Rechlin v Glendinning Management Consultations Australia Pty Limited

The appeal to this Court 8Mr Rechlin had the right to challenge the whole of the decision under s 187 of the Industrial Relations Act 1996, by bringing an all grounds appeal to the Industrial Court of New South Wales. Instead, he has appealed the decision to this Court under s 39 of Local Court Act 2007, which permits an appeal 'only on a question of law'. Under a provision of this kind, mixed questions of fact and law may not be pursued (see R v PL [2009] NSWCCA 256; (2009) 199 A Crim R 199). 9It is only the proper construction of s 4(2)(a)(iii) of the Long Service Leave Act which thus arises for determination in these proceedings.

10Section 4 of the Act relevantly provides: "4 Long service leave (1) Except as otherwise provided in this Act, every worker shall be entitled to long service leave on ordinary pay in respect of the service of the worker with an employer. Service with the employer before the commencement of this Act as well as service with the employer after such commencement shall be taken into account for the purposes of this section. (2) ... (a) Subject to paragraph (a2) and subsection (13) the amount of long service leave to which a worker shall be so entitled shall: .... (iii) in the case of a worker who has completed with an employer at least five years service, and whose services are terminated by the employer for any reason other than the worker's serious and wilful misconduct, or by the worker on account of illness, incapacity or domestic or other pressing necessity, or by reason of the death of the worker, be a proportionate amount on the basis of 2 months for 10 years service. ... " 11On a literal or grammatical reading of s 4(2)(a)(iii), the section is not concerned with whether or not the misconduct for which a worker is dismissed in fact occurred. Read literally, if a worker is dismissed for serious and wilful misconduct after 5 years service and before 10, the worker has no right to payment of proportional long service leave on termination. Neither party contended, however, that the provision should be so interpreted. They both accepted that it falls to the employer to establish not only that the reason for the dismissal was serious and wilful misconduct, but also that the worker actually engaged in such misconduct. 12That approach accords with long settled authority. In W.D. & H.O. Wills (Aust) Limited v Jamieson [1957] AR (NSW) 547, De Baun J held (at 552) that: "... it is a question of fact whether misconduct is serious within the meaning of the Long Service Leave Act, and I agree that once the worker has established his right to payment for long service leave then, in order to avoid payment, the employer must satisfy the Commission that he has dismissed the employee for serious misconduct." 13His Honour then turned to consider whether the employer had established that the misconduct for which it had dismissed the worker amounted to 'serious misconduct' (that being the statutory test, at that time). This approach rested on the conclusions of Dixon J in Darling Island Stevedoring & Lighterage Co Ltd v Jacobsen [1945] HCA 22; (1945) 70 CLR 635, where consideration was given to the question of whom an onus of proof fell on, in respect of facts also described negatively in the legislation there in question. Dixon J observed at 655: "The answer depends upon the interpretation of the provision. For the burden of proof is a legal consequence of the nature of the qualification placed by the words "without his own default or wilful act" upon the general conditions of liability stated in the clause. If these words are but part of the legislative attempt to define the conditions upon which the worker's right to compensation arises, then, like all other ingredients or elements in a cause of action or title to claim, proof of the fulfilment of the conditions they describe must lie with the claimant. But if the true nature of the qualification is to introduce new matter, not as part of the primary grounds of liability, but as a special exception or condition defeating or answering liability otherwise existing, then the onus of proof lies with the party setting up default or wilful act by way of answer. The form in which the clause is cast, no doubt, favours the view that the words in question express part of the description of the primary or general grounds of liability. For they occur in the formulation in a single proposition of the conditions in which the worker or his dependants "shall receive compensation from the employer." But, although in such a question the form in which an enactment is thrown is a consideration of much importance, it is by no means decisive. The substance of the provision must be considered and weight must be given to the nature of the general conditions laid down and to the substance and real effect of the particular qualification. Further, an interpretation is to be preferred which will give the provision an operation consistent with the principles of the common law. Notwithstanding the form of the clause, I think that the considerations of substance show that the qualification, expressed by the words "without his own default or wilful act," amounts to a particular exception or answer, the proof of which lies upon the employer." 14Here, correctly thus it appears, it was common ground that in a case arising under s4(2)(a)(iii), an onus falls on the employer to establish both that the reason for the worker's dismissal was serious and wilful misconduct and that it in fact occurred.

Does s 4(2)(a)(iii) confine an employer called upon to establish that it dismissed a worker for serious and wilful misconduct to evidence of what was known to it at the time of the dismissal?

15In order to meet the onus which fell upon it, the Company led evidence as to the information on which it acted at the time of Mr Rechlin's dismissal for serious and wilful misconduct. It also led evidence as to further information which later came to light, which confirmed that he had engaged in such misconduct. 16On Mr Rechlin's approach on appeal, when he was dismissed the Company had acted on mere suspicion, which it was not entitled to do. His contention is that unless what is known to an employer at the time of the dismissal establishes that the misconduct for which the worker is dismissed was both serious and wilful, under s 4(2)(a)(iii) the worker has an entitlement to be paid proportionate long service leave on termination . 17Mr Rechlin thus contends that given the terms of s 4(2)(a)(iii), properly construed, the Company could not rely on after acquired information to establish that he had, in fact, engaged in serious and wilful misconduct, as it suspected when it dismissed him. It could only rely on what it knew and acted on at the time of the termination. 18On Mr Rechlin's approach, the critical part of s 4(2)(a)(iii) are the words 'whose services are terminated by the employer for any reason other than the worker's serious and wilful misconduct'. Those words, he submits, incorporated the necessity that 'the services of the worker to have been terminated for serious and wilful misconduct which was within the knowledge of the employer at the time of such termination in order for the employer to escape liability to pay long service leave'. 19Mr Rechlin also urged the view that the word 'reason' must be construed as referring to a rational reason, supported by facts and circumstances known to the employer at the date of the termination, sufficient to constitute a dismissal for 'serious and wilful misconduct'. A pretext or simulacrum of a reason for termination, let alone a mere suspicion of misconduct, is insufficient for an employer to escape its obligation to pay long service leave on termination of the workers employment. 20The Company conceded that the word 'reason' connotes a rational reason for termination, but submitted that there was no proper basis for reading into the provision a limitation of serious and wilful misconduct 'known to the employer at the date of termination'. 21Mr Rechlin also contended that an employer was not entitled to rely on information only acquired after the termination, to escape liability to pay long service leave, because such an approach was inconsistent with the literal construction of the section and with its beneficial purpose. The view was also urged that the construction for which Mr Rechlin contended would promote the purpose of the Act, while that for which the Company contended would not. 22Mr Rechlin conceded that at common law, an employer who summarily dismissed an employee for misconduct, was entitled to rely on after acquired information to establish that the employee's conduct was such that the right to dismiss summarily had arisen to be exercised (see Shepherd v Felt & Textiles of Australia Ltd [1931] HCA 21; (1931) 45 CLR 359.) It was argued, nevertheless, that such an approach was not available under this statutory scheme. It was only what was known to the employer at the time of dismissal, which was relevant to the question of the worker's rights under s 4(2)(a)(iii).. 23A consideration of the parties' competing cases must commence with the observation that neither of the constructions for which they contended adheres strictly to the grammatical meaning of the words used. If that construction were to be adopted, any worker dismissed for serious and wilful misconduct, whether or not it had occurred, would have no entitlement to long service leave. There is no difficulty with that approach, which as I have noted adheres to long established views as to the proper construction of a predecessor to s 4(2)(a)(iii). As discussed in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78]: "However, the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction [For example, the presumption that, in the absence of unmistakable and unambiguous language, the legislature has not intended to interfere with basic rights, freedoms or immunities: Coco v The Queen (1994) 179 CLR 427 at 437.] may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning." 24The purpose of s 4(2)(a)(iii) must be ascertained in the context of this statutory scheme, as a whole. In this regard, it is to be noted that s 33 of the Interpretation Act provides: "33 Regard to be had to purposes or objects of Acts and statutory rules In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object." 25It is not in issue that the Act is beneficial legislation and must be construed accordingly, so as to give full effect to its purpose. As discussed in IW v City of Perth [1997] HCA 30; 191 CLR 1 at [11]: "The injunction contained in s 18 of the Interpretation Act is reinforced by the rule of construction that beneficial and remedial legislation, like the Act, is to be given a liberal construction [West v AGC (Advances) Ltd (1986) 5 NSWLR 610 at 631]. It is to be given "a fair, large and liberal" interpretation rather than one which is "literal or technical"[Coburn v Human Rights Commission [1994] 3 NZLR 323 at 333]. Nevertheless, the task remains one of statutory construction. Although a provision of the Act must be given a liberal and beneficial construction, a court or tribunal is not at liberty to give it a construction that is unreasonable or unnatural. ... . " 26The purpose of s 4 of the Long Service Leave Act is not expressly stated in the Act, but it is apparent from the provisions there made. It is firstly, to grant workers certain rights to take paid long service leave from their employment, after satisfaction of a qualification period. Secondly, in certain other circumstances, in lieu of taking long service leave, it is to grant workers the right to be paid proportional long service leave on termination of their employment after specified periods of service with the employer, and in some cases, with related employers. 27In the case of workers whose employment is terminated after 5 years service and prior to 10 years service, under s 4(2)(a)(iii) a right to payment of proportional long service leave on termination is granted workers in three circumstances: where the worker's services are terminated by the employer for any reason other than the worker's serious and wilful misconduct; where the worker's services are terminated by the worker on account of illness, incapacity or domestic or other pressing necessity; where the worker's services are terminated by reason of the death of the worker 28Section 4(2)(a)(iii) specifies the circumstances in which such worker has the right to payment of proportionate long service leave on termination of employment. What s 4(2)(a)(iii) is not concerned with, is how an employer might prove that such a worker does not have such a right, because he or she was dismissed for serious and wilful misconduct. 29That is why the limitation, which on Mr Rechlin's approach, must necessarily to be read into the provision, is a limitation which must be approached with real caution. It is well settled that implying words which are not there into the text of legislation is wrong, in the absence of clear necessity, unless satisfied that by inadvertence, the Parliament has overlooked an eventuality which must be dealt with, if the purpose of the Act in question is to be achieved (see the discussion in Pearce and Geddes, Statutory Interpretation in Australia, 7th ed (2011) LexisNexis Butterworths at [2.32] to [2.34]). 30In this case the construction urged for Mr Rechlin requires the implication of a limitation concerned not with whether or not the worker actually engaged in the serious and wilful misconduct for which he or she was dismissed, but what evidence an employer is entitled to rely on, if called upon to establish that the worker had no right to payment under s 4(2)(a)(iii), because the worker was dismissed for such misconduct. 31Contrary to the view urged for Mr Rechlin, it seems to me that properly construed, while s 4(2)(a)(iii) imposes an onus on an employer to establish the serious and wilful misconduct for which it dismissed a worker, it does not limit the evidence which the employer might bring about that misconduct, to what was known to it at the time of dismissal. 32This conclusion flows from various considerations. 33Firstly, s 4(2(a)(iii) creates an entitlement to payment of proportional long service leave when an employer dismisses a worker, in specified circumstances. That right hinges on a negative, one concerned with the conduct of the worker. For an entitlement under s 4(2)(iii) to arise, the worker must not have engaged in serious and wilful misconduct and must not have been dismissed for such misconduct. 34What s 4(2)(iii) is not concerned with, is how either of these two factual matters on which the existence of the statutory entitlement depends, may be proved in the event of any dispute. Contrary to the case urged for Mr Rechlin, questions of the evidentiary burden which will arise in a contest in legal proceedings later brought by a worker, who has not been paid proportional long service leave on termination, having in mind the requirements of s 140 of the Evidence Act and the matters considered in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336, are not relevant to the construction of s 4(2)(iii). 35The consequence of this approach to the construction of s4(2)(a)(iii) are that if a worker's services are terminated by an employer after 5 years service and before 10, for a reason other than serious and wilful misconduct, redundancy, for example, a right to payment of long service leave, arises on termination. That is a right which exists, even where, unbeknownst to the employer, the employee has engaged in serious and wilful misconduct. Under this Act the employer has no right to recover what was paid, if it later comes to light that the employee had engaged in serious and wilful misconduct, because the reason for the termination was not serious and wilful misconduct. The Act makes no provision for any 'clawback' by the employer of a proportional payment of long service leave, made on termination, if the misconduct later comes to light. 36This is where the balance which the Act seeks to achieve lies in the case of termination of the employment of a worker with between 5 and 10 years service. 37Section 4(2)(a) (iii) is concerned with both the employer's reasons for dismissal and with the employee's conduct. If the reason is serious and wilful misconduct, if challenged the employer must establish both that this was the reason for the dismissal and that it occurred. In doing so, the Act does not restrict the employer to evidence of what was known to it at the time of the termination. 38That is a question of fact. What conduct a worker engaged in prior to dismissal, does not depend on what was known to the employer at the time of the termination. Evidence as to information which later comes to either the worker's, or the employer's attention, which casts light on whether or not the worker engaged in the serious and wilful misconduct for which he or she was dismissed, will be relevant and admissible on that factual question. 39To adopt any other approach would result in a construction of the Long Service Leave Act plainly contrary to its purpose. 40In the case of an employee with between 5 and 10 years service, it is apparent that the Legislature did not intend to grant workers an entitlement to long service leave, if the worker is dismissed for serious and wilful misconduct, in which the worker actually engaged. In enacting the provision the Legislature struck a balance, which has plainly favoured those employees whose serious and wilful misconduct has not come to light before their dismissal and who are dismissed for other reasons. It has not, however, granted workers an entitlement to pro rata long service leave if they are able to conceal the full extent of their misconduct, prior to the termination, if in fact he or she is dismissed for that misconduct and upon challenge the employer can later prove that the misconduct for which he or she was dismissed, was both serious and wilful. 41In construing s 4(2)(a)(iii) consideration must not only be given to the ordinary and natural meaning of the words there used, which do not contain the limitation contended for, consideration must also be given to the consequences of the respective constructions for which the parties contended (see Amalgamated Society of Engineers v Adelaide Steamship Co Ltd ("Engineers' case") [1920] HCA 54; (1920) 28 CLR 129). In this case, what Barwick CJ discussed in Tickle Industries Pty Ltd v Hann (1974) 130 CLR 321; (1974) 2 ALR 281 at 289 ought also to be born in mind: "It is ... a sound rule of statutory construction that a meaning of the language employed by the legislature which would produce an unjust or capricious result is to be avoided. Unless the statutory language is intractable, an intention to produce by its legislation an unjust or capricious result should not be attributed to the legislature." 42That is an important consideration in this case, given the various consequences which would flow from the competing constructions which the parties contended for. 43For Mr Rechlin, the view was urged that if his construction of s 4(2)(a)(iii) were not accepted, it would permit unscrupulous employers to dismiss workers for reason of serious and wilful misconduct, even when they had no proper basis for such a decision. That would leave employees in the position where they would have to pursue their rights, and would give employers the opportunity, when faced with such a challenge, to search for information by which the decision, which had no real basis at the time it was made, could be supported. 44That is certainly a possibility which should be considered, when the competing constructions are considered. Also to be considered, however, are other potential consequences of the construction for which Mr Rechlin contended. 45One important consequence which must be considered is that on Mr Rechlin's approach, a worker whose employment was terminated by the employer for serious and wilful misconduct, would have an entitlement to long service leave, if the information on which the employer had acted on termination, was later proven to establish only that there had been serious misconduct, but did not establish that it was wilful. In that event the worker would have an entitlement to be paid proportional long service leave. 46Even if there had in fact been both serious and wilful misconduct, which the worker had been able to conceal and information had later come to light, which the employer could prove, which established beyond question that the misconduct had also been wilful, the worker would have an entitlement to payment of long service leave. That is a result which the words of s4(2)(a)(iii) do not comfortably accommodate. 47Also necessary to be considered is the converse situation. That is, in the case of exactly the same misconduct, a worker would have no entitlement to payment of proportional long service leave, if at the time of the dismissal the employer was in possession of information which showed both that the misconduct was serious, as well as wilful. The result would be that the legislative scheme would favour a worker who was able to conceal the extent of his or her misconduct, so as to give such a worker an entitlement to long service leave. 48That would seem to be quite a capricious result, contrary to the obvious purpose of the Act. This consequence of the construction urged for Mr Rechlin requires careful consideration, it seems to me, before it could sensibly be accepted that it was a construction which the Legislature intended, when enacting s 4(2)(a)(iii). 49That caution is all the more necessary, when the potential consequences, of the construction for which Mr Rechlin contended for other workers, are considered. 50As a matter of logic, on his approach, in a case where an employer acted to dismiss a worker for misconduct, given information which established that there had been both serious and wilful misconduct, a worker would have no entitlement to payment under s 4(2)(a)(iii), even if the worker could later establish that the information on which the employer had acted was wrong. 51A simple, commonplace example of such a situation, is where a worker is dismissed for stealing money from a till, where all of the information available to the employer at the time of the dismissal, points to the worker having engaged in that serious and wilful misconduct. On Mr Rechlin's approach, such information would not only provide a proper basis for an employer dismissing the worker for serious and wilful misconduct, but would have the result that the worker would have no right to payment under s 4(2)(a)(iii). 52On his approach, even if another worker later came forward to confess that it was he or she who had taken the money, the employer would have no obligation to pay long service leave to the dismissed worker under s 4(2)(a)(iii). On challenge the employer would be able to establish that it had dismissed the worker on the basis of information which established that the worker had engaged in serious and wilful misconduct. The after acquired information, which established the worker's innocence, would be irrelevant. 53If s 4(2)(a)(iii) is concerned only with what is known to the employer at the time of the termination, in such a situation the innocent worker could not rely on the after acquired information to establish that he or she had not engaged in the misconduct on which the employer had acted. That result would clearly not accord with the obvious purpose of this statutory scheme 54It is obvious that an unscrupulous employer can always wrongly refuse to make a long service leave payment due to a worker, by dismissing an innocent worker for serious and wilful misconduct, in breach of the obligations imposed by s 4(2)(a)(iii). The construction urged for Mr Rechlin would not preclude that possibility. What will always give such an employer pause, is the onus falling upon it, of proving that the worker in fact engaged in the serious and wilful misconduct for which he or she was dismissed. That is where the balance in this legislative scheme lies. 55It must also be considered that it is well settled that an interpretation which permits a person to take advantage of their own wrong, is one which will not lightly be accepted. In Thompson v Groote Eylandt Mining Co Ltd [2003] NTCA 5; (2003) 173 FLR 72 Mildren J, discussed this, observing at [32] - [34]: "[32] There are a number of examples of the extent to which the rule has been applied. In "Broome's Legal Maxims" 10th Edition at p 191, the learned authors say: It is a maxim of law, recognised and established, that no man shall take advantage of his own wrong; and this maxim, which is based on elementary principles, is fully recognised in Courts of law and of equity, and, indeed, admits of illustration from every branch of legal procedure. [33] The rule has been applied in Australia in modern times. In Holden v Nuttall (1945) VLR 171 at 178, Herring CJ construed the word "hardship" in the National Security (Landlord & Tenant) Regulations so as not to effect an injustice or enable a person to benefit from his own wrong. At 178, his Honour said: In the circumstances of this case, moreover, I think it may properly be said that the hardship the defendant will suffer is self-inflicted and it is his own conduct that has caused any hardship that he may suffer. He has chosen to make use of the regulations for his own protection regardless of the injury he has done the plaintiff thereby. And by claiming to rely on the hardship he will suffer if dispossessed, he seeks to continue the protection to be derived by him from the regulations indefinitely, so that the injustice that Mrs Uhe and he have been able to inflict upon the plaintiff may be perpetuated. The regulations were not made to enable injustice to be perpetrated in this way. And the word "hardship" should if necessary be limited as a matter of construction so as to avoid attributing to the regulation-maker the intention of bringing about an injustice or allowing a man to benefit from his own wrong. [34] The same principle has been applied in a number of other cases: see Woodcock & Anor v South Western Electricity Board (1975) 1 WLR 983 at 986-987; Burrows v Molyneux Gold-Dredging Company Ltd (1936) NZLR 211 at 230-233; The Firm (Australia) Pty Ltd v South Sydney Council [1999] NSWLEC 5 at para 7; Braunack v Goers (1979) 23 SASR 1 at 22. See also, Pearce and Geddes, Statutory Interpretation in Australia, 5th Edn., para [2.35]." 56In this case, a construction of s 4(2)(a)(iii), which would entitle a worker who has engaged in serious and wilful misconduct to payment of proportional long service leave, because an employer was precluded from relying on evidence which established that the misconduct had been both serious and wilful, because all of the relevant evidence was not known at the time of the dismissal, is one which would permit the worker to take advantage of his or her own wrong. 57That is a construction not lightly to be embraced and one which s 4(2)(a)(iii) does not lend itself to, given the language of that provision.

The legislative history does not support the construction for which Mr Rechlin contended 58The parties also addressed submissions to the legislative history. The conclusion which I have reached as to the proper construction of s 4(2)(a)(iii) accords with what was discussed in the Second Reading Speech, when the provision was enacted. That supports the conclusion which I have reached, but it does not depend upon it. 59Mr Rechlin's position was that the legislative history was not relevant to the proper construction of s 4(2)(a)(iii), relying on s 34(3)(b) of the Interpretation Act. Section 34 provides: "34 Use of extrinsic material in the interpretation of Acts and statutory rules (1) In the interpretation of a provision of an Act or statutory rule, if any material not forming part of the Act or statutory rule is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material: (a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), or (b) to determine the meaning of the provision: (i) if the provision is ambiguous or obscure, or (ii) if the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made) leads to a result that is manifestly absurd or is unreasonable. (2) Without limiting the effect of subsection (1), the material that may be considered in the interpretation of a provision of an Act, or a statutory rule made under the Act, includes: (a) all matters not forming part of the Act that are set out in the document containing the text of the Act as printed by the Government Printer, (b) any relevant report of a Royal Commission, Law Reform Commission, committee of inquiry or other similar body that was laid before either House of Parliament before the provision was enacted or made, (c) any relevant report of a committee of Parliament or of either House of Parliament before the provision was enacted or made, (d) any treaty or other international agreement that is referred to in the Act, (e) any explanatory note or memorandum relating to the Bill for the Act, or any other relevant document, that was laid before, or furnished to the members of, either House of Parliament by a Minister or other member of Parliament introducing the Bill before the provision was enacted or made, (f) the speech made to a House of Parliament by a Minister or other member of Parliament on the occasion of the moving by that Minister or member of a motion that the Bill for the Act be read a second time in that House, (g) any document (whether or not a document to which a preceding paragraph applies) that is declared by the Act to be a relevant document for the purposes of this section, and (h) any relevant material in the Minutes of Proceedings or the Votes and Proceedings of either House of Parliament or in any official record of debates in Parliament or either House of Parliament. (3) In determining whether consideration should be given to any material, or in considering the weight to be given to any material, regard shall be had, in addition to any other relevant matters, to: (a) the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), and (b) the need to avoid prolonging legal or other proceedings without compensating advantage." 60It is apparent from the provisions of s 34(1) and (2) that the legislative history on which the Company sought to rely may be considered when determining the proper construction of a provision such as s 4(2)(a)(iii), subject to the considerations raised by s34(3). In this case, they are not such as could properly result in that history being overlooked. 61The relevant history, discussed in the Second Reading Speech, is that up until 1963, there was no entitlement to pro rata long service leave prior to completion of 10 years service (see New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 15 October 1967 at 3264). In 1963 a right to payment of pro rata long service leave after 5 years service was introduced, seemingly in response to a concern that employers were seeking to deny employees their entitlements, by dismissing employees shortly before completion of 10 years service. The Act was then amended to provide for pro rata payment of long service leave to any worker whose services were terminated by the employer 'for any reason'. In 1967, the current words were enacted. 62It appears from the Parliamentary debates in 1967, that there was a concern that the pre-existing provisions encouraged workers to engage in misconduct, so that their services would then be terminated by their employer, with the result that they would be entitled to be paid long service leave on termination prior to completion of 10 years service. There was debate about the enactment of a provision excluding an entitlement to pro rata long service leave, when a worker was dismissed for serous misconduct. In the Second Reading Speech, it was said: "The error into which our predecessors fell was in regarding the case of a worker who by his own serious misconduct brings about his own dismissal as being in any way comparable to that of a worker who has been compelled to leave his job through no fault of his own, and perhaps even because of the employer's wish to deprive him of his leave rights. In a case of serious misconduct it is in a very real sense the worker's own fault that the employment is brought to an end and it is proper that his position should be exactly the same as it would have been had he simply resigned to take up another position. ... The Government fully accepts the principle that a worker with ten or more years' service has a vested right on long-service leave and has a just entitlement to payment for that leave whenever happens. We are simply saying, in this bill, that an employee dismissed for some grave fault in relation to his employment should not receive a benefit he could not have claimed if he had himself abandoned his job. ... The truth of the matter is that, though it is, of course, impossible to compile an exhaustive list of the particular acts that can amount to serious misconduct, all such acts have in common certain features that have been laid down by the courts of this country and of Great Britain. It has been held that in order to justify the summary dismissal of an employee for misconduct the act or omission of which he has been guilty must have been wilful, and must also have been serious in the sense that it relates to something that is basic to the relationship of employer and employee in the particular employment. This bill specifically states that misconduct, if it is to result in loss of long-service leave benefits, must be serious. Therefore, workers have no reason to fear that loss of these benefits may result from some trivial or inadvertent error or omission on their part." 63It is apparent that when enacted in its current form, s 4(2)(a)(iii) was concerned to remove a right granted workers in 1963, to payment of proportional long service leave, when employment was terminated by an employer, no matter the reason. In amending the provision as it was, the intention of the Legislature was to remove that right in the case of workers who had actually engaged in serious and wilful misconduct and who were dismissed for that reason. That was the balance which the Legislature struck, with the consequences I have earlier discussed. 64It follows that that history does not support the construction for which Mr Rechlin urged. That is but another reason for rejecting the construction for which he contended.

The appeal must be dismissed 65In the case of a dispute over whether a worker has the right to be paid proportional long serviced leave under s 4(2)(a)(iii) on termination of employment, both employers and workers are entitled to rely on after acquired information, which casts light on the question of whether the worker in fact engaged in the serious and wilful misconduct for which he or she was dismissed. The section is not concerned with how that factual issue may be proven by the employer, upon whom the onus falls to establish that fact. It is rather concerned with whether the serious and wilful misconduct for which the worker was dismissed, in fact occurred. 66It was for the Company to establish that Mr Rechlin had, in fact, engaged in the serious and wilful misconduct for which he was dismissed. It relied on information which was known to it at the time of Mr Rechlin's dismissal for serious and wilful misconduct, as well as after acquired information, to establish this, as it was entitled to do. His Honour came to the view that this evidence established that Mr Rechlin had no right to the payment which he claimed was due to him, because he had engaged in the serious and wilful misconduct for which he was dismissed. 67On the proper construction of s 4(2)(a)(iii), the evidence led by the Company as to the now disputed after acquired information was both relevant and admissible to that question. His Honour's conclusions on that evidence are not challenged. 68In the result the appeal must be dismissed.

Costs 69The usual order is that costs follow the event. In this case that would be an order that Mr Rechlin bear the Company's costs of the appeal, as agreed or assessed. Unless the parties approach within 14 days, that will be the Court's order.

Orders 70For the reasons given, I order that the appeal be dismissed,

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 October 2012