Byrne v Australian Airlines Limited- Frew v Ausn Airlines Ltd
[1995] HCATrans 104
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S132 of 1994
B e t w e e n -
GEORGE ALBERT BYRNE
Appellant
and
AUSTRALIAN AIRLINES LIMITED
Respondent
Office of the Registry
Sydney No S133 of 1994
B e t w e e n -
GEORGE MORTIMER FREW
Appellant
and
AUSTRALIAN AIRLINES LIMITED
Respondent
BRENNAN CJ
DAWSON J
TOOHEY J
McHUGH J
GUMMOW J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON WEDNESDAY, 3 MAY 1995, AT 10.19 AM
(Continued from 2/5/95)
Copyright in the High Court of Australia
______________________________
BRENNAN CJ: Yes, Mr Jackson.
MR JACKSON: Thank you. Your Honours, may I mention two matters arising from yesterday, before going on to continue our submissions? The first concerns the reference to the Metal Trades Case which your Honour Justice McHugh made yesterday: may I just say one thing about it. The decision is Metal Trades Industry Association v Amalgamated Metal Workers’ and Shipwrights’ Union (1983) 152 CLR 632. I just wish to give your Honours the references to the pages at which material matters may be found. May I say what they are, however.
The issue in the case was whether the New South Wales Employment Protection Act was inconsistent with the provisions of a federal award prescribing matters rather similar to those which your Honours will see set out in clause 11(d) of the award in the present case, together with other matters which one will see reflected in other parts of the award. And it was held that it was, your Honours, and in the reasons there is some discussion of the relationship between laws of the States including the common law and the terms of an award. Could I give your Honours the pages: they are 642, 644, 650, 651 and 653.
Your Honours, the other thing I wanted to say in relation to it is this: your Honours will see in a couple of passages to which I have given references that expressions are used such as “the award varying the terms in the contract of employment” but those remarks were remarks were ones which were not at all directed to the question of which the Court is presently concerned, of course.
The second thing I wish to say, your Honours, concerning the matters arising yesterday is this, that the argument on behalf of the appellant really involves, and I am speaking about its relationship to the terms of clause 11 of the award, what it really involves is taking out part of the award, namely clause 11(a), indeed, part of clause 11(a), giving to that provision an independent operation. By that I mean independent of the context in which it is to be found, that is, a context which includes the remainder of clause 11 including clause 11(g) and the special procedure contemplated by clause 41.
Then, having so taken the provision out, giving it an independent meaning uncontrolled by those provisions and, your Honours, doing so, if we may say so with respect, for no better reason than, as is sometimes said I suppose in relation to climbing Mount Everest, that it happens to be there.
Your Honours, may I return them to the submissions we were making and the issue with which I was about to deal was the second basis of rejection by the majority in the Full Court of the implication as a matter of fact, that is on the basis that it could not be said that it went without saying that such a term should be included in the contract. That is dealt with, your Honours, in paragraph 16 of our outline of submissions and your Honours will see that we rely upon the observations of Justices Beaumont and Heerey at page 865.
May I take your Honours to that briefly; page 865 line 14 though to page 866 line 2. Your Honours will see in that relatively short passage at the second half of page 865 and the top of page 862 what, in our submission, is plainly the correct position. An employer or employee might well say, “Well, I am bound by the award”, but to say that I am bound by the award or to recognise that both parties are bound by the award is a quite different thing from saying that the award is not only to have the binding effect attributed to it pursuant to the Statute but also to have an effect as a contractual term carrying with it the additional remedies which are derived from the contract.
To say that one is bound by the terms of the award in that context is to recognise the reality, it is not to make the award terms terms of the contract, or to make terms of the contract only those terms which favour one party, for example the employee. I should also say there really is not any particular basis why one would import into the contract on this assumption only the terms which favour one party or the other. It is tempting to do so, of course, but there really is not any legal basis for saying that there is some reason for importing into the contract as terms of the contract only the terms which favour the employee.
A further matter too, in this regard, arises from the observations of Mr Justice Jenkinson in Gregory v Phillip Morris Limited (1988) 80 ALR 455, at 459. Essentially what his Honour said was ‑ I will take your Honours to the passage in just a moment ‑ that if the view were taken that the terms of the award were relevant then to the contract, it would prevent the employee agreeing, in effect, to better terms. Your Honours will see at page 495, the passage commences at line 20 and goes through to line 43, but the particular passage is the one that commences at about line 32 and it goes through to the end of that passage. It might be possible by some theory of variation of terms, and so on, to get around the proposition that his Honour puts there, but at the same time what it does illustrate is the unlikelihood of the proposition that the terms of the award are to be treated as contractual terms rather than having the force according to their ordinary legal nature.
Your Honours, this aspect of the case was revisited, if I could use that expression, by Chief Justice Wilcox in Gooley v Westpac Banking Corporation. May I take your Honours to that decision. It is the unreported decision of his Honour in the Industrial Relations Court. The particular passage to which I wish to refer is at pages 65 to 67 and commences at the bottom of page 65. His Honour there is dealing with the question of implication as a matter of law, in effect. The passage I am about to read is a passage where he, in effect, reverts to observations made by Mr Justice Beaumont and Mr Justice Heerey in relation to implication as a matter of fact. But he goes on to say at page 67, commencing at about point 4 on the page:
One can only regard as fanciful the alternative scenario.....of an employer and employee negotiating about the question “whether award provisions are to be expressly incorporated in the contract ... and thus create contractual remedies in case of breach.”
Your Honours, it may be that one would not expect that to happen very often, but in some cases it certainly would happen. But leaving that aside particularly, the ultimate question was whether, in relation to this aspect of the case, it could be said that a term in the terms of clause 11(a) should be implied into the contract. One of the tests was whether it went without saying that that should happen.
If one has a situation where there is, as the members of the Full Court observed in this case, a structure of an award which operated according to its own terms, it is very difficult, in our submission, to say that one could say that it went without saying that there should be an additional remedy given or an additional right given by importation into the contract in circumstances where, leaving aside the necessity of it, it is something that primarily would be a matter in relation to which one would expect parties to agree.
Could I come then, your Honours, to the next paragraph of our outline of submissions, paragraph 17, which deals with the question of the implication of terms as a matter of law. Now, your Honours, it is plain, in our submission, or I should say it is established, in our submission, that the relevant test is one of necessity and it is so expressed in the cases to which we there refer. May I take your Honours to two and two only of the references. The first is Liverpool City Council v Irwin (1977) AC 239, at page 254 and, your Honours, this was the case in which the House of Lords rejected the approach which had been taken by Lord Denning that terms could be implied whenever it was reasonable to do so and the decision was that the basis was not reasonableness but necessity and your Honours will see that at page 254 in the speech of Lord Wilberforce and particularly the paragraph commencing between E and F where his Lordship said in the first and second sentences that the test was one of necessity.
GUMMOW J: The crucial passage in a way that sums it up is at 256 in the middle of the page, the one sentence paragraph in the middle of 256, “What necessarily arises whenever a landlord” et cetera.
MR JACKSON: Yes, and, your Honours, that that remains the test one sees in Scally v Southern Health and Social Services Board (1992) 1 AC 294, at page 307 and in Lord Bridge’s speech - and he gave the only substantive reasons in the case. At page 307 there are two passages. The first, your Honours, is between A and B, the sentence, the first line:
A clear distinction is drawn in the speeches of Viscount Simonds -
and so on -
between the search for an implied term necessary to give business efficacy to a particular contract and the search, based on wider considerations, for a term which the law will imply as a necessary incident of a definable category of contractual relationship.
It is really that second one that is the one under consideration now, but your Honours will see, going down then between D and E on the same page, page 307, that his Lordship says:
But I take the view that it is not merely reasonable, but necessary, in the circumstances postulated, to imply an obligation -
et cetera. In relation to the question of the result, he was differing from the court below, and your Honours will see that the test applied again was one of necessity.
Now, your Honours, I will not go over the underlying facts in relation to this but, as your Honours will see, we would submit, for the reasons we have set out in relation to implication as a matter of fact, in paragraph 15, it is just impossible to regard the inclusion of a term such as that relied on now, as a matter of necessity.
Indeed, your Honours, if I could add one thing to it, that is that the submissions of our learned friends recognise that duties covering the case would exist in the absence of such a term. And I am referring your Honours to paragraphs 1.7 and 1.8 of their outline of submissions, but the complaint that is made there, and made orally, is that there is a plethora of them, there are too many that might have to be resolved in particular cases which ones applied. So the invitation is given to the court to say, “Resolve the potential difficulty of deciding which is the right one; have a new one”. That is the one suggested by our learned friends. So that, your Honours, it is very difficulty in those circumstances, we would submit, to say that there is necessity.
Could I turn then, your Honours, to the next basis relied on, the crystallised custom. Your Honours, in looking for authority dealing with the point, the crystal cabinet appears to be bare and, equally forlorn, in our submission, is the state of the evidence as to the existence of any such custom and, in particular, may I refer to paragraph 19(a) of our outline of submissions. Your Honours, the short fact is there is nothing.
Your Honours, the appellants also suffer, in our submission, the difficulty to which we refer in paragraph (b), and it is necessary, as one of the tests for importing a custom into a contract - and your Honours will see the reference to the Court’s decision in Con‑Stan Industries, that the custom be ‑ and we have extracted the relevant passage from the Court’s decision:
so well known and acquiesced in that everyone making a contract can reasonably be presumed to have imported that term into the contract.
Now, your Honours, maybe that is a test which is at least as stringent as the requirement of going without saying but it may well be a more stringent test but, in any event, it is not materially different for present purposes and, in our submission, if, for the reasons we have submitted earlier, they fail on the question of obviousness in relation to implication as a matter of fact, then, for similar reasons, they would also fail in demonstrating that the requirements of this aspect of the test, defined by the Court in Con‑Stan 160 CLR at page 236, is satisfied, and your Honours will see that set out as test No 2 of the several tests.
BRENNAN CJ: That really does not answer the question, does it? The phrase that you have cited there is so well known and acquiesced in that everyone is to be taken. Here, one might say that clause 11(a) was well known and acquiesced in non constat that everyone who makes a contract would have assumed it to be in the contract.
MR JACKSON: Indeed, your Honour. Could I answer what your Honour is putting to me by saying this, I was picking out the words of the test and the test really involves two aspects to it. One is the degree of knowledge and acquiescence of it and then the second thing is, as your Honour points out, that the element that the knowledge and acquiescence must be such that it results in a particular result, namely that it is to form a contractual term.
Your Honours, one Would readily understand the application of that by bifurcated as it were, test in circumstances where one is dealing with the conduct of persons in particular activities where people commonly conduct themselves in a particular way. But when one comes to circumstances where what one is not looking at is the conduct of individuals or the course of business or things of that kind but instead a situation where there is the imposition by a body having statutory functions of particular provisions in relation to particular classes of persons, that is a quite different theoretical situation to start with, your Honour. Even if one picks the name given to it, “crystallised custom”, it seems to suffer from two relevant defects. One is that the custom is not a custom in the relevant sense and the other is that the crystallisation comes from the source which fundamentally is not contractual.
Your Honours, could we refer also to paragraph 19(c) of our submissions to the effect that really if one says there is something which is a custom it comes back really to what we were submitting earlier that both parties recognised that they were bound by the award, but to say that is to say that and not to say any more.
Your Honours, could I move then to the argument which is set out in paragraph 4 of our learned friend’s outline of submissions and that is the argument based on Automatic Fire Sprinklers Pty. Ltd. v Watson 72 CLR 435.. In that case, Watson was suing for his remuneration and also for damages, but the case was unusual in the sense that what he was suing for was remuneration during the period until the relevant order came to an end and his employment was then terminated.
Mr Justice Kitto, then at the Bar, was appointed arbitrator and he had stated two issues which your Honours will see set out at page 459, point 9. You will see, your Honours, a reference to paragraph 18 which is paragraph 18 of a case or something of that nature that had been stated and Mr Kitto, as he was:
In par.18 he says: “It was contended before me on behalf of Watson that the purported dismissals were ineffectual.....for the reasons ‑
Now, your Honours will see the two reasons set out: one was the reliance on the regulation 14 and the other was that a purported dismissal of a servant, if wrongful, does not determine the employment unless it is accepted.
Your Honours, it was on the basis of the first of those that the case was decided and it is apparent if one looks at the reasons ‑ and I will take your Honours to the relevant passages in a moment ‑ that it turned on the particular effect of the particular provision and, as we say in our written submissions, one has to look at the nature of the provision and the circumstances in which it was enacted.
But, your Honours will see where the critical parts of the decision are and I take your Honours to the reasons of the majority. The first is that of Justice Rich and, having referred at the bottom of page 459 to those two grounds, what your Honours will then see in the second paragraph of page 460 that he says in the second sentence:
For the reasons I have given, I am clearly of opinion that we should hold that it does for the first reason stated in par. 18.
That is, the regulation, and the reasoning to support that is to be seen on the previous page a little further up from the passage to which I referred earlier. What your Honours will there see, about half‑way down the page, is a reference to Lord Goddard where he says:
The interpretation attached to these statutory provisions is expressed by Lord Goddard C.J., as he now is, in a single sentence: “If a statute says that a person shall not terminate a contract except with the permission of a third person, in my opinion it follows that he is incapable of terminating it without that permission”.
Your Honours will see a reference also to Justice Atkinson. So that his Honour clearly relied on that and so too did Justice Dixon at page 466, point 9, in a passage going through to page 467, about point 3. Then at page 471, about point 4, going through to page 472, point 1. If I could refer particularly to the last paragraph on page 471 and then the paragraph numbered 1 on page 472. The general position was discussed by his Honour at the bottom of page 466 and the top of page 467 in the passage which I earlier referred to.
Your Honours, Justice McTiernan, at page 472, in a passage commencing at the second paragraph of his reasons on that page, relies on the prohibition in the statutory provision. It is apparent that that is the basis on which he relies in his reasons. Justice Williams, at page 479, about point 4, in the paragraph commencing, “The attempted repudiation”. So that that is the basis of that decision and no doubt it is correct to say that in an appropriate case a statutory provision may have the effect that a purported termination in some circumstances is not effective. But in endeavouring to apply that to the present case, the critical thing is to examine the relevant provision.
I have gone to the provisions of the award already, but what they do support, in our submission, is the contention which we advance in paragraph 20(a) of our outline of submissions that the whole structure of clause 11 and clause 41 suggests that there is not nullity brought about by a termination of employment which does not comply with clause 11(a). Indeed, clause 11(a) really recognises that the termination will be effective. What it does do - and your Honours will have seen, for example, the provision that said that the fact that under the award, if the clause 41 procedure is brought into being, then the employee is to work, but the fact the employee is working does not affect the validity of what has gone before, namely, the termination.
What is sought to be done by clause 11(a) is to bring into being a procedure which will resolve a matter which is, of course, capable of giving rise to, amongst other things, industrial disputation. Could we refer also to the passages from the reasons of the majority in this case which we have set out in paragraph 20(a) of our written submissions, and I have already taken your Honours to those earlier when dealing with the terms of clause 11 and clause 41. One does have, also, the matters to which we refer in paragraph 20(b). If I could take your Honours for just a moment to that passage at page 877. It is the paragraph commencing at the bottom of the page and going through the whole of that paragraph on the next page, on page 878, and that demonstrates, in our submission, that the better view is that the notion that the employment will continue until the determination by a court is unlikely to be the better view of the operation of the award.
May I move from that to paragraph (5) of our learned friend’s outline of submissions. That appears to deal with an award-based right. What we have said already in relation to other aspects of the case and in our outline of submissions really deals, I think, with anything that is relied on in that regard. I just wish to add a couple of things, your Honours. The first is this: that it is not entirely clear, with respect, whether reliance is still placed ‑ and I say “still placed” because of the terms of ground 6 of the notices of appeal in this case ‑ whether reliance is still placed on a tortious basis.
MR GROSS: No, your Honours.
MR JACKSON: Could I then add one further thing and that is germane to the earlier submissions on contract and it deals with the question of good faith, the importation of some question of good faith. What we would say is that if one does look at the review by your Honour Justice Gummow in Service Station Association Ltd v Berg Bennett & Associates Pty Ltd ‑ and I will give your Honours the reference in just a moment ‑ to the importation of a duty of fairness, there does not really support the notion that there is any general such duty to be found in Australian law. That decision is in 45 FCR 84 and could I take your Honours particularly to pages 96 and 97. Your Honour before that dealt with matters such as:
an implied obligation on each party to do all that was reasonably necessary to secure performance of a contract.
That is dealt with at page 93, Secured Income Real Estate, and, your Honours, other aspects are set out on pages 94 and 95, but at page 96 what your Honour concluded at the bottom of the page was that:
Anglo‑Australian contract law as to the implication of terms has heretofore developed differently, with greater emphasis upon specifics, rather than the identification of a genus expressed in wide terms.
I will not read out the remainder of the paragraph, but your Honours will see the expression used by your Honour at page 97:
it requires a leap of faith to translate these well‑established doctrines and remedies into a new term as to the quality of contractual performance, implied by law.
Now, your Honours, we would submit, if I could put it this way, first, there is just simply no basis for the importation of any general duty of fairness in relation to contracts of this kind. If the case is anything, it is a case where the term to be implied is the term in clause 11(a), whatever it means, and it would be very difficult to say, your Honours, that one would imply in addition to that, first of all, some term of fairness where the term that was being implied on the principal argument was one that in any event dealt with harsh, unreasonable, et cetera, provisions because those terms would seem to cover the potential field.
In addition, your Honours, if one says that provision is to be imported but then you deal with that in a context of fairness, that seems to add nothing because the very terms involve an element of fairness themselves. So, your Honours, it is very difficult to identify precisely how one is to apply the concept of fairness on which reliance is sought to be applied. No doubt in some circumstances of course one treats fairness as being an element, but the very concepts involved here involve fairness but fairness in a context which is already defined. Your Honours, may I move then to grounds 7 to 10, which we deal with in paragraphs 24 to 27 of our outline of submissions.
Now, your Honours, may I deal first with paragraphs 24 and 25. As your Honours will have seen, the approach which was taken by the Full Court was to say that the terms harsh, unjust or unreasonable were terms which had in effect a separate operation. It is not 100 per cent clear, your Honours, whether the separate operation was a separate operation of the three words harsh, concept A, unjust, concept B, unreasonable, concept C, or whether the separate operation is one which is related to procedural, on the one hand, substantive on the other. The latter, that approach, seems to be the one that the court was adopting to say that there is a distinction to be drawn between procedural harshness, injustice and so on, and substantive, the same on the other hand.
Your Honours, the approach taken in terms of the result was that because the court was of the view that there had been substantive harshness, unjustness, et cetera, that, therefore, there was a contravention of clause 11(e) and that the case should be dealt with as a matter of penalty. Your Honours, the fundamental difficulty that arises, in our submission, in relation to that is that the concepts of “harsh, unjust and unreasonable” in clause 11(a) look to the termination of employment and one must look at the facts, whether they be substantive or procedural matters, in the light of the whole of the provisions and not subdivided into two aspects, substantive and procedural.
It is, as we submit in paragraph 25, a composite notion. I wish to take your Honours, for just a moment if I may, to a couple of things. The first is that in the reasoning of the Conciliation and Arbitration Commission which lead to the introduction of this provision, there is no hint to be found that substantive and procedural matters are to be dealt with as separate aspects but, indeed, quite the reverse. The basis was, your Honours, that there was a rejection of the notion that the terms of clause 11(a) should be expressed in such a way as to require as a separate matter, procedural fairness and the terms of clause 11(a) were expressed as they were picking up what was said, for example, in Re Lote, the case to which we refer in paragraph 25. They were expressed in the way in which they were because the whole of the circumstances, so the commission said, had to be looked at in any particular case.
Could I give your Honours something I do not think your Honours have which is a copy of the relevant extracts from the reasons for decision of the Conciliation and Arbitration Commission in the Termination, Change and Redundancy Case. It is part of print No 6230 and your Honours should have the first page and then commencing at page 11.
Your Honours, under the heading “Nature of provisions” on page 11, you will see a paragraph (a), “Test of unfair dismissal”. Then, immediately under that, the submission made on behalf of the ACTU, your Honours will see:
that an employer shall not dismiss an employee in a manner or for a reason which is harsh, unjust or unreasonable.
Could I invite your Honours to read the next paragraph which says that test is not universally applied and that there is a kind of overall test looking at all the circumstances. It is a passage, your Honours, which goes to the bottom of that page where there is a reference back to the form of the claim made by the ACTU.
Could I just intimate, your Honours, in relation to page 11 before I move on from it, that what your Honours will see is a summary of the position in other jurisdictions and in particular a quotation from Re Lote. Your Honours will see in the last paragraph on page 11 that the members of the commission say that they will discuss the claim in relation to manner of termination under the heading “Procedure”. That is at page 15.
They reject the proposition, at page 15, that there should be a provision dealing with the manner. Now, your Honours, that is discussed throughout page 15, after that heading, but the important part is the last paragraph. Your Honours will see,in that paragraph, specifically, about two lines below the letter j on the side of the page:
All State tribunals appear to accept that the manner of dismissal is relevant to the issue whether the dismissal is harsh, unjust or unreasonable but they consider that the adequacy of the procedure is a question of extent and degree to be considered having regard to the circumstances in particular cases.
And, your Honours will see that, at the top of the next page, on the second line:
we expect that a similar approach would continue under the provisions we are prepared to award.
And, your Honours, I would refer also to the next paragraph, where they specifically reject the proposal for specific reference to the method of dismissal.
TOOHEY J: Mr Jackson, what I am about to ask you does not bear directly on the point you are just making but, when you are looking at a clause such as clause 11(a), and the words “termination shall not be harsh, unjust or unreasonable”, is it the fact of termination that the clause is concerned with, and that alone, or are the conditions on which employment is terminated also relevant; for instance, the period of notice that may be given, or the amount of compensation that may be offered to an employee by an employer?
MR JACKSON: Your Honour, This will be a fuzzy answer, I am afraid, but it really involves a couple of things. The answer, broadly speaking, is that it must depend on the circumstances, but the term, “harsh, unjust or unreasonable” does not seem to encompass, if I could say, first of all, necessarily only the fact of termination by itself. What one has is, if one looks for example at paragraph 11(d), your Honour will see that there are provisions dealing with the periods of termination which are required and, for example, paragraph (v) recognises the ability to terminate for misconduct.
Now, your Honours, in relation to that, it seems to be the case, if I could say this first of all, that there could be a consideration by the procedure of clause 11(f) of the question whether, notwithstanding the fact that notice in accordance with it had been given, it was yet “harsh, unjust or unreasonable”.
TOOHEY J: Well, that seems to flow from the relationship of paragraph (a) and paragraph (d), because paragraph (d) requires notice in order to terminate and, presumably, if you did not give that notice absent some justification for summary dismissal, then you would not have terminated the employment in accordance with the award.
MR JACKSON: Yes.
TOOHEY J: My question really is whether, in considering whether termination has been “harsh, unjust or unreasonable” it is relevant to look at any greater period of notice that may be offered by an employer, or any greater form of compensation that may be offered, such as money in lieu of notice.
MR JACKSON: Your Honour, that is where the answer I gave your Honour before may get a little fuzzy because, if one had circumstances where an employee had been employed for many years and was given the briefest period of notice consistent with the terms of the award and in circumstances where there was no other reason such as the fact that there were great difficulties with the business, he was just given that notice, then it might be possible to say that it was really unjust or unreasonable or harsh to dismiss such an employee with no more than the bare minimum given by the award.
All that would mean, your Honour, would be that clause 11(a) would be attracted and that would allow the procedure contemplated by 11(g) and 41 to be enlivened. I accept the possibility that there may be circumstances in which that might occur. I should say, having spoken of employees with long service, that in the particular case one thing that was said by one of the employees in question here was, “I’ve been here for 26 years”. But in cases where what was involved was pilfering, one might regard that as perhaps a circumstance of aggravation rather than mitigation.
Your Honours, in relation to this aspect of the matter, we would also refer your Honours to two other things. The first is that your Honours will see in paragraph 25 of our written submissions that in Lane v Arrowcrest Group Limited, Mr Justice Von Doussa dealt with the artificiality of the division of the concept into substantive and procedural aspects. The relevant part of his reasons was quoted by the primary judge in this case and your Honours will see them at page 748, going from point 4 to about point 30 at the bottom of the page. It is manifest, in our submission, that one has to look to see what the nature of the conduct in question is.
Could I say one further thing in relation to it. This aspect was dealt with a little in passing by Mr Justice Sheppard and Mr Justice Heerey in their joint reasons in Bostik (Aust) Pty Limited v Gorgevski No 1 (1992) 36 FCR 20. Your Honours will see at page 28 under the heading “Harsh, Unjust or Unreasonable”, their Honours were dealing with circumstances which one has to say did seem a fairly tough case on the facts for the employee. There was a company policy which prohibited smoking in particular areas of the works and in a non‑smoking area, he was found, perhaps inadvertently, to be smoking. At page 28 their Honours said in the last paragraph:
Practically speaking, what seems to have created the problem here is that those who decided to dismiss the respondent did not advert to the provisions of the Award -
that is a provision to the effect of clause 11(a) -
and regarded themselves as being bound by the company’s own policy -
that which had developed to being one of instant dismissal for smoking in non‑smoking areas.
The employer was bound both by the Award and by the implied term.....not to dismiss the respondent harshly, unjustly or unreasonably.
The implied term of course being in the light of the earlier cases before the present case.
No policy, whether or not promulgated with the agreement of unions.....could vary that constraint.
Your Honours, that goes on to the top of the next page.
But, your Honours, that really means no more than that the question, in the end, is whether the dismissal was one which satisfied the requirements of the award. It does not mean that one has to divide up substantive and procedural matters and it really supports, in our submission, the composite, as it were, notion to which I have referred.
So, your Honours, what we would submit ‑ and I am still speaking about paragraphs 24 and 25 of our outline of submissions ‑ that the Full Court was in error in dividing up clause 11(a) into substantive and procedural aspects. The result which follows, of course, in our submission, is that the Full Court should have dealt with that part of the appeal to that Court by the present appellants which dealt with Mr Justice Hill’s findings on the substantive matter, namely whether they were implicated in the pilfering.
Your Honours, we will accept that is what the Court should have done; it was not at our instigation that they did not but, for their own reasons, their Honours seem not to have dealt with that, that being on the wrong basis that there was, in any event, a contravention of the terms of clause 11(a) in procedural matters.
GUMMOW J: Are you saying, Mr Jackson, that the procedural considerations would be swept up with the substantive considerations and it is a global question?
MR JACKSON: Yes, indeed your Honour.
GUMMOW J: They only looked at part of the globe. And if they had looked at the entirety the substantive matters, to use that expression, would have outweighed the significance of the procedural problems.
MR JACKSON: Yes.
McHUGH J: Does not the problem arise in this way concerning procedures: that if it is established as a fact that an employee has been guilty of gross misconduct justifying instant dismissal, that is the end of the matter, but an employer may act reasonably even though those facts are not established. An employer may act reasonably if there are reasonable grounds for suspecting an employee is guilty of misconduct. But, in that class of case, in particular, a dismissal would prima facie be unjust or unreasonable unless the employee is given some opportunity of explaining himself. For example, in a malingering case, if you establish the employee is guilty of malingering, well it could hardly be said to be unjust or unreasonable. But if, on the other hand, there are some facts that point to it and you do not give him a chance to make an explanation, then it may well be so.
MR JACKSON: Well, that is so, your Honour. What that emphasises, if I may say so, with respect, is that what one is looking at is a statutory test. “Composite” is perhaps the wrong word, your Honours; it conveys a notion. Three words are used to convey an overall notion and how the notion is to be applied to particular circumstances must depend on the circumstances, whether one is looking at it in the light of circumstances which are established as justifying a condign course of conduct on the part of the employer, or ones which are not yet established but may lead to that.
Your Honours, it is really impossible to say, except perhaps in broad classes, what the position is in a particular case. But, your Honours, where one has a situation where the issue then comes to a court and what is found by the court is that the conduct was, in fact, engaged in, the conduct was conduct which merited and was known to merit instant dismissal and nothing else is offered; no explanation is offered; no alternative course is even suggested and where, as the Judge found in this case, they were not telling the truth about what happened even in the witness box.
In circumstances like that, your Honours, one has to look at the situation as the events in fact appeared when they came to be decided by a court. If they appear in that fashion it is very difficult, indeed, in our submission, to say that the termination of employment - to use the test provided for by the clause - was one which was harsh, unjust or unreasonable. It was the right thing to do in the circumstances found to have existed.
BRENNAN CJ: That is an argument which goes in favour of your side of the record in this case. But what of the case where the employer acts quite reasonably in coming to the conclusion that there was misconduct but, due to some exceptional circumstance unknown to the employer at the time, it turns out when the matter comes to court that there was innocence on the part of the employee?
MR JACKSON: In circumstances of that kind because, inevitably, we would submit, one has to look at the situation from the point of view of the employer, and what one is saying is, we would submit, was the employer acting harshly or unjustly or unreasonably in taking the course which the employer did. In circumstances of that kind, your Honour, may we say two things. The first is that the answer to the question would be that the employer had not acted harshly, unjustly or unreasonably. What we would submit is that the justification for adopting a conclusion of that kind is to be seen in the fact that issues of that nature are, prima facie, to be resolved by the adoption of the procedure going through level after level contemplated by clause 11(g) and clause 41.
If I could develop that slightly. What your Honours will see is that clause 11 does, in a sense, contemplate that there may be genuine differences which have to be resolved; differences which occur ‑ genuine or not genuine really ‑ differences which have to be resolved. And it also recognises, no doubt, as frequently is liable to happen in employment situations, that strong views may be held and strong views may be held which are really unjustified by the true facts. It then provides for different levels of each side of the equation, as it were, to deal with the issue and one would hope that the higher the level the more dispassionately, one might think, the issue can be resolved and then seeks to have that issue resolved in that way.
If the issue is resolved in that way then one sees a situation where, whatever might have been the particular quality of the conduct at the time when it occurs there is not, of course, a relevant breach of the award because ‑ perhaps I can put it this way: there is not, in our submission, any breach of the award which could be the subject of a successful prosecution. If there is no resolution of the matter then it remains to be dealt with on the circumstances as they appeared. It may be that in the events ultimately found to have occurred one can say that the base facts which appear are different from those which appeared to the employer reasonably at the time. But if they did appear reasonably then, in our submission, it is difficult to say that the test in 11(a) is satisfied.
TOOHEY J: But you develop that argument by taking as your starting point the question whether the employer has acted harshly, unjustly or unreasonably and that may be warranted. On the other hand, one might argue the question is whether termination of employment was harsh, unjust or unreasonable and that that is not to be determined solely by reference to the mind of the employer but is an objective test to be applied.
MR JACKSON: Your Honour, the way in which clause 11(a) is expressed specifically - and, your Honour, I appreciate in saying this there are a number of possible views open on the issue, but the manner of expression of clause 11(a) is that termination of employment by an employer shall not be harsh, unjust or unreasonable and the manner of expression used in those words is emphasised - I am sorry, the fact that the employer is specifically referred to, that is the first thing.
The second thing is in the next paragraph one sees that terminations include terminations with or without notice, again, by the employer and then your Honour will see that subparagraph (f) takes one then to clause 41 and when one gets to clause 41 what your Honours will see - your Honour, I think nothing specifically to which I would wish to refer, but your Honours will see that what is contemplated is that there will be a dispute or claim which is to be discussed by the aggrieved employee with the supervisor. Your Honour, what we would submit is that one really does have to look at the conduct of the employer to see whether in the circumstances as then appeared it was reasonable.
TOOHEY J: But you see the objective test cuts both ways; it would allow an employer to adduce evidence of facts not known to the employer at the time of dismissal which might go to support the termination of employment.
MR JACKSON: Yes, your Honour.
BRENNAN CJ: Why would one not postulate in the case of dismissal for misconduct the notion or the test of whether, objectively speaking, having regard to the conduct now known to have been engaged in by the employee or having regard to the conduct as known having regard to the manner of acquisition of the knowledge at the time of the dismissal, one could objectively say that the dismissal was not harsh, unreasonable or unfair?
MR JACKSON: Your Honour, I do not think that is really very different from what I was submitting.
BRENNAN CJ: Except that you put your emphasis on having regard to the viewpoint of the employer. The employer might well regard it as reasonable to take disciplinary action by way of dismissal whereas the objective view might be that, “Whatever you think, Mr Employer, objectively speaking, having regard to commercial and industrial standards, we think it was unreasonable.”
MR JACKSON: Your Honour, that is a possible view, of course. Could I just say in relation to it two things. The first thing is that in the present case, in our submission, for the resolution of the present case, it is not necessary to decide ultimately what the test should be, we would submit. The second thing, however, is that what prima facie is to be resolved by the dispute procedure is whether the employee should, in effect, be reinstated or some other provision made in relation to it. Your Honours, what we would submit is that the better view of the matter in the light of the words used in the opening part of clause 11(a) is the reasonableness is that of the employer. If there are matters that are germane to the question whether the employer should have taken that view, the course of negotiation contemplated by clause 41 is the method provided to seek to resolve that without itself affecting the nature of the test of clause 11(a) itself.
BRENNAN CJ: Mr Jackson, having regard to your overall argument, what would be the order made by this Court if your argument should succeed and a cross‑appeal succeed?
MR JACKSON: Your Honour, it will take me just a moment to deal with that. The position, we would submit, is this. Whilst we accept the proposition that the Full Court should have entered upon the question of the correctness of the primary judge’s view on the question of pilfering, our submission also is that that is an issue in relation to which there is, in reality, no basis for setting aside the primary judge’s view based, as it was, on his view of the evidence including the witnesses before him. We would seek to defend the primary judge’s view in this Court by saying that if the Full Court had dealt with that issue, the result would have been that the appeal failed on that issue.
BRENNAN CJ: And you would like us to watch the video for that purpose.
MR JACKSON: Your Honour, which one; the three? Could I just say ‑ ‑ ‑
BRENNAN CJ: But is not the video critical to that?
MR JACKSON: Quite, your Honour, yes.
BRENNAN CJ: Well then, would it not have to go back and if it has to go back, do we not have to postulate the test?
MR JACKSON: Your Honour, could I just say this. We do not know what the nature of the attack made on the primary judge’s finding is. Our learned friends did not tell us yesterday and we do not really know what it is. If it is just that another view might have been taken on the evidence well that, of course, is not good enough.
So that one really does not know what the basis of attack is and until one knows what the basis of the attack is, it is very difficult to say whether the case in that regard should be sent back to the Full Court or not. But what one can say about it, your Honours, is that the test applied by the Full Court, in dividing up the issue, is one that was in error. Your Honours, if I could just say this: the first thing is that we would submit that there was no basis for the Full Court to have set aside the primary judge’s finding on the facts. Your Honours, we have endeavoured to deal with that in that document, “Findings of Fact”, I gave your Honours yesterday.
BRENNAN CJ: Mr Jackson, let it be assumed, for the purposes of argument at this stage in the proceedings, that the attack upon the primary judge’s finding of fact is this: that there was Mr Brosnan who was engaged in manifestly doubtful conduct, and the question is the implication of the present appellants in that conduct and that, looking at the video, the conclusion that they were so involved was an unreasonable conclusion to which a judge ought not to have come and to which the employer ought not to have come. Now, in those circumstances, what would have to be done?
MR JACKSON: In that case, your Honour, it becomes a matter of hearing what the submissions are on the point. Your Honours, would have to see the video to see that. We would then be submitting that the finding of the primary judge was not based just on that; it was based on his view of the witnesses and some other matters. Your Honours, that is what the Court would have to deal with. Your Honours, I really do not want to put the Court in an unduly difficult situation, but we are in a position where we are entitled to say that the course suggested by our learned friends should not be adopted for another ground; the ground being that if that issue had been dealt with by the Full Court they would have lost anyway. So, that is really the issue, your Honours, with which we would wish the Court to deal.
Your Honours, I would not want to trouble the Court particularly any more on the issue without our learned friends, as they should, in our submission, dealing with their argument on the point. I also might say that I would not wish the Court to be put in the situation of having to observe the videos necessarily in Court. I would be happy to deal with it whatever is the most convenient way for the Court.
BRENNAN CJ: Before you leave that I should point out that there have been cases in the criminal jurisdiction where the Court of Criminal Appeal not having dealt with an issue that has been raised by an appellant, the matter has been sent back to the Court of Criminal Appeal to deal with after the allowing of an appeal here.
MR JACKSON: Yes. Your Honour, the difficulty in the present case of course is that the appeal - I am sorry, I withdraw that; the point does not arise. Could I then move to our cross‑appeal which is a matter in respect of which we would need special leave because an alteration of the order made by the Full Court is sought. I was going to move, if I might, to our cross‑appeal. It is a matter in respect of which we need special leave because we seek to vary the order of the Full Court. That is dealt with, your Honours, at page 10 and following of our submissions.
What we would submit is that the Full Court’s approach to the meaning of clause 11(a) is inevitably involved in the appeal and the meaning of those provisions is of general importance. I do not think I can develop further what is set out in paragraph 2 and the matters in relation to which we would rely in relation to the detail of the approach taken by the members of the Full Court who were against us on the question whether there had been procedural fairness even if that aspect be considered in isolation are dealt with in the succeeding paragraphs.
Could I take your Honours - and I do not wish to beat the drum unduly about the matter - to three references dealing with the importance of not pilfering in relation to passengers’ baggage: first to his Honour the primary judge’s reasons for judgment at page 714 in volume 4.
Mr Jackson, as at present advised, the Court would be minded, if your argument otherwise succeeded, to consider the meaning of clause 11(a) in the context of the facts of the present case and to define its operation in terms of whether there is some dichotomy between the procedural and substantive issues, but having defined the meaning and propounded a test in relation to clause 11(a) in the context of the present case to send the matter back to the Full Court. Now, unless you have got some argument which will take us further than you have taken us thus far, reference to the seriousness of pilfering would necessarily arise in a consideration of the questions of facts.
MR JACKSON: Yes. Your Honour, all we would seek to say was to - could I say two things. The first is all I was going to say about the matter of pilfering was just to take your Honours to the three references which your Honours will see in the concluding words of paragraph 3 on page 12 of our submissions, which just show the judge’s finding about it, and the two passages in volume 2 at pages 238 and 289 where the appellants indicated their knowledge of this. Now, your Honour, that is the first thing. If the Court is of the view, if I could perhaps put it this way, that the test provided for by clause 11(a) is one which involves the looking of the whole of the facts to determine - and without going to the detail, your Honour, of it more than this - whether in the circumstances the case was one where the termination satisfied the test then we would submit that it would be appropriate for the Court to enter on the question whether the substantive finding should have been set aside because that would bring the matter to an end, in our submission, on that test.
However, your Honours, if your Honours take the view that these issues need to be evaluated by the Full Court in the light of a new test then, your Honours, that is no doubt a matter that the Court would remit to the Full Court but, your Honours, could I just say in relation to it that we would submit, if I may say so with respect, that it should be made apparent in the Court’s reasons that the whole question, subject to the Court’s views on the matter, is one which has to be dealt with, in effect, by the court afresh. I do not mean, your Honours, afresh as to, of course, matters that it would not be appropriate for the court to deal with afresh.
BRENNAN CJ: You mean they should have another look at it.
MR JACKSON: Have another look at it, your Honour; not bound by previous views as to questions of whether particular aspects were or were not fair or unfair.
GUMMOW J: Or there may be some difficulty with composition of the Full Court too, of course.
MR JACKSON: Yes.
TOOHEY J: Well, on your approach that would not matter, would it, in the sense that you, as I understand you, are not suggesting that the matter go back on the basis that the court simply take any further argument and evidence but that it look at the matter de novo.
MR JACKSON: Yes, your Honour. Could I indicate more particularly what we would be concerned about: Your Honours will see from the matters set out in our submission dealing with the cross-appeal, that the members of the Full Court, in effect, parsed and analysed ‑ if I can use that expression ‑ the conduct that had been engaged in prior to the termination and looked at particular things of that and said, “This was bad, this was bad, this was bad”, and we have set out our submissions in relation to the correctness of those conclusions. We would not wish to be in a situation where, on the further argument, the Full Court would be bound by each of those conclusions in the sense that we would not be able to reagitate those issues.
McHUGH J: Is there any necessity for this case to go back to the same Bench? It would probably be more efficient if it went back to a Bench of three.
MR JACKSON: Indeed, your Honour, yes.
McHUGH J: However - - -
MR JACKSON: Your Honour does not see any particular necessity?
TOOHEY J: Unfortunately, from what we have been told, it appears that most of the time before the Full Court was occupied on precisely this question so that you are looking down the barrel of another three or four days hearing before the Full Court unless the matter can be trimmed in some way.
MR JACKSON: Well, your Honour, one would hope so. It would be pretty difficult, in a sense, to see how an appeal could take as long as that if one is just dealing with those questions.
BRENNAN CJ: Depends how long the video runs for, perhaps, Mr Jackson.
MR JACKSON: How many times the video is run, your Honour.
McHUGH J: Three of them.
MR JACKSON: Three. Your Honour, those are our submissions.
BRENNAN CJ: Mr Gross?
MR GROSS: Your Honour, I think the Chief Justice asked a question concerning the nature of clause 11(a) and posed the problem of where you have a person who ultimately turns out to be innocent, whether that would raise a situation where the termination was harsh although matters looked reasonable to the employer in terminating the employee at the time. That is dealt with by Chief Justice Black, your Honours, at 783 point 16 to 784 point 07 and perhaps I will just briefly read it:
In the present case - - -
BRENNAN CJ: We can read it for ourselves.
MR GROSS: Thank you. Now, the second matter: my learned friend suggested that, in effect, the majority judgments had treated procedural and substantive aspects as being separate compartments and determined the case solely on a procedural basis. Your Honours, that is not so.
I would like to take your Honours to page 838, if I might. At 838, line 6, it is said:
It is well established that, for present purposes where a dismissal is based upon alleged misconduct, the employer will not breach the Award if it is demonstrated that, in so far as it was within the employer’s power before dismissal, the employer conducted as full and extensive an investigation into all of the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances -
The words “as was reasonable in the circumstances” is, in fact, explained in those further texts which complete the paragraph. Just to demonstrate the matters dealt with in this shorthand fashion, might we hand up relevant extracts from Mr Anderman’s book and Mr Collins’ book. We have not been able to get to the Rubenstein book. We have pinned the references together.
BRENNAN CJ: Thank you.
MR GROSS: At page 118 of Mr Anderman’s book, at the bottom of the heading “A REASONABLE INVESTIGATION”:
An employer is required by s57(3) to show that he made a reasonably diligent investigation. This is not an absolute obligation.
I will not repeat the terms of 57(3), which is a very, very large provision. At the top of page 119, after the quote:
In practice, therefore, to show that an inquiry was not reasonable an employee must establish two points. First, that the employer’s method of investigation was inadequate in some respect, and second, that the inadequate method of investigation resulted in a failure to find out information which could have affected the result.
The first heading, “(a) An unreasonable method of investigation” is then explored. Could I have your Honours pass over to page 120 at the commencement of the paragraph at point 2:
Yet the duty to hold a hearing, as indeed the duty to investigate the evidence, is not an absolute obligation. As the EAT remarked in Gray Dunn & Co Ltd v Edwards, ‘it is now well settled that common sense places limits upon the degree of investigation required of an employer who is seized of information which points strongly towards the commission of a disciplinary offence which merits dismissal’. Thus, in a case where an employee is charged by the police with theft and has been caught with the employer’s property and makes no protestations of innocence this may entitle the employer to dismiss without further investigation.
That leads to the second heading, “(b) The effect of the faulty method”. If I can just read the next paragraph ‑ ‑ ‑
TOOHEY J: Can I just ask you this, Mr Gross. In order to determine how relevant this is, do we not need to know what section 57(3) says?
MR GROSS: Your Honours, we do have the text. Perhaps I can get that photocopied.
BRENNAN CJ: Your junior can attend to that while you are proceeding.
MR GROSS: If we can, your Honour. We have one copy; we do not have multiple copies, I am sorry. Under the heading (b), “The effect of the faulty method”:
It is not enough for an employee to show that the employer’s enquiry was inadequate in a formalistic sense. He must be able to show that the inadequacy of the employer’s investigation was such that it precluded the employer from finding out information of which a reasonable employer should have known and which might reasonably have been expected to affect the result. In other words an employee must be able to show, not only that there was a failure to pursue a careful inquiry, but also that there was a reasonable possibility, looked at from the time of dismissal, that the omission would have affected the result.
There are further qualifications, your Honours, which appear in Mr Collins’ text.
GUMMOW J: But, Mr Gross, is not the crucial point of the joint judgment at page 841, line 16? Their Honours do seem to be drawing this dichotomy in a procedural sense. That suffuses what has gone before, as I would have thought.
MR GROSS: Your Honour, that is a conclusion which is in the context of two matters: one, a finding of procedural defect in relation to exploring what Mr Harvey had to say and, secondly, the delay in, as it were, bringing the matter to the attention of the appellants. That conclusion expressed means this, that because of these procedural flaws, the question of whether or not the dismissal was unfair or harsh, et cetera, both procedurally and substantively, turns on the procedural conclusions, because the understanding of what the substantive truth of the matter is has been affected by those procedural flaws.
McHUGH J: What do you mean by that? As I said to you yesterday, if the employee admits in the witness‑box he had been pilfering his fellow employees’ property, nobody, including his fellow employees, would seem to me to regard it as harsh or unreasonable that he was dismissed merely because the employer failed to ask somebody some question about the circumstances.
MR GROSS: Your Honour, we accept that and the passage I was about to take your Honours to very briefly in Collins makes those points quite emphatically, we accept that point.
BRENNAN CJ: Well then, look at the bottom of page 841 and the top of page 842 where their Honours expressly decline to examine the issue that is mentioned there.
MR GROSS: What their Honours said there was that it was unnecessary to deal with that further argument and, in other words, the procedural deficiencies were such that there was a breach found in the overall context.
BRENNAN CJ: That is the whole point. What if, on reviewing the trial judge’s findings, it was correct to say that these gentlemen were involved in pilfering. The procedure was defective but, nonetheless, looking at the evidence that is available now they were involved in pilfering.
MR GROSS: The Full Bench appears to have taken a different view from Justice Hill in relation to the matter and rather than drawing that conclusion of involvement felt that the matter was, in effect, incapable of resolution by them and if I take your Honours to those passages that will be clear.
BRENNAN CJ: But why? I mean, the trial judge made a finding that they were involved in pilfering. If that finding stood, what should the conclusion of the case have been given, all the defects of procedure?
MR GROSS: Your Honours, the award would still have been breached but obviously that finding by his Honour would influence the determination of damages and bear in mind that ‑ ‑ ‑
BRENNAN CJ: Why do you say that it would have been breached? That is the very point, is it not, whether it was breached in the sense that the dismissal, once it was found that they had been pilfering, whether or not that was harsh and unconscionable?
MR GROSS: Yes. Your Honours, we would wish to demonstrate that. In fact, the Full Bench was plainly of the view that the evidence which Justice Hill relied upon to find pilfering was not sufficient to enable them to reach the same conclusion and so, therefore, with the equivocation of the evidence, those procedural failures had an impact which required that the overall conclusion be reached that the clause was breached.
BRENNAN CJ: Do you mean they did direct their minds to the question of whether there had or had not been pilfering and came to the conclusion that Justice Hill had acted on insufficient evidence?
MR GROSS: Your Honours, they did not proceed to say that in terms but, nevertheless, it is to be readily inferred from the way in which they explained the consequences of the inadequate investigation that they felt that it was unclear what role the appellants had played in the conduct of Mr Brosnan. Can I emphasise this, there was no pilfering demonstrated by Brosnan. All one had was a suspicion that he was attempting to interfere with the bags. There was no pilfering demonstrated, nor was anything regarded as being stolen that day.
BRENNAN CJ: Unless you can demonstrate, Mr Gross, that the court directed its line to the finding of Justice Hill at to the involvement of these gentlemen in the conduct of Mr Brosnan, it is going to be very difficult for you to resist this argument.
MR GROSS: Yes. Well, your Honours, can I then do that if I may. Your Honours, at page 832 in the judgment of Justices Beaumont and Heerey - I am very mindful that their judgments are not only majority judgments, but the ones which were regarded as basically describing the correct position so far as the other judges were concerned. At 832 the appellants’ arguments on the appeal are set out and your Honours will see it at line 5:
The video evidence did not warrant the dismissal of either appellant ‑
I will not read that paragraph aloud, your Honours.
BRENNAN CJ: Yes.
MR GROSS: Yes, And then at line 19:
The dismissal procedure was unfair -
and that in effect summarises the matters in respect of which judgments have been given by the Full Bench and then at 833, line 20:
It was not open to the trial Judge to rely on his own observations with respect to the credit of the appellant and of Mr. Brosnan -
Now, in dealing with the appeal those judges at 834 to 835 dealt with the general meaning of harsh, unjust or unreasonable in clause 11(a), recited the passage from Gorgevski, which is the passage Justice Hill referred to, and if your Honours would go to the passage at 835 at the top of the page your Honours will see that the test involves looking at a number of facts which are not just procedural, but there is a reference, for example, to the circumstances which led to the decision to dismiss and that is 835 line 10 and then at line 15:
Other matters have to be considered such as the gravity of the employee’s misconduct.”
And they agree with that observation. Then, your Honours, they then apply those tests to the present circumstances and your Honours will see first of all they are dealing with the failure to interview Mr Harvey, that is at the bottom of page 835, and then at the top of page 836, line 4:
Mr. Harvey was capable of throwing light on what actually happened then and, in particular, on what role, if any, the appellants had in the incident.
And we emphasise “what role if any”. Now that does not stand well with Justice Hill’s decision. Just moving on down, your Honours, to page 837 line 11 what is said is that:
As has been said, as a member of the team, Mr Harvey must have been in a position to provide some relevant information on the question whether the conduct of the appellant warranted their summary dismissal.
We emphasise “relevant information”.
In failing to pursue this potential source of information in a context where serious doubts had been raised -
we emphasise “serious doubts” -
about what actually happened on the day -
The respondent acted, in effect, unreasonably. And then further on down at line 20:
It is one thing for an employer to decline to pursue a line of inquiry where there exists other sources of reliable information. It is another thing, as here, to fail to speak to a witness present on the occasion, especially when any wrongdoing has been denied by others.
So that that distinction between lines 20 and 24 is between a situation where there are other sources of reliable information, that is other proof ‑ ‑ ‑
BRENNAN CJ: But we are back again to what was done by way of procedure.
MR GROSS: With respect, no.
McHUGH J: At page 835 at line 25 they said:
In our opinion, the way in which the respondent went about terminating the employment of the appellants should have led his Honour to conclude -
And at the bottom of page 837 line 25:
On this ground alone -
GUMMOW J: The judgment is divided up very carefully into sections and subsections. I do not think you are in the right subsection. You are in the procedure subsection.
MR GROSS: Obviously the way they dealt with the matter is by concentrating on the procedural aspects but on the other hand that is in the context of those passages to which I have already referred your Honours that, in fact, one does not have to take reasonable steps if, in fact, the guilt is clearly established. On the other hand, one plainly in determining an overall conclusion under clause 11(a) takes into account not only the procedural deficiencies but also the substantive evidence of guilt. Unfortunately they did not articulate that in those terms but we would submit it would be extraordinary, having had four days of argument on the point, to put that entirely aside or alternatively to put aside an acceptance by Justice Hill of the substantive involvement of these men in the conduct of Brosnan.
McHUGH J: It is not extraordinary at all. If their Honours took the view that there is a procedural substantive dimension to this clause. So that, if you breach procedural dimension that is the end of the game. And that is obviously what they did. I would have thought it was as plain as a pikestaff.
MR GROSS: Your Honours, their Honours did not formulate the matter on this basis that if there is procedural failing, therefore there must be a breach of the clause; rather, in the context of what was plainly disputed facts and equivocal information, this procedural failure breached the clause.
McHUGH J: But their Honours said, at 841, line 16:
For these reasons we are of the view that a breach of cl.11(a) has been established because, in a procedural sense, the respondent acted unreasonably.
Now, what could be plainer than that, Mr Gross?
MR GROSS: But, your Honours, that falls short of saying that a procedural failure alone, despite guilt, is sufficient in all cases to warrant a finding of breach of the clause.
McHUGH J: That is not the issue that you were debating.
BRENNAN CJ: Mr Gross, if you maintain that the Court of Appeal has already decided in your favour the issue of fact that was found against you, in terms of involvement in Mr Brosnan’s activities, by Justice Hill, take us to the best sentence which you can find here.
MR GROSS: Your Honour, they did not determine it in our favour; rather, they took into account the fact that the information was equivocal but, having done so, resolved the matter by reference to the procedural failures, particularly having regard to the fact that those procedural failures had an effect on the capacity of anyone, including a court, to determine the substantive truth.
BRENNAN CJ: Well?
MR GROSS: In other words there was a contaminating effect and they appear to have resolved the matter in that way.
BRENNAN CJ: Are you saying that they said it was unnecessary to determine whether or not Justice Hill was right?
MR GROSS: Well, your Honour, they did not say that but, plainly, that is a fair inference from their judgment.
BRENNAN CJ: Well, then, is that correct? Because if Justice Hill was right, then what is the conclusion of this case?
MR GROSS: Well, your Honours, put in that way, one still has the procedural failure which amounts to a breach of the clause.
BRENNAN CJ: I understand that. I understand the procedural failure. But, can you answer my question?
MR GROSS: Well, the matter still has to be remitted back for decision in relation to the outstanding matters and the outstanding matters, for example in relation to the question of penalty, would include the question of whether there is substantive proof of the matters Justice Hill referred to.
BRENNAN CJ: You do not seem to address the question of what the correct result in terms of conviction should be, if Justice Hill is right.
MR GROSS: Well, your Honours, the conviction should stand because the conclusion reached by his Honour is one which is arrived at retrospectively, taking into account improper matters including the demeanour of the appellants. And, your Honours, we would submit that has to be taken into account. Your Honours, I think that completes my submissions, unless there is some further matter.
BRENNAN CJ: Thank you, Mr Gross. The Court will consider its decision in this matter.
AT 12.00 PM THE MATTER WAS ADJOURNED
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