Industrial Law - Other jurisdictions - Tasmania - Industrial Relations Commission - Jurisdiction and powers - Adequacy of redundancy offer disputed, not termination itself - Whether time limit applies to dispute relating to severance pay in respect of termination of employment as a result of voluntary redundancy.

Industrial Relations Act 1984 (Tas), ss29(1), (1A), (1B), 31(1B), (1C), 70.

New Town Timber & Hardware Pty Ltd v Gurr [1995] TASSC 79; (1995) 5 Tas R 71, referred to.

Judgment Number: [1999] TASSC 140

PIONEER BUILDING PRODUCTS PTY LTD trading as NUBRIK

1 This appeal involves the interpretation of various provisions of the Industrial Relations Act 1984 ("the Act"). The applicant's former employee Mr Letter ("the worker") was in dispute with the applicant over the amount of severance pay he received in respect of the termination of his employment with it as a result of redundancy. He had been employed by the applicant company for 37 years. Talk of a redundancy had started in March 1997 and resumed in March 1998. In April 1998, the worked accepted the applicant's redundancy offer. Although accepting the offer, the worker disputed its adequacy. He claimed an entitlement to two weeks' pay for each year of service (ie, 74 weeks) but accepted a package of 55 weeks' pay, 4 weeks' pay in lieu of notice and $8,000 compensation for the loss of use of a company car. The worker, although accepting the package in April, did not finish work with the applicant company until 30 June 1998. He lodged an application for a dispute hearing over his redundancy on 10 August 1998, ie, over five weeks after his employment was terminated. He was unaware of any time limit on his application until early August 1998. These proceedings raise the question whether any such time limit applies in respect of a dispute of this kind, for the Commissioner allocated to hear the dispute pursuant to the Act, s29, held that it did apply, exercised a discretion to refuse an extension of time and dismissed the application. An appeal to the Full Bench of the respondent Commission succeeded on the basis that the time limit did not apply and the worker's application was remitted to another Commissioner. These proceedings seek the quashing of that decision and the orders made in accordance with it.

2 The Act, s29(1A) and (1B) provide:

(1A) A former employee may apply to the President for a hearing before a Commissioner in respect of an industrial dispute relating to -

(a) the termination of employment of the former employee; or

(b) severance pay in respect of employment of the former employee terminated as a result of redundancy; or

(c) a breach of an award or a registered agreement involving the former employee.

(1B) An application for a hearing before a Commissioner in respect of an industrial dispute relating to termination of employment is to be made within 14 days of the date of termination or within any further period the Commissioner considers appropriate in the circumstances."

3 The worker's dispute, it is common ground, was an industrial dispute relating to severance pay in respect of a former employee terminated as a result of redundancy, but the applicant contends that it nonetheless falls within the umbrella of subs(1B) in that it is a dispute relating to termination of employment and hence is subject to the time limit. The respondent Commission has indicated that it will submit to such order as the Court may make but counsel for the worker, who has been joined in the proceedings as an interested party, submits that subs(1B) has no application to pars(b) or (c) of subs(1A). It is necessary to trace the history of relevant parts of the Act.

4 Prior to the enactment of the Industrial Relations Amendment Act 1994, the following relevant sections provided:

'industrial dispute' means a dispute relating to an industrial matter and includes a dispute relating to

(a) the engagement, dismissal, or reinstatement of any particular employee or class of employees;

(b) the entering into, execution, or termination of any contract for services in circumstances that affect, or may affect, an employee in, or in relation to, his work; or

'industrial matter' means any matter pertaining to the relations of employers and employees and, without limiting the generality of the foregoing, includes

(i) rates of remuneration, whether as wages rates or piecework rates, or variations of those rates or additions to those rates, or extra or special payments;

(ii) hours or days of work, or variations of those hours or days, or additions to those hours or days;

(iv) the privileges, rights, and functions of employers and employees;

(vi) the relations between employers and employees;

(vii) the employment or non-employment of persons of a particular sex or age;

(viii) the determination or definition of the functions of any employees or class of employees; or

(ix) the preferential employment or non-employment of a particular person or class of person who is or is not a member of an organization or a class of persons who are or are not members of an organization; and

(b) the manner in which any rates of remuneration are to be fixed for the time being, whether by reference to basic wage or to any other matter, whether or not that other matter is or is to be determined under an award,

29 - (1) An organisation, employer or employee may apply to the President for a hearing before a Commissioner in respect of an industrial dispute that has arisen or the applicant considers is likely to arise.

(2) Where an application under subsection (1) has been made to the President, he shall, unless he believes that it would not assist the settlement or prevention of the relevant industrial dispute, convene a hearing before a Commissioner.

31 - (1) Subject to this section, where the Commissioner presiding at a hearing under s29 ... is of the opinion, after affording the parties at the hearing ... a reasonable opportunity to make any relevant submissions and considering the views expressed at the hearing ... that anything should be required to be done, or that any action should be required to be taken, for the purpose of preventing or settling the industrial dispute in respect of which the hearing ... was convened, that Commissioner may, by order in writing, direct that that thing is to be done or that action is to be taken.

s70 (1) An appeal may be made to a Full Bench against

(b) an order made by a Commissioner under section 31 directing that an amount be paid or that no amount be paid to a person who has been found by the Commissioner to have been unfairly dismissed in circumstances where reinstatement or re-employment is not possible or practical or to a person who has been retrenched or made redundant involuntarily ...

(c) an order made by a Commissioner under section 31 directing that a person be reinstated or re-employed ...

(d) an order made by a Commissioner under section 31 directing that a person not be reinstated or re-employed ..."

This was how the Act stood when the case of New Town Timber & Hardware Pty Ltd v Gurr [1995] TASSC 79; (1995) 5 Tas R 71 was decided.

5 In 1994, the Act was further amended (Act No 90 of 1994). Section 29 now read:

"29 - (1) An organization, employer, employee or the Minister may apply to the President for a hearing before a Commissioner in respect of an industrial dispute that has arisen or the applicant considers is likely to arise.

(1A) A former employee may apply to the President for a hearing before a Commissioner in respect of an industrial dispute relating to the termination of the employment of that employee.

(1B) An application for a hearing before a Commissioner in respect of an industrial dispute relating to termination of employment is to be made within 14 days of the date of termination."

Other alterations to the section are not relevant for present purposes. Section 31 was amended by inserting after subs(1) the following subsection:

"(IA) Before deciding whether or not to make an order in respect of an industrial dispute relating to termination of employment, a Commissioner is to take into account the standards of general application contained in Part II of the International Labour Organisation's Convention concerning the Termination of Employment at the Initiative of the Employer as set out in Schedule 10 to the Commonwealth Act."

Apart from some grammatical changes, those parts of s70 to which I have referred were not relevantly amended.

6 Substantial amendments were effected by Act No 18 of 1998. The definitions in s3 were altered, with the substitution of the following new definition of "industrial dispute":

"'industrial dispute' means a dispute in relation to an industrial matter -

(b) that is likely to arise or is threatened or impending;"

The definition of "industrial matter" was amended by omitting pars(a) and (b) from the definition of "industrial matter" and substituting the following paragraphs:

(i) the mode, terms and conditions of employment; or

(ii) the termination of employment of an employee or former employee; or

(iii) the reinstatement of an employee or a former employee who has been unfairly dismissed; or

(iv) the payment of compensation to an employee or a former employee if the Commission determines reinstatement is impractical; or

(v) severance pay for an employee or a former employee whose employment is to be, or has been, terminated as a result of redundancy; or

(b) a breach of an award or a registered agreement - "

Section 29 was relevantly amended by deleting the words from subs(1) "that has arisen or the applicant considers is likely to arise" so that it now reads:

"29 - (1) An organization, employer, employee or the Minister may apply to the President for a hearing before a Commissioner in respect of an industrial dispute."

In addition, sub(1A), as inserted in 1994, was omitted and the present subs(1A) cited above substituted, while the discretionary power to extend time was added to subs(1B). The relevant amendments to s31 were the insertion of two further subsections, (1B) and (1C):

(1B) If a Commissioner, in hearing an industrial dispute relating to termination of employment, considers that an employee or a former employee has been unfairly dismissed but reinstatement to the employee's or former employee's previous position is impractical, the Commissioner, if of the opinion that it is appropriate to do so, may make an order requiring the employer to pay the employee or former employee compensation of any amount the Commissioner determines appropriate.

(1C) A Commissioner, in hearing an industrial dispute relating to termination of employment resulting from redundancy, may make an order in respect of severance pay for an employee or former employee whose employment is to be, or has been, terminated."

Finally, s70 was amended by omitting subs(1) and substituting the following subsection (so far as is relevant):

"70 - (1) An appeal may be made to the Full Bench against -

(b) an order made by a Commissioner under section 31(1) after a hearing relating to an industrial dispute in respect of any termination of employment, including termination resulting from redundancy, or breach of an award or a registered agreement by -

7 In New Town Timber & Hardware Pty Ltd v Gurr (supra), the Full Court held that although there was no express grant of power to a Commissioner to order the payment of any amount to a person found to have been unfairly dismissed in circumstances where reinstatement or re-employment is not possible or practical, the existence of such a power was recognised in s70, which gave a right of appeal against the making of any such order. However, there was no power to order any amount where the employee, having been dismissed, did not seek reinstatement (per Underwood J at 100, per Zeeman J at 119). The existence of a right to order payment of an amount to a person who has been retrenched or made redundant involuntarily is also acknowledged, provided, of course, that the claim is made in circumstances where an industrial dispute within the meaning of the Act has arisen.

8 The 1994 amendments, by s29(1A), introduced an express right for a former employee to apply for a hearing in respect of an industrial dispute relating to the termination of the employment of that employee; but by subs(1B) required such a claim to be made within 14 days of the date of termination. The powers of a Commissioner to make orders on such a hearing, which were granted by s31, were enlarged by requiring the Commissioner to take into account the standards of general application contained in Pt2 of the ILO Convention concerning the Termination of Employment at the Initiative of the Employer. Article 12 of the Convention provides:

1 A worker whose employment has been terminated shall be entitled, in accordance with national law and practice, to -

(a) a severance allowance or other separation benefits, the amount of which shall be based inter alia on length of service and the level of wages, and paid directly by the employer or by a fund constituted by employers' contributions; ... "

Article 10 of the Convention referred to the kind of power recognised by s70 in New Town Timber & Hardware Pty Ltd v Gurr (supra) for it provided:

If the bodies referred to in Article 8 of this Convention [ie a court, labour tribunal, arbitration committee or arbitrator] find that termination is unjustified and if they are not empowered or do not find it practicable, in accordance with national law and practice, to declare the termination invalid and/or order or propose reinstatement of the worker, they shall be empowered to order payment of adequate compensation or such other relief as may be deemed appropriate."

9 The 1998 amendments have redefined industrial dispute and industrial matter. In respect of industrial matters, the definition section appears to make a distinction between matters relating to "the termination of employment of an employee or former employee", reinstatement of unfairly dismissed employees, the payment of compensation if reinstatement is impractical and "severance pay for an employee or a former employee whose employment is to be, or has been, terminated as a result of redundancy". In one sense, all these matters could be said to be matters relating to the termination of employment. But they are different areas of potential dispute. When, therefore, s29(1A) initially breaks the areas of dispute which can be referred to a Commissioner into those relating to (a) the termination of employment of the former employee, and (b) severance pay in respect of employment of the former employee terminated as a result of redundancy, this distinction is preserved and the requirement in subs(1B) that an application be made within 14 days of termination would appear to apply only in respect of disputes concerning termination other than disputes in respect of severance pay where no issue is raised about the genuineness of the employer's right to terminate for redundancy.

10 The applicant, however, contends that s31 only gives a right to order severance pay in the circumstances mentioned in s31(1C), namely when the Commissioner is hearing an industrial dispute relating to termination of employment resulting from redundancy. It is common ground that the right of appeal given by s70 in respect of orders made "under section 31(1) after a hearing relating to an industrial dispute in respect of any termination of employment including termination resulting from redundancy" would include orders made under s31(1B) and (1C). The further reference in ss31(1C) and 70(1) to a dispute "relating to termination of employment", it is submitted, reinforces the conclusion that in s29(1B) all forms of dispute relating to termination of employment are made subject to the limitation period.

11 I find this argument unpersuasive. For the purposes of ss31 and 70, disputes about the quantum of severance pay where no issue is raised as to the right of the employer to terminate by reason of redundancy can properly be described as industrial disputes relating to termination of employment; but when s29(1A) differentiates between disputes relating to termination of employment of a former employee and disputes relating to severance pay resultant upon that termination and preserves the distinction recognised in the definition section, I am of the view that the time limit in subs(1B) is intended to apply to disputes where the termination is challenged and not to disputes where the fact of termination as the result of redundancy is accepted and the dispute relates only to the amount of any severance pay.

12 The Full Bench gave some pragmatical reasons why this interpretation was to be preferred, pointing out that a dispute of the former kind could lead to an order for reinstatement. In these circumstances there was good reason why an employer should have the protection of a time limit lest staffing arrangements might have to be rearranged, whereas if the fact of termination was not in dispute and it was only a question of the potential for a further monetary payment, there would not be the same reason for prompt action or disadvantage to the employer if prompt action were not taken. I think there is much to be said for these additional observations, but I rest my conclusion on the specific wording of s29(1A) and (1B).

13 After the hearing of the application, counsel for the applicant submitted a letter contending that the Full Bench was without jurisdiction to hear the appeal to it because the Commissioner had dismissed the worker's application for an extension of time and s70 gives no right of appeal from an order refusing such an application. This argument is fallacious. The worker sought a remedy in respect of severance pay. The Commissioner erroneously took the view that an extension of time was required before any remedy could be given. He refused the extension and thereupon dismissed the worker's application for relief. The proceedings before the Full Bench challenged the necessity for an extension and his dismissal of the application. There were other grounds of appeal challenging the way he exercised the discretion which he erroneously considered that he had, but the Full Bench did not address them. In my opinion, the Full Bench had jurisdiction to hear the appeal against the order dismissing the worker's application. I would discharge the order nisi.