Fryar v Service Systems Pty Ltd

Notice of Motion On 13 July 1998 at the hearing of the motion already filed the applicants filed in Court an Amended Notice of Motion. After hearing the parties on a number of the issues raised in the Notice of Motion the following orders were made: 1. That leave be granted to file the Amended Notice of Motion in Court. 2. That the requirements of service be dispensed with. 3. That the motion be returnable instanter. 4. That the first and second applicants be granted leave to file in Court an amended application dated 13 July 1998. 5. That the hearing of the application be expedited. 6. That a notice pursuant to s 33X(1)(a) of the Federal Court Act be given to the members of the group in accordance with the notice as amended at annexure "A" to the affidavit of Ian Malcolme Murray affirmed 9 July 1998, on or before 17 July 1998. 7. That a notice pursuant to s 33X(1)(a) of the Federal Court Act be given to the members of the group by distribution of the notices by Ian Malcolme Murray in person, by facsimile or by registered mail. 8. That members of the group wishing to opt out of proceedings do so by Thursday 16 July 1998. 9. That the Court hear and determine as a preliminary issue whether effective notice of retrenchment has been given to members of the group. The remaining parts of the Notice of Motion were adjourned to 16 July 1998.

Preliminary Issue On 16 July 1998 the preliminary issue of whether effective notice of retrenchment had been given on 29 June 1998 to members of the group (ie members of the second applicant employed by the first respondent) was heard. The applicants relied on the following evidence: (a) An affidavit affirmed on 13 July of Mr Murray who deposes as to his knowledge of who owned and managed the Gretley mine. Mr Murray also deposes to the course of meetings he had with management of the Gretley mine and members of Boston No. 2 Lodge in relation to negotiations for a new enterprise agreement. Mr Murray then explains the term "care and maintenance" in relation to the Gretley mine and finally indicates that on a number of occasions in discussions with the company he had been advised that the company would not sell the mine and would open the mine again to extract the remaining coal on the lease or contract out the coal producing operations. (b) a bundle of documents, being correspondence between the parties in relation to the retrenchment notices and the decision to close down Gretley mine. (c) an affidavit of Keenan Jason Endacott affirmed on 3 July 1998, annexing a copy of the Coal Mining Industry Production and Engineering) Consolidated Award December 1997 and a copy of the Gretley Colliery UMW Enterprise Agreement 1996. Mr Endacott also deposes as to the course of meetings between the parties in relation to negotiations for a new enterprise agreement and further annexes copies of correspondence in relation to the retrenchment notices sent to members of the group by the second respondent. The respondents relied on the following evidence: (a) four affidavits of John Patrick Casey being: (i) an affidavit sworn on 10 July 1998. (Mr Casey, the Director of Organisational Services of the second respondent, is responsible for human resources, safety, training, public affairs and government affairs of the second respondent) Mr Casey in this affidavit provides statistical information in relation to the Gretley mine which formed part of the basis of the company's decision to close the mine. Mr Casey also deposes as to the course of meetings and correspondence in relation to this decision including details of a meeting on 3 July 1998 between various members of management which led to the decision to close the mine and the steps taken by Mr Casey to notify the union of this decision. Finally Mr Casey deposes as to the costs involved in placing the mine on care and maintenance compared with the costs of retaining the employees who have been retrenched; (ii) an affidavit sworn on 13 July 1998 in which Mr Casey annexes a copy of a letter dated 8 July 1998 to Mr Wayne Greentree as reproduced above; (iii) a first further affidavit sworn on 16 July 1998 which annexes material in relation to proceedings before the Australian Industrial Relations Commission and also states that all correspondence with various subsidiaries of the second respondent, including the first respondent, is on the letterhead of the second respondent and that there has been no suggestion by the applicants that communications and negotiations have been made by anyone other than the employer; (iv) a second further affidavit sworn on 16 July 1998 which annexes a copy of a letter dated 14 July 1998 to the applicant, a copy of which was sent to all employees of the Gretley Colliery who are members of the second applicant, disputing the view taken by the second applicant of the retrenchment notice and giving notice of retrenchment, to take effect on 18 August 1998. (b) an affidavit of Fiona Jean Inverarity sworn on 16 July 1998 annexing material in relation to proceedings before the Australian Industrial Relations Commission.

Submissions of the Parties The principal submission made on behalf of the applicants was that the notice of termination was invalid or ineffective because it was uncertain and/or ambiguous. It was also submitted that the notice, which created a unilateral new condition of the employment contract could not be construed as a notice pursuant to the terms of the contract between the parties, there being no agreement between the parties. As an alternative the applicants submitted that a notice of this kind with a condition subsequent, which is not fulfilled, is not a valid notice of termination. The respondents however submitted that the notice was absolute in terms and that that part of the letter which offers to rescind the termination on the happening of an event i.e. a favourable vote on the eighth draft of an enterprise agreement, does not affect its validity at law. To support the submission that notice must be certain to be valid the applicants cited a decision of Von Doussa J in Fryar v Service Systems Pty Ltd (1996) 137 ALR 321 where although His Honour was dealing with statutory unlawful termination where the termination was in the nature of a retrenchment, he had occasion to discuss the nature and purpose of notice. It was submitted that what was said in this case applies to the present case. His Honour said (at p 331) "A period of notice is to give an employee the opportunity to adjust to the change in circumstances which is to occur and seek out other employment …" Applying this to the present case, these workers would not, until the outcome of the contingency i.e. the vote is known, be in a position or wish to be accept alternative employment whilst there is a contract which continues with the present employer. It would not then be an opportunity to adjust to a change in the circumstances. The applicants made two further submissions: (i) That the notice was invalid because it imposed economic duress on the employees; and (ii) It was a notice given by a party other than the employer. The respondents submitted that the question of duress does not arise because the condition or offer was withdrawn prior to the date set for the vote on the agreement. Further that the second respondent was an authorised agent of the first respondent (the employer) and the applicants had dealt with both respondents on that basis. They submitted alternatively that by not putting in issue, either at the Australian Industrial Relations Commission or in pleadings, the question of authority or agency, they have waived or are estopped from arguing it in these proceedings.

Decision In my view the letter of 29 June is uncertain and ambiguous. The first paragraph states that the company (not specified as either the first or second respondent) has decided to downscale coal production at the mine and put it on care and maintenance. Mr Casey's evidence which I accept is that the decision to cease coal production at the mine was not taken until 3 July. Even on the face of the letter this paragraph is contradicted because there is a condition subsequent or alternatively, offer of continuing employment (as put by the respondents) which would be incomprehensible if the mine was to be downscaled to care and maintenance. The notice of retrenchment is expressed to "have effect" from 3 August. This is, in my view, uncertain because it does not make clear whether the period of notice will begin on 3 August or the retrenchment will take effect on that date. The respondents submitted that the surrounding facts and the rest of the letter would allow the reader (and the Court) to conclude that the date was intended to apply to the retrenchment and not the notice of retrenchment and that having a potential for two meanings does not amount to ambiguity. Another difficulty with the letter is the use of the word "you", in the singular, in relation to the vote. It was submitted that it was understood that the agreement had to be accepted by the group not each individual member of the group for the retrenchment to be withdrawn but the letter, on its face, makes the offer of re-employment or condition subsequent depend on the person to whom the letter is addressed voting in favour of the enterprise agreement. Even if all of these difficulties with this notice could be overcome by recourse to the surrounding circumstances of the letter, known, according to the evidence, to the members of the group affected, in my view it would still be an invalid notice. The retrenchment is conditional on the outcome of the vote which is to be taken before the retrenchment (on one view) takes effect. Applying the principle set out in Fryar v Service Systems Pty Ltd which is relevant to a case such as this the "certainty" of the employment situation and thus the opportunity to adjust to a change in circumstances should it occur would not operate until after 13 July, the nominated date for the vote. This letter is either a conditional notice of retrenchment, or a notice of retrenchment subject to a condition subsequent which is not satisfied (the meeting to vote on the enterprise agreement having been cancelled by letter dated 8 July, after the decision to close the mine was taken). On either construction it is not a valid notice. Because of the view I take on this issue of certainty, it is not necessary to consider the further submissions on economic duress, third party notice, waiver or estoppel by conduct. Some of these matters may, of course, remain of relevance to the rest of the proceedings. The consequence of my conclusion that this notice lacks certainty is that the purported notice contained in the letters of 29 June and 8 July from the second respondent to the group members is void and of no effect and I will make a declaration in those terms. I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Connor

Associate: Dated: 27 July 1998 Counsel for the Applicant: C Howell

Solicitor for the Applicant: Construction Forestry Mining and Energy Union

Solicitor for the Respondent: Dunhill Madden Butler