Pendergast v Tony Blain Pty Ltd

1 GLYNN J: This is an application for leave to appeal and, if leave is granted, an appeal against a decision of Commissioner Connor given in Matter No IRC3914 of 1999. The proceedings at first instance concerned an application brought under s84 of the Industrial Relations Act 1996 by Garry Pendergast, the appellant, in which it was alleged that his termination of employment amounted to a dismissal which was harsh, unreasonable or unjust. 2 In a decision given on 6 December 1999, the commissioner determined that the application should be dismissed, relevantly concluding that the termination was brought about as a result of a major restructuring and hence was a genuine redundancy. In the result, the appellant's claim for relief as an unfair dismissal was disallowed by the commissioner. The appellant seeks appellate review in order that the decision be set aside and that he be awarded compensation equivalent to six months' remuneration. 3 We invited Mr M J Heath, counsel for the appellant, to address initially on the question of leave to appeal. The reasons in support of leave as contained in the appeal papers were: 1. The appellant's employment was unilaterally terminated by the respondent for the purpose of engaging an agent to carry out the same work as previously carried out by the appellant as an employee. A question of public interest arises as to whether such a unilateral termination for the purpose stated can constitute an unfairness giving rise to a claim for relief pursuant to Part 6 of the Industrial Relations Act 1996.

The effect of the appellant's termination was to deprive the appellant of the ability to earn commission as set out in the appellant's employment contract. A question of public interest also arises as to whether the deprivation of the ability to earn the contracted commission constitutes an unfairness giving rise to a claim for relief pursuant to Part 6 of the Industrial Relations Act 1996. 4 Counsel developed those reasons with propositions relating to the concept of outsourcing leading to a dismissal as requiring an authoritative pronouncement by this Commission as to the principles which should be applied in determining unfair dismissal claims and, so it was stated, the appeal raises other issues of importance sufficient to attract leave. For instance, counsel submitted the commissioner had misapplied the principles in Outboard World Pty Ltd t/as Budget Waste Control (Sydney) v Muir [1993] 51 IR 167 so as to require appellate review. 5 Having heard Mr Heath in full on the question of leave, we are not satisfied the particular circumstances of this case justify appellate review. We have considered the commissioner's reasons for decision and those reasons attended to the relevant principles involved in the context of the particular facts. We do not see any question of law or principle involved, nor any finding of fact which was not reasonably open. 6 Accordingly, no case, in our view, has been made out to require leave to appeal. Leave to appeal is refused and the appeal is, therefore, dismissed. (Submissions heard on an application by the respondent for costs.) 7 HUNGERFORD J: Earlier today in this matter the Commission declined to grant leave to appeal and dismissed the appeal. It seems, in consequence of that decision, the respondent now makes an application for costs of the appeal and of the proceedings at first instance. Mr P C Coleman of counsel for the respondent, in that respect, relies upon the provisions of s 181(2)(a), (b) and (c) of the Industrial Relations Act to support costs orders in favour of his client. Specifically, he relies upon paras (a) and (b) to support a costs order for the appeal and for the proceedings at first instance; in addition, para (c) is relied upon to support a costs order as to the appeal from 9 May 2000. The significance of the 9 May date is that it was on that date the respondent wrote, what is often referred to as a "Calderbank letter", to the appellant setting out a proposal which, if accepted, would reasonably dispose of these proceedings but, if rejected, would support an application for costs: see Calderbank v Calderbank [1975] 3 All ER 333; [1976] Fam 93. 8 I would propose to deal, firstly, with that Calderbank letter in terms of considering the application for costs of the appeal, supported as it is by s 181(2)(c). The essential point is that to support a costs order there must be a proposal for a settlement of the claim which has been unreasonably rejected. In my view, the letter of 9 May 2000 does not propose a settlement of the claim. Effectively, it seeks withdrawal of the claim; that is, that the appellant walk-away. In my view, that is not a settlement. That part of the costs application must, it seems to me, therefore fail. 9 In relation to reliance on paras (a) and (b) of s 181(2), those paragraphs essentially concern, I think, a situation where the proceedings have been instituted in other than in an ordinary and proper way; that is, without reasonable cause or where they were frivolous or vexatious. I am satisfied, having considered the commissioner's decision, that the proceedings at first instance were not unreasonably brought. In respect of the appeal proceedings, they too were not unreasonably brought. 10 Particularly so far as the appeal is concerned, it is perhaps appropriate to remember that appellate review is not by way of a hearing de novo of the decision at first instance. The commissioner may have been right or he may have been wrong, but the task on appeal, as I think the leave decision made plain, is to determine whether the commissioner's findings were reasonably open. We may or may not have made the same decision in the exercise of our discretion and, indeed, when one goes to the decision of the commissioner and his concluding remarks I think the point I am endeavouring to make will be plain. The commissioner said this: I take the view that Mr Riley should have given more consideration to Mr Pendergast's position. It seems to me that a valuable human resource has been squandered unnecessarily. Mr Riley professes to have acted in response to Mr Pendergast's requests for increased remuneration and assistance with his large sales area, but I regard his evidence in that respect with some suspicion. In reality, he was proposing a course of action for the benefit of ACME and, in my opinion, at the expense of Mr Pendergast. He did give Mr Pendergast an extension of time in which to find alternative employment but I suspect that to have been also of benefit to ACME with the new "Star Wars" promotion. I have no reason to dispute that Mr Pendergast was an experienced and capable employee for ACME. And yet he was thrown away, whilst Mr Riley pursued his aim of "outsourcing" sales work to agencies. 11 And so it was, in the result, that the commissioner, as is plain from the last paragraph of his decision, rejected Mr Pendergast's claim and found that the termination was "brought on by a major restructuring of the operations" of the employer and as "something which is a prerogative of management". The commissioner had in mind also the extended period of time given to Mr Pendergast to remain in employment and look for a new job. 12 In my view, those passages from the commissioner's decision make it clear that it was not unreasonable for some sense of grievance to be experienced by Mr Pendergast and, indeed, I hold the view that it was wholly unsurprising an unfair dismissal claim was made. That that claim was unsuccessful is not to the point. 13 That the appeal too has been unsuccessful, for the reasons earlier given, is not to the point. An overall view of the commissioner's decision of some 10 pages in length shows careful attention to the facts of the case; the commissioner clearly did not express any view or make any suggestion at all that the claim was frivolous or vexatious or without reasonable cause. In my view, the commissioner in that respect was correct to refrain from doing so and I do not think the grounds under s 181(2)(a) and (b) have been made out. 14 For those reasons, I would reject the application for costs. 15 GLYNN J: I agree with his Honour. 16 McKENNA C: I also agree and have nothing to add. 17 GLYNN J: The order of the Commission is, therefore, that the application for costs is dismissed.

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