Haralabopoulos v Real Estate Institute of New South Wales

Sydney Water Corporation Ltd v Industrial Relations Commission of NSW (2004) 61 NSWLR 661; (2004) 141 IR 14 CASES CITED: Anthony Balsdon v Murray Irrigation [2003] NSWIRComm 251 Truelove v Sydney Water Corporation Limited & Anor (2005) 146 IR 253

Applicant Mr G Giagios, of counsel Solicitors Daniels Lawyers LEGAL REPRESENTATIVES:

Respondent Mr P Newall, of counsel Solicitors Fisher Cartwright Berriman

Akis Haralabopoulos v Real Estate Institute of New South Wales

Application under s 106 of the Industrial Relations Act 1996

1 The applicant, Akis Haralabopoulos, has commenced proceedings against the respondent, Real Estate Institute of New South Wales, by way of summons, seeking relief under s 106 of the Industrial Relations Act 1996. 2 When the matter came before the Court for hearing on Monday, 17 July 2006 the respondent, represented by Mr Newall of counsel, made a threshold challenge to the jurisdiction of this Court on two bases. First, that the applicant's claim for relief under s 106 is properly characterised as an unfair dismissal application and therefore beyond this Court's jurisdiction by virtue of s 109A of the Act. Secondly, that the circumstances of the applicant's termination of employment are more appropriately construed as a breach of his contract of employment and for that reason the claim also falls outside the jurisdiction of this Court: see Sydney Water Corporation Ltd v Industrial Relations Commission of NSW (2004) 61 NSWLR 661; (2004) 141 IR 14. 3 Both parties were content for the Court to hear the respondent's application and decide the issues at the commencement of the proceedings. On this basis, I granted the respondent leave to make the application. Both parties also indicated to the Court that reliance should be placed on the applicant's affidavits of which there are two, as well as the affidavit of Geoffrey Hunter, for the respondent and the summons for relief and other documentation, in deciding the application. 4 In order to properly consider the submission of the parties, it is necessary to first set out in full the claims in the summons. The relevant portion of that document is extracted below:

(1) An order declaring variation, from commencement, of the Contract of Employment entered into by the applicant and the Respondent on 4 May 2001 and in respect of which the application is made.

(2) An order that the Respondent pays the applicant compensation in the sum of $80,996.70 (inclusive of holiday entitlements), interest on the said amount and the costs of this application. In addition, expenses incurred by the applicant of no less than $500.00 in the course of his duties.

On 4 May 2001 the applicant and the Respondent entered into a Contract of Employment wherein the applicant commenced work for the Respondent at 9a.m. on 1 May 2001 in the capacity of "Manager, Research & Policy".

The Contract of Employment expired at 5 p.m. on 1 May 2004.

Contract of Employment set out the "Terms and Conditions of Employment". Clause 6 of Schedule 1 provided for the Termination of the applicant's employment if, inter alia , the applicant "is guilty of any improper misconduct ( sic ) or wilful neglect in the discharge of his duties".

The Contract of Employment and Schedule 1 did not provide for the manner in which allegations of misconduct would be investigated and in particular, for natural justice and procedural fairness to be afforded to the applicant.

On 1 July 2003, the Respondent terminated the applicant's employment with immediate effect.

The Respondent purported to terminate the applicant's employment because of "unsatisfactory behaviour at a Macquarie Bank Property Luncheon on 12 June 2003".

The applicant contends that the Respondent is not entitled under the Terms of Clause 6 of Schedule 1 to terminate the Contract of Employment for "unsatisfactory behaviour".

The applicant, on numerous occasions, sought full particulars of the allegations made against him. Those particulars were never provided by the Respondent.

The applicant was advised that the allegations were to be investigated but was not interviewed as part of the investigation, nor were the allegations put before the applicant for comment.

The applicant contends that there was a complete absence of natural justice or procedural fairness in the investigation of the allegations made against the applicant by persons whose identity was not disclosed to the applicant.

The termination of the applicant's Contract of Employment was not sanctioned by the contract and was harsh, unjust, unreasonable and unconscionable.

The applicant contends that the absence of any proper provision for the investigation of allegations of misconduct in the Contract of Employment renders the contract unfair within the meaning of section 106 of the Industrial Relations Act 1996.

The applicant seeks a variation of the contract from its commencement to include provision for the investigation of allegations of misconduct and for the right of the applicant to be provided with full particulars of the allegations in writing and to have a proper opportunity to respond to those allegations.

The applicant contends that the absence of such provisions have caused his Contract of Employment to be terminated prematurely and without proper cause.

C. The award, agreement or determination by reference to which the claim or any part of it is based: Contract of Employment dated 4 May 2001.

D. Particulars of the manner in which any amount claimed is calculated: The applicant's annual salary was $88,360.00. At the date of termination of the applicant, the balance of the contract was 44 weeks and therefore the amount itemised is $80,996.76. 5 In relation to the respondent's contention that the applicant's claim represents an unfair dismissal claim in disguise, the Court was taken to a first instance decision of Boland J in Anthony Balsdon v Murray Irrigation [2003] NSWIRComm 251. According to the respondent, in that decision, similar orders were sought in a summons for relief under s 106 and refused by Boland J on the basis that the claims were not reflective of a genuine challenge to the terms of the contract, but rather were more properly characterised as an unfair dismissal claim dressed up as an unfair contract claim. 6 The similarity between the claims in Balsdon and the present claim was said to be illustrated by Order 3(a) sought by the applicant in Balsdon. That Order sought a variation to the contract to include a termination of employment clause which was set out as follows:

Termination of your employment will not be harsh, unjust or unreasonable. In the event that any complaint arises concerning your conduct you will not be dismissed unless and until a full inquiry is conducted by Murray Irrigation Limited into all of the facts and circumstances of any complaint made against him, during which time you will be entitled to be provided with legal advice and assistance at the expense of Murray Irrigation Limited. Any period of suspension shall be on full pay and only in circumstances where there is cogent evidence which would satisfy a court or tribunal that you may have been guilty of any misconduct. In the event that you are dismissed or suspended from duty, contrary to the above term, you will be immediately restored to duty and all back pay owing to you will be paid with interest including any other expenses borne by you. 7 As I apprehend the respondent's submission on this issue, Order 3(a) corresponds most closely to paragraphs B (11) and (13) of the applicant's summons in these proceedings. 8 According to the respondent, the core of the applicant's complaint concerns a lack of procedural fairness. The summons seeks to vary the contract to incorporate a term of procedural fairness and this is precisely what was sought in Balsdon. Moreover, the fact of procedural unfairness is the only matter about which the applicant makes complaint. 9 The applicant, in response, who was represented by Mr Giagios of counsel, contends that the respondent has misapprehended the nature of the applicant's case. The applicant's attack which is made wholly upon the contract of employment focusses on the absence of unfair procedures. The absence of any such provision in the contract is the reason for the unfairness in the contract. The termination of the applicant's employment is simply the manifestation of that unfairness. Unlike Balsdon, the focus here is not on the employee's conduct, but the fact that he was given no proper opportunity to defend himself against the allegation of misconduct. In addition, the compensation sought by the applicant is the measure of the unfairness ascertainable by reason of the number of weeks prior to the date of expiration of the contract when the applicant's employment was (pre-maturely) terminated. 10 The respondent also relied on what it said was the proper characterisation of the circumstances of the applicant's termination here, namely a breach of contract, with the result that the application has not been validly brought under s 106. This characterisation, according to the respondent, is exemplified by what is stated in the summons in B11 and B13. It is significant, says the respondent, that the conduct about which the applicant makes complaint, is expressed in the summons as conduct not sanctioned by the contract. This is a different proposition from an assertion that something was not permitted (in a contract): see Sydney Water at [35]; cf [32], [33]. Consideration 11 Balsdon concerned a decision to dismiss the applicant characterised as an unfair dismissal by reason of a lack of procedural unfairness, as opposed to an attack on the terms or operation of the employment contract: at [30]. This characterisation of the applicant's case formed the basis for Boland J's conclusion at [36] that the claim before his Honour, "has all the hallmarks of an unfair dismissal claim". In contrast, the applicant's claim in these proceedings clearly focusses on the terms of the contract of employment, specifically what those terms failed to provide, namely, fair termination procedures. This approach is amply demonstrated in my view by what is expressed in the summons at B4 and B13. The contract of employment which is annexed to the applicant's affidavit sworn on 22 October 2003 contains no provisions relating to fair procedures upon termination of employment. It simply provides that termination may be initiated in the event of the commission of certain offences or "improper misconduct" or "substantial breach", and, also contains provisions in relation to notice requirements. 12 A claim under s 106 based on what the contract or arrangement failed to provide, in my opinion, clearly falls within s 106 and is therefore within the jurisdiction of this Court: see Truelove v Sydney Water Corporation Limited & Anor (2005) 146 IR 253 at [29], [30]. I would add that even if the application had also been framed, at least in part, as a breach of contract, it would not necessarily have precluded the applicant from seeking relief under s 106: Sydney Water Corporation at [40]. 13 For these reasons, I conclude that the applicant's claim falls within s 106 of the Act. The respondent's application therefore is dismissed. _________________________

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