Allison v Bega Valley Council, Industrial Relations Commission of NSW, Full Bench, 1 September 1995, 16-17, as yet unreported

Judgment (12 paragraphs)

[1]

THE COURT: BACKGROUND This matter concerns an appeal from the judgment of Wilcox CJ given on 1 June 1995 where his Honour set aside orders in favour of the appellant made by Judicial Registrar McIlwaine ("the Registrar") concerning the appellant's claim that his employment had been unlawfully terminated by the respondent. His Honour ordered that the application of the appellant pursuant to s 170EA Industrial Relations Act 1988 ("the Act") be dismissed. His Honour formed the view that the employment of the appellant had not been terminated by the respondent. Accordingly the employment had not been terminated as that expression appears in s 170EA and the application was not competent.

[2]

The appellant commenced employment with the respondent on 14 November 1988. By 1991 the appellant had been promoted to the position of manager. On the day he ceased employment with the respondent, 19 May 1994, he was the Quality Control Manager. On the afternoon of 18 May 1994, the appellant was asked to attend at the office of Mr Mahoney, the Finance and Administration Manager of the respondent and informed that an item of stock (a toy radio) was not located on an inspection of stock in the appellant's department and that there was no record of movement of that item entered on the computer supervised by the appellant. The appellant was asked to explain. Early the next day the missing item was found in the appellant's department. Late in the afternoon of 19 May 1994 the appellant was called to Mr Mahoney's office again and re-interviewed by two security consultants engaged by the respondent, a Mr Jeffery and a Ms Iverach, in relation to the radio. At that time officers of the respondent suspected that the appellant had committed an act of dishonesty. Mr Mahoney and a Mr Callaghan (the immediate superiors of the appellant) were present at the interview at various stages. As a result of what transpired at the interview, as well as subsequent discussions which occurred between the appellant and Ms Sharon Horn, (the personnel officer of the respondent), the appellant's employment with the respondent came to and end. Immediately after the abovementioned discussions Ms Horn returned to her office to prepare a letter of resignation that was to be signed by the appellant. Mr Callaghan then proceeded to accompany the appellant to his office to enable him to collect his belongings. Following this the appellant was escorted from the premises of the respondent. After waiting in a car-park outside the respondent's place of business the appellant was handed a letter of resignation drawn by Ms Horn on behalf of the respondent. He was requested to sign it and did so. It is this combination of facts which has led the appellant to contend that his employment was terminated by the respondent, whilst the respondent for its part maintains its contention that the appellant decided of his own volition to resign from his employment. On 1 June 1994, the appellant made application under s 170EA of the Act for orders including an order declaring the termination of his employment by the respondent to have contravened Division 3 of Part VIA of the Act. The application was heard by the Registrar on 19, 20 and 25 January 1995. The appellant appeared in person at that hearing. On 27 March 1995 the Registrar delivered his reasons for judgment. He found that the respondent had contravened the Act in terminating the employment of the appellant. He also made orders for the reinstatement of the appellant and the payment of remuneration lost by reason of the dismissal. On 12 April 1995, the respondent moved the Court for an order that the decision of the Registrar be reviewed by a Judge of the Court pursuant to s377(2) of the Act. The review proceeding was heard before his Honour on 1 June 1995 and reasons for judgment were delivered on that day. Again the appellant appeared on his own behalf. As in the hearing before the Registrar the respondent was represented by counsel. The parties conducted the review proceeding on the basis that the transcript of the evidence before the Registrar should be treated as "evidence" before the Court on the review. No witnesses were called and the advantage of observing the manner in which the witnesses had presented their evidence remained with the Registrar. Additional evidence on affidavit was presented by the respondent. It must be assumed that wherever the Registrar made findings based upon his impressions of the reliability of witnesses the review proceeding as conducted was not challenging those findings. FINDINGS OF THE REGISTRAR The evidence of the appellant was accepted and preferred by the Registrar on all principal issues. The Registrar found that the witness on whose testimony much of the respondent's case relied was less than satisfactory. The Registrar made the following material findings squarely based upon his assessment of the demeanour and credibility of witnesses:- The appellant was given no opportunity to have present at the interview an independent person who "might provide an independent recollection of what went on in this interview". During the interview Mr Jeffrey told the appellant that either he resign or the police would be "called in". When the appellant signed his resignation letter he felt he had no alternative other than to resign.

A recent and more comprehensive discussion of the relevant cases can be found in the judgment of Burchett J in Rennie v The Commonwealth, Full Court of the Federal Court, 17 November 1995, as yet unreported. CONCLUSION The critical issue in this appeal is whether there had been a termination of the employment of the appellant. The statutory right to seek a remedy depends upon there having been. This emerges from the provisions of s170EA(1) which reads: "A person ("the employee") may apply to the Court for a remedy in respect of termination of his or her employment." Section s170CA provides that the object of Division 3 of Part VIA is to give effect to the Convention concerning Termination of Employment at the Initiative of the Employer and the Recommendation concerning Termination of Employment at the Initiative of the Employer which are Schedules 10 and 11 of the Act respectively. Section 170CB provides that an expression has the same meaning in the Division as it has in the Convention. The terms "termination" and "termination of employment" are defined in the Convention as meaning "termination at the initiative of the employer". Accordingly the terms "termination" and "termination of employment" in the Act have the same meaning. The Convention does not, however, define the expression "at the initiative of the employer" and its meaning in the Convention must be gleaned from the Convention as a whole. This expression does not appear in the Act and is imported into the Act by s170CB. It is distracting, in our opinion, to treat the question posed in the present case to be whether the applicant resigned or had his employment terminated by the respondent. A question framed in those or similar terms assumes that a resignation is not or could not be a termination at the initiative of the employer. The present task is to construe the expression "termination at the initiative of the employer" as it appears in the Convention and determine whether there has been such a termination in relation to the employment of the applicant. The approach to be adopted in construing a convention was discussed by von Doussa J in Andersen v Umbakumba Community Council (1994) 126 ALR 121, 124-125 in the following passage: "The rules which govern a national court when construing an International Convention which has been enacted into Australian domestic law are more liberal those than traditional cannons of construction of the English common law. In Commonwealth v Tasmania (the Franklin Dam case) (1983) 158 CLR 1; 46 ALR 625, Gibbs CJ at CLR 93 and Brennan J at CLR 222-223 considered that the relevant rules of interpretation are to be found in Art 31, paras 1 and 2 and Art 32 of the Vienna Convention on the Law of Treaties, and Murphy J at CLR 177 assumed that the interpretation principles in these Articles applied. See also Thiel v FCT (1990) 171 CLR 338 at 349, 356; 94 ALR 647 and Victrawl Pty Ltd v Aotc Ltd (1993) 117 ALR 347 at 350. The Vienna Convention was in force before the Termination of Employment Convention was adopted by the General Conference of the International Labour Organisation on 22 June 1982." The general rules of interpretation by the Vienna Convention are: "Article 31

A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.
The context for the purpose of the interpretation of the treaty shall comprise, in addition to the text, including its preamble and annexes: (a) any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty; (b) any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty. Article 32 provides: Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: (a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable." Apart from the rule of interpretation laid down in the Vienna Convention, Mason and Wilson JJ in Shipping Corp of India Ltd v Gamlen Chemical Co. (A'Asia) Pty Ltd (1980) 147 CLR 142 at 159; 32 ALR 609 at 618 (with whose judgment Gibbs and Aicken JJ agreed) said: "It has been recognised that a national court, in the interests of uniformity, should construe rules formulated by an international convention, especially rules formulated for the purpose of governing international transactions such as the carriage of goods by sea, 'in a normal manner, appropriate for the interpretation of an international convention, unconstrained by technical rules of English law, or by English legal precedent, but on broad principles of general acceptation', to repeat the words of Lord Wilberforce in James Buchanan & Co Ltd v. Babco Forwarding & Shipping (UK) Ltd [1978] AC 141 at 152; see also Stag Line Ltd v. Foscolo, Mango & Co Ltd [1932] AC 328 at 350."

We have not been referred in these proceedings to any instruments other than the Convention and our consideration of its meaning is by reference to its text only. It is necessary to consider the ordinary meaning of the expression "termination at the initiative of the employer" in context in the Convention having regard to its object and purpose. The word "initiative" is relevantly defined in the New Shorter Oxford Dictionary in the following way: "initiative 1. The action of initiating something or of taking the first step or the lead; an act setting a process or chain of events in motion; an independent or enterprising act." and in the Concise Macquarie Dictionary in the following way: "initiative 1. an introductory act or step; leading action; to take the initiative. 2. Readiness and ability in initiating action; enterprise: to lack initiative." These definitions reflect the ordinary meaning of the word "initiative". Viewed as a whole, the Convention 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: Siagen v Sanel (1994) 122 ALR 333 at 351; (1994) 1 IRCR 1 at 19. 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. An example would be a situation where the employer decided to dismiss an employee and did so orally or in writing with immediate effect. Other situations may be more complex as exemplified by the circumstances considered by Moore J in Grout v Gunnedah Shire Council (1994) 125 ALR 355 where an employee had given written notice purporting to terminate the employment relationship. The notice was not reasonable but was accepted by the employer which later refused to allow the employee to withdraw the notice. A question arose as to whether that was a termination of the employment at the initiative of the employer and his Honour held it was. His Honour said at 372: "I have already said that Div 3 concerns termination at the initiative of the employer. The respondent submits that 'initiate' means 'to begin, commence, enter upon; to introduce, set going, or initiate': see Shorter Oxford English Dictionary. In this matter, it is submitted, it was the applicant and not the respondent that initiated the termination by writing the letter of 18 May. This, in my opinion, gives the expression 'termination' in the Act, read in conjunction with Art 3 of the Convention which speaks of 'termination ... at the initiative of the employer', a narrow meaning that was not intended. A principal purpose, if not the sole purpose, of Div 3 is to provide an employee with a right to seek a remedy in circumstances where the employee did not voluntarily leave the employment. An employee may do some act which is the first in a chain of events that leads to termination. An example would be an employee who engaged in misconduct at work which ultimately led to the employer dismissing the employee. However, that situation and the present are not situations where the termination was at the initiative of the employee. In both instances the step or steps that effectively terminated the employment or purported to do so were taken by the employer." In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship. This issue was addressed by Wilcox CJ in APESMA v David Graphics Pty Ltd ("David Graphics"), Industrial Relations Court of Australia, NI 94/0174, 12 July 1995, as yet unreported, Wilcox CJ. His Honour, at 3, referred to the situation of an employee who resigned because "he felt he had no other option". His Honour described those circumstances as:- "... a termination of employment at the instance [of] the employer rather than of the employee". and at 5:- "I agree with the proposition that termination may involve more than one action. But I think it is necessary to ask oneself what was the critical action, or what were the critical actions, that constituted a termination of the employment." We now turn to consider the facts in this case. On the finding of fact that the respondent directed the appellant to resign or have the police "called in", it is our view that what occurred was a termination of employment at the initiative of the employer. When an employee has no effective or real choice but to resign it can hardly be said that the termination of her or his employment is truly at the employee's initiative. But for the insistence of the employer, termination of employment would not cross the mind of the employee. According to the appellant's evidence which as we have said the Registrar accepted, and preferred where it conflicted with evidence adduced by the respondent, the respondent told the appellant that it would have the police "press charges" against him. He was placed in a situation designed to induce him into resigning on the basis that he would be relieved of having to go through the ordeal of a police investigation. An unstated consequence of benefit to the respondent was that, in turn, it would be relieved of an obligation to the appellant to conduct a procedure that gave a fair opportunity to the appellant to answer any allegation made against him before the respondent terminated the appellant's employment if it decided so to act. It was not a real option for the appellant to respond to the respondent's ultimatum by electing to face a police investigation where there was an operative inducement that resignation would save the appellant and his family from the embarrassment that would ensue from an investigation. In so far as the ultimatum offered the choice of resigning it was not in the circumstances a real choice. On the facts as found by the Registrar the threat to call in the police was intended to induce a reluctant resignation in circumstances where the respondent had not completed its enquires and had not resolved to report the matter to the police. It appears to have been accepted by the Registrar as a finding that the appellant believed that a report to the police would place a stain on his character and inhibit his prospects of other employment in the future, irrespective of the outcome of a police investigation. The proper conclusion from the facts as found by the Registrar and presented to his Honour was that the respondent wanted the appellant's resignation because it desired to terminate the appellant's employment. There was no other reason for it to do so. It sought to do so in that way to avoid any consequences that might flow from summary dismissal of the appellant. It is apparent that on the findings of the Registrar as to what occurred at the interview the respondent made it clear through its representatives that it no longer desired to employ the appellant. In our opinion, the "critical action" here, to use the expression of the Chief Justice in David Graphics (supra), was the threat of the respondent that unless the appellant resigned the respondent would ask the police to charge him with an offence. The termination of the appellant's employment was not at his initiative. It was a resignation obtained by the respondent by an ultimatum designed to achieve that objective. That conclusion is reinforced by the peremptory conduct of the respondent in escorting the appellant out of the respondent's premises, leaving him to stand in a car-park to await a letter of resignation to be prepared by the respondent and brought to him to sign. That conduct by the respondent suggested summary termination of the appellant's services by the respondent rather than voluntary resignation by the appellant. It is necessary for present purposes to concentrate on the expression "termination at the initiative of the employer", as that expression is central to the operation of Division 3 of Part VIA of the Act. Accordingly it cannot be assumed that decisions concerning other legislative formulations or cases concerning constructive dismissal are to be applied without qualification when considering the provisions of Division 3. However industrial tribunals and courts have long accepted that an employee who resigns from his or her employment can and should be treated as having been dismissed by the employer if the dismissal is one where the employee did not resign willingly and, in effect, was forced to do so by the conduct of the employer. A recent example of such a case is in Alison v Bega Valley Council, Industrial Relations Commission of NSW, 1 September 1995, as yet unreported. A Full Bench of that Tribunal dealt with an appeal against a finding of a Commissioner that there had been no termination by an employer in like circumstances. The Full Bench reached a contrary conclusion and at pages 16-17 of its reasons the Full Bench said:- "In the circumstances of these proceedings, the threat made by the employer to call in the police was always regarded by Mr Allison as a significant factor. Indeed, the threat of police action and the consequent impact that it would have on Mr Allison and his family were at all material times motivating in his decision ultimately to tender a letter of resignation. It is clear from the evidence that he was otherwise reluctant to do so. Such a threat in our opinion has in the circumstances of these proceedings similar force and effect as a threat of dismissal. There was no doubt in the mind of the General Manager that the threat was real and that Mr Allison so understood it. Given the natural impact that this would have on Mr Allison we regard the threat in the overall context in which it occurred as having the same force and effect in initiating the letter of resignation as if it had been in fact a threat of dismissal. This is particularly so where we are satisfied that, as Commissioner McKenna found, there were mitigating circumstances in Mr Allison's favour." As Kennedy J stated at 4, 6 in The Attorney-General v Western Australian Prison Officers' Union of Workers ("Western Australian Prison Officers' Union"), Western Australian Industrial Appeal Court, Appeal IAC 8 of 1995, 3 November 1995, as yet unreported, where the question was whether the employer had dismissed the employee by threatening, inter alia, to call in the police unless the employee resigned, the test is who "really terminated" the contract of service. In Auckland Shop Employees Union v. Woolworths (NZ) Ltd (1985) 2 NZLR 372 at 374 Cooke J held that the words "unjustifiable dismissal" included cases: "...where an employer gives a worker an option of resigning or being dismissed; or where an employer has followed a course of conduct with the deliberate and dominant purpose of coercing a worker to resign." [emphasis added] It is unnecessary to consider whether the facts fall within or without the notion of constructive dismissal. (See: Western Australian Prison Officers' Union, per Rowland J at 7-8 and the cases there cited.) A useful discussion of the law on constructive dismissal is found in "Constructive Dismissal of Employees in Australia": McCarry (1994) 68 ALJ 495. We are of the opinion that on the facts found by the Registrar and presented to his Honour, the employment of the appellant was terminated at the initiative of the employer. Accordingly there had been a termination of the appellant's employment within the meaning of s170EA of the Act and the Court had jurisdiction to determine the appellant's application. ORDERS: It was common ground that if the Court decided to set aside the orders of Wilcox CJ on 1 June 1995 the matter should be remitted to a single Judge of the Court to hear and determine afresh the review proceedings under s377. A directions hearing will have to be held to determine how the parties intend to conduct the review proceedings. The Court is of the view that it is appropriate to make the following orders:

The orders of Wilcox CJ of 1 June 1995 be set aside.
In lieu thereof the Court orders that the application under s 170EA Industrial Relations Act 1988 ("the Act") be remitted to a single Judge of the Court for a hearing by way of review under s377 of the Act. I certify that this and the preceding 17 pages are a true copy of the Reasons for Judgment herein of their Honours Justices Lee, Moore and Marshall. Associate: Date: 28 November 1995 Counsel for the Applicant: Mr C Newlinds (directly briefed) Counsel for the Respondent: Mr M Scott Solicitor for the Respondent: Cutler Hughes & Harris Date of hearing: 19 September 1995 Date of judgment: 28 November 1995

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Judgment (12 paragraphs)

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