Association of Professional Engineers, Scientists and Managers Australia on behalf of Phillip Edward Cross v Deniliquin Council
[1995] IRCA 651
•14 December 1995
CATCHWORDS
TERMINATION OF EMPLOYMENT - review of decision of Judicial Registrar - whether valid reason for termination arising out of the operational requirements of business - whether genuine redundancy - relevance of another position arising from restructure - onus of proving existence of valid reason - whether court can take into account personal circumstances of the employee, the terms upon which the employee was initially employed and the procedure adopted by the employer in the termination in determining whether the termination is harsh, unjust or unreasonable.
Industrial Relations Act 1988 (Cth) - s.170CA, s.170DC, s.170DE meaning of "having regard to", s.170EDA, s.170EE, Schedule 10, Schedule 11
Acts Interpretation Act 1901 (Cth) - s.15AB
R v Hunt; Ex parte Sean Investments Pty Ltd (1979) 25 ALR 497
Croft v Minister for Health (1983) 45 ALR 449
Queensland Medical Laboratory & Ors v Blewett & Ors (1983) 84 ALR 615
Byrne v Australian Airlines Ltd (1995) 131 ALR 422
Kenefick & Anor v Australian Submarine Corporation Pty Ltd (1995) 131 ALR 197
Jones v Department of Energy and Minerals, Ryan J, 16 June 1995, unreported
Liddell v Lembke (1994) 127 ALR 342
No. NI253R of 1994
ASSOCIATION OF PROFESSIONAL ENGINEERS, SCIENTISTS AND MANAGERS AUSTRALIA ON BEHALF OF PHILIP EDWARD CROSS -v- DENILIQUIN COUNCIL
MOORE J
SYDNEY
14 December 1995
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. NI253R of 1994
)
NEW SOUTH WALES DISTRICT REGISTRY )
BETWEEN: ASSOCIATION OF PROFESSIONAL
ENGINEERS, SCIENTISTS AND
MANAGERS AUSTRALIA ON BEHALF
OF PHILIP EDWARD CROSS
Applicant
AND: DENILIQUIN COUNCIL
Respondent
JUDGE: Moore J
PLACE: Sydney
DATE: 14 December 1995
ORDER OF THE COURT
THE COURT ORDERS THAT:
The matter is adjourned to enable the parties to bring in short minutes to give effect to the reasons for judgment.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. NI253R of 1994
)
NEW SOUTH WALES DISTRICT REGISTRY )
BETWEEN: ASSOCIATION OF PROFESSIONAL
ENGINEERS, SCIENTISTS AND
MANAGERS AUSTRALIA ON BEHALF
OF PHILIP EDWARD CROSS
Applicant
AND: DENILIQUIN COUNCIL
Respondent
JUDGE: Moore J
PLACE: Sydney
DATE: 14 December 1995
REASONS FOR JUDGMENT
Introduction
This is a review, sought by Deniliquin Council ("the Council") under s377 of the Industrial Relations Act 1988 ("the Act"), of the determination by a Judicial Registrar of an application brought by the Association of Professional, Engineers, Scientists and Managers Australia ("the Union") under s170EA of the Act on behalf of Mr Phillip Cross. It had been claimed that the termination of Mr Cross's employment contravened a number of the provisions in Division 3 of Part VIA of the Act. The Judicial Registrar ordered the Council to reinstate Mr Cross.
The termination of Mr Cross's employment arose in circumstances where the Council restructured its management at a senior level and reduced the number of directors from three to two. Mr Cross held one of the three positions which were abolished, applied for one of the two newly created positions but was unsuccessful. He was immediately dismissed by the Council. It is contended by the Union that his termination was in contravention of s170DE of the Act. I will refer to this provision in more detail when dealing with a submission made by the Council that much of the material sought to be relied on by the Union was irrelevant and thus should not be admitted into evidence.
It is convenient, however, first to set out the events which led to and surrounded the termination of Mr Cross's employment. While there were areas where there was a conflict in the evidence of some witnesses, those differences are not material and so much was conceded by the parties. The following narrative represents findings of fact I have made.
The factual background
Mr Cross has an honour's degree in engineering. In 1966 he commenced as a cadet engineer with Goulburn City Council and progressed to the position of Manager of Engineering Projects which was the position he held prior to his employment by the Council. It was a comparatively senior position and Mr Cross would act as Acting Director of Engineering Services if the Director of Engineering Services was absent.
In late 1991 the position of Director, Works and Services at the Council became vacant. The Council referred the preparation of the advertisement for the vacant position to a committee. The manner in which the job was advertised assumed some importance in the Union's case. The committee comprised of Mr Cockayne who was the Town Clerk/General Manager, and at least three members of the Council, Mr Leetham, the then Mayor, Mr Harvie and Mrs Taylor. Mr Cockayne and Mr Harvie gave evidence in the review.
Mr Cockayne's evidence, which I accept, was that he said the following at a meeting of the committee in late 1991:
"We have not been getting spectacular results for advertisements for positions in the recent past. The new Act is imminent. People in the industry know that the Act is likely to require people to be put onto contract. For those reasons I think we need to put in the ad a statement that the individual will be offered a long term contract when the new Act comes into effect."
and that none of the councillors disagreed with his proposal. It reflected his views at the time. The reference to the "new Act" was a reference to a proposal to recast the Local Government Act 1919 which, in fact, occurred with the later enactment of the Local Government Act 1993 (NSW) ("the new LG Act"). During cross-examination Mr Cockayne said that although the new LG Act came into force in July 1993, it had been anticipated in the local government industry since at least 1991 and through 1992.
Mr Cockayne drafted the advertisement for the position of Director of Works and Services which, as published, read:
"DENILIQUIN
MUNICIPAL COUNCIL
DIRECTOR -
WORKS AND SERVICES
Applications are invited and will be received up until 5.00pm on Wednesday, 19th February, 1992 for the abovementioned position.
The Director of Works and Services is a member of the Council's senior management team and has responsibility for the Council's Work Staff, which presently numbers 46.
Applicants should therefore be highly motivated professionals with management experience and must hold an Ordinance 4 Certificate as a Municipal Engineer. Experience in Town Planning would also be an advantage.
Salary and other conditions of employment will be in accordance with the Local Government Senior Officers' Award for a Grade 7 Council and a motor vehicle will be provided by the Council and will be available for full private use under its relevant policy. A 19-day work roster is used and the Council has a policy for payment of part untaken sick leave (subject to a qualifying period).
The Council will be prepared to negotiate a fixed term performance based contract for a period for up to five years with a suitable applicant on implementation of the proposed new Local Government legislation. (emphasis added)
Applicants should provide full details of personal particulars, qualifications and experience, and copies only of recent references.
Deniliquin is a town of 8000 people situated on the Edward River in the southern Riverina and offers a high level of facilities including four primary schools, a modern high school, a College of TAFE and excellent recreational Clubs. It is situated within easy distance by road from Melbourne, has a daily air service to Sydney and has direct connections by coach to all major centres.
A job description, and further details related to the appointment may be obtained from the undersigned on (058) 81 2444 (b.h.) or (058) 81 3505 (a.h.)."
In late January 1992 Mr Cross applied for the position after reading this advertisement in the Sydney Morning Herald. He contacted the Council and was sent a letter from Mr Cockayne which enclosed various documents including a job description. He later made written application. He was motivated to make the application as he viewed it "as a promotion in his career from being a Manager of Engineering to a Director, in charge of a department".
Mr Cross was concerned, prior to the interview, to ensure that the position with the Council would be for a reasonable period of time. He said, and I accept:
"... I did not want to give up what I had in Goulburn for a short term position. I did not want to have to move again while my sons were doing their final two years of high school. I decided to apply for the position because the advertisement stated that Deniliquin council would be prepared to enter into a fixed term contract after the proposal Local Government legislation came into effect. I had also spoken to the principle of Deniliquin High School who told me my sons could continue with their preferred subjects if we moved to Deniliquin."
In due course Mr Cross was interviewed in March 1992 by a further committee charged with the task of interviewing and selecting a person for the position. The committee was made up of all the then members of the Council and Mr Cockayne was at the interviews as an adviser/observer. Approximately seven of the nine councillors were present at Mr Cross's interview.
Mr Cross inquired of those interviewing him about the advertisement's reference to a five year contract. He says, and I accept, that a discussion along the following lines occurred:
"Cross;"The job advertisement mentioned a five year contract. What more can you tell me about that?"
Answer;"As you know we are expecting a new Local Government Act later this year. As we understand it, under the Act we must first appoint a General Manager. The General Manager will then have to look at the structure of the Council and finalise performance contracts for the three directors positions. We can't be certain what will be in the new Act, but it is our intention at this stage, subject to that Act, that the three directors will be put on contract."
Mr Cross said in evidence that the decision to leave Goulburn Council was a difficult one as he had a "happy association with Goulburn Council", that he was also concerned that he would be interrupting his sons' education who were attending high school, and that he had also accrued 66 week's of sick leave and could only transfer 13 weeks of them if he took up the position at the Council.
Mr Harvie confirmed during cross-examination that Mr Cross had raised during the interview an issue as to whether or not directors "who would currently be in positions would be offered contracts". Mr Harvie formed the view that it was "reasonably important" to Mr Cross as to whether or not he would be offered a contract when deciding whether to take up the position. When the interviews were finished the committee decided to offer Mr Cross the position and agreed that the position would be offered on the terms set out in the advertisement.
After the Council decided to appoint Mr Cross, Mr Cockayne telephoned him to inform him that he was the successful applicant and over the following days there were further telephone conversations between them. During one of those conversations the issue of a contract was raised. Mr Cockayne said words to the effect:
"The committee have determined to offer you the position, and what you wanted is part of their resolution. The resolution specifically refers to all the terms of the advertisement which includes the clause about the contract. I got it in there and it has gone through. As soon as the Act is in we can sort out the provisions of the contract but assuming the Act will have long-term contract conditions in it, you will be given a long term-contract."
During cross-examination Mr Cockayne was asked the following questions in relation to the offer of the Council:
"Well, did you understand that you had made a promise on behalf of Council to Mr Cross about a contract?---No, I'd made an offer on behalf of Council to Mr Cross. I don't see that as a promise as such. I conveyed an offer to Mr Cross as a result of the Council's decision.
What did you understand the offer to be?---That he'd be offered a job which would in turn - which had a condition that in turn when the Act came in he would be offered a contract, a longer term contract.
So it was an offer of an offer?---I don't see it that way. I see that what I did was conveyed a Council decision to him which offered him a position subject to a whole series of conditions, one of which was that if or when the Act came in he would be offered - he would get a longer term contract.
Do you see it as a conditional promise that in the event that the Act comes in and it contains these terms you will be given a contract?---Well, if the Act didn't come in the contract issue would become redundant."
On 9 March 1992 Mr Cockayne wrote a letter to Mr Cross formally offering him the position. It read:
"9 March 1992
Mr P Cross
44 Dickson Street
GOULBURN NSW 2580
Dear Mr Cross,
Position of Director of Works and Services
Reference is made to your interview in Deniliquin on Wednesday 4th March for the abovementioned position and to our subsequent telephone conversations and confirmation is hereby given of the Council's offer to appoint you to the position of Director of Works and Services on it's staff.
In resolving to make this offer to you, the Council resolved to request that on your acceptance of the appointment to the position you give consideration to undertaking a course in town planning which would ultimately lead to a qualification in that area.
The offer of the appointment is to be subject to:-
(a)The Local Government Senior Officer's Award.
(b)The general terms and conditions as set out in the relevant advertisement and job description as provided for the position (refer attached copies).
(c)The provision of motor vehicle of a Berlina or equivalent standard under the conditions as detailed in the Council's standard form of Industrial Agreement (see sample copy attached).
(d)Your formal acceptance of the offer.
As with all staff positions on this Council, you will therefore be eligible to receive an additional allowance of $52 per annum after two months period of satisfactory service and for payment of untaken sick leave in accordance with the Council's Industrial Agreement (providing for payment of 25% after 10 years and 50% after 15 years).
It would be appreciated therefore if you could confirm at your earliest convenience your acceptance of this offer and for you to make arrangements to commence duties as soon as reasonably possible.
As indicated in our telephone discussions, I convey the Council's warmest regards in relation to your appointment and look forward to a mutually satisfying involvement with you in Local Government in Deniliquin.
Yours faithfully,
(signature)
B R COCKAYNE,
Town Clerk/General Manager
encl."(emphasis added)
Thus the offer of appointment was subject to the terms and conditions set out in the advertisement.
Mr Cross formally accepted the offer by letter dated 11 March 1992. Mr Cross said, and I accept, he accepted the offer on the following basis:
"I carefully considered the terms of the offer of employment before deciding to accept the position. I would not have accepted the position if I had thought there was a possibility that I might have to re-apply for the position after the new Act came into effect, with the consequent real possibility of being made redundant within a year of accepting the position. I would not have given up my secure employment with Goulburn City Council and risked having to move my family again at a crucial time in my sons' education. Based on statements made to me in the interview, in the telephone conversations with Barry Cockayne and the terms of the offer which expressly included the terms of the advertisement, I was confident that the offer was for a reasonably long period and as such decided to accept the position in my letter of 11 March 1992."
Mr Cross was cross-examined both about his expectations at the time he accepted and the duration of the employment he anticipated. It cannot be said that he then had, or was reasonably entitled to then have, a belief that he would inevitably secure a contract of a duration then known to him. However plainly he believed the employment to which he was moving was comparatively secure and his employment would survive the introduction of the new legislation. That belief was justified having regard to the circumstances of his appointment.
When Mr Cross commenced as the Director, Works and Services, the other senior managers employed by the Council were Mr T O'Connor, Director, Health and Building and Mr A Cairney, Director, Finance and Administration. Each director reported to the Town Clerk/General Manager, Mr Cockayne.
Mr Cross's responsibilities and duties as Director, Works and Services were to oversee the Council's engineering works, manage employees in the engineering department and to keep the Town Clerk/General Manager and Council informed of engineering activities and issues. Mr Cross was in charge of a budget of approximately $6,000,000.00, which was two thirds of the total of the Council's budget. It appears he was also in charge of a staff of approximately 40.
In July 1993 the new LG Act came into force. Section 332 provided:
"(1)A council must determine:
•an organisation structure
•those positions within the organisation structure that are senior staff positions
•the resources to be allocated towards the employment of staff.
Council may not determine a position to be a senior staff position if the remuneration for the position is less than:
(a)the lowest band of the "executive band" of the Local Government (State) Award as in force at the commencement of this section; or
(b)such amount as may be prescribed by the regulations."
and s334 provided:
"(1)A council must appoint a person to be its general manager. The person must not be a body corporate.
The position of a general manager is a senior staff position."
Consistent with the provisions of s334, the Council sought to appoint a General Manager. Mr Cockayne was unsuccessful in his application for the position and was made redundant under the new legislation. On 29 November 1993 Mr Armstrong was appointed to the position of General Manager.
Mr Armstrong viewed as one of his functions under the new LG Act to implement and develop organisational change and in early December 1993 he had discussions and meetings with Mr Cross and the two other directors. Those meetings involved discussions about who was in fact responsible for certain areas of the Council's operations and whether there was a need to improve the organisation structure. There was possible conflict in the evidence as to whether Mr Armstrong then indicated to Mr Cross in those discussions there would definitely be changes, and the extent to which he discussed possible changes he was considering. However it was common ground that such differences as there were, were not material. What is clear is that nothing was said to Mr Cross in late 1993 that plainly indicated a restructuring would occur that would result in the abolition of the position he then occupied.
On Thursday 27 January 1994 Mr Cross was asked to attend the General Manager's office. According to Mr Cross, and I accept, the following discussion took place:
"Armstrong: "I have decided on a new management structure which will take effect as of Monday. Under the structure your responsibilities for cemeteries and parks and gardens will become the responsibility of the Director of Health and Building and your responsibilities of the sale yards and the airport will become the responsibility of the Director of Corporate Services. The names of the three directors positions will change. Your position will be called the Director of Operations".
Cross:"I would prefer to keep my current title of Director of Works and Services."
Later that day Mr Armstrong sent a memo to Mr Cross confirming the "interim" arrangement he had earlier discussed. In the memo he was referred to as working in an "acting capacity as Director of Works and Services." He believed such a reference was with respect to his status pending him being put onto contract. During cross-examination Mr Cross agreed he was aware in January 1994 that an interim structure was put in place and there was prospect of further changes.
On 23 March 1994 Mr Armstrong presented to the Council at its meeting a report entitled "Proposed Restructure and Appointment of Directors - Stage 1 March/April 1994." The report outlined three organisation structures for the Council to choose from, namely -
•Option A - A return to the old structure established at the 4 July 1990 Council meeting, namely three directors being responsible to the General Manager.
•Option B - The interim structure established by Mr Armstrong in January 1994.
•Option C - A new structure refining the organisation from three directors to two directors: a Director of Corporate Services and a Director of Operations.
At the meeting Mr Armstrong expressed his preference for Option C and the Council accepted his recommendation. It was proposed by him that the new directors positions be advertised and filled on merit and this proposal was adopted by Council at its extraordinary meeting on 23 March 1994.
In the week prior to that meeting, Mr Armstrong informed Mr Cross the Council would be meeting to determine an organisation structure. Mr Cross was not able to attend as he was attending an engineers' conference. Mr Armstrong did not tell Mr Cross prior to the meeting what the options were he was proposing. On Thursday 24 March 1994 at Mr Armstrong's request, Mr Cross telephoned him to find out what the Council had determined. Mr Armstrong informed him the new structure comprised of two directors only and that Mr Cross would have to apply for a position if he wanted one.
Mr Armstrong gave evidence to the effect he had recommended Option C to the Council as he believed Council was "top-heavy" and could efficiently operate with only two directors. However, Mr Armstrong agreed with a proposition put to him that a reason he gave to the Council for choosing Option C was that it would enable the current directors to apply for the new positions along with other applicants. He had noted on the bottom of his written proposal that such an act would send a message to the community that the Council wanted "to adopt an effective and appropriate structure and to appoint the most appropriate staff available based on merit." Another reason for adopting Option C advanced by Mr Armstrong was the need to move towards an emphasis on skills in management rather than technical expertise.
On 25 March 1994 Mr Armstrong sent Mr Cross a letter confirming Council's decision to restructure Council in accordance with Option C.
"25th March 1994
Mr P E Cross
298 Noyes Street
DENILIQUIN NSW 2710
Dear Philip,
Executive Restructure
Council at its Extraordinary Meeting held on 23rd March 1994, resolved that:-
Council adopt Option C and approve the restructure as outlined in the Background Report prepared by the General Manager as per the attached structure.
(ii)Council nominate two Councillors to advise the General Manager in selecting a suitable candidate for the position of Director of Corporate Services and Director of Operations.
Advertisements will appear (copy attached) in Saturday's "Australian", "Sydney Morning Herald" next Tuesday 29th March 1994 and the next edition of "The Local Government Job Directory".
If you are considering applying for one or both positions, I would urge you not to discuss your application or any aspect with Members of the Council.
Councillors Derrin and Leetham have been nominated by Council to advise the General Manager with the appointments once applications close on the 8th April 1994.
As discussed already, I would be most grateful if you would act in your current position until the matter of permanent appointments are finalised.
May I take this opportunity of wishing you well if you do decide to apply and reassure you not to hesitate to contact me on any aspect of restructuring or the appointment if I can clarify any items.
Yours sincerely,
(Signature)
NEIL D ARMSTRONG
GENERAL MANAGER"
During cross-examination Mr Cross accepted that he had no objection to a structure of two directors though he believed one of the positions should have gone to him.
According to Mr Cross on 7 or 8 April 1994 he informed Mr Armstrong he was concerned with Council's decision to advertise the two directors positions. He referred Mr Armstrong to his personnel file and his letter of employment indicating he would be offered a performance contract of 5 years once the new Act came into effect. He then showed Mr Armstrong a copy of the advertisement. It was common ground that this is the first time Mr Armstrong was aware of Mr Cross's expectation of continued employment or a contract.
Mr Cross contends he then said words to the effect:
"Given the commitment that was made, Council should formalise my contract. Under this new structure Council should negotiate a contract with me for the position of Director of Operations. That is essentially the position I was employed to do and have been doing."
Mr Armstrong replied:
"I will have to think about your comment and make some further enquiries."
On 10 April 1995 Mr Cross wrote a letter to the General Manager concerning the terms upon which he was originally employed and requesting that "his position now be formalised". There was an issue about the circumstances in which Mr Armstrong received the letter, the circumstances in which the conversations took place in early April 1994 and what was said. However the material fact is that the request Mr Cross made in his letter was not acted upon by Mr Armstrong and it was only at this stage that Mr Cross was raising the circumstances of his initial appointment.
On 8 April 1994, Mr Cross applied for the position of Director of Operations. On 18 April 1994 Mr Cross and a number of other applicants, including Mr Terry O'Connor, were interviewed for the position. The General Manager, Messrs Derrin and Leetham who were members of the Council, and Craig Moffatt of Wakool Council conducted Mr Cross's interview. At approximately 5.45pm on 18 April 1994 Mr Armstrong requested Mr Cross to come into his office and he informed him that he had not been successful in respect of his application for the position of Director of Operations. Again there is a divergence in Mr Cross's account and Mr Armstrong's account of all that was said. However on either account the plain import of what Mr Armstrong said initially was that Mr Cross had not been successful and, as a consequence, his employment with the Council was being terminated.
On 19 April 1994 Mr Armstrong wrote to Mr Cross in the following terms:
"Mr P E Cross
298 Noyes Street
DENILIQUIN NSW 2710
Dear Philip,
I refer to yesterday's meeting and confirm that your application for the position of Director of Operations was unsuccessful.
Therefore, in accordance with Clause 40, Schedule 7 of the Local Government Act 1993, your position of Director of Works & Services is redundant and your employment with the Council now ceases.
As discussed, to assist you the Council will pay an ex-gratia payment of 13 weeks and will allow you use of a Council vehicle and a mobile phone for a period of 2 weeks, ending on Monday 2nd May 1994.
In addition, Mr John Kleem, Management Consultant, has been retained to provide an out placement service to yourself and can be contacted on telephone (02) 908 4845.
Attached are 2 cheques totalling $69, 162.94 with details of the termination payment.
On behalf of the Council may I thank you for your service with the Council and wish you well in your future employment.
Yours sincerely,
NEIL D ARMSTRONG,
GENERAL MANAGER"
Clause 40 Schedule 7 is to a provision in the following terms:
"40. (1)Despite any other Act or law, the council may by resolution terminate the employment of a person identified in the resolution on the ground of redundancy arising from the determination by the council of its organisation structure.
(1A)Despite any other Act or law, the council may by resolution terminate the employment of a person identified in the resolution on the grounds that:
(a)the position previously held by the person has been abolished as a result of the determination by the council of its organisation structure; and
(b)the person has been offered, but has refused to accept, an alternative position in the council's organisation structure, being a position having remuneration no less than that of the position previously held by the person.
The Employment Protection Act 1982 does not apply to a termination of employment to which this clause applies."
On 20 April 1994 the Council passed the following resolution:
"(B)MAYORAL MINUTE - REDUNDANCY OF DIRECTOR OF WORKS AND SERVICES
The Mayor introduced a Mayoral Minute which dealt with the Council's new organisational structure and the redundancy of the position of the Director of Works and Services with the Council.
That -
THE COUNCIL RESOLVE to terminate the employment of Mr Philip Cross effective from 18th April 1994 due to his position of Director of Works and Services being made redundant."
On 13 May 1994 the Union filed the application under s170EA. On 23 May 1994 Mr Cross commenced a period of temporary employment with Jerilderie Shire Council which administers a local government area adjacent to that administered by the Council. That employment has continued, in various ways and for a variety of reasons which I need not detail, to the present though is due to come to an end, so I was informed, on 18 December 1995.
On 24 October 1994 the Council called for applications for a newly created position of Manager Engineering. Mr Cross applied but was not given an interview and thus was not successful. Mr Cross was not viewed as a suitable candidate by the selection panel. He was not viewed as having the ability to lead and motivate staff, meet deadlines, have management or negotiating skills, general management ability or the understanding of human resources at the necessary level. The interview panel was constituted by Mr Armstrong, Mr O'Connor, Mr Crawley, who is now the Director of Corporate Services, and an engineer acting as a consultant to the Council. The person then appointed to the position no longer works for the Council and the position is now vacant. I refer to this matter in more detail later in this judgment.
Evidence was led by the Council from Mr Armstrong, Mr Harvie and Mr Crawley. Each expressed the view, in varying ways, that were Mr Cross to be reinstated, it would be disruptive to the administration of the Council, would create personal and professional tension amongst the management or staff at the Council. It was also contended by Mr Harvie that Mr Cross was not suitable for the position of Manager Engineering which has been vacant for some time.
The scope of s170DE
As can be seen, some of these findings were based on the evidence relating to matters other than the capacity and conduct of Mr Cross and the operational requirements of the Council. Evidence was led, and in some instances findings have been made, about such matters as the terms upon which Mr Cross was offered employment and the effect of the termination on him and his career. The Council had objected to evidence of this latter type and had submitted that the evidence should be limited. I ruled that the evidence should be admitted and indicated I would give my reasons for doing so when giving final judgment. These are my reasons.
The objection was based on a construction of s170DE of the Act that, in my opinion, is not warranted by the language of the Act having regard to the legislative purpose of Division 3. Section 170DE provides:
"(1)An employer must not terminate an employee's employment unless there is a valid reason, or valid reasons, connected with the employee's capacity or conduct based on the operational requirements of the undertaking, establishment or service.
A reason is not valid if, having regard to the employee's capacity and conduct and those operational requirements, the termination is harsh, unjust or unreasonable. This subsection does not limit the cases where a reason may be taken not to be valid."
Also relevant is s170DC which provides:
"An employer must not terminate an employee's employment for reasons related to the employee's conduct or performance unless:
(a)the employee has been given the opportunity to defend himself or herself against the allegations made; or
(b)the employer could not reasonably be expected to give the employee that opportunity."
and s170EDA(1) which provides:
"If an application under section 170EA alleges that a termination of employment of an employee contravened subsection 170DE(1):
(a)the termination is taken to have contravened subsection 170DE(1) unless the employer proves that, apart from subsection 170DE(2), there was a valid reason, or valid reasons, of a kind referred to in subsection 170DE(1); and
(b)if the employer so proves, the termination is nevertheless taken to have contravened subsection 170DE(1) if the applicant proves that, because of subsection 170DE(2), the reason or reasons proved by the employer were not valid."
The construction of s170DE advanced by the Council was that the question of whether the termination of an employee's employment was harsh, unjust or unreasonable was to be determined only by reference to the employee's capacity and conduct or the operational requirements of the employer. Matters such as the personal circumstances of the employee, the terms upon which the employee was initially employed and the procedures adopted by the employer in effecting the termination are not relevant when determining whether the termination was harsh, unjust or unreasonable.
This contention was based on the language of the Act including Schedule 10 which is the Convention concerning Termination of Employment at the Initiative of the Employer, the related Recommendation in Schedule 11 and the explanatory memorandum for the Industrial Relations Reform Act 1993 which enacted Division 3 of Part VIA. Section 170CA makes plain that the object of Division 3 is to give effect to the Convention and Recommendation.
The point was made by the Council that nowhere in the Convention does the expression "harsh, unjust or unreasonable" appear. Reference was made to Articles 4, 5, 6 and 8 of the Convention which provide:
"DIVISION A JUSTIFICATION FOR TERMINATION
Article 4
The employment of a worker shall not be terminated unless there is a valid reason for such termination connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service.
Article 5
The following, inter alia, shall not constitute valid reasons for termination:
(a)union membership or participation in union activities outside working hours or, with the consent of the employer, within working hours;
(b)seeking office as, or acting or having acted in the capacity of, a workers' representative;
(c)the filing of a complaint or the participation in proceedings against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities;
(d)race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin;
(e)absence from work during maternity leave.
Article 6
Temporary absence from work because of illness or injury shall not constitute a valid reason for termination.
The definition of what constitutes temporary absence from work, the extent to which medical certification shall be required and possible limitations to the application of paragraph 1 of this Article shall be determined in accordance with the methods of implementation referred to in Article 1 of this Convention.
...
DIVISION C PROCEDURE OF APPEAL AGAINST TERMINATION
Article 8
A worker who considers that his employment has been unjustifiably terminated shall be entitled to appeal against that termination to an impartial body, such as a court, labour tribunal, arbitration committee or arbitrator.
Where termination has been authorised by a competent authority the application of paragraph 1 of this Article may be varied according to national law and practice.
A worker may be deemed to have waived his right to appeal against the termination of his employment if he has not exercised that right within a reasonable period of time after termination.
It was submitted that the concept of unjustified termination reflected in Article 8 is a reference to the matters in Articles 5 and 6, which are dealt with in s170DF, or the matters in Article 4. Article 7, dealing with the question of procedural fairness, is reflected in s170DC. Thus the scope of section 170DE must be treated as limited to the matters referred to in Article 4. A similar result, it was submitted, flows from an analysis of the Recommendation Concerning Termination of Employment at the Initiative of the Employer which is Schedule 11 to the Act.
The explanatory memorandum says of s170DE:
"Section 170DE: Harsh, unjust or unreasonable termination
Proposed subsection 170DE(1) requires that an employer not terminate employment unless there is a "valid" reason which is:
•connected with the employee's capacity or conduct; or
•based on the operational requirements of the business.
Proposed section 170DE gives effect to Article 4 of the Termination of Employment Convention. The Convention provides that the employment of an employee shall not be terminated without a valid reason connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service.
Proposed subsection 170DE(2) provides that a reason is not valid if the termination is harsh, unjust or unreasonable. In deciding this, regard must be had to the employee's capacity or conduct or the operational requirements (this will depend on the reasons for the dismissal).
This subsection is a partial restatement of what the Termination of Employment Convention means by its reference to a "valid" reason for an employer terminating employment. The "harsh, unjust or unreasonable" test is not exhaustive of whether a reason is "valid".
The preparatory materials for the Termination of Employment Convention indicate that the concept of a valid reason for termination incorporates two requirements: that the reason for termination be a valid kind of reason, namely the conduct or capacity of the worker or the operational requirements of the workplace, and that the reason be sufficiently serious to justify termination.
The provisions of proposed subsection 170DE(2) are aimed at prohibiting termination of employment where the reason for termination is of a kind that is acceptable under the Convention, because it is related to the employee's conduct or capacity or to the employer's operational requirements, but where these factors are not sufficiently serious to justify termination. There will not be a valid reason for termination of employment if, in the light of the factors said to constitute the reason for the dismissal, the dismissal was harsh, unjust or unreasonable, for example where trivial misconduct or a minor lapse in performance is the stated reason for termination. In such circumstances, there is not a valid reason for termination of employment within the meaning of the Termination of Employment Convention." (emphasis added)
Section 15AB of the Acts Interpretation Act 1901 (Cth) authorises use of the explanatory memorandum to confirm that the meaning is the ordinary meaning: s15AB(1)(a), determine the meaning if the provision is ambiguous or obscure: s15AB(1)(b)(i) or the ordinary meaning is manifestly absurd or unreasonable: s15AB(1)(b)(ii).
The starting point in determining the meaning of s170DE(2) is the language of the provision in context. Section 170DE plainly has to be read in conjunction with s170EDA. S170EDA(1)(a) deems an employer to have contravened s170DE(1) unless the employer establishes affirmatively that the termination was for a valid reason because of, relevantly, operational requirements. I will refer only to operational requirements as it is the consideration arising in this case and to do so does not, in my opinion, result in any language being overlooked which might suggest some construction other than the one I view as correct.
The deeming effect of s170EDA(1) must be negatived before s170DE(2) has any application. Thus the question of harshness, unjustness or unreasonableness only arises if the employer has demonstrated there is a valid reason for the termination because of operational requirements. This must mean, in my view, that the termination can be justified because of operational requirements. It is then that s170DE(2) comes into play and s170EDA(1)(b) obliges the employee to demonstrate affirmatively that the termination was harsh, unjust or unreasonable. It cannot be intended, in my opinion, that s170DE(2) permits consideration of relevantly, only operational requirements, which is the Council's submission. If s170ED(2) operated in that way, it would lead only to a re-consideration of the matters that were relevant to the operation of s170DE(1) and which, when considered, triggered a consideration of s170DE(2) in the first place. Section 170DE(2) would, in substance, serve no purpose. Plainly what s170DE(2) is intended to achieve is to enable an employee to establish that notwithstanding that his or her termination was justified because of operational requirements, a remedy should be available because the termination was harsh, unjust or unreasonable. However what s170DE(2) requires the Court to do, is when considering questions of harshness etc, to continue to keep in mind as a fundamental consideration the operational requirements which were considered in the application of s170DE(1) in conjunction with s170EDA(1)(a). Thus any relevant matter may be considered when considering whether the termination was harsh, unjust or unreasonable, but of fundamental importance, to be weighed with those matters, is the operational requirements of the employer which had been earlier considered.
This is consistent with the language of s170DE(2) which, when speaking of "those operational requirements", is referring back to the expression "operational requirements" in s170DE(1). Moreover the expression "having regard to" has a generally accepted meaning in a context such as the present. A variant of it was discussed by Mason J in R v Hunt; Ex Parte Sean Investments Pty Ltd (1979) 25 ALR 497 at 504:
"When sub-s(7) directs the Permanent Head to "have regard to" the costs, it requires him to take those costs into account and to give weight to them as a fundamental element in making his determination."
and later:
However, the sub-section does not direct the Permanent Head to fix the scale of fees exclusively by reference to costs necessarily incurred and profit. The sub-section is so generally expressed that it is not possible to say that he is confined to these two considerations. The Permanent Head is entitled to have regard to other considerations which show, or tend to show, that a scale of fees arrived at by reference to costs necessarily incurred, with or without a profit factor, is excessive or unreasonable.
and see also: Municipal Officers' Association of Australia v Lancaster & Anor (1981) 37 ALR 559 at 578-9 and 590, Croft v Minister for Health (1983) 45 ALR 449 and 457 and Queensland Medical Laboratory & Ors v Blewett & Ors (1988) 84 ALR 615 at 623.
Thus evidence of the circumstances of the appointment of Mr Cross would be relevant to a consideration of whether the termination of his employment was harsh, unjust or unreasonable.
One of the matters referred to by the Council when submissions were made concerning the construction of s170DE(2) were the provisions of s170DC. The existence of that latter specific section indicated, it was submitted, that at least the question of procedural fairness is not intended to be a relevant consideration when determining whether a termination has been harsh unjust or unreasonable.
Since the submission was made and I made the ruling on the admissibility of the evidence, the High Court has given judgment in Byrne v Australian Airlines Ltd (1995) 131 ALR 422. In the context of deciding what is comprehended by the expression "harsh, unjust or unreasonable" in the award under consideration, the Court indicated that the question of procedural fairness should not be considered apart from other relevant matters in determining whether the termination was of the proscribed character.
There are now a number of judgments in this Court that appear to consider the question of procedural fairness as a matter to be separately dealt with when determining whether a termination was invalid because it contravened the provisions of s170DE(2). That is, whether the termination was harsh, unjust or unreasonable. The relevance of the observations in Byrne v Australian Airlines Ltd (supra) to the operation of s170DE(2) and the relationship between s170DC and s170DE(2) are important questions. They are matters I need not address and, in my opinion, should not now address in detail without the benefit of full argument particularly when I am giving reasons for a ruling earlier made on the admissibility of evidence. Furthermore the view I have taken on the scope of s170DE(2) generally would not be affected by a conclusion that, as a matter of construction, procedural fairness or aspects of it were not intended to be comprehended by the notions of harshness, unjustness or unreasonableness in s170DE(2). That is a narrow, separate but important point that may be left for future consideration.
The validity of the termination - s170DE(1)
It is first necessary to determine whether the Council had a valid reason for terminating the employment of Mr Cross having regard to the provisions of s170DE(1). That is to say, the Council must demonstrate: see 170EDA(1), that there was a valid reason based on its operational requirements for the termination of Mr Cross's employment. The principal focus of the parties submissions was on that aspect of s170DE(1) and not the "employer's capacity or conduct". I am not satisfied that there was a valid reason.
I have already set out the terms of s332(1) of the new LG Act which required the Council to determine an organisation structure. The contention of the Union that this imposed an obligation on a Council to determine a structure but not necessarily to implement it involves, in my opinion, an unduly narrow construction of s332 that does not reflect its intended effect. The purpose of s332 evident from its terms and the context in which it appears was to require a Council, upon the enactment of the new LG Act, to review its existing structure. If it determined that a new or different structure was appropriate, then that structure was to be adopted in the sense that it was to be implemented. A Council is then obliged by s333 to redetermine its structure at least within 12 months of an ordinary election. In proposing a new structure, Mr Armstrong was acting in conformity with s332 as was the Council in adopting it.
The Union sought to criticise the structure and to argue that it was unnecessary for the Council to have proceeded on the basis that the position held by Mr Cross should be treated as having been abolished in the restructure given that many of the duties he performed as Director, Works and Services, would still have to be performed and that professional engineering work would still have to be done for Council. It is to be remembered that a feature in the restructure was to employ two directors with an emphasis on management skills. The issue I am presently considering is whether it was open to Council to restructure its operations in the way it did and whether having done so, the termination of Mr Cross's employment was for a valid reason.
There is no reason, in my opinion, to view the restructure and the emphasis placed on managerial skills in the two director positions created as a result, as anything other than a bona fide attempt by Mr Armstrong initially and the Council subsequently to adopt as a first step in a process of reform, which they believed was the appropriate management structure for the Council for the years ahead. Having reached that conclusion it follows that the calling for applications for the newly created positions and effectively spilling the existing positions should be treated as a concomitant of that restructure especially if, as I infer was the case, each of the occupants of the three existing positions were not manifestly unsuitable to fill the new positions. As a matter of fact, two were ultimately appointed to them and Mr Cross was, in effect, invited to apply. That I infer from the letter of 25 March 1994 to Mr Cross and in particular the second, third and last paragraphs. It is not the Court's function to determine whether the restructuring adopted by Council was the only way it could have gone about the task: see Kenefick & Anor v Australian Submarine Corporation Pty Ltd (1995) 131 ALR 197 at 207.
To this point I have been considering whether the effective abolition of the position held by Mr Cross was as part of a restructuring that is comprehended by the expression "the operational requirements" of the Council. I have concluded it was. However the question that s170ED(1) requires to be answered is whether the employee's termination was for a valid reason relating to those operational requirements. It is not whether a valid reason existed to abolish a position occupied by an employee. It is to be remembered that the termination of Mr Cross's employment followed immediately upon the selection of others to the two newly created positions. For reasons which I shortly explain it is not apparent to me why this was necessary.
When discussing the evidence I referred to various options put by Mr Armstrong to Council. The option adopted was Option C. In his report to Council, Mr Armstrong detailed why he was recommending that option to Council and what were the implications of its adoption. One of the two Divisions that would be created was the Operations Division which would include the engineering functions of Council. In dealing with the implications of adopting Option C, Mr Armstrong said in his report:
"At a later date both Divisions will undergo further structural change at middle management and at the supervisory level. These changes will be implemented by the new Directors when appointed in consultation with the General Manager and staff and will be Stage 2 of the total restructure process.
Two significant changes in the Engineering area will be the appointment of a suitable person with Engineering Management skills and qualifications to a newly created position of Engineering Services Manager.
This position will report directly to the Director of Operations.
The position of Design and Supervising Engineer will become redundant with some duties absorbed into the new position. The current incumbent of the position may wish to apply for the new position."
He thus proposed that a new position of Engineering Services Manager would be created. The prospect that this position might be created gave rise to the following submission by the Union:
"In the alternative, even if the Court rejects the position that the Council had an operational requirement to keep Mr Cross to do the duties to be undertaken by the Director of Operations, it is still the case that there was no operational requirement to make Mr Cross redundant. The Respondent would prefer to have at least one professional engineer on its staff (cross examination of Mr Armstrong and Mr Harvie). At that time it had one, Mr Dawe (Mr Cross's deputy), but the Respondent's General Manager, Mr Armstrong, intended that Mr Dawe's position would be made redundant and a new position for a professional engineer be created (see Mr Armstrong's 'Options Paper' presented to Council at the time Council determined to implement a new structure; attachment E, on p5 of that document). Indeed that new position was advertised in October 1994. Given the Respondent's plans in that area it would have been appropriate to keep Mr Cross employed to fill that position when it became vacant in the foreseeable future."
In the written submissions the Council initially made, this submission of the Union was not dealt with though it is plainly raised an argument in the alternative. Nor was it dealt with by the Council at the hearing that took place following the filing of the written submissions. That may well have been because the main thrust of the Union's case, having regard to the contentions that it filed and the evidence called, was that Mr Cross should not have lost a position as a director as a result of the restructure. However those contentions did advert to the failure of Council to discuss the possibility of Mr Cross continuing in another position, though in the context of s170ED(2), and contended that there was an ongoing need for an employee with professional engineering qualifications in the context of discussing s170ED(1) but on the basis that Mr Cross should have been appointed to the position of Director of Operations. I considered it desirable, in the circumstances, to call for further submissions which were duly made by Council and the Union.
The submissions of the Council included the following:
The position contemplated is clearly at a lower salary and is one level down in the hierarchy. If appointed to the position Mr. Cross would experience a demotion in salary, responsibility and status. Clearly, it would constitute a termination of his employment as Director, Works and Services. The evidence in this case indicates that he would not accept such a position.
It is plain that at the time there was another qualified employee in the position of Design and Supervising Engineer, who may have wanted to be considered for the newly created position.
At the time the decisions were made to "spill" the directors' positions, it was not known that Mr. Cross would be unsuccessful in his application.
Even after Mr. Cross was unsuccessful in his application, the proposal to create the position of Manager, Engineering Services, though firm, was still only a proposal and may have been the subject to refinement by the new director responsible for that area. Moreover, the competing claims referred to above of Mr. Dawe were not then resolved."
I do not accept these submissions. The termination of employment to which these proceedings relate was the termination of Mr Cross's employment on 19 April 1994. It is for the Council to satisfy the Court that the termination was because of operational requirements. It is clear, on the evidence, that the occupant in the engineer position that would be created would report to the Director of Operations. However, the case of the Council advanced in these proceedings was that the old hierarchy had gone. Council's management was being restructured. As Mr Crawley said in evidence:
"The old traditional hierarchal structure that councils were used to has now gone. At least so far as our Council staff is concerned. We have a team approach with a lot fewer boundaries and demarcations and a lot more flexibility between roles and staff and departments. There is a lot more mixing of tasks with much less "hands on" at the director and manager level: where there is now a much greater emphasis on managing the people and their development rather than administering the process. The directors and managers have become a lot more involved in staff development and training, strategic planning, performance appraisal and financial management."
It is not clear to me, and the Council has not established, that the position would be at a lower salary than that paid to Mr Cross at the time of his termination. That was a matter to be decided by Council. It may be that the demotion of an employee constitutes termination within the meaning of s170EA. It may not. It is an unresolved issue in relation to the operation of Division 3. However, the termination on 19 April 1994 was not termination by demotion, if that be the correct approach, but rather termination by written notice and purportedly in conformity with clause 40 of schedule 7 of the new LG Act.
I do not accept the contention that the evidence in this case indicates that Mr Cross would not have accepted the position that was to be created. No suggestion was made at the time of his termination that he might consider applying for it and accordingly there is no evidence of his contemporaneous views on whether he might seek the position. Moreover he ultimately applied for the position in October 1994 when it was advertised. I accept that he did so reluctantly and as a result of a suggestion made by the Judicial Registrar. That does not alter the fact, however, that he applied. Mr Cross was cross-examined about his attitude to that position. Mr Cross did not say he would not have accepted the position had it been offered to him. Plainly he was not enthusiastic about the idea but his want of enthusiasm does not give rise to an inference that it would not have been accepted if offered.
The fact that there was another employee who might have applied for the job does not justify the termination of Mr Cross's employment on 19 April 1994. It assumes some pre-judgment of the comparative merits of Mr Cross and the other employee who might apply for the position when it was created. It is not apparent to me that any such judgment was then made nor that, had it been made, it would have been justified.
Some two years earlier Mr Cross had applied for a senior position and been successful. He was then viewed as a person of ability satisfying the requirements of the position. I accept that he was not offered an interview for the position in October 1994 when he applied. However had his employment not been terminated it may well be that further consideration would have been given to the duties with a view to creating a position that more accorded with the perceived strengths of Mr Cross. Moreover the task of selection was ultimately a subjective one.
I do not see as relevant the submission that when the spill was decided upon, it was unknown that Mr Cross would be unsuccessful in his application. The relevant decision of the Council was not the decision to abolish the existing positions and create two new positions but rather the decision of Council to confirm the termination of Mr Cross's employment. That occurred after the application had been made and had not succeeded.
I was referred to several judgments of this Court where the provisions of Division 3 of Part VIA of the Act have been considered in the context of a position or positions in an organisation being abolished. The matter was considered by Ryan J in Jones v Department of Energy and Minerals unreported 16 June 1995:
"... it is within the employer's prerogative to rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions. It is inappropriate now to attempt an exhaustive description of the methods by which a reorganisation of that kind may be achieved. One illustration of it occurs when the duties of a single, full-time, employee are redistributed to several part-time employees. What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant in the sense in which the word was used in the Adelaide Mil Co-operative case."
This passage has been cited with approval in Mitchell-Collins v The Latrobe Council an unreported judgment of Spender J of 25 August 1995 and Aitkin v The Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia v Western Australian Branch an unreported judgment of Lee J of 7 August 1995: see also Leddicoat v Schiavello Commercial Interiors (SA) von Doussa J 18 October 1995 unreported and Quality Bakers of Australia Ltd v John Goulding & Anor Beazley J 23 June 1995 unreported.
The factor in this case that sets it apart from many cases concerning redundancy is that the organisational restructuring that led to the abolition of the position occupied by Mr Cross was intended to occur progressively and the abolition of his and other positions was the first step in what was intended to be a more extensive review of the administrative structures of the Council. Accordingly it was not possible to say, to use the words of Ryan J, that after the reorganisation there were not any functions or duties to be performed by Mr Cross. It was contemplated at the time Option C was adopted that a further restructuring of positions involving engineering duties and functions would occur.
In construing s170DE(1) and applying its provisions to a particular set of facts, it is necessary to bear in mind the object of Division 3 of Part VIA. As earlier mentioned s170CA states that the object of Division 3 is to give effect to the Convention and Recommendation which are Schedules 10 and 11 to the Act respectively. The Recommendation contains provisions concerning termination for economic, technological, structural or similar reasons.
Article 19 provides:
"(1)All parties concerned should seek to avert or minimise as far as possible termination of employment for reasons of an economic, technological, structural or similar nature, without prejudice to the efficient operation of the undertaking, establishment or service, and to mitigate the adverse effects of any termination of employment for these reasons on the worker or workers concerned.
Where appropriate, the competent authority should assist the parties in seeking solutions to the problems raised by the terminations contemplated."
and article 21 provides:
"The measures which should be considered with a view to averting or minimising terminations of employment for reasons of an economic, technological, structural or similar nature might include, inter alia, striction of hiring, spreading the workforce reduction of a certain period of time to permit natural reduction of the workforce, internal transfers, training and retraining, voluntary early retirement with appropriate income protection, restriction of overtime and reduction of normal hours of work."
Thus a feature of the Recommendation is that an employer should avoid terminating an employee's employment as a result of a restructuring if it is possible to place the employee in another position within the employer's organisation. It cannot be assumed that s170DE(1) operates to treat a termination as having been for a valid reason if the employee occupying a position which is abolished as the result of a restructuring might be placed in another position created by that restructuring. It is inappropriate to suggest some comprehensive formulation of how s170DE(1) might operate in circumstances such as the present. In this case, however, a position was due to be created for which Mr Cross was not manifestly unsuited. That was to occur shortly after the abolition of Mr Cross's position and there is nothing in the evidence to suggest that the time taken thereafter to create and fill the position viz March/April 1994 to October 1994, could not have been shorter had Mr Cross remained an employee of the Council. It may be accepted that had Mr Cross's employment not been terminated in April 1994, then upon the creation and filling of the position of Manager Engineering, the employment of at least Mr Cross or the other engineer then employed by Council may have been terminated consistent with the provisions of s170DE(1). However it is not a termination in those circumstances that I am considering.
I have accepted that the abolition of his position was justified but it does not follow, for the reasons that I have given, that the termination of his employment was a necessary consequence. The Council has not established that the termination of Mr Cross's employment was for a valid reason.
It is thus unnecessary to consider whether the termination of Mr Cross's employment was harsh, unjust or unreasonable though were it necessary to do so, some of the matters I have discussed to this point would be relevant.
Remedy
Having found that the termination of Mr Cross was in contravention of s170DE(1), it is necessary to consider what remedy should be ordered. The Union seeks reinstatement and its primary submission was, in substance, that he should be reinstated to a position of director, though it preferred that any order made not specify a position to which Mr Cross was being reinstated.
The Council opposed reinstatement of any character. Section 170EE gives primacy to the remedy of reinstatement and, for reasons given by Gray J in Liddell v Lembke (1994) 127 ALR 342 at 361-368, the Court must, in my opinion, order reinstatement if it is not impracticable. Various attempts have been made by Judges of the Court to amplify the meaning of the word "impracticable" and, on one view, they evidence a divergence of approach as to what that word comprehends. Many of the relevant judgments are discussed by Marshall J in Mary Abbott-Etherington v Houghton Motors Pty Ltd 28 September 1995 unreported. It is likely that in applying s170EE(1) and (2) the mix of considerations and the evidence to which they relate will be as varied as the cases are numerous in which they arise. Ultimately nothing may be gained by endeavouring to provide words, or sets of words, in substitution for the word adopted by Parliament.
Section 170EE(1)(a) contemplates two types of orders for reinstatement. The first is reappointing the employee to the position in which the employee was employed immediately before the termination. In the present case that was, in substance, the position of Director, Works and Services even though the Council was in the process of implementing a structure in which that position was abolished. The second type of order is one appointing the employee to another position on terms and conditions no less favourable than those enjoyed at the time of termination. Such an order would have two elements. The first is identifying a position and ordering reinstatement to it. The second is requiring the provision of terms and conditions no less favourable.
The position formerly occupied by Mr Cross no longer exists even though a number of aspects of it are to be found in the position of Director of Operations. They are, however, different positions. There is another position to which Mr Cross might be appointed, namely the position of Manager Engineering to which I have earlier referred. I am not satisfied that it would be impracticable to order the reinstatement of Mr Cross to that position. While paying due regard to the views of Mr Harvie, Mr Armstrong and Mr Crawley I do not consider the likely negative aspects of Mr Cross resuming employment as long term or incapable of being dealt with by those involved in the short to medium term. Mr Armstrong, Mr Crawley and Mr O'Connor, occupy senior positions in the management of Council. I have no reason to believe they will not bring to bear a professional approach in their dealings with Mr Cross or that he will not do likewise. The personal tensions that will doubtless arise, will, in my opinion, be capable of being dealt with by them. In so far as other staff are concerned, I am not satisfied that Mr Cross will not deal with them in a way that will minimise tension. It will be in his interest to do so and it is likely that he has been somewhat chastened by the events of the last eighteen months. I am also not satisfied that Mr Cross will not be able to effectively discharge the duties of Manager Engineering. In any event, the Council did not submit in its final written submissions that he could not.
I propose to order the reinstatement of Mr Cross to the position of Manager Engineering and that he be employed on terms and conditions no less favourable than those on which he was employed in the position of Director, Works and Services.
I will also make such orders as is necessary to maintain the continuity of the Mr Cross employment. Given that the employment was in local government in New South Wales, it is appropriate that the parties be given an opportunity to consider the form any such order should take. I will order that the Council pay Mr Cross the difference between the income he earned in his employment with Jerilderie Shire Council and that which he would have earned with the Council. Again I will give the parties an opportunity to consider the form any such order should take. I should indicate, however, that the additional cost of accommodation, in the sum of $150 per week claimed by the Union, is not, in my opinion, comprehended by the expression "remuneration lost" in s170EE(b)(ii) and accordingly should not figure in the calculation of the sum to be ordered. I direct that the parties file short minutes of the orders to give effect to these reasons for judgment within seven days of the date of the publication of them.
I certify that this and the preceding forty-one (41) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore.
Associate: ........ ........ ......
Dated: ..../..../....
APPEARANCES
Advocate for the Applicant: Mr I Taylor
Counsel for the Respondent: Mr P Kite
Dates of Hearing: 7, 8 and 11 September, 20 November 1995
Written Submissions Complete: 28 November 1995
Date of Judgment: 14 December 1995
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