Smith v Boral Limited

Industrial Relations Commission (NSW)|2000-12-14|Before: Glynn J, Walton J, Mr P

Industrial Relations Commission of New South Wales in Court Session

CITATION : Smith v Boral Limited [2000] NSWIRComm 267 APPLICANT John Kevin Smith PARTIES : RESPONDENT Boral Limited (Origin Energy Limited as from 18/2/2000) FILE NUMBER: IRC 2236 of 1998 CORAM: Glynn J CATCHWORDS : Unfair contract - redundancy - notice of fourteen months worked out - respondent's Termination Policy provided for payment in respect of both redundancy and notice - working out of notice not an option in that Policy - respondent's actions not accepted from outset by applicant - summons for relief under s 106 filed six weeks later. Order that respondent pay applicant amount calculated in accordance with the Termination Policy formula for notice/redundancy together with interest. LEGISLATION CITED : Industrial Relations Act 1996 s 106 s 109A Anti-Discrimination Act 1977 s 95A Cukeric v David Jones (Australia) Pty Ltd (1997) 78 IR 430 Fryar v Systems Services Pty Limited 137 ALR 321 Newton v Goodman Fielder Mills Ltd (1998) 81 IR 227 CASES CITED : Pacific Publications Pty Limited v Cantlon (1983) 4 IR 415 Payne v Foxboro (1998) 81 IR 404 Reich v Client Server Professionals of Australia Pty Limited (Administrator Appointed) [2000] NSWIR Comm 143 (2000) 99 IR 69 Ross v GN Comtext (Australia) Pty Ltd [2000] NSWIR Comm 133 (unreported, Walton J, Vice President, 98/6383, 31/8/00) HEARING DATES: 09/15/1999; 08/11/2000; 10/27/2000 DATE OF JUDGMENT: 12/14/2000

APPLICANT: Mr I Neil of counsel SOLICITORS Mr P Hayward Haywards LEGAL REPRESENTATIVES: RESPONDENT: Mr B D Hodgkinson of counsel SOLICITORS Mr A Ash Clayton Utz

JUDGMENT:

33 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: GLYNN J

JOHN KEVIN SMITH V BORAL LIMITED Application under section 106 of the Industrial Relations Act 1996

1 John Kevin Smith (the applicant) seeks orders pursuant to s 106 of the Industrial Relations Act 1996 (the 1996 Act) against Boral Limited (the respondent) avoiding or varying the contract(s) of employment between the applicant and the respondent and seeking the payment of moneys in lieu of notice and for redundancy, together with interest and costs. (The Court was advised on 29 May 2000 that the respondent had on 18 February 2000 changed its name from Boral Limited to Origin Energy Limited. The applicant, by consent, was granted leave to amend its summons for relief, to reflect that change. Otherwise I refer to the respondent as Boral in this judgment as reflecting the position as at the date of the applicant's termination.) 2 At the time that this application was filed on 1 May 1998, the applicant was still in employment with the respondent. He had been put on notice on 27 March 1998 that that employment would cease on 31 May 1999. 3 The matter was not able to be settled by conciliation undertaken pursuant to s 109 and the file was re-allocated to me on 2 March 1999 and mentioned on 12 March 1999. It was listed for hearing on 3 June 1999, with further dates in that month also allocated. 4 On 3 June 1999, Mr B D Hodgkinson of counsel for the respondent advised the Court that in its view, a factor had arisen that could affect the hearing. That factor was the possible effect of the enactment with effect from 1 December 1998 of s 109A, that section providing for the exclusion from Division 2 of Part 9, unfair contracts of the 1996 Act, certain contracts in connection with unfair dismissals. 5 A difficulty that arose in this particular case was that the applicant was subject to a long period of notice extending from 27 March 1998 to 31 May 1999, i.e. s 109A came into effect at a point somewhat over mid-way in that period of notice. 6 The hearing day on 3 June 1999 was vacated by consent to allow both parties the opportunity to further consider the problem. 7 The outcome of those discussions was that it was agreed between the parties that the matter be adjourned until 15 September 1999 on the footing it would be impossible for Mr I Neil, of counsel, on behalf of the applicant, to conclude the proceedings on that day as it seemed likely that the vexed question of the proper meaning and construction of s 109A would not yet have been resolved in proceedings at that time before a Full Bench of the Commission. 8 Mr Neil on 15 September 1999 opened the applicant's case. It was accepted that both parties would have liberty to revisit their cases in the light of the outcome of the proceedings before the Full Bench. Having opened, Mr Neil then put the applicant in the witness box and there, through him, put before the Court four affidavits he had made up until that date in support of his application. Objections to one of those affidavits were dealt with. Following the completion of the applicant's evidence in chief, the proceedings were adjourned by consent. 9 The evidence given by the applicant on his own behalf eventually included five affidavits. 10 The only witness called on behalf of the respondent was Michael Boyd Scobie, Director, Corporate Services and the respondent's Company Secretary. 11 It was the common position of counsel that given the exchange of affidavits and the identification of conversation within those affidavits there was no Brown v Dunn argument available to either side because of that exchange and of the time that the parties had had to consider that material. 12 The Court was also advised that the applicant has commenced proceedings pursuant to the Anti-Discrimination Act 1977, alleging that the termination of his employment had been brought about as a consequence of age discrimination. There is no bar to the continuation, post the finalisation of these proceedings, of the Anti-Discrimination Tribunal proceedings, in which he seeks damages. However, that Tribunal has said that it will not deal with the matter further until these proceedings are concluded. The Tribunal has also said that if the applicant is successful here it is unlikely to hear those proceedings, in accordance with the discretion conferred upon it by s 95A of the Anti-Discrimination Act. 13 The applicant has not yet formed a view as to whether or not he would proceed with those Anti-Discrimination Tribunal proceedings, and said he would only form that view after he has had an opportunity to see the decision of this Court. He said that if he succeeded here it is highly unlikely he would proceed anywhere else. Cross-Application 14 The respondent, on 19 April 1999, filed a cross-application pursuant to s106 seeking: 1. A declaration that the contract of employment and/or arrangement or collateral arrangement thereto between the Applicant and the Respondent is unfair, harsh or unconscionable on the Applicant to the extent that, as suggested by the Respondent the Boral (Australia) Termination Policy is a term of that contract or forms a part of the arrangement or collateral arrangement.

An order that the contract between the Applicant and the Respondent or the arrangement or collateral arrangement thereto is hereby varied to include the following term: The Boral (Australia) Termination Policy shall not apply to the Applicant or to the termination of the Applicant's employment.

An order that the Respondent pay the Applicant's costs of these proceedings.

Such other orders as the Commission considers reasonable. 15 The grounds to support that cross-application were as follows: 5. The Applicant is a corporation entitled to sue and be sued in and by its said corporate name and style.

The Respondent was employed by the Applicant and its predecessors from 1978.

By letter of 27 March 1998, the Applicant advised the Respondent that the Respondent's employment would be terminated, which termination would be effective in 1999.

The Applicant has from time to time for guidance purposes only published various policies.

At no time has the Applicant made the policies published by it part of employment contracts or arrangements or collateral arrangements involving the employment of persons including the Respondent.

The Respondent did not at any time seek to have incorporated in his contract the terms of any of the Applicant's policies, in particular the terms of the Boral (Australia) Termination Policy. The Boral (Australia) Termination Policy does not on its terms apply to the circumstances of the termination of the Respondent's employment.

The Applicant did at all times provide the Respondent with a significant period of notice so as to allow the Respondent an opportunity to reorganise his affairs consequent upon the termination of his employment.

The Respondent first raised the question of terminating the contract of employment with the Applicant.

Having provided the Respondent with a significant period of notice regarding the termination of his employment, it would be unfair, harsh or unconscionable to require additional payments to be made by the Applicant to the Respondent. Further, it would be unfair, harsh or unconscionable to apply the terms of the Boral (Australia) Termination Policy to the circumstances surrounding the termination of the Respondent's employment by the Applicant.

The declarations and orders sought in this matter will ensure that the contract, arrangement or collateral arrangement between the Applicant and the Respondent operates in a manner fair to the Applicant. 16 On 11 August 1999 the cross-application was amended by consent to reflect a change in the respondent's name from Boral Ltd to Origin Energy Ltd. Submissions - Applicant 17 The background to this case is that for many years the applicant was employed by the respondent as a corporate lawyer. He began his employment with a corporation known as Blue Circle Southern Cement on 17 April 1978. Blue Circle was acquired by the respondent. Thereafter the applicant's employment continued with the respondent. He turned sixty-two on 29 November 1998. 18 There is one factual controversy in this matter which the Court will be asked to resolve. It will not be critical to the determination of the application, but is nevertheless a controversy which is raised on the evidence. 19 The controversy is this: did Mr Smith in about the middle of 1997 and for a time thereafter indicate to Mr Scobie that he then had an intention to retire in the foreseeable future. Mr Smith denies both that he had such an intention at that time or at any time thereafter and that he ever said anything to Mr Scobie which would indicate that he did. He was very firm in that recollection, by reference to a conversation with his wife in September or October 1997, with the resulting resolution that he would break the habit of a working lifetime and take his holidays when they fell due. It is entirely, of course, inconsistent with a resolution of that kind, to at the same time intend to retire within a short period of time. In the end, of course, there is no objective material upon which the Court can test the conflicting evidence of Mr Smith and Mr Scobie. 20 That factual controversy in the end will not be critical to the Court's determination of this application. The reason for that is that whatever finding the Court might make in relation to that controversy, it is a finding that can go no higher than Mr Scobie's evidence and that is that Mr Smith avowed an intention to resign in the foreseeable future in about the middle of 1997 and thereafter. Even if Mr Scobie's evidence were to be accepted, one thing is plain and that is that by the time one comes to the critical period, early 1998, Mr Smith was declining to retire in the foreseeable future. In other words, if he had once had that intention and avowed having it, that time had passed. By early 1998 he avowed a different intention. 21 One can make no assumptions in this regard. An employee is free to change his mind about a question of this kind. Nothing decisive had been done one way or the other by either party acting upon anything that had been said at that point in time so that there was no impediment on him changing his mind in that regard nor could there be any assumption that although he had turned 62 years of age, he would not be working for many years to come. One thing that Mr Smith did say, however, was that he did not think he would be there at the age of 70 so there were many years left in him as a loyal and effective employee. 22 In early 1998 his financial circumstances did not permit him to retire and he could lawfully, subject to the terms of the Boral Australia Termination Policy, have continued in employment without regard to his age and the respondent could not lawfully have terminated his employment with regard to his age. That last point was accepted by the respondent. 23 In the meeting on 16 March 1998 Mr Smith was told by Mr Scobie or Mr Waldon, or both of them, that he was a valued employee and that Boral had no cause to terminate his services. What brought his employment to an end, and the Court was asked to make this finding, was Boral's decision to bring it to an end. Boral dismissed him. Mr Scobie was at the least involved in that decision. 24 Boral had taken it upon itself to deploy a Termination Policy. A finding was also sought that Mr Scobie consciously and deliberately applied that Policy to the decision in which he played a part, to terminate Mr Smith's employment and indeed, having regard to the terms of the Policy, he could have done no other. 25 First, it was a Policy which applied to Total Cost employees, of which Mr Smith was one. Second, it was the only Policy which applied to the termination of employees of that kind. Nor is it suggested that there was any other contractual prescription of what might be done as a consequence of Boral's decision to dismiss Mr Smith. 26 The avowed purpose of the Termination Policy was to more clearly define the categories in which employment of Total Cost employees might be terminated. When one runs down the exhaustive list of distinct categories of termination, there is only one which can possibly apply to Mr Smith. 27 The only category in which he might fall was (d) which refers to redundancy. That is where the position has ceased to exist or it has been substantially redefined and the incumbent is clearly unsuitable to fill the position. The latter aspect of that extended definition of redundancy is plainly the circumstance that was so described in the critical meeting on 16 March 1998, that there was a need to reorganise, and that Mr Smith was not suitable for the position. The fact that Boral intended to reorganise was repeated in later conversations. No one suggests that those words were not said. One of the reasons why he was told that he was, within the words of the policy, unsuitable to fill the redefined or reorganised position was that he was not going to be around long enough. No one denies that. 28 Solicitors then acting for Mr Smith, wrote to the respondent's solicitors on 12 August 1998 which was during a period when Mr Smith was serving out his period of notice. Having canvassed the terms of the Termination Policy in detail, the respondent was asked to nominate into which category the applicant fell. The question was posed and it was never answered. There is certainly no evidence resisting the notion that of the only available categories of termination, Mr Smith fell within the last. It is unresisted and so it follows that a finding is inevitable that that is the category in which he properly fell but of course, he was not treated as that category required. 29 What Boral did was to give notice and it gave nothing on account of severance, as the Policy required. It could not do that (see Pacific Publications Pty Limited v Cantlon, [(1983) 4 IR 415]. For the distinction between the two concepts see Fryar v Systems Services Pty Limited (137 ALR at 321) and Newton v Goodman Fielder Mills Ltd [(1998) 81 IR 227 at 238). 30 All that a long period of notice did was to give him longer to contemplate the inevitable end of his working life. He had reached a point in his career where it was really not practical and it is notorious for someone to find a comparable employment position elsewhere. When the end came, he walked away after more than 21 years' service with in effect nothing more than his statutory entitlements. 31 That conduct and those events point to a contract which in all the circumstances was unfair. There was only one way for Mr Smith to come away with anything at all as a consequence of his employer's decision to bring his valued employment to an end and that was to accept Mr Scobie's invitation to go early but, of course, the penalty for going early, was that the applicant was to take a heavy discount on the period of notice, Mr Scobie offering no more than the lower end of the range that the Policy allowed. That too was unfair and constituted an unfair aspect of the employment. 32 The relief that is appropriate in the circumstances is the very relief for which the policy provides. If one applies not appendix B, which had nothing to do with the matter in truth, but section D Redundancy, one arrives at the position that Mr Smith had an entitlement to a payment equivalent to 64 weeks. There is a cap of 18 months but that does not come into play here, with a premium of 25 per cent for someone over the age of 60, that being a reflection no doubt of the notorious fact that persons at that age are unlikely to secure other employment. 33 When one does that calculation on a total cost remuneration of $159,000, one arrives at the figure of $244,615. That is the appropriate measure of compensation for the unfairness visited upon Mr Smith in all of the circumstances of a case as the evidence has revealed. Although that is not the full claim that is advanced in the Summons for Relief, the evidence reveals that amount as something which has a rational connection to the unfairness revealed in the contract. Submissions - Respondent 34 If the Court needs to resolve the factual controversy in the evidence, and the Court may not need to do so, then the need does not result necessarily in Mr Smith's evidence being accepted. The Court has Mr Scobie's evidence; there is no doubt in his mind in that evidence that this issue was raised with Mr Smith first, that Mr Scobie took the issue up, as certainly he accepts readily, that he decided as a consequence of one of his senior solicitors identifying to him the intention to retire that he would move forward in terms of the restructuring and needs of the department for the future and the like. There is no doubt about that, that is not a matter of controversy. 35 The Court would have no hesitation in accepting that was Mr Scobie's understanding and belief. Mr Scobie is a company secretary, legally trained, who acknowledged an understanding of policy changes as a consequence of Anti-Discrimination legislative considerations. It beggars reality then to think in a particular instant, in dealings with a senior solicitor that he forgets all that, and moves on some other ground as is alleged by the applicant essentially based on age. 36 If the Court ultimately comes to the conclusion it is necessary to determine the controversy, the controversy is determined in favour of Mr Scobie. 37 It may not be necessary to do that because there are some other factual matters that are not matters of controversy. They are these: some conversations took place over a period of time. These conversations led to consideration of the severing of the employment relationship. In the correspondence ultimately a decision was made by Mr Scobie to notify the applicant bringing to an end of the contract of employment. What then needs to be decided is whether in terms of s 106 that earlier series of events invokes, firstly, the jurisdiction necessary to find unfairness and, secondly, any consequential order upon jurisdiction being found. 38 It may be in this case it is not necessary to resolve how that point was reached because what happened previously does not necessarily impact on what happened after the point that notice of termination was given, that there was a bringing to an end by notice of the contract of employment. 39 A period of notice of some 14 months was given. What then needs to occur is that there be an assessment of the terms of severance to determine whether the terms were in the circumstances fair and reflected the fairness of the contract or were themselves unfair so as to warrant some alternate order. 40 This is not a case, as the majority of cases are, where any inadequacy can be said in the way in which severance was dealt. The position here is that the notice that was given was not only of a sufficient but possibly of a generous length. Consistent with the approach that one has to look at notice, and one looks at notice served as more valuable in real terms than notice paid for, the respondent contended that a payment in lieu of notice has a lesser value. It cannot be said that notice served has any lesser value than notice paid, because ultimately what is being talked about is the concept based upon the common law concept of reasonable notice. It follows that one could not have a lesser value ascribed to notice served, the full value of that being the payment of remuneration during the period of notice so that the person is in receipt of that. The starting point is with the concept of notice and notice worked is more valuable than notice served (see Fryar (137 ALR at 331) ). 41 There was the commencement of discussion between the applicant and the respondent about the reduction of the notice period. That negotiation never got further than the initial inquiries, Mr Scobie indicating he thought something towards the lower end of the scale provided by the Policy for leaving at an earlier date was appropriate. That commencement of an exchange to see whether an alternative could be pursued was ultimately not pursued by Mr Smith. 42 The starting point of any consideration is that every contract of employment can be brought to an end by payment or a provision of reasonable notice, a common law position. 43 This Commission exercises a jurisdiction of determination in respect of fairness when such contracts are brought to an end and does it in two ways. Firstly, reasonable notice might be one quantum to one party and a different quantum to another. So the Commission has looked at various factors and essentially concentrates on seniority and length of service as being the two major factors in the determination of what is fair in the circumstances. 44 Clearly the courts have encouraged the avoidance of disruption caused by immediate and unheralded severance of employment. The dislocation created by an immediate termination is something that has a significance which may vary between the parties. An example of consideration of the effects of immediate termination is to be found in Cukeric v David Jones (Australia) Pty Ltd [(1997) 78 IR 430]. It is that concept that has driven the courts and this Commission to embodying the principle that notice served is a very important factor because by providing notice as distinct from payment one is treating a person as a person, allowing them the opportunity to adjust, to reorganise their lives in an orderly fashion, in a fashion more suitable to themselves than to the employer and in such a way as to minimise the shock impact of an immediate termination. 45 Here, just that was done. Here, what was done was a very long period of notice indeed. That long period of notice is at all points to be counted. An employee cannot get to the end of it and then seek to start again as though no notice had been given at all. To do that would be to in fact reverse the trend in terms of notice and to encourage the immediate termination of services, because no value would be being given to notice served. That was not the approach adopted by Hill J in Payne v Foxboro [(1998) 81 IR 404 at 407]. 46 The two essential characteristics, length of service, status of position, motivate the considerations as to notice (see Payne v Foxboro [(1998) 81 IR 404 at 407]; and Ross v GN Comtext (Australia) Pty Ltd (Ross) [2000] NSWIR Comm 133 (unreported; Walton J, Vice President; 98/6383; 31/8/00) ). Ultimately, in the terms used in Ross at par 34, the question the Court in this case has to determine was whether the period of notice actually given to Mr Smith in this case, when tested against the standards of fairness, was appropriate or not. The respondent submits it was. 47 In this case having regard to the length of the notice ultimately the respondent would suggest that the Court would come to the view that that length of notice encompassed the combination of payment for severance as well as the consideration of notice. 48 The period here provided was one that, when one balances it out, fairly approached the concepts that are considered by the various Judges as being relevant to the termination of the employment as to both notice and severance. That approach in this case means that one weighs up how much time in total is it appropriate to consider in relation to Mr Smith and in doing that take into account the actual period of notice he was given commencing in 1998. The fact that the period is combined in this case is not an exclusion to considerations as to its appropriateness in respect of both of the elements. 49 In David Jones Ltd v Cukeric [(1977) 78 IR 430] Mr Cukeric who was 58, who was senior level and 35 years in the same company in total received 18 months as a payment in lieu of notice and severance payment combined. 50 In Payne 12 months was thought to be appropriate by Hill J in respect of a person who had 27 years service. Here Mr Smith gets a period in addition to 12 months and has a lesser period of service. Service of just over 21 years is not of the order of Mr Payne's service of 27 years. Here one could say a period less than 12 months would be appropriate but the applicant received an additional period over that in the period of notice provided here. On the approach adopted by Walton J, Vice President in Ross, that total can be considered in the discharge of notice and severance. 51 On no case could it be said that more than 18 months could be warranted for the applicant as somehow fair. The Cukeric and Payne cases showed that objectively, the provision of fourteen months notice to the applicant was fair in that it was sufficient to meet all the concepts of fairness e.g. status, length of service etc, taken into account in those cases. 52 Pacific Publications v Cantlon is a very specific judgment that deals with award entitlements. The subject matter of the dispute in that case was that monies paid in the course of employment had not been attributed to the discharge of award obligations. What the Court is asked to look at here, is the question of fairness, not rights as a consequence of the making an award. 53 The Termination Policy did not assist the applicant. It was not an enforceable contract or term as seemed to be suggested by the applicant, or even a basis on which a term would be implied. If it is elevated to that point, if it is somehow said this Policy becomes a restricting consideration upon the treating of the applicant fairly by the respondent, then the cross-claim is made out and ought be granted. The reality though is that one comes back to what the Court's task is. What is fair? 54 In the cases cited, the authorities establish 18 months, as did the Policy, as being the upper level in circumstances of very extended employment and other factors. In this case there was a notice period of some 14 months, one that is in all the circumstances fair and consistent with those cases. The Court in deciding what is fair between the parties cannot ignore the fact of provision of a notice period. 55 In the circumstances here the lesser period of notice is appropriate and what is not appropriate is to double count, and to add to the notice period the additional considerations which include yet further notice. So ultimately the table that would have operated, is a table in the Policy. What would have been paid to Mr Smith was 14 months payment or in this case he got that full value in 14 months notice. He cannot get 14 plus 14 when the policy itself always contemplated that that 14 months was in respect, at least in part, of notice and that there was a maximum of 18 months under any circumstances. It follows from what has been paid, the notice period discharges all of the relevant considerations under s 106 and as a consequence the matter ought be dismissed. 56 Very much in the alternative there would be some consideration between the 14 months already provided, and the maximum of 18 months. Submissions - Applicant - In Reply 57 The respondent's submissions amount to a plea to the Court to acquiesce in the unilateral and entirely unexplained departure from a Policy which constitutes an element in the balance of the relationship between it and all of the employees to whom the Policy applies. 58 The Policy provides for a maximum of 18 months combined notice and severance pay. That is not a payment equivalent to the amount that the employee would have earned over 18 months, which payment was satisfied by the working out of notice as submitted by the respondent. 59 The two positions are conceptually quite different. There is a world of a difference between a payment of a lump sum on the one hand and notice given and worked out on the other hand. The latter is what happened to the applicant. The former is what Boral's policy required. The respondent pointed to the fact that the payment that the Policy required in the circumstances of Mr Smith's case included an element of on account of both notice, and on account of severance. 60 The way in which that was put does not do justice to what actually happens when an employee works out a period of notice. During that time the employee contributes his or her labour, talents and energy to the service of the employer, and the employer in consideration of that contribution makes a payment or remunerates the employee. When Boral gave Mr Smith 14 months notice and Mr Smith worked that 14 months out, Boral had the advantage of 14 months service from Mr Smith, 14 months of his labour, 14 months of his talents, 14 months of his energy. That was a unilateral departure from the Policy, that the respondent now claims wipes out any obligation that it had to the applicant under the Policy. 61 There is no presumption as put by the respondent that notice served is more valuable to an employee than notice paid out, or at least that it had the same value. In the facts of this case and the circumstances in which Mr Smith found himself, notice worked out had less value to Mr Smith than the payment to which he was entitled under Boral's policy. All that it achieved in Mr Smith's case was to give him more time to contemplate the inevitable end of his working life. 62 In the respondent's submissions it was put that there was a common law rule that every contract can be brought to an end by the giving of notice presumably by the term which the contract stipulates, and if no such stipulation, by reasonable notice. There is no such rule. 63 It may not be fair in the circumstances of the particular case to bring a contract of employment to an end by the giving of actual notice, and requiring that notice to be worked out. It all depends upon the circumstances of the case. In Mr Smith's case the evidence was that he had reached such an age that for all practical purposes his working life would come to an end upon the termination of his employment. There was no point in him having two months, one month, or 14 months to look for other employment because he was never going to find any. Because of the nonsensical way the world works he had run directly into the prejudice that works against every employee of his age when searching for new employment. The very reasons that the authorities identify for requiring reasonable notice here manifestly have no application at all, and meant the notice given to him was of no practical benefit to him. 64 The respondent submitted that if Mr Smith were to be successful in the circumstances of his particular case it would encourage summary dismissal because it could set notice worked at nought. Mr Smith's case is not advanced upon some universal concept of fairness. It looks at the individual circumstances of his case: his period of service, the position he had reached, his age at which new employment is an impracticable possibility, and the fact that he was working for an employer, whose Termination Policy provided that in the circumstances requiring Mr Smith's dismissal, he be given a notice and severance payment, and in fact prescribed no other way of treating him in that circumstance. What Mr Smith missed out on here was the payment that the Policy required. 65 The respondent is unable to point to any reason why it should be entitled in fairness to unilaterally depart from this Policy to its own benefit, and to the manifest detriment of Mr Smith. Consideration 105 Definitions

contract means any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument.

(c) that provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or

(d) that is designed to, or does, avoid the provisions of an industrial instrument.

Note . The jurisdiction of the Commission under this Part is exercisable only by the Commission in Court Session.

Division 2 Unfair contracts may be declared void or varied

106 Power of the Commission to declare contracts void or varied

(1) The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract.

(2) The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason.

(3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time.

(4) In considering whether a contract is unfair because it is against the public interest, the matters to which the Commission is to have regard must include the effect that the contract, or a series of such contracts, has had, or may have, on any system of apprenticeship and other methods of providing a sufficient and trained labour force.

(5) In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case. 66 A considerable time in submissions was spent on virtually the only factual dispute between the applicant and Mr Scobie, that dispute being as to whether or not the applicant had said in mid-1997, as was contended for by Mr Scobie, and denied by the applicant, that he intended to retire in the foreseeable future, probably before the end of 1998. 67 Even if the applicant used the specific words as to retirement as claimed by Mr Scobie, and I accept that Mr Scobie had a genuine understanding that he had been told that the applicant would retire in the foreseeable future, I do not see that that affects the outcome of this application. I accept that the issue of the applicant's future with Boral was raised with him by Mr Scobie in the second half of 1997. I accept that within that time frame general statements were made by the applicant along the lines of "I guess all of us would like to retire, some earlier than others". Even if the applicant had had an intention to retire at one time, it is clear that he had decided not to proceed along that path at that time. He had taken no formal steps to initiate the process, and, if Mr Scobie's evidence is accepted, avoided doing so. 68 There were substantial reasons other than the applicant's age as to why Mr Scobie was concerned to ascertain the intentions of the applicant with regards to retirement. Mr Scobie wanted to restructure the organisation. It was the length of time the applicant would be still an employee that was relevant to that restructure, and the filling of positions within it. 69 The applicant's evidence as to views he formed in relation to approaches from consultants as to employment all except one it would seem, being before he left Boral, do not advance his case here, other than to support the notorious understanding that the older one is, the more difficult it is to obtain a new job. 70 On 16 March 1998, Mr Smith met Mr Scobie in the company of Mr Stuart Waldon who was a manager in charge in Boral's Human Resources department. The meeting was convened at Mr Scobie's request. Mr Smith was told the subject of the meeting was to be his accumulated leave and other matters. The "other matters" turned out to be the termination of Mr Smith's employment. 71 He was then told the amount of notice that he would be entitled to. He was referred to the Boral Termination Policy. Mr Smith raised a question about whether the Boral Termination Policy applied to him and said it was his view that the Policy would not alter his common law rights. He asked for time to consider his position and reread the Termination Policy which he said he had not seen for some time. 72 In a letter dated 27 March 1998 the applicant was advised by Mr Scobie: Boral Limited hereby gives you notice that your employment by it will cease on 31 May 1999.

The period of notice given to you has been calculated under the Boral (Australia) Termination Policy.

Please acknowledge receipt of this letter by signing the attached copy of this letter and returning it to me. 73 On 30 March 1998 the applicant sent the following letter (omitting formal parts) to Mr Scobie: You have on no less than four occasions, asked me whether I have given any consideration to my future at Boral. On the last of those occasions I told you that I have no immediate intentions of retiring.

On Friday, 13 March last, you asked me to see you and a Human Resources person on the following Monday to discuss my "accumulated leave and other matters". At the meeting on Monday you then informed me that although I was a "valuable employee" and that Boral had no grounds to terminate my services, you did intend to re-organise and needed an employee who would "be here longer than you will be". You then discussed the terms of notice you intended to give me.

Quite apart from any rights arising out of these discussions which I may have, this company has clearly acted unlawfully in terms of the Anti-discrimination Act and it is now my intention to commence proceedings to protect my rights. 74 The applicant relied upon the following exposition as to principles relating to notice and to redundancy by Von Doussa J in Fryar v System Services Pty Ltd (137 AR 321 at 331): There is a distinction between the nature and purpose of a period of notice or payment in lieu, and a severance payment. The distinction is reflected in Arts 11 and 12 of the Termination of Employment Convention. While the two are often treated together to arrive at a global redundancy package, the separate nature and purpose of the two entitlements remains, and assume importance in this case.

A period of notice is to give an employee the opportunity to adjust to the change in circumstances which is to occur and to seek other employment: Matthews v Coles Myer Ltd (1993) 47 IR 229. The period may be worked out, as s 170DB allows, and it often is, as it is recognised that the employee's prospects of obtaining other employment may be better if the search is undertaken while the employee remains in employment: see for example Sinclair v Anthony Smith & Associates Pty Ltd (IRC of A, Von Doussa J, 1 December 1995, unreported) at 8.

A severance payment, however, is intended to provide a payment as compensation for the loss of non-transferable credits and entitlements that have been built up through length of service such as sick leave and long service leave, and for inconvenience and hardship imposed by the termination of employment through no fault of the employee: Termination, Change and Redundancy case (1984) 8 IR 34 at 62, 73. The inconvenience and hardship includes the disruption to an employee's routine and social contacts and the competitive disability to long term employees arising from opportunities forgone in the continuous service of the employer: Food Preservers Union of Australia v Wattie Pict Ltd (1975) 172 CAR 227. Such a payment is taxed on the favourable terms which apply to an eligible termination payment. It is quite inconsistent with the nature and purpose of the payment, and the taxation regime, that the severance entitlement should be worked out as if the number of weeks used to calculate the entitlement were weeks of notice. 75 That case was decided in the context of claims of unfair dismissal where the applicants had worked out notice periods of 41 and 33 weeks until the nominated termination dates and received no severance payment on leaving. 76 There is no reason to think that one consequence noted by Von Doussa J (at p 330) in that case was not similarly a consequence in this case: … A consequence of working out the full period nominated by the respondent was that the applicants paid income tax on the weekly remuneration during that period, and were denied a lump sum on termination along with the taxation advantages otherwise available to people whose employment comes to an end from genuine redundancy. 77 It seems to me that the respondent's approach was coloured by an understanding that the applicant had intended to retire "in the foreseeable future" but that he had changed his mind so as not to miss out on payments that might come to him on being made redundant, a course of action that the respondent's officers appeared to view in some way as being unacceptable. 78 In my view, the respondent's approach is made clear no matter which version of a conversation between the applicant and Tony Berg, the respondent's then CEO on 20 May 1998, is accepted. 79 The applicant said that Mr Berg said: The law is often an ass and it is unfair and it upsets me that men, who would normally simply retire on reaching a particular age, now sit back and force companies to get rid of them by paying them large sums of money. 80 It was put to the applicant, in cross-examination, that Mr Berg, who was not called as a witness, had said: … your actions might be interpreted as seeking to leverage compensation, as much as possible compensation from the company at a time when you had an intention to retire in any event.

The way the law works can be unfair in that some people who would normally retire wait to be retrenched so that they can receive a large package. 81 The applicant said that Mr Berg said "I have no cause to seek retribution from you as of now but that is not to say that I will not in the future depending on what happens." He denied that Mr Berg had said the following words as put to him by Mr Hodgkinson: "I harbour no ill feelings to you now, but if we cannot reach a sensible solution obviously I might change my view". 82 The applicant maintained the accuracy of his version, but upon examination the two versions have essentially the same meaning. 83 There is nothing untoward in changing one's mind about retiring, or even in simply delaying a final decision until it can be known what benefits in doing so might be available from the employer. 84 There would be nothing to be deprecated if the applicant, or any employee, wished to maximise his financial position, taking into account in this case particularly the stage he had reached of his career. On its plain words, the Termination Policy provided for payment in certain situations characterised as redundancy. The applicant did not engineer the redundancy circumstances. The applicant was made aware that Mr Scobie wished to restructure the organisation. Boral (Australia) Termination Policy (10/4/96) 85 This Termination Policy would appear to have replaced a policy described as "the 1992 Termination/Severance Policy". It is expressed to cover "all Australian Total Cost employees". "A Total Cost employee" is not defined in the Policy. 86 It was common ground that the applicant is a Total Cost employee. In his case, his remuneration ($159,000) was in the form of salary and not otherwise packaged. 87 It was said in the Overview to the 1996 policy that the 1992 Policy had been designed as a Redundancy Policy for Total Cost employees, not as a comprehensive Termination Policy. 88 The 1992 policy had fostered redundancy as the only form of termination with associated payouts, rather than the utilisation of other forms of legitimate termination. This new Termination Policy was to provide for more appropriate and better management of terminations. 89 There are a number of distinct termination categories within the new policy: (a) Summary dismissal - not relevant in this case; 90 The other categories are described as follows: (b) Termination on Notice:

Termination under this category should be where an individual's performance has been marginal, or where people are unable to meet the core competencies of their job and are having difficulty carrying out their duties, or where the individual's management and/or operating style is in conflict with Boral's purpose and value statements. An individual terminated on Notice may be experiencing a combination of these problems.

The notice period given is a function of the job size and the individual's length of service (Appendix B). Employees are expected to work out their notice period but may elect to resign and receive 25% of their remaining notice period paid in lieu, with no other termination payments, other than Annual Leave/Long Service Leave entitlements and superannuation entitlements.

The definition for termination within this category is the same as (b) above, however, this category of termination is a negotiated termination where the Company determines that the employee is not required to work out the notice period specified. Payment in lieu may be negotiated from 25% to 100% of the time specified in the matrix (Appendix B). Note that the notice matrix is identical for Termination on Notice and Company Notice in Lieu.

The Redundancy category of termination occurs where a position ceases to exist or has been substantially redefined and the incumbent is clearly unsuitable to fill the position. The termination of the employee occurs not on account of any personal act or default of the employee nor on account of any consideration peculiar to the employee. Every attempt should be made to redeploy individuals to alternative suitable positions before the redundancy is effected. The redundancy payment comprises the combined notice and severance payment and should be calculated by reference to the individual's level of remuneration, age and length of service. 91 It is then provided that: Executives covered by redundancy are to receive a severance and notice payment calculated using the following formula:

The minimum severance and notice payment, regardless of period employed is six months.

The maximum severance and notice payment, regardless of period employed and age is 18 months.

Calculation for severance and notice payments is on Total Cost but excludes incentive payments.

The redundancy payment is calculated as follows:- four weeks pay for the first year of employment, plus three weeks for each subsequent year. The payment will not exceed 18 months.

An age multiple applies: …

This multiple is applied to the redundancy payment calculated in (4) above. The total payment, including the age multiple, will not exceed eighteen months.

The payment calculated for redundancy is for both notice of termination and length of service. There are no additional termination payments. Annual Leave/Long Service Leave and superannuation payouts are as per entitlements.

… 92 Mr Scobie confirmed that the Boral (Australia) Termination Policy he had referred to in the applicant's letter of termination dated 27 March 1998, was the same Policy attached to an affidavit dated 3 June 1999 of the applicant (Ex 2). It is from that document that the above extracts are taken. 93 Examination of the termination categories in the 1996 Policy shows that the only category within which the applicant could fall is that of redundancy. 94 The Policy provides that "executives covered by redundancy are (my emphasis) to receive a severance and notice payment (my emphasis)" calculated using the formula then set out. 95 The applicant had been employed for just over 21 years. He was aged 62. Setting aside for ease of calculation, the additional period of some weeks, the applicant was entitled, on the basis of the formula set out in cl (d) of the Termination Policy, to a severance and notice payment (my emphasis) of at least 80 weeks, capped, however, at 18 months. (It appears to have been accepted that the capping provision would need to come into play.) 96 The applicant's position became redundant in the course of the restructure put in train by Mr Scobie. However, it would seem that he had been given fourteen months notice prior to that restructure being finalised. 97 The 14 months notice given by Mr Scobie to the applicant was calculated on the basis of the "Termination on Notice and Company Notice in Lieu Matrix" located at the back of the new Policy which Mr Scobie said showed that the applicant, based on his length of service (20 years at that time) and grade (28+), would, if he fell into either of those categories, have been entitled to 14 months notice. Mr Scobie said that he had deliberately calculated the applicant's entitlements working from that matrix and that he believed that the calculation of the period of notice made under appendix B gave reasonable notice to the applicant of his termination of employment. He did not recall referring to the heading above it. 98 He had deliberately looked at the Policy because he believed it was pertinent at the time. He did not look anywhere else. 99 Pressed by Mr Neil, Mr Scobie said the notice was calculated in accordance with Appendix B which is "under the Policy" in accordance with Mr Neil's definition. Mr Neil had put to him that " "under" means you followed the Policy, is that not right?" 100 In my view, Mr Scobie, on the basis of his evidence, in making calculations based on the new Policy, paid attention only to what he regarded as the relevant figures and, little, if any, attention to the definitions or, indeed, to the explanatory text of that Policy. He could not recall whether he had done so and said it was possible he did not do so for the purpose of making the calculations in respect of the applicant's entitlements. 101 Mr Scobie said that he did not see (b) had any particular application to the situation of the applicant in March 1998. The matters referred to in the first sentence of (b) did have elements of being performance related. The giving of notice to the applicant was not performance related. 102 One major difference between categories (b) and (c) and that of category (d) is that on termination within (b) and (c) the employee is expected to work out the notice period, but payment in lieu, in differing proportions, may be negotiated in relation to those periods. 103 In relation to category (d), redundancy, reference is made to the redundancy "payment" which "comprises the combined notice and severance payment". There is no reference to working out any period of notice. 104 Extracts from a letter dated 24 April 1998 from Mr Scobie to the applicant are set out below: 6. … I wrote my letter to you dated 27 March 1998 being the last day of that following week giving you notice that your employment will cease at the end of May 1999.

You and I discussed the position the next Tuesday, 31 March 1998. The discussion was quite detailed and acknowledged to be "without prejudice" to your position. During the discussion, you said that if you were to leave earlier than 31 May 1999, the middle of July 1998 might be a suitable time.

Boral's policy on the termination of Total Cost employees contemplates that if an employee is not to work out a notice period, payment in lieu may be negotiated from 25% to 100% of the period not worked.

Consistent with my discussion with you on 31 March 1998, Boral is willing to negotiate a basis on which you are not required to work out the period of notice given to you. In all the circumstances, this may well be a sensible course suiting both you and the Company. If terms on which you are to leave earlier than May 1999 are to be negotiated, I contemplate that a payment in lieu towards the lower end of the range in point 8 above would be appropriate.

I suggest you discuss with me whether there is a basis upon which we can negotiate for you to retire earlier than May 1999. 105 (A copy of this letter, annotated by the applicant, was attached as Annexure B to his affidavit dated 3 June 1999. Those annotations indicated acceptance of the accuracy of pars 6, 7 and 8 set out above. In response to a query from the Bench, Mr Neil advised that the applicant had made those handwritten annotations, and the letter had been tendered on that basis. Attached to a later affidavit dated 15 September 1999, was the copy of a note dated 14 May 1998 from the applicant to Mr Scobie advising "I do not think it necessary to reply in detail to your letter of 24th April but note that some of its assertions do not accord with my record of events.") 106 Mr Scobie said that the consideration he had in mind when he contemplated as at 24 April 1998 that a payment at the lower end of the range would be appropriate was that the applicant had indicated to him in the middle of the previous year that he would be retiring in the foreseeable future. There were subsequent discussions with him about that. With that in mind Mr Scobie believed a payment at the lower end of the range was appropriate because it was not as if there had been no contemplation on the applicant's part that he would be working for the long term. (The latter assertion was denied by the applicant.) 107 It seems to me that that suggestion as to "a payment in lieu towards the lower end of the range", that range being from 25% to 100%, reflected a belief of the respondent that the applicant, in seeking payment out of notice was seeking a windfall benefit at the expense of the company. Mr Scobie's suggestion was not, in any event, an approach that accorded with the Policy itself, in the particular circumstances of the applicant's termination, that termination not fitting within any of the categories (a), (b) or (c). 108 In Payne v Foxboro L & N Pty Ltd [(1998) 81 IR 404 at 407 and 408], Hill J took into account the applicant's length of service (27 years plus) and status (National Sales Manager), to order an additional twelve months (less one day) pay in lieu of notice and that redundancy payments already made be increased based on full remuneration. In his consideration, Hill J expressed the view that a provision in the contract for a period of 12 months notice (or payment in lieu) would have been fair and reasonable. 109 It was said by Walton J, Vice President, in discussing the conceptually distinct purposes of notice (or payment in lieu) and redundancy payments in Ross v GN Comtext (Australia) Pty Ltd [2000] NSWIR Comm 133 (unreported; 98/6383; 31/8/00) as to a severance payment that: Such a payment is taxed on the favourable terms which apply to an eligible termination payment. It is quite inconsistent with the nature and purpose of the payment, and the taxation regime, that the severance entitlement should be worked out as if the number of weeks used to calculate the entitlement were weeks of notice.

Furthermore, in addition to the considerations referred to in these cases and others the general rule, except in cases of summary dismissal for cause and/or any contractual provision to the contrary, is that an employee is entitled as of right to fair and reasonable notice of termination irrespective of the reasons therefor. Termination of employment on the ground of redundancy consequent upon restructuring for reasons of economy and efficiency, has long attracted special consideration, and generally speaking, separate and additional benefits.

I accept that in the context of a termination on grounds of redundancy, particularly where the employee has been employed for an extended period of time, it is appropriate to consider the need for a severance or redundancy payment. The failure of a contract to so provide, (or to ensure that a reasonable payment is made in it's [sic] operation), is a matter which may lead to the conclusion that the contract is unfair in its terms or its operation. In this case, the failure to ensure that a reasonable payment was made upon redundancy supports the conclusions already reached that the contract or arrangement was unfair to the applicant.

Whether, in a particular case, it is appropriate to order a separate payment in the nature of severance or redundancy pay or one payment in light of both notice and the circumstance of redundancy is a matter for the discretion of the Court. 110 In Newton v Goodman Fielder Mills Ltd [(1998) 81 IR 227 at 238], Hill J had the following to say: There are, in my opinion, significant differences in the nature and purpose of provisions governing notice of termination of employment and provisions dealing with the appropriate severance payments to be made on retrenchment for redundancy reasons more particularly in the case of the restructuring of a business - despite that there may be some overlapping of the factors relevant to take into account in each case.

In my opinion, it was both appropriate and fair in the circumstances of this case that Mr Newton should have been given a reasonable period of actual notice. (The above case is one in which no notice was given.) 111 Ultimately, however, many of the cases cited as to the interaction of notice (or payment in lieu) and redundancy as to payments to be made are not of direct relevance for consideration in this matter. The respondent's Termination Policy had already dealt with that issue. Contrary to the respondent's submissions as to the fairness of the notice, the Policy did not provide fourteen months notice as appropriate for the applicant in the circumstances of redundancy. The applicant, because of the length of his service (21 years) and his status in the company, was entitled to payment (my emphasis) capped at 18 months salary, to take account of both notice and redundancy. Notice worked out was not an option under that Policy in relation to redundancy. 112 It was submitted for the respondent that the Termination Policy was not elevated to an enforceable contract or a term of the contract as the applicant's submissions would suggest. The Policy had been published for guidance purposes only and, as the respondent contended in the grounds and reasons for its cross-claim, it would be unfair, harsh or unconscionable to the respondent to apply the terms of that Policy to the circumstances surrounding the termination of the applicant's employment. 113 In my view, the Termination Policy fell within the definition of "contract" in s 105, at the very least as either an "arrangement, or any related condition or collateral arrangement". 114 The Policy, in terms, was expressed to cover "all Australian Total Cost employees". It was common ground that the applicant was a Total Cost employee. The Policy was specifically designed as a Redundancy Policy for Total Cost employees. In terms of that Policy the applicant was a redundant employee: his position had been substantially defined. Mr Scobie regarded the applicant as unsuitable to fill the position, because of Mr Scobie's need for that position to be filled by someone who would "be here longer than" the applicant would be. 115 Mr Scobie used the Policy as the basis for the period of notice he gave the applicant when he terminated the latter's services on 27 March 1998. He used it as the basis for the early negotiations with the applicant as to the extent the applicant might cash out that notice and leave earlier than the stipulated date. Mr Scobie said that there was no other document to which he referred. 116 If an employer issues to employees policies for "guidance purposes" (to use the term in the grounds of the respondent's cross-application) it must expect that employees will take notice of those policies in the conduct of their affairs. 117 I do not think that an outcome that could result in the payment of money, and, on my decision will do so, to the applicant in addition to the notice given and worked out, is unfair to the respondent, when that outcome is the result of the respondent's own non-compliance with its own Termination Policy. 118 For those same reasons, the cross-application by the respondent is dismissed. 119 I do not accept as a general proposition the respondent's contention that notice served is more valuable in real terms than notice paid for. Both have value and which of them is the more valuable to an employee will depend upon the specific circumstances of each employee. 120 Counsel for the respondent submitted that the very long period of notice must at all points be counted, in that the applicant cannot get to the end of notice and then, at that point, seek to have the matter reviewed as though no notice had been given at all. That submission might have had some force if the applicant had simply sat back and waited for the notice period to end before complaining of it. 121 That is not the circumstance under which the applicant brings this application. From a very early point after notice of termination had been given, the applicant made it very clear that he did not accept the situation. On 27 March 1998 he had been formally advised that his employment would cease on 31 May 1999. The Termination Policy set out a formula for payment to take account of notice and severance considerations in cases of redundancy. It did not prescribe for notice to be worked out. Despite that, the applicant sought to negotiate with Mr Scobie an arrangement whereby he would retire at an earlier convenient date, the balance of his entitlement to be paid out. Mr Scobie on 24 April 1998 responded that the applicant could retire earlier than May 1999, but only on terms that represented a huge discount of up to 75 per cent on the payout of the unworked notice. (Mr Scobie's calculations had already short-changed the period of notice he said was due to the applicant by almost four months, by his incorrect reference to the matrix at the back of the Termination Policy, rather than by reference to the formula in para (d) of the Policy relating to redundancy.) Not unnaturally, in the light of Mr Scobie's expressed views on the payout, the applicant did not pursue those discussions. He filed this application on 1 May 1998, some six weeks after the formal advice of termination. 122 There had been an indication by the applicant that suggests that some period of notice would have been acceptable to him. That indication was, of course, given in the course of negotiations, and I do not take it into account. 123 For reasons already stated, I do not think it necessary to resolve the difference between the applicant and Mr Scobie as to which of them first raised the issue of retirement or when the issue was raised. 124 The effect of the respondent's actions was that the restructure of positions went ahead. The outcome of that restructure was that the applicant was made redundant, having in the meantime worked out a fourteen months notice period. What the applicant had had was notice that at the end of fourteen months he would be redundant, without any compensation to be made for that redundancy. 125 In Reich v Client Server Professionals of Australia Pty Limited (Administrator Appointed) [2000] NSWIR Comm 143 [(2000) 99 IR 69 at 83] in the majority judgment of Wright J, President, Walton J, Vice-President and Hungerford J, it was stated: It logically follows, in our view, that Mr Fernon's submission, as earlier quoted, that "unfairness in a contract is demonstrated by unfair conduct that is consistent with the contract" is only partly correct but to which should be added "unfair conduct that is inconsistent with the contract". We accept Mr Murphy's approach to this aspect, namely, as he said, "conduct by an employer which is unfair and which breaches the employment contract, even though not permitted by the terms of that contract … would nevertheless render such contract unfair and amenable to relief. Such approach is entirely consistent with the language of s 106(2)." We would only add the comment that to us it seems an utterly arid exercise in semantics to find conduct as part of the operation of a contract to be unfair but not thereby to find also the contract to be unfair because such unfair conduct was not permitted by the otherwise fair contract - we think it should be stated as plainly as it may be, and as we think the authorities and s 106(2) do, that a contract may be found to be unfair because of any conduct of the parties. 126 In brief, the conduct of the respondent in this case was that the respondent unilaterally imposed on the applicant a period of notice, not only in conflict with its own Termination Policy, but also incorrectly calculated even if it had applied as to redundant Total Cost employees (which it did not), and quite contrary to the wishes of the applicant. 127 The respondent cannot now successfully claim, in those circumstances, that that period of notice worked out by the applicant satisfies the respondent's obligations to him in relation to compensation for all notice/redundancy considerations arising out of the termination of the applicant's employment. 128 For the reasons I have discussed in detail earlier, I find, pursuant to s 106(2), that the conduct of the respondent was such as to make the contract of employment unfair and harsh in terms of s 105(1) of the 1996 Act. 129 Pursuant to s 106, the Commission orders: (1) The contract of employment between the applicant and the respondent is varied as from 1 March 1998 to provide that the respondent in the circumstances of redundancy shall not impose on the applicant a fourteen months notice period to be worked out by the applicant in satisfaction of both notice and redundancy considerations. (2) The respondent is to pay the applicant an amount based on his 21.12 years of service and his age of 60 plus at the date of termination and calculated in accordance with the formula set out in cl (d) paras (1) to (5) of the Boral (Australia) Termination Policy. (3) Interest is payable on the final amount calculated to satisfy Order (2) at the appropriate Supreme Court rates as from 1 June 1999 until satisfaction of this judgment. 130 The second order is expressed in the terms it is because my calculations as to the monetary outcome of that formula are different from the figure placed on the record by Mr Neil. The parties are to confer and file agreed orders within twenty eight days. 131 The parties are to confer as to costs. If agreement cannot be reached I am to be advised within 28 days and the matter may be relisted for further short submissions. *********************

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.

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (58 paragraphs)

Parties

Cases Cited (8)

Cited By (2)