Abboud v The State of New South Wales - [2004] NSWIRComm 360 - NSWIRComm 2004 case summary — Zoe

NSWNSWIRComm

Abboud v The State of New South Wales

[2004] NSWIRComm 360

Industrial Relations Commission (NSW)|2004-07-01|Before: Sams DP, Mr P

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Court

Industrial Relations Commission (NSW)

Decision date

2004-07-01

Before

Sams DP, Mr P

Source

Original judgment source is linked above.

Judgment (103 paragraphs)

[1]

CITATION : Daniel Adam Pearce and Paul John Sandford [2004] NSWIRComm 360 APPLICANT: PARTIES : Daniel Adam Pearce RESPONDENT: Paul John Sandford FILE NUMBER: 393 of 2004 CORAM: Sams DP Termination of employment - unfair dismissal - part time shop assistant - out of time application - exercise of discretion - underpayment claim - sufficient reason - summary dismissal for misconduct - refusal to work overtime - swearing at the employer - whether dismissal harsh, unreasonable or unjust - procedural fairness - principles considered. CATCHWORDS : Held, delay in filing application not excessive - reasonable apprehension that monies owed might be jeopardised - sufficient reason established - exercise of discretion - application to extend time to file application granted - applicant did not contest allegations - applicant insubordinate - misconduct proven - employer acted too hastily - dismissal not harsh or unjust - dismissal unreasonable - reinstatement impractical - compensation at lower end of the scale - orders made. LEGISLATION CITED : Industrial Relations Act 1996 Abboud v The State of New South Wales (Department of School Education) (1999) 92 IR 32 Antonakopoulos v State Bank of NSW (1999) 91 IR 385 Bankstown City Council v Paris (1999) 93 IR 209 Blyth Chemicals Limited v Bushnell (1933) 49 CLR 66 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 Buckman v Burdekin (1998) 85 IR 415 Busways v Johnson (1994) 55 IR 255 Byrne and Anor v Australian Airlines (1995) 61 IR 32 Concut Pty Ltd v Worrell and Anor (2000) 103 IR 160 Day v Lumley Life Limited (1999) 90 IR 70 D & R Commercial Pty Ltd v Flood (2002) 113 IR 344 Electricity Commission of New South Wales t/as Pacific Power v Crump (1993) 48 IR 296 Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division, on behalf of Gregory Bowman and City of Sydney Council [2001] NSWIRComm 91 Police Association of New South Wales on behalf of Adam Tregonning, and New South Wales Police Service [2000] NSWIRComm 14 Ghunaim and CP & E Ting Pty Ltd [2000] NSWIRComm 272 Griffith Ex-Services Club Limited v Federated Liquor and Allied Industries Employees Union of Australia (1993) 51 IR 186 CASES CITED : Hill v Department of Juvenile Justice [2000] NSWIRComm 128 Humphries v Cootamundra Ex-Services and Citizens Memorial Club Limited [2003] NSWIRComm 211 Hunt v Hornsby Shire Council [2001] NSWIRComm 242 Hurrell and Queensland Cotton Corporation Limited [2003] NSWIRComm 139 John Lysaght (Australia) Limited and Federated Ironworkers' Association of Australia, New South Wales Division & Ors (1972) AILR 517 Johnson v Catholic Education Office, Diocese of Parramatta (1998) 87 IR 57 Little v Commissioner of Police (No.2) (2002) 112 IR 212 Martin v Nominal Defendant (1957) 74 WN (NSW) 121 Oswald v NSW Police Service (1999) 90 IR 42 Outboard World v Muir (1993) 51 IR 167 Paris v Bankstown City Council [1999] NSWIRComm 10 Staal and Tupene and Health and Research Employees' Association of New South Wales (on behalf of Nagy and Others) and Western Sydney Area Health Service [2004] NSWIRComm 27 Standley and Electronics Boutique Pty Ltd (unreported, Sams DP, IRC98/4516, 18 March 1999) Transport Workers' Union of Australia, New South Wales Branch, on behalf of Joseph Vallis, and TNT Australia Pty Limited, trading as TNT Express [2002] NSWIRComm 46 Wells v Commissioner of Police (2000) 100 IR 106 Western Suburbs District Ambulance Committee v Tipping (1957) AR (NSW) 273 Wilson v Department of Education and Training (2000) 100 IR 1 HEARING DATES: 10/05/2004 DATE OF JUDGMENT: 11/29/2004

[21]

15 There are, of course, general principles established by the Courts in respect to time limits and in particular the Commission's discretion to waive time limits. In Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, McHugh J said at p551: The discretion to extend time must be exercised in the context of the rationales for the existence of limitation periods. For nearly 400 years the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that "[w]here there is delay the whole quality of justice deteriorates"… and at p552: The effect of delay on the quality of justice is no doubt one of the most important influences motivating a legislature to enact limitation periods for commencing actions. But it is not the only one. Courts and commentators have perceived four broad rationales for the enactment of limitation periods. First, as time goes by, relevant evidence is likely to be lost (26). Second, it is oppressive, even "cruel", to a defendant to allow an action to be bought long after the circumstances, which gave rise to it, have passed (27). Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them (28). Insurers, public institutions and businesses, particularly limited liability companies, have a significant interest in knowing that they have no liabilities beyond a definite period (29), as the New South Wales Law Reform Commission has pointed out (30)… and at p553 …In enacting limitation periods, legislatures have regard to all these rationales. A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature's judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated. Against this background, I do not see any warrant for treating provisions that provide for an extension of time for commencing an action as having a standing equal to or greater than those provisions that enact limitation periods. A limitation provision is the general rule; an extension provision is the exception to it. The extension provision is a legislative recognition that general conceptions of what justice requires in particular categories of cases may sometimes be overridden by the facts of an individual case. The purpose of a provision such as s. 31 is "to eliminate the injustice a prospective plaintiff might suffer by reason of the imposition of a rigid time limit within which an action was to be commenced". (35) But whether injustice has occurred must be evaluated by reference to the rationales of the limitation period that has barred the action. The discretion to extend should therefore be seen as requiring the applicant to show that his or her case is a justifiable exception to the rule that the welfare of the State is best served by the limitation period in question. Accordingly when an applicant seeks an extension of time to commence an action after a limitation period has expired, he or she has the positive burden of demonstrating that the justice of the case requires the extension.

[22]

16 More recently, a Full Bench of this Commission said in Hurrell and Queensland Cotton Corporation Limited [2003] NSWIRComm 139: 12] Having made that observation, a lack of knowledge of the 21 days time limitation specified in s 85(1) of the Act may well be a relevant consideration in determining whether to accept an application out of time. A failure to consider or to give any weight to such evidence may well amount to a failure to have regard to evidence relevant to essential aspects of the exercise of discretion. The discretion to accept an application out of time involves balancing a range of considerations, including an applicant's ignorance of the relevant time limit, whether an applicant has an arguable case and the applicant's prospects of success. In Griffith Ex-Services Club Limited v Federated Liquor and Allied Employees Union of Australia (NSW Branch) on Behalf of Vian (1993) 51 IR 186, the Full Commission considered the predecessor provisions to those now contained in s 85 of the Act concerning late applications for relief from unfair dismissal (see s 246(3) - (4) of the Industrial Relations Act 1991) in this way: Those subsections, in our view, are procedural and expressly grant the Commission the discretion to allow the lodgement of applications beyond the 21 days prescribed in s246(2). The applicant employee carries the burden of showing why the Commission should exercise its discretion to grant such an extension: Lucic v Nolan (1982) 45 ALR 411 at 416. The discretion, however, requires the formation of the view that there is a "sufficient reason". Factors going to the formation of a view of a sufficient reason are outlined in s256(4)(a) to (d). It is not appropriate to formulate any definition of what constitutes a "sufficient reason": see Martin v Nominal Defendant (1957) 74 WN (NSW) 121. However, the evidence of the proceedings before the Commissioner was relevant to be considered pursuant to the statutory requirements in regard to the formulation of the view. 13] Similarly, in Skelly v Prouds Jewellers Pty Ltd (1994) 53 IR 3 at 6, in the context of an application for the extension of time to appeal, the Full Commission emphasised the need to take all relevant factors into account in determining an extension of time application; see also the decision of Walton J, Vice President in Brady v Kennedy t/as "Sardines" (1999) 91 IR 258. In our view, the considerations discussed in those decisions are apposite to the exercise of discretion under s 85(3) of the Act. In particular, we would adopt the observations of the Vice-President in Brady, that "the ultimate exercise of discretion is governed by the requirements of justice in a particular case".

[60]

52 In Byrne and Anor v Australian Airlines (1995) 61 IR 32 the High Court said a termination of employment "may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted" (p72). In Electricity Commission of New South Wales t/as Pacific Power v Crump (1993) 48 IR 296 at p302 the Full Commission said: The conciliation commissioner, therefore, in our view of his decision, was concerned that the ultimate sanction of termination of employment was too severe a penalty. That approach was properly open to the conciliation commissioner, notwithstanding his favourable finding as to the action of the appellant, is supported by the decision of Watson J in Metropolitan Meat Industry Board v Australasian Meat Industry Employees' Union, New South Wales Branch [1973] AR (NSW) 231 at 233 as follows : I fail to see why in applying this test to determine whether or not he should intervene, and having in mind the considerations referred to by Sheldon J in Loty's case [1971] AR (NSW) 95 at 99, the commissioner (or the Commission on appeal) is precluded from considering whether or not termination was too severe a penalty in all the circumstances - even if the dismissal was legally justified or even if, as Mr McDevitt put it, the point had been reached where at the particular time the employer's representative was faced with a situation which had developed to a stage where he had no other alternative. In some cases, the issue of unfairness has been resolved because of the way in which the employer has exercised his right to dismiss or because of the absence of adequate justification for dismissal. But even if there are grounds for terminating the contract of employment, it is still open to the tribunal to examine the severity or otherwise of the step of dismissal. The Commission, commissioners and committees have so acted in the past and have intervened to order reinstatement where because of mitigating circumstances or past good conduct, termination has been shown to be too harsh a consequence. See also Little v Commissioner of Police (No.2) (2002) 112 IR 212 , Busways v Johnson (1994) 55 IR 255 and Wells v Commissioner of Police (2000) 100 IR 106.

[70]

58 Did the serious misconduct here alleged constitute a wilful repudiation of the contract of employment by the applicant? In deliberating on this question, I refer to four authorities: In North v Television Corporation Ltd (1976) 11 ALR 599, Franki J said at p616: It is clear that a single act of disobedience may be sufficient to justify dismissal on the ground of misconduct but it was held in Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285, that to justify summary dismissal a single act must be such as to show that the employee was repudiating the contract of service or one of its essential conditions. The 1959 English case referred to makes it plain that an act of disobedience or misconduct (justifying dismissal) requires also that the disobedience must be " wilful ": … I do, however, think (following the passages which I have already cited) that one act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions; and for that reason, therefore, I think that one finds in the passages which I have read that the disobedience must at least have the quality that it is "wilful": it does (in other words) connote a deliberate flouting of the essential contractual conditions. (P288). Mr Edwards referred me to the decision of Hungerford J in Day v Lumley Life Limited (1999) 90 IR 70. There his Honour described the employment relationship as a serious contractual relationship involving rights and obligations on both sides: The employment relationship, I have to say, is a serious relationship with important incidents for both parties to it. It is a consensual relationship based on contract and with respective rights and obligations. It should not, I think, operate, or to be so seen, in practice in a way, which permits one party, here, the employer, to act in a one-sided manner contrary to the legitimate expectations and understandings of the other party, here the employee, and particularly where such action damages or detrimentally affects the career interests of the employee. Employees have a corresponding duty to act with fidelity and good faith. In Concut Pty Ltd v Worrell and Anor (2000) 103 IR 160, his Honour, McHugh J, dealt with the ordinary relationship of the employer and employee at common law: The ordinary relationship of employer and employee at common law is one importing implied duties of loyalty, honesty, confidentiality and mutual trust. At common law: "[c]onduct which in respect of important matters is incompatible with the fulfillment of an employee's duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal. ... [T]he conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to its future conduct arises." In the present case, the findings at trial went beyond mere uneasiness as to the future. They necessitated, or at least warranted, a conclusion that the "confidence" essential to the relationship of employer and employee had been destroyed. Instead of pursuing the interests of the company and its shareholders, the employee had pursued his own private interests. Not only was the employee in breach of his duty of fidelity and trust owed to the employer, he had remained in breach of that duty to the date of the trial. Until that time he had not accounted for the benefits wrongly appropriated by him. Indeed, he had denied any wrongful appropriation. The issue so tendered at the trial was determined against the employee. He was then subject to the employer's counter-claim for an order to make a refund. Such order was duly made at trial. It was not contested on appeal. Given his senior status in the company's service and the nature and extent of the misconduct disclosed in the evidence and accepted by the primary judge, it was open to him to find that the employee had undermined the confidence essential to the ongoing relationship of employment. Prima facie, this had afforded a legal justification for the employee's summary dismissal. It is, however, only in exceptional circumstances that an ordinary employer is entitled at common law to dismiss an employee summarily. Whatever the position may be in relation to isolated acts of negligence, incompetence or unsuitability, it cannot be disputed (statute or express contractual provision aside) that acts of dishonesty or similar conduct destructive of the mutual trust between the employer and employee, once discovered, ordinarily fall within the class of conduct which, without more, authorises summary dismissal. Exceptions to this general position may exist for trivial breaches of the express or implied terms of the contract of employment. Other exceptions may arise where the breaches are ancient in time and where they may have been waived in the past, although known to the employer. Some breaches may be judged irrelevant to the duties of the particular employee and an ongoing relationship with the employer. But these exceptional cases apart, the establishment of important, relevant instances of misconduct, such as dishonesty on the part of an employee like Mr Wells, will normally afford legal justification for summary dismissal. Such a case will be classified as amounting to a relevant repudiation or renunciation by the employee of the employment contract, thus warranting summary dismissal. See also Blyth Chemicals Limited v Bushnell (1933) 49 CLR 66; Transport Workers' Union of Australia, New South Wales Branch, on behalf of Joseph Vallis, and TNT Australia Pty Limited, trading as TNT Express and Hunt v Hornsby Shire Council [2001] NSWIRComm 242.

[76]

64 It is now well settled that each of the words - harsh, unreasonable and unjust - have their own discrete meaning and not all three descriptions of a dismissal are necessary for a finding of unfairness. In other words, a particular dismissal might be found to be "harsh" but not "unreasonable" or "unjust". This principle arises from the oft-quoted authority in Byrne & Anor v Australian Airlines where the expression "harsh, unreasonable or unjust" was considered in an Award clause. In their joint judgment McHugh and Gummow JJ said at p72: It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted. 65 The principle was further discussed in Outboard World v Muir (1993) 51 IR 167 where a Full Commission said: First we deal with the argument for the appellant that the Commission erred by applying the wrong test in connection with the dismissal: 'unfair' rather than 'harsh, unreasonable or unjust' dismissal. We agree with Mr Reitano's submission in this respect that the reference by the Commissioner to "unfairness" did not represent any misunderstanding of the correct test but was merely the use of a shortened form of expression intended to embrace the three relevant words. Whilst we recognise that there may be a natural tendency (recognised in the use even by the advocate for the Company before the Commissioner of the term 'unfair') to use the shortened form, we consider that it is preferable that a member of the Commission utilise the precise words provided by s246, rather than the catch-all heading, particularly when expressing the basis for a finding that a dismissal is within one or more of the heads provided by the section. We take this view because, even though there may be some circularity in the full phrase 'harsh, unreasonable or unjust', we detect scope for variation of meaning which may be critical to the determination of a particular matter and may be obscured by the use of the substitute term "unfair". Different but not wholly dissimilar words, "unfair", "harsh", and "unconscionable", are used in s275, power of the Industrial Court to Declare Certain Contracts Void, of the 1991 Act. In relation to those words, then appearing in s88F of the 1940 Act, the Commission in Court Session ( Perrignon , Cahill and Dey JJ) in A & M Thompson Pty Ltd v Total Australia Ltd [1980] AR (NSW) 399 at 418 Cahill J (delivering a separate judgment) said: The duty of the Commission is to reach a conclusion on the issues of whether the subject transaction is 'unfair', or 'harsh' or 'unconscionable'.