Bell v Gillen Motors Pty Ltd

[1989] FCA 123

Re: PETER DAVID BELL
And: GILLEN MOTORS PTY LIMITED
No. N I 11 of 1988
FED No. 123
Industrial Law
24 FCR 77
27 IR 324

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
INDUSTRIAL DIVISION
Wilcox J.(1)

CATCHWORDS

Industrial Law - Proceeding for penalty for breach of award - Proper interpretation of award - Meaning of "period of continuous service" - Termination of employment - Notice of termination given by employee - Subsequent notice of termination given by employer - Period of notice required to be given - Whether period which had elapsed since notice given by employee should be deducted from period of notice required to be given by employer - Employer acting on bona fide, but erroneous, advice of employer industrial organisation - Whether, under all the circumstances, a monetary penalty should be imposed.

Conciliation and Arbitration Act 1904 s.119

HEARING

SYDNEY

#DATE 10:4:1989

Counsel for the Applicant: Miss C C Simpson

Solicitors for the Applicant: Australian Government Solicitor

Counsel for the Respondent: Mr A R Ashburner

Solicitors for the Respondent: Freehill, Hollingdale & Page

ORDER

That, in terminating the employment of Wayne Keith Simpson on 20 May 1986 by the payment of only one week's wages in lieu of notice, the respondent breached cl.6(d)(i) of the Vehicle Industry - Repair, Services and Retail - Award 1983.

JUDGE1

This proceeding for a penalty raises a question as to the proper interpretation of a provision of The Vehicle Industry - Repair, Services and Retail - Award 1983. There being reason to believe that the particular provision was inserted into the award in the "flow-through" from the decision of the Full Bench of the Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy Case, a similar problem of interpretation may arise under other awards as well.

1. The proceeding is brought by Peter David Bell, an inspector under the Conciliation and Arbitration Act 1904. At the time of the filing of the Application that Act was still in force. Accordingly, reliance was placed upon s.119 of that Act, which relevantly read as follows:
   

"119 (1) Where any ... person bound by an order or award has committed a breach or non-observance of a term of the order or award, a penalty may be imposed by the Court ...

(1A) ...

(B) ...

(1C) ...

(1D) The maximum penalty that may be imposed under sub-section (1) in respect of a breach of a term of an order or award is--

(a) where the penalty is imposed by the Court--

(i) in a case to which sub-paragraph

(ii) does not apply -- $1,000; or

(ii) if the breach is a separate breach by virtue of a provision included in an order or award in accordance with paragraph 41(1)(c) -- $500; or

(b) in any other case -- $250.

(2) Any such penalty may be sued for and recovered by--

(a) the Registrar; or

(aa) an Inspector; or

(b) any organization which is affected, or whose members or any of them are affected, by the breach; or

(c) any member of any organization who is affected by the breach; or

(d) any party to the award or order; or

(e) any officer of any organization which is affected, or any of whose members are affected, by the breach, who is authorized under the rules of the organization to sue on behalf of the organization.

(3) Where in any proceedings against an employer before a Court specified in sub-section

(1), it appears to the Court that an employee of that employer has not been paid an amount to which he is entitled under an order or award, that Court may order that the employer shall pay to the employee the amount of the underpayment but no order shall be made in respect of so much of the underpayment as relates to any period more than 6 years prior to the commencement of the proceedings.

(4) Proceedings under this section in respect of a breach of a term of an order or award may be commenced at any time within 6 years after the commission of the breach."

1. The Conciliation and Arbitration Act was repealed, as from 1 March 1989, and replaced by the Industrial Relations Act 1988. However, s.8 of the Industrial Relations (Consequential Provisions) Act 1988 provides that where, immediately before the commencement of the Industrial Relations Act, a proceeding was pending in this Court and the hearing of the proceeding had not started, Part III of the Industrial Relations Act -- which deals with proceedings in this Court -- "applies in relation to the proceeding as if the proceeding had been instituted under the Industrial Relations Act". Consequently, in practical terms, the proceeding is unaffected by the legislative changes which have occurred.

2. Clause 6 of the Vehicle Industry - Repair, Services and Retail - Award 1983 relates to the contract of employment. Sub-clause (d) deals with termination of employment. The sub-clause commences with the matter of notice of termination by an employer:
   

"(d)(i)(1) In order to terminate the employment of an employee the employer shall give to the employee the following notice: Period of continuous service Period of notice Less than 1 year 1 week 1 year and up to the completion of 3 years 2 weeks 3 years and up to the completion of 5 years 3 weeks 5 years and over 4 weeks

(2) ...

(3) ...

(4) Where an employer gives an employee notice of termination of employment the parties may mutually agree to the employment ending at any time after the giving of the notice and before expiration of the period of the notice and in such a case wages shall be paid only up to the time of the agreed termination.

(5) Payment in lieu of the notice prescribed in subparagraph 6(d)(i)(1) and/or 6(d)(i)(2) hereof shall be made if the appropriate notice period is not given. Provided that employment may be terminated by part of the period of notice specified and part payment in lieu thereof.

(6) ...

(7) The period of notice in this clause shall not apply in the case of dismissal for conduct that justifies instant dismissal, including malingering, inefficiency, neglect of duty or misconduct or in the case of casual employees, apprentices, or employees engaged for a specific period of time or for a specific task or tasks.

(8) Where an employer gives an employee notice of termination of employment the employee shall at any time after having been given such notice be entitled to give notice to the employer of the immediate termination of his employment but in such circumstances he shall pay or forfeit wages for the balance of the notice period.

(9) Subject to paragraphs (7) and (8) hereof where an employer has given notice to an employee as aforesaid the employee shall continue in his employment until the date of the expiration of such notice. An employee who, having been given notice as aforesaid, absents himself from work during such period without reasonable cause (proof whereof shall be upon him) shall be deemed to have abandoned his employment and shall not be entitled to payment for work done by him within that notice period.

(10) For the purpose of this clause continuity of service shall be calculated in the manner prescribed by subclause 27(e) - Calculation of continuous service of this award."

1. Thereafter cl.6(d) deals with the termination of employment by an employee:
   "(d)(ii)(1) The notice of termination required to be given
   

by an employee shall be the same as that required of an employer, save and except that there shall be no additional notice based on the age of the employee concerned.

(2) ...

(3) If an employee fails to give or work out the appropriate notice the employer shall have the right to withhold moneys due to the employee with a maximum amount equal to the ordinary time rate of pay for the period or balance of notice.

(4) Where an employee gives notice of the termination of his employment the parties may mutually agree to the employment ending at any time after the giving of the notice and before expiration of the period of the notice and in such a case wages shall be paid only up to the time of the agreed termination.

(5) Where an employee has given notice of the termination of his employment he shall at any time after giving such notice be entitled to give notice to the employer of the immediate termination of his employment but in such cases he shall pay or forfeit wages for the balance of the notice period.

(6) Subject to subparagraphs (4) and (5) hereof where an employee has given notice as aforesaid he shall continue in his employment until the expiration of such notice notwithstanding paragraph (3) hereof. An employee who having given notice as aforesaid, absents himself from work during such notice period without reasonable cause (proof whereof shall be upon him) shall be deemed to have abandoned his employment and shall not be entitled to payment for work done by him within that notice period.

(7) For the purpose of this clause continuity of service shall be calculated in the manner prescribed by subclause 27(e) - Calculation of continuous service of this award."

1. Clause 27 relates to annual leave. Sub-clause (e) defines the method of calculating continuous service for the purpose of determining an employee's annual leave entitlement. For that purpose service is deemed to be continuous notwithstanding certain interruptions which may in fact have occurred: an interruption or determination of employment made by the employer to avoid obligations in respect of leave, an absence from work on account of personal sickness, accident or leave lawfully granted or for reasonable cause. The clause goes on to deal with the computation of periods of continuous service, referring to such matters as absences due to sickness or accident or while on workers' compensation or long service leave.

2. This case concerns the application of the award requirements to the termination by Gillen Motors Pty Limited, the respondent, of the employment of Wayne Keith Simpson. On 4 December 1980 Mr Simpson commenced a four year apprenticeship as a motor mechanic with a company called Donnelly Datsun Pty Limited. This company carried on business at 818 Canterbury Road, Lakemba. On 1 February 1983 Mr Simpson's indenture of apprenticeship was transferred to the present respondent, then known as Rubatori Pty Limited, consequentially upon that company taking over the premises formerly occupied by Donnelly Datsun. The evidence does not disclose the nature of any wider transaction between Donnelly Datsun and Rubatori. However, it does show that Mr Simpson continued to carry out the same work as before the assignment, in the same premises.

3. Mr Simpson's apprenticeship was completed on 3 December 1984. However, he did not then leave the employment of Gillen Motors. Presumably pursuant to arrangements previously made, he was employed, without any interruption in his activities, as a motor mechanic.

4. On 12 May 1986 Mr Simpson gave to Mr Bill Barry, the Service Manager of Gillen Motors, notice that he proposed to terminate his employment with the company at the expiration of four weeks from that day. Mr Barry accepted this notice but, on 20 May 1986, he advised Mr Simpson that his services were terminated. Mr Simpson was given his pay, which was made up so as to include one week's wages in lieu of notice. It was not then suggested that Mr Simpson was being dismissed for neglect of duty or for misconduct; and any such suggestion was expressly disavowed by counsel for Gillen Motors during the course of the hearing before me. The view taken by Mr Barry, on behalf of Gillen Motors, was that the period of notice applicable to Mr Simpson, under cl.6(d) of the award, was two weeks. He considered that, one week having elapsed since the date of the notice given by Mr Simpson, it was competent for the employer to terminate the contract of employment forthwith provided that, in so doing, it gave to Mr Simpson pay in lieu of the second week's notice. The applicant has taken the view that Gillen Motors was not entitled to terminate the employment by paying merely one week's wages in lieu of notice. Consequently, he argues that the action taken by the company constituted a breach of the award for which breach a penalty should be imposed. No order is sought under s.119(3).

5. The resolution of the question whether the action taken by Gillen Motors breached the award involves two separate questions: what, under the circumstances pertaining to Mr Simpson, was the period of notice required by cl. 6(i)(1); and what was the effect, in terms of calculating the relevant period, of the effluxion of part of the period of the notice given by the employee.

6. Clause 6(d)(i)(1) relates the length of notice required to be given by an employer to the "period of continuous service" of that employee. The term "period of continuous service" is not defined in the award. The only assistance provided by the award as to this phrase is that contained in cl.27(e); but that sub-clause deals with the manner of computation of the period rather than the concept itself. Counsel suggest three possible applications of cl.6(d)(i)(1) to the facts of this case. The first possibility, raised by counsel for the applicant, is that Mr Simpson's "period of continuous service" amounted to more than five years, from 4 December 1980 until 20 May 1986. Upon this basis the period of notice specified by cl.6(d)(i)(1) would be four weeks. But this approach treats the period of Mr Simpson's apprenticeship to Donnelly Datsun as being part of his "period of continuous service" to Gillen Motors. In the absence of a provision deeming service with one employer to be service with a successor in business of that employer, there is no justification for this step. On no view of the meaning of the word "service" did Mr Simpson commence service with Gillen Motors before the assignment of his indenture of apprenticeship on 1 February 1983.

7. The second possibility put by counsel for the applicant is that the "period of continuous service" of Mr Simpson with Gillen Motors should be calculated as from the date of the assignment to that company of his indenture of apprenticeship. Upon that approach the period would be a little over three years, so that cl.6(d)(i)(1) would require the giving of three weeks' notice. That period includes some 22 months during which Mr Simpson was an apprentice and the respondent argues that it is incorrect to include, for the purposes of a computation under cl.6(d)(i)(1), any period of apprenticeship. In the respondent's submission the "period of continuous service" ran from 4 December 1984 when Mr Simpson commenced to be employed as a tradesman. There being a period of only about 17 months between that date and the date of termination of employment, the notice period stipulated by cl.6(d)(i)(1) is said to be only two weeks.

8. A question arises as to the extent to which the award is intended to confer rights and duties in relation to apprentices, during the period of their apprenticeships. Plainly, some of the award provisions are intended to apply to apprentices. Clauses 14 and 15 contain a series of specific provisions relating to apprenticeships. Clause 14(c) expressly makes applicable to apprentices the provisions as to holidays, annual leave, sick leave and bereavement leave which are prescribed by cll. 26, 27, 28 and 30 of the award. In several other clauses of the award apprentices are expressly mentioned, in such a manner as to indicate that the particular clause applies to them. Some clauses are plainly inapplicable to apprentices, because their provisions conflict with the content of cl. 14 or cl. 15. Examples are cll. 8-10 (wage rates) and 12 (payment by results). In other cases, for example cl. 19 relating to meal breaks, cll. 20-22 dealing with weekend and holiday work and cl. 24 concerning overtime, it is not apparent that the clause does not apply to apprentices.

9. In the case of cl. 6(d), it seems to me that the better view is that the sub-clause does not apply to the termination of the employment of an apprentice during the period of the apprenticeship itself. I say this not only because cl.6 deals with the "contract of employment", a concept which differs from the relationship engendered by an indenture of apprenticeship, but also because there are special restrictions upon the termination of an indenture of apprenticeship, contained in this case in cl.14(d) of the award. I think that those provisions were intended exhaustively to cover the termination of the relationship between an apprentice and a master.

10. However, whatever may be the position in relation to the termination of an apprenticeship during the course thereof, it does not follow that a past period of apprenticeship should be disregarded for the purpose of computing the "period of continuous service" of a person who has served as an apprentice and then continued in the service of the ex-master as a qualified tradesman. The award, except for those parts of it which relate to the rights and duties of apprentices and masters during the period of apprenticeship, governs the rights and duties of all employees, including ex-apprentices. In the present case, as is common ground, cl.6(d)(i)(1) applied to the relationship between Mr Simpson and Gillen Motors. The question is, in its application, what did cl.6(d)(i)(1) mean by the words "period of continuous service"?

11. As a matter of ordinary English the noun "service" is apt to describe the relationship of an apprentice to a master. But, accepting that proposition, counsel for the respondent argues that an ambiguity arises in its use in the present context. Counsel says that if, as I have held, cl.6(d)(i)(1) does not apply to the termination of the employment of an apprentice during his or her period of apprenticeship, it is uncertain whether the word "service" is intended to include a reference to the period of employment as an apprentice of a person who continues to be employed after the expiration of that period. Under those circumstances, counsel argues that the Court ought to receive extrinsic evidence which will assist in determining the actual intention of the framer of the award.

12. At the trial counsel for the respondent tendered in evidence three sets of documents to the admission of which counsel for the applicant objected on the ground of relevance. As the objections raised a substantial question for determination and it was convenient to do so, I admitted the documents into evidence, subject to relevance and reserving until my ultimate disposal of the matter the determination of the objections as to admissibility.

1. The relevant documents comprised the reasons for decision of the Full Bench of the Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy Case, some extracts from the argument before the Full Bench in that case, certain provisions of the Metal Industry Award 1984 and the Metal Industry (Long Service Leave) Award and the transcript of the proceedings before Commissioner Paine, of the Commission, when the presently contentious provisions were added to the Vehicle Industry - Repair, Services and Retail - Award 1983. These documents were said to be relevant to the present proceeding because they assisted the Court to resolve the ambiguity said, by counsel for the respondent, to reside in cl.6(d)(i)(1).

2. I have come to two conclusions in relation to the documents. First, it seems to me that, as a matter of law, the documents are not admissible in the present proceedings. Secondly, in any event, I do not think that the documents show what was the actual intention of those responsible for the selection of the words which now appear in cl.6(d)(i)(1).

3. The words falling for interpretation in this case are contained in an industrial award. In making awards and amendments of awards, the Australian Conciliation and Arbitration Commission carried out a legislative function. Accordingly, the appropriate analogy is to those rules which, at common law, governed the use of extrinsic material in the interpretation of statutes. I say "at common law" because Parliament has recently varied those rules, by the insertion of s.15AB into the Acts Interpretation Act 1901; but that variation applies only to the interpretation of statutes.

4. The common law rules regarding extrinsic material were discussed in chapter 4 of Pearce "Statutory Interpretation in Australia" (2nd ed). The learned author there distinguished between two categories of documents: "parliamentary and executive material" and "statutory and judicial material and international treaties". The current analogy is to the former category, in relation to which Professor Pearce commented that extrinsic materials "may be used by the courts to determine what was the state of facts with which the Act was concerned -- to ascertain the background to the Act or, as it is often put, the 'mischief' with which it was intended to deal".

5. It is clear on the authorities that resort may be had to extrinsic material, even for the limited purpose mentioned by Professor Pearce, only in cases of ambiguity: see Wacal Developments Pty Limited v Realty Developments Pty Limited (1978) 140 CLR 503 at p 513, Dugan v Mirror Newspapers Limited (1979) 142 CLR 583 at pp 599-600 and Pearce, op cit, para.23. As Professor Pearce remarked, in that paragraph, "in reality whether or not the words of an Act are ambiguous depends upon whether the court declares them to be so". And, as Gray J pointed out in Printing and Kindred Industries Union v Davies Bros Ltd (1986) IR 444 at p 449, judges have differed in their approaches to that question:
   

"There appears to be no clear test laid down for determining when an ambiguity exists. At one extreme is the statement of Isaacs ACJ in Pickard v John Heine & Son Ltd (1924) 35 CLR 1, at 9, where his Honour said, in interpreting an award: 'Personally I see no ambiguity. But as the interpretation I favour was disputed at the Bar, it must be because there is such ambiguity.' At the other extreme is the statement of Viscount Simonds in Kirkness v John Hudson and Co Ltd (1955) AC 696, at 711-712, with reference to an earlier decision of the House of Lords interpreting a statute:

'In this case Lord Buckmaster was of opinion, as had been at least one of the members of the Court of Appeal, that the first contention of the Crown was right, and that the words of the earlier Act had the meaning they sought to put upon them. The other noble and learned Lords thought otherwise. It would have been easy then to say that, since judicial opinion differed as to the meaning of these words, there was such an ambiguity as to justify recourse to a later Act to resolve it. But the decision of this House was unanimously to the contrary. That means that each one of us has the task of deciding what the relevant words mean. In coming to that decision he will necessarily give great weight to the opinion of others, but if at the end of the day he forms his own clear judgment and does not think that the words are 'fairly and equally open to divers meanings' he is not entitled to say that there is an ambiguity. For him at least there is no ambiguity and on that basis he must decide the case.' Care must be taken, of course, not to create an ambiguity by bringing into consideration external factors which may be used legitimately to resolve an ambiguity if one exists."

1. The problem, as it seems to me, with the view taken by Isaacs ACJ is that it assumes that counsel for each of the parties has a genuine personal belief in the correctness of the submission made by him or her. That will not necessarily be so. As with any other submission, counsel is entitled to contend for a particular interpretation of a statute regardless of any personal belief as to its correctness. Notwithstanding competing submissions there may in fact be only one personal view at the bar table as to the meaning of a particular statutory provision. In my opinion the approach of Viscount Simonds is correct: the judge must look at the contentious words and reach a personal decision as to whether they are ambiguous. Only if the judge finds an ambiguity is it legitimate for him or her to go to extrinsic material.

2. In the present case I find no ambiguity. As I have said, the word "service" is appropriate to the relationship which exists during a period of apprenticeship. It matters not that cl.6(d)(i)(1) is inapplicable to the termination of the employment of an apprentice during the currency of the apprenticeship. It is applicable to the termination of the employment of a non-apprentice, whether or not that employee has previously served an apprenticeship with the employer. As a matter of ordinary English, as it seems to me, the sub-clause requires account to be taken of the whole period of continuous service: both the period of apprenticeship and the period of service thereafter. There being, in my view, no ambiguity in the phrase under consideration, it is not appropriate to go to extrinsic material in relation to its meaning.

3. Even if there were an ambiguity, reference may be made to extrinsic material only to show the mischief sought to be addressed; not to show the solution proposed to be adopted by the award. As I will show, the subject material does not go to the mischief being addressed; rather it is tendered in order to show the solution which was adopted. That would be an illegitimate use of the material. But, in my opinion, it does not succeed in achieving even that purpose.

4. The disputed documents show that, on 2 August 1984, the Full Bench of the Commission handed down its reasons for decisions on matters of principle in the Termination, Change and Redundancy Case. Those reasons dealt with issues relating to notice of termination of employment but they contained no specific reference to the position of apprentices or ex-apprentices. Subsequently, in speaking to the minutes of the amendments to the Metal Industry Award thought to be necessary to implement the decisions in principle, the employers' representative referred to the position of apprentices, arguing that the new provision ought specifically to exclude its application to apprentices. The representative of the Australian Council of Trade Unions proposed that the provision should expressly apply to apprentices. Counsel for the Commonwealth supported the employers upon this matter, that is in relation to termination during the period of apprenticeship. However, counsel argued that, in a case where an apprentice continued in the service of an employer after the completion of the apprenticeship, the whole period of service should be taken into account for the purpose of the computation of the period of notice. Counsel referred to the specific provision made, in relation to the calculation of long service leave, by cl.5(2) of the Metal Industry (Long Service Leave) Award 1984:
   

"5(2) Where an employee has entered or enters into a contract of employment with an employer within a period of twelve months after the completion of an apprenticeship with the employer the period of apprenticeship shall be taken into account for the purpose of calculating the period of his service with that employer under that contract of employment."

Predictably, the ACTU representative supported, and the representative of the employers opposed, that suggestion.

1. In its Supplementary Decision, dated 14 December 1984, dealing with the contentions raised during the argument upon the minutes, the Full Bench dealt with the matter of notice of termination fairly briefly. No reference was made to apprentices or to ex-apprentices. The only arguable clue as to the thinking of the Full Bench upon that matter was provided by the following passage:
   

"In determining the definition of continuous service, which we consider to be appropriate, we have looked at the service requirements contained in the Annual Leave clause, clause 25, of the Metal Industry Award and in clause 5 of the Metal Industry (Long Service Leave) Award.

We are not prepared to accept the provision that 'continuity of service should be deemed broken by strike or other industrial action, a stand down or an unauthorised absence' as suggested by the employers. However, on balance, we will adopt the continuous service definition contained in clause 25 -- Annual Leave -- in preference to that contained in the Metal Industry (Long Service Leave) Award."

1. Counsel for the present respondent argues that the disclosed preference of the Full Bench for the definition of continuous service contained in cl.25 of the Metal Industry Award over that set out in cl.5 of the Metal Industry (Long Service Leave) Award indicates a decision by the Full Bench to reject the submission made by the Commonwealth, and supported by the ACTU, that the period of any apprenticeship should count for the purpose of computing notice. However, a comparison of the two definitions reveals several differences between them. The Long Service Leave award preserves continuity of service notwithstanding absences by reason of industrial disputes, lay-offs consequential upon slackness of trade and gaps in employment of not more than two months' duration. The annual leave clause makes no reference to these matters.

2. The various types of interruption in employment referred to in the Long Service Leave award, but not in the annual leave clause, were discussed in argument on the minutes before the Full Bench of the Commission. In the absence of any explanation in its Supplementary Reasons, it is impossible to know what factors actuated the Full Bench's preference for the annual leave model. In particular, the documents sought to be tendered do not demonstrate its view upon the matter of notice of termination of the employment of apprentices or ex-apprentices. All that is clear is that a formula was adopted which made no express reference to apprentices, but which was not inapt to cover the period of service as apprentices of those who thereafter continued in the employment of the same master.

3. There is a further difficulty about using the Termination, Change and Redundancy Case as a guide to the interpretation of the relevant provision of the Vehicle Industry - Repair, Services and Retail - Award: the persons who decided the Termination, Change and Redundancy Case were not the people responsible for the form of that provision. That provision was inserted by Commissioner Paine, who was not a member of the Full Bench in the Termination, Change and Redundancy Case. Further, it appears from the transcript of the proceedings before Commissioner Paine, when cl.6(d) was inserted, that the relevant words were chosen by the parties. They were inserted in the award by consent. So far as that transcript reveals, at no stage did Commissioner Paine have to consider the matters with which this case is concerned. The evidence sought to be tendered does not reveal the identity of the actual authors of cl.6(d), still less their subjective intentions upon the matter of the computation of periods of expired apprenticeships.

4. The conclusion I have reached, in respect of the first aspect of the case, is that, for the purposes of computing the required period of notice under cl.6(d)(i)(1), any period during which the employee served the employer as an apprentice -- being a period immediately prior to continuous service as a tradesman -- ought to be included. It follows that the requisite period of notice, in the case of Mr Simpson, was three weeks.

5. The second aspect of the case, namely the effect of the notice given by Mr Simpson on 12 May 1986, may have less general importance. But it seems to me to have been erroneous for Mr Barry to have assumed that the period of notice given by him on 20 May 1986 was able to be reduced because of the fact of Mr Simpson's notice on 12 May 1986. The award contemplates two methods of termination of employment: a notice of termination given by an employer and a notice of termination given by an employee. Paras.(i) and (ii) of cl.6(d) prescribe the requisite period of notice in each case. Each paragraph provides for the period of notice to be shortened: either by agreement of the parties or unilaterally. If the period is unilaterally shortened by the employer, wages must be paid in lieu of notice; if by the employee, by payment or forfeiture of wages. Neither paragraph provides for an agglomeration of the periods of two separate notices.

6. In the view I take, Mr Simpson was bound to give Gillen Motors three weeks' notice of the termination of his employment. He elected to give four weeks notice so that, without more, his employment would have terminated at the expiration of that period of four weeks, on 9 June 1986. Mr Barry could have responded by seeking an agreement with Mr Simpson for his employment to cease at an earlier date. Alternatively, he could immediately have given to Mr Simpson a three week notice of termination on behalf of the employer. But, on 12 March 1986, he did neither of these things. Thereafter those options continued to remain open to him; but, if he chose to give a notice of termination on behalf of the employer at a later date, the requirement of cl.6(d)(i)(1) remained intact: the relevant period was three weeks. In the absence of agreement, Mr Barry was not entitled to set off the period of the employee's notice which had by then elapsed. By 20 May 1986 it would, of course, have been pointless for Mr Barry to give to Mr Simpson three weeks' notice. His options were to allow Mr Simpson's period of notice to expire on 9 June 1986, to seek Mr Simpson's agreement to an earlier termination or to make payment of three weeks' wages in lieu of notice under cl.6(d)(i)(5). Mr Barry was not entitled unilaterally to terminate Mr Simpson's employment merely by paying one week's wages -- or even two weeks' wages -- in lieu of notice. In taking this course he acted in contravention of the award. The case alleged by the applicant is made out.

7. The applicant does not seek any ancillary relief. The only claim made by him is for the imposition of a penalty. In the ordinary case of breach of an award it will be appropriate to impose a penalty. But this is not an ordinary case. The evidence shows that, in taking the course which he did, Mr Barry acted upon the advice of an industrial officer of the Motor Traders' Association, the relevant employer organisation. In the view I have expressed, that advice was erroneous. But there is no reason to doubt that it was given, received and acted upon in good faith and in the belief that it represented the intent of the award. Having regard to the novelty of the provision and the submission which had been put in the Termination, Change and Redundancy Case on behalf of the employers, it is not difficult to understand how the Association came to give its erroneous advice. It was reasonable, under the circumstances, for Mr Barry to rely upon that advice. There is no suggestion either of a lack of care of any representative of the company upon this occasion or of any previous breach of an award by the company.

8. Notwithstanding that a breach or non-observance of an award is established, the Court has a discretion as to the imposition of a penalty. In the present case the appropriate course is to make a declaration as to the fact of non-observance of the award, but to refrain from imposing any monetary penalty. I propose to take that course.