plainly unjust as to warrant review on the ground that a substantial wrong has occurred. We would answer that question in the affirmative. The practical consequence of the Commissioner's decision was to impose a substantial financial penalty on Mr Kenley - in the order of $19,633. In our view such an outcome is plainly unjust.
 The financial impact of the order upon Mr Kenley is out of all proportion to the conduct which attracted the Commissioner's censure. Mr Kenley made a mistake. His actions were "stupid", "improper" et cetera but he was not the aggressor in the incident and his actions were motivated by good intentions. By way of analogy we do not think it could seriously be contended that in the absence of termination it would have been reasonable for the respondent to suspend Mr Kenley for some seven months without pay (leaving aside the absence of a common law right to suspend without pay).
 We think that Mr Kenley's conduct warrants the imposition of some loss of remuneration but not to the extent determined by the Commissioner. We propose to make an order requiring the respondent to pay Mr Kenley fifteen weeks pay, less applicable tax.
 We have decided to grant leave to appeal and to uphold the appeal. The Commissioner's decision not to make an order pursuant to s.170CH(4)(b) is quashed and we will make an order requiring the respondent to pay Mr Kenley the sum of $14,100, less applicable tax.
BY THE COMMISSION:
Printed by authority of the Commonwealth Government Printer
<Price code D>
1 Transcript, 16 February 2000, p.119 at lines 29-33.
2 Exhibit G1 at paragraph 14.
3 Transcript, 16 February 2000, p.10 at lines 1-4.
4 Transcript, 16 February 2000, p.9 at lines 23-26.
5 Exhibit G1 at paragraphs 15 and 16.
6 Transcript, 16 February 2000, p.117 at lines 30-38 and p.118 at lines 1-3.
7 Transcript, 16 February 2000, p.119 at lines 23-28.
8 Transcript, 16 February 2000, p.121 at lines 18-27.
9 Transcript, 8 June 2000, p.9 at lines 11-15.
10 (1995) 63 IR 366.
11 (1996) 65 IR 374.
12 (1936) 55 CLR 499 at 504-505.
13 Transcript, 8 June 2000, p.17 at lines 9-17.
14 Edwards v Giudice  FCA 1836 per Moore J.
15 (1936) 55 CLR 499 at 504-5; see Construction, Forestry, Mining and Energy Union v Giudice at pp 28-29.
16 (1936) 55 CLR 499 at pp 504-505.
17 Eg R v Oakes (1959) 2 QB 350; see also Barker v Barker and Wade (1976) 13 ALR 123 where it was held that a reference to "as a wife and mother" in s.75(2)(1) of the Family Law Act 1975 (Cth) should be read disjunctively.
18 (1968) 13 FLR 143 at 147.
19 Transcript, 16 February 2000, p.10 at line 9.