THE PERIOD OF NOTICE
29 The offer made to the applicant on termination of employment was for payment of one month' pay in lieu of notice and a further five months redundancy payment making a total of six months. That offer was, as I have previously pointed out, made conditional upon the applicant signing a deed of release.
30 I am conscious that differing views have been expressed by judges of this Court and its predecessors as to the most appropriate approach to be taken to the assessment of notice and payment in lieu of notice, especially where redundancy is involved. Some judges have assessed separate amounts of moneys to cover payment in lieu of notice to terminate the contract of employment and to cover an amount which should properly be payable by reason of the retrenchment of the employee through redundancy. Some of the authorities in this area are referred to in the judgement of Maidment J in Starkey v Healthcare Corporation Pty Ltd (unreported 24 August 1999) IRC 97/6613. His Honour analysed the various factors which are relevant to the assessment of a period of notice on termination and which are relevant to the calculation of severance payments in redundancy situations and observed that there was some area of overlap. His Honour said: "Accepting the difference of judicial view as to the components properly attributable to either pay in lieu of reasonable notice or severance pay it would seem to me to be artificial to award compensation for perceived inadequacies of either payment without regard being paid to their aggregate." I respectfully agree with this approach.
31 To some extent the approach which will be adopted will depend upon the practice adopted by the employer. (See, for example, the observations of Peterson J in Young v Tieman Industries Pty Ltd (2000) NSWIRComm 111).
32 The circumstances of the applicant's employment and the circumstances applying to his termination of employment on the basis of redundancy are significantly different from those which were considered by the Full Court of the Industrial Court of New South Wales in Baker v National Distribution Services Ltd (1993) 50 IR 254. There is no question in these proceedings, as was the case in Baker of relevantly different standards of redundancy entitlements being applied by an employer to two groups of employees so as to render the lesser standard unfair. In addition, the circumstances of the applicant's employment by the respondent and the termination of that employment do not appear to come within obligations imposed on employers by the Employment Protection Act 1982 which, by clause 10 of the Employment Regulation 1995 applies only to employees whose employment is covered by an industrial instrument. Obviously the existence of standards applying to award employees as referred in Baker will create some form of standard by which the provision of payments on redundancy to all employees may be judged on a relative basis in terms of fairness. However, there are many areas of distinction between circumstances where employment is governed by industrial awards and redundancy standards applied to employees whose employment is governed by industrial awards and those which apply, and ought to apply to non-award employees. Such a distinction will be heightened in cases, such as this, where the applicant worked under conditions and in circumstances which are remote from those usually governed by industrial instruments.
33 In all the circumstances of these proceedings I prefer to assess one period of reasonable notice which will take into account inter alia the fact that termination of employment involved a redundancy situation.
34 This global approach appears to have been adopted by a Full Bench of this Court in David Jones Ltd v Cukeric (1997) 78 IR 430, ESP at 462. The same approach was taken by a Full Bench of this Court in Gala v State Bank of NSW (1998) 84 IR 216. In those proceedings the Full Bench (Cahill VP, Maidment and Hungerford JJ) were required to assess "what benefits an employee in the appellant's position might reasonably expect to receive if the respondent had retrenched the employee after eleven years of satisfactory service in a senior specialist position when, through no fault of the employee, that position had been made redundant." (at 226). Their Honours referred to the Redundancy Awards Case (1994) 54 IR 419 by which a scale of severance pay was set for insertion under awards by way of a safety net. After referring to the relevant scale and to severance pay scales set in an award of the Australian Industrial Relations Commission, the Full Bench concluded: "In the circumstances of this case, we think it is reasonable for the appellant to be awarded an amount referable to a lack of notice (or pay in lieu) and to the failure by the respondent to extend benefits which would normally be expected upon a termination on account of redundancy." (at 226-7). An amount was assessed which was the equivalent of nine months' salary based on the appellant's annual salary. The approach taken by each of the Full Benches in each of these cases, and especially in Gala appears to me to involve the determination of a period of notice which was considered to be reasonable in all the circumstances, the fact of redundancy being one element and presumably a major element within those circumstances. This approach was also applied recently by Walton J, Vice President in Ross v GN Comtext (Australia) Pty Ltd (2000) NSWIRComm 133.
35 By what process does one determine what would be a reasonable period of notice in all of the circumstances? Reasonable notice is that which the employer should have reasonably given in all the circumstances. Such a period should reflect that which the hypothetical ordinary average standard employer acting reasonably should have given. I was not referred to any authority which adequately describes such an employer. Obviously, analogies exist in the area of negligence where the conduct of a reasonable person is more frequently applied within the litigation process.
36 An interesting and to my mind helpful description of the reasonable person is contained within an article by Henry T Terry on Negligence published in 29 Harvard Law Review 40 at 47-49. This publication occurred in 1915 so that some of the language may be seen to be dated, especially the reference to a standard man as opposed to a standard person. Nevertheless I set it out because it contains some material which I find of assistance in identifying the reasonable employer for the purpose of these proceedings:
The test of reasonableness is what would be the conduct or judgment of what may be called a standard man in the situation of the person whose conduct is in question.
A standard man does not mean an ideal or perfect man, but an ordinary member of the community. He is usually spoken of as an ordinarily reasonable, careful, and prudent man. That definition is not exactly correct, because in certain cases other qualities than reasonableness, carefulness, or prudence, e.g., courage, may be important; but it will do for our present purpose. It is because the jury is supposed to consist of standard men, and therefore to know of their own knowledge how such a man would act in a given situation, that questions of reasonableness and negligence are usually left to the jury.
Every man, whether he is a standard man or not, is required to act as a standard man would. If by chance he is not such a man, he may, as has been said, make a mistake and act so as to be guilty of legal negligence, though he has used all such care and forethought as he was capable of. In the case of contributory negligence there is an exception to this rule in the case of abnormal persons, such as children and persons of unsound mind. They are not required to act like a standard man, but only to use such judgment as they are capable of. But as to negligence which is not merely contributory, as to negligent wrongs against others, the standard man test applies to their conduct also. Women are not abnormal persons, except perhaps in respect to courage.
Anything that a standard man would do is reasonable. If there are several different courses which he might take, any one of them is reasonable, even though one would be more reasonable than another. All that the law requires of a man is reasonable conduct, not the most reasonable nor even the more reasonable. Also even a standard man, being human and therefore fallible, may err in his judgment. Conduct which in fact causes injury, if due to an error of judgment which a standard man might make, is not negligent. This is the meaning of the statement above mentioned, that mere error of judgment is not negligence. But this must be distinguished from an error which a standard man would not make.