Chmiel v Alcohol and Drug Foundation - Queensland
[2010] QDC 497
•23 December 2010
DISTRICT COURT OF QUEENSLAND
CITATION:
Chmiel & Anor v Alcohol and Drug Foundation – Queensland [2010] QDC 497
PARTIES:
CHRISTOPHER JOSEPH CHMIEL
First plaintiff
AND
LESLEY MARIANNE CLARKSON
Second plaintiff
AND
ALCOHOL AND DRUG FOUNDATION – QUEENSLAND
Defendant
FILE NO/S:
BD1257/06
DIVISION:
PROCEEDING:
Trial
ORIGINATING COURT:
District Court, Brisbane
DELIVERED ON:
23 December 2010
DELIVERED AT:
Brisbane
HEARING DATE:
31 August-4 September 2009, 26 April, 15 June 2010
JUDGE:
McGill DCJ
ORDER:
Judgment that the defendant pay the first plaintiff $92,601.73 and pay the second plaintiff $64,539.78. The defendant’s counterclaim is dismissed. Order the defendant pay the plaintiffs’ costs of and incidental to the counterclaim to be assessed.
CATCHWORDS:
EMPLOYMENT LAW – Contract of service – industrial award – remuneration – entitlements – termination of employment – overtime – allowances – annual leave – long service leave
RESTITUTION – Money paid by mistake – whether relevant mistake – whether voluntary payment in response to bona fide demand – payments not recoverable.
COSTS – Statutory provision – whether applicable – effect of – whether unreasonable act.
Workplace Relations Act 1996 (Cth) s 720, 824.
Australian and International Pilots Association v Qantas Airways Ltd [2007] FCA 879 – cited.
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 – cited.
Bostik (Australia) Pty Ltd v Gorgevski (No. 2) (1992) 41 IR 471 – applied.
CFMEU v Clarke [2008] FCAFC 143 – applied.
Commissioner of Stamp Duties (NSW) v Atwill (1972) 126 CLR 665 – considered.
D.P. Excavations and Haulage Pty Ltd v Commissioner of Taxation (2005) 190 FLR 198 – cited.
Dowling v Fairfax Media Publications Pty Ltd [2009] FCA 339 – cited.
Fryer v Systems Services (1995) 60 IR 68 – applied.
Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] FCAFC 120 – cited.
Gordon v Carroll (1975) 27 FLR 129 – cited.
Gregory v Philip Morris Ltd (1988) 24 IR 307 – cited.
Griggs v Noris Group of Companies (2006) 94 SASR 126 – applied.
Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 – applied.
Hill v CA Parsons & Co Ltd [1972] Ch 305 – cited.
Larner v London City Council [1949] 2 KB 683 – distinguished.
Macauslane v Fisher & Paykel Finance Pty Ltd [2003] 1 Qd R 503 – applied.
Western Australia v Wilsmore (1982) 149 CLR 79 – considered.COUNSEL:
A.J. See for the plaintiffs
M.P. Amerina for the defendant
SOLICITORS:
Stevens and Tozer for the plaintiffs
Hall Payne Lawyers for the defendant
The plaintiffs were formerly employed by the defendant, and claim that they are owed money payable either pursuant to their contracts of employment or under relevant industrial awards. There is a counterclaim for the recovery of what is alleged to have been an overpayment on the part of the defendant. The pleadings on which the matter went to trial were a further amended statement of claim filed 4 August 2008, an amended defence and counterclaim filed 20 March 2009, and a reply and answer filed 17 June 2006. However, on 31 August 2009 I gave leave to further amend the statement of claim, and a further amended statement of claim pursuant to that leave was filed in court that day. There was no consequential amendment to the defence.
Under the pleadings it is admitted that the defendant is capable of being sued and that the plaintiffs were employed by the defendant at all material times. It was further admitted that prior to 5 July 2001 the plaintiffs’ employment was governed by the provisions of the Social and Community Services (Queensland) Award 1996, and on and from the following day it was governed by the provisions of the Social and Community Services (Queensland) Award 2001, both awards made under the Workplace Relations Act 1996 (Cth). It followed that the defendant was bound by those two Awards. It was further admitted that at material times the first plaintiff’s position was classified as Level 8 under the classification structures contained in each of the Awards, and the second plaintiff’s position was classified as Level 7.
The first plaintiff
The first plaintiff has qualifications in commerce and business administration: p 38. He worked for a bank, and then a range of other businesses as an accountant, a marketing manager and a general manager before joining the defendant as a marketing director in June 1992: p 39.[1] During 1993 he was promoted to the position of Interlock State Director; Interlock is the name of a business operated by the defendant: p 44.[2] Neither side produced a copy of the new letter of appointment, but the first plaintiff said that it was very similar to Exhibit 5, except that it provided for an increase in salary: p 49.
[1]His initial contract of employment is Exhibit 5.
[2]The job description for that position is Exhibit 36.
I should explain the Interlock business. Part of what the defendant did was operate what was for practical purposes a business of providing counselling services to employees of a wide range of entities, under contracts with the respective employers, so that the employers could provide counselling services to their employees in circumstances where that might be thought appropriate.[3] For example, employees might be entitled to take advantage of counselling services if they had personal problems, or counselling services might be provided in the event of something traumatic happening to employees in the course of their employment. The counselling work was mostly done by counsellors employed on a casual basis, who charged for the actual hours worked. Because of the possibility of counselling being provided in response to particular traumatic events, the defendant had arrangements in place so that counsellors were available if required on short notice at any time of the day or night.[4]
[3]See for, example, Exhibit 6 p 6. See also Aldred pp 39-40.
[4]See Exhibit 12.
The first plaintiff said that in about mid 1998 he was approached to accept the position of general manager of the defendant, but he was reluctant to accept the position and he was not appointed to the position until July 1999: p 18.[5] There was a further letter of appointment,[6] but again neither side produced a copy of that letter; the first plaintiff said that his letter was almost identical to Exhibit 11, the later letter of appointment of the second plaintiff, when she was appointed Interlock South Queensland Manager in 2002: p 24. There was no evidence to contradict this proposition, and I accept that there was a written contract of employment between the first plaintiff and the defendant in accordance with this evidence.
[5]For his responsibilities in that position, see p 21.
[6]Aldred p 44.
Exhibit 11 was in the form of a letter which, omitting formal parts, stated as follows:
“On behalf of the Alcohol and Drug Foundation – Queensland, I am pleased to offer you appointment to the Foundation as Interlock Manager South Queensland on the conditions set out below:
Start Date:Monday 13 January 2003 with a probation period of three (3) months.
Salary:Your salary is $60,000 p.a. and the position is classified as level 7 of the Social and Community Services (SACS) award. Salaries are paid fortnightly and reviews take place annually.
Superannuation: The Foundation contributes an amount equivalent to 9% of your salary towards the superannuation fund.
Hours:Office hours are from 8.30a.m. to 5.00p.m. Monday to Friday with a rostered day off every four weeks. However, because of the nature of the work you can anticipate working outside these hours from time to time.
Annual Leave: Annual leave entitlement is twenty (20) days per annum. An annual leave loading of 17.5% applies.
Sick Leave:Sick leave entitlement is ten (10) days per annum in accordance with the SACS award is required for any period of absence over two (2) days.
Termination of
Termination of employment is in accordance
with the SACS award.
Employment:Other
The position is covered by the Social and
Community Services (SACS) Award, a copy of which is available in the office for your information.
Conditions:Please sign the attached copy of this letter in the place provided and return to me as an indication of your acceptance of the conditions of employment.”
The plaintiff said that his start date was different, the salary was different, the level of the SACS Award was Level 8 but otherwise his letter of appointment was in the same terms: p 27. There were no other material changes in the first plaintiff’s position until his employment came to an end.
The second plaintiff
The second plaintiff is a qualified psychologist who became interested in the sort of work provided by Interlock, and began to work as a part-time counsellor with Interlock in the early 1990s: p 82. She went on to become a full-time counsellor, and subsequently a senior counsellor in March 1995 when the person previously in that position retired: p 84. In that position the second plaintiff counselled clients, but also supervised the work of other counsellors within Interlock. She was also involved in setting up a program used by Logan House, a residential facility for people with longstanding alcohol and drug problems operated by the defendant, and developing a pre-release program for prisons for which the defendant had obtained a grant from the government: pp 86-8. There were other similar duties taken on, all at the request of the Chief Executive Officer of the defendant, Mr Aldred. In 1999 she became senior counsellor and clinical director: p 89. Finally, in January 2003 she was appointed to the position of Interlock Manager, South Queensland: Exhibit 11.
Apart from their work relationship, the plaintiffs, after meeting at work, married in 1998.[7]
[7]Chmiel p 83.
Date of termination of employment
On the pleadings there is a dispute as to how the plaintiffs’ employment came to an end. The resolution of this turns on the effect of an exchange of correspondence between the plaintiffs and the defendant in the context in which it occurred. The plaintiffs allege that the effect of that was that their employment was terminated on 20 April 2005 without notice; the defendant’s case was that the plaintiffs’ resigned their employment with effect from 20 April 2005. The determination of the date on which the plaintiffs’ employment terminated is obviously relevant.
I do not consider that the effect of the pleadings is that it is common ground that the employment terminated on 20 April 2005. The plaintiffs alleged that they were in effect summarily dismissed on that day, after they had previously given notice of termination of their employment on 15 July 2005. That was denied by the defendant. The defendant alleged that the effect of the correspondence was that the plaintiffs resigned as at 20 April 2005, but that was disputed by the plaintiffs. If the plaintiffs were entitled to terminate their employment on 15 July 2005 by notice given on 23 March 2005 (which in itself was not disputed by the defendant), and neither the plaintiffs’ nor the defendant’s allegation as to the effect of what happened on 20 April 2005 was made out, the result is that the plaintiffs’ employment came to an end on 15 July 2005.[8]
[8]There was no alternative allegation that the employment was terminated in some other way.
The second plaintiff’s employment contract expressly provided in relation to termination of employment that it was to be in accordance with the Social and Community Services Award: Exhibit 11. As I have said, I accept there was a similar condition in the employment contract for the first plaintiff. In any event, the award operated according to its terms. The relevant award is Exhibit 4, the 2001 Award as varied. Termination of employment is governed by Clause 16 within Part 2 of that award. Clause 16.1.2 provides that, for employees employed in Level 6, 7 and 8, at least four weeks’ notice shall be given, though Clause 16.1.3 provides that employees over 45 years of age at the time of giving the notice with not less than two years’ continuous service (which applied to both plaintiffs) shall receive an additional week’s notice.
The minimum period of notice for the defendant to terminate the plaintiffs’ employment under Clause 16 was therefore five weeks. There was an exception in the case of conduct which justified instant dismissal: Clause 16.1.6. Clause 16.2.1 provides that “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.” Hence the plaintiffs were entitled to terminate their employment by giving at least four weeks’ notice to the defendant. The period of notice in fact given by the plaintiffs was in excess of three months, which was more than sufficient notice. Accordingly, it satisfied the requirements of the award, and therefore was effective to terminate the employment on 15 July 2005, unless the employment had previously been terminated.[9]
[9]See Fryer v Systems Services (1995) 60 IR 68 at 87-88 per Gray J; Griggs v Noris Group of Companies (2006) 94 SASR 126 at 146; Hill v CA Parsons & Co Ltd [1972] Ch 305 at 313-4.
There was some background to the circumstances of the termination which provides a context in which to interpret the correspondence between the parties at the relevant time.
The first plaintiff had in early 2005 been involved in investigating the conduct of an employee of the defendant working at Logan House: p 43. As a result of that investigation, he recommended that the employee’s employment be terminated and that recommendation was accepted by the Board. In the course of this investigation, it appeared to him that the manager of Logan House had been aware of what had been going on and had done nothing about it, and the first plaintiff said that he was asked by the president of the defendant to continue his investigation into the role of the manager of Logan House. At about the same time, he said that there was a complaint from another employee at Logan House that she was being victimised because she had provided information which led to the dismissal of the employee who was dismissed. Before he completed this investigation the plaintiff said that Mr Aldred became involved in the investigation, and wanted to wind it up on a particular basis, which the first plaintiff was not happy with, and subsequently Mr Aldred took the investigation out of his hands: p 44.
The first defendant received a memo dated 18 March 2005 from Mr Aldred which among other things relieved him of management responsibility for Logan House: Exhibit 16. Mr Aldred also took over responsibility for Human Resource Management. The memo also foreshadowed the appointment of a clinical director. There was an extraordinary meeting of the Board of Directors of the defendant on 18 March 2005: Exhibit 9. This followed difficulties which had arisen between the president of the defendant, Mr Fox, and Mr Aldred, as a result of which Mr Aldred came to be stood down; Mr Aldred said that he was stood down by Mr Fox, whereas Mr Fox said that Mr Aldred stood himself down. At that meeting the Board carried a resolution of confidence in Mr Aldred as CEO, and removed Mr Fox from the presidency; Mr Fox then resigned as a director of the defendant.
There was a further Board meeting on 22 March 2005, at the end of which the first plaintiff announced that the plaintiffs would be retiring: Exhibit 9. On 23 March 2005 they signed a notice of retirement letter which was given to Mr Aldred: Exhibit 15. That letter proposed that they continue to work for the next four weeks with the last working day being 20 April 2005. It noted that they had not taken any rostered days off that year and planned to take four days as rostered days off: 24 and 29 March, and 4 and 11 April. It said they had substantial amounts of outstanding leave and proposed to take annual leave from 21 April 2005 to 15 July 2005 which would be their last day of employment. They sought payment of outstanding annual and long service leave and other benefits on that day.
In accordance with the proposal in the letter of 23 March the plaintiffs did not work on 24 March; the following days were Easter. When they returned to work on 29 March they were called into Mr Aldred’s office and each given a letter which in the case of the first plaintiff became Exhibit 17. The letter referred to “your resignation of 23 March 2005 which is accepted by the ADFQ.”[10] It continued:
“I note your proposal for separation from the organisation, and save and except for reserving the ADFQ’s rights, I have no issue with advising the Board to accept that proposal in respect of timing. It is my decision, however, and one in which I am supported by the Board that, given the reasons you have cited for your resignation and that you consider that you no longer have the trust of the staff, it is appropriate that you not return to work. In reaching this decision, I have taken into account our long and fruitful working relationship. As you would also understand, I do not wish to place you in a position of embarrassment.[11] In these circumstances, I have decided to grant, again subject to a full reservation of the ADFQ’s rights, special leave from the present time up to and including 20 April 2005. I request that you now return the following [a list of various specific property followed including ‘any other property of the ADFQ whatsoever’ which made the rest of the list unnecessary. The letter then advised that he had arranged for a representative of the defendant’s solicitors to attend at their residence to receive the property from them.].”
[10]There is nothing in the award to indicate that the employer has the option of accepting or rejecting a resignation; under the award the resignation took effect regardless of the views of the employer.
[11]According to Mr Aldred that statement was not true: the exclusion of them from the premises was undertaken because of a concern that the plaintiffs might sabotage the records and other property of the defendant: p 95.
After both plaintiffs had been given these letters they were escorted from the premises by the solicitor who drove them home in the defendant’s vehicle which they had been using, collected some items of property which they had at home, and departed.[12] There was no further communication between the parties until the plaintiffs received letters from the defendant’s solicitors dated 29 April 2005: Exhibit 18. The first letter referred to Clause 28 of the award and the letter continued with an assertion that the plaintiffs were not entitled pursuant to the award to accrue rostered days off. It was asserted that neither the CEO nor the Board were aware that the first plaintiff was purportedly accruing untaken RDOs and taking them as part of his annual leave or in conjunction with annual leave and that this had not been authorised by either of them. The letter continued that the purported accruing of such RDOs was without appropriate consent and was unlawful and that the taking of them was also unlawful and that the second plaintiff had also unlawfully accrued and taken RDOs, but the first plaintiff did not have authority to authorise the accruing or taking of accrued RDOs by the second plaintiff. The letter then continued that it was calculated that the first plaintiff had been overpaid an amount equivalent to 409 hours and the second plaintiff an amount equivalent to 367.34 hours, and called upon them to show cause within three working days as to why the foundation should not recoup these monies owed from monies that would otherwise be paid to them. There was a separate letter to the second plaintiff which incorporated without repeating it what was said to the first plaintiff.[13]
[12]Chmiel p 48; Clarkson p 107. The defendant was entitled to waive the plaintiffs’ obligation to work during the period of notice: Thomson “The Meaning of Dismissal” (1973) 89 LQR 331 at 335.
[13]What I have said states the substance of the letters, without conveying their remarkably aggressive style.
Although these letters were dated 29 April, the first plaintiff said (and I accept) that they were not actually delivered until 4 May: p 48. Leaving aside the deficiencies in content in the letters, the result of this correspondence was to cause the plaintiffs to consult the Department of Industrial Affairs, where they received advice. As a result they sent a reply by email dated 4 May 2005: Exhibit 19. For present purposes, the significance of that letter is simply that nothing in it could possibly amount to a resignation immediately, nor could it amount to a repudiation of the contract of employment; the letter restated the plaintiffs’ position that they were on annual leave which was to continue until 15 July 2005. They, however, asserted that the time taken in responding to the letter ought not to have come out of their annual leave and submitted a timesheet for three hours in respect of that time.
Two days later, on 6 May, each plaintiff received a further document from the defendant. The first document is headed “Termination Pay for Chmiel”, gave a commencement date of 1 June 1992 and then said on the next line “calculated up to 20/04/2005” : Exhibit 20. It then gave an hourly rate of $46.18, and a calculation of 60.8 hours for the fortnight ended 23 April 2005 with an amount of $2,807.74, an annual leave calculation of 716.25 hours up to 20 April 2005 and long service leave calculation of 421.21 hours up to that date, from which was deducted 1,124.8 hours as “RDOs taken in lieu of annual leave from June 1993 to April 2005, 12 days per year at 7.6 hours”. This produced a balance owing of 12.71 hours, which when multiplied by $46.18 produced a figure of $586.95. PAYG of $820.69 was deducted, with a net amount payable to the first plaintiff of $2,574.” In fact, a payment of that amount was made into his bank account at about that time. There was a similar letter in respect of the second plaintiff: Exhibit 31. Nothing else of relevance passed between the parties prior to 15 July 2005.
In light of that evidence, it is difficult to see why anybody should have thought that anything happened on 20 April 2005 which could have had the effect of bringing the employment to an end. Absolutely nothing happened on 20 April 2005. The plaintiffs were not at work, having been told in no uncertain terms that they were not welcome there and escorted from the premises; they were never asked to return. The fact that they were subsequently paid a termination payment which was calculated as at 20 April 2005 is neither here nor there; nothing which was done some time in May could have had the effect of terminating their employment as at 20 April 2005. The only way consistently with the award that the employment could have been terminated as at 20 April 2005 was if the defendant had given notice of such termination five weeks earlier, but nothing was relied on as constituting such notice, and nothing emerged in the course of the evidence which could constitute such notice. It was not pleaded or submitted that there was any conduct on the part of either plaintiff warranting summary dismissal, and certainly nothing emerged in the course of the evidence.
Plainly therefore the employment of the plaintiffs was not terminated by the defendant on 20 April 2005. As well there was no resignation by the plaintiffs as at 20 April 2005 as alleged by the defendant. Indeed, in the light of the evidence at the trial, the proposition that there was such a resignation is so absurd that I do not need to provide any further reasoning in relation to that point. It was suggested during argument by counsel for the defendant that the pleadings, or perhaps the conduct of the parties after May 2005, was such that the employment contract was abandoned as at 20 April 2005. It is possible for a contract to be abandoned by both parties to it, but if the contract has been validly terminated in accordance with its internal mechanism for termination, or by force of an industrial award, nothing that happens thereafter could amount to abandonment of the contract by the parties. There would be nothing left to abandon. There was nothing prior to 15 July 2005 which amounted to abandonment of it by the plaintiffs or either of them.
In my opinion, notwithstanding the allegations in the pleadings, the evidence in the present case points unambiguously to a conclusion that the plaintiffs’ employment terminated on 15 July 2005 pursuant to their contracts and to the applicable industrial award as a result of the notice which they gave. It is therefore necessary for all of the relevant calculations with reference to the termination of their employment to proceed on that basis.
Overtime
There was no dispute that the first and second plaintiffs were paid over award payments and that it was a term of their contracts of employment that the plaintiffs would not be paid overtime. In these circumstances, there is no contractual right to be paid overtime, but if on the true construction of the applicable Award and in the events that have happened an entitlement to be paid overtime arises in accordance with the Award, the plaintiffs have an entitlement to be paid that overtime. The Awards provided that there would not be an entitlement to overtime if the overall terms and conditions of an employee were more favourable than the provisions of the Award as a whole. The plaintiffs submitted that that requirement was not satisfied; the defendant’s case was that it was, so that there was no entitlement to payment of overtime under the Award. The defendant also disputed that the plaintiffs worked the hours that they claimed to have worked beyond normal working hours.
The 1996 Award (Exhibit 3) dealt with overtime in Clause 38. The basic entitlement was that provided in Clause 38.2, that all time worked in excess of ordinary working hours should be deemed to be overtime which (except in the case of shift workers) should be paid at a rate of time and a half for the first three hours and double time thereafter. Clause 38.6 required each employer to establish a procedure for approval of overtime, and Clause 38.7 provided that overtime shall only be worked with the prior approval of the employer, provided that the above procedure may allow for employees to work overtime without specific prior approval in defined emergency situations.
However, Clause 3.4 provided:
“The conditions of this award, except Part 4, shall apply to employees classified at Levels 6, 7 and 8, provided that the overall terms and conditions of employment for such employees are no less favourable than the provisions of this award as a whole.”
The plaintiffs say that the overall terms and conditions of employment of the first and second plaintiffs were less favourable than the terms and conditions of employment that the first and second plaintiffs were otherwise entitled to receive under the provisions of the award as a whole. Because of this, Clause 3.4 of the award was said not to apply so as to deprive them of the benefit of the overtime provisions in Part 4 of the 1996 Award. Accordingly, the plaintiffs are entitled to be paid in accordance with more beneficial provisions than the 1996 Award, and in due course the 2001 award. The structure and arrangement of the 2001 Award was similar. Overtime was provided for in Clause 31, with Clause 31.2 similar to Clause 38.2 of the previous award. Again, Clause 31 was in Part 4, and Clause 3.3 provided (Exhibit 4):
“The conditions of this award, except Part 4,[14] shall apply to employees classified at Levels 6, 7 and 8, provided the overall terms and conditions of employment for such employees are no less favourable than the provisions for this award as a whole.”
[14]On 29 March 2004 the Award was amended to insert the words “and Clauses 26.5, 26.6 and 26.9” after the expression “Part 4”, with effect from 6 July 2001, when the 2001 Award took effect: Exhibit 4. These clauses dealt with overtime meal allowances, sleepovers and on call allowances, which in the 1996 Award were covered by Clause 38.
Given that the first plaintiff was employed on Level 8 and the second plaintiff on Level 7, on the face of it this clause applied, so that the starting point for each of the awards is that the award applies to such employees except Part 4. The difficulty is as to the effect of the words in the clause commencing with the word “provided”. The plaintiffs’ submission is that if the plaintiffs were better off under the award as a whole, that is including the provisions of Part 4, then they were under the terms and conditions of their employment, they were entitled to the benefit of the award. Presumably the clause was not intended to mean that Part 4 did not apply to these employees unless they would be better off if it did, so there must be some other relevant comparison.
The concept of a “no less favourable” clause or provision is not difficult to understand, but such provision ordinarily applies in circumstances where there is no difficulty in making the comparison between the particular state of affairs to be subject to the “no less favourable” test and the equivalent state of affairs under the award. There is such a clause in the 1996 Award in Clause 28.1. But there are different rates of payment not just for each level, but for three or four pay points within each level, so, unless the comparison is between the provisions of the award for a particular Level 6, 7 or 8 employee with and without Part 4 applying, which does not really seem to make a lot of sense, it is not altogether clear what the hypothetical situation is with which the comparison of the actual overall terms and conditions of employment for the particular employee is to be made.
The wage rates increase from pay point to pay point, and from level to level, except that pay point 3 for Level 1 is the same as pay point 1 for Level 2. The increase from one level to the next up seems in Exhibit 3 to be ordinarily about $1,000 to $1,100, except for the increase from pay point 3 for Level 5 to pay point 1 for Level 6, which is $3,957. That supports the notion that there is some additional remuneration being provided, which could well be seen as a payment in lieu of a right to receive overtime (and other benefits in Part 4), although that does not seem to make much allowance for lost overtime. A person on Level 5 pay point 3 was required to work 38 hours a week: Clause 33. It follows that someone on pay point 3 within Level 5 who routinely worked 2.6 hours per week overtime would, because of the time and a half loading, be receiving more money than someone on pay point 1 of Level 6 regardless of how much overtime that person worked. That is not much overtime to have to work.
Indeed, given that the description of a Level 6 position in Clause 27.2 is somewhat more demanding than the description of a Level 5 position anyway, it is not clear what amount of the difference between Level 5 and Level 6 is attributable to a payment in lieu of Part 4, unless perhaps it is the difference of $2,867. Of course, it would be somewhat odd if a payment was to be received in lieu of overtime, unless the amount received by way of payment for overtime was greater than that payment, in which case one received the greater amount. That would mean that a person would effectively get payment for overtime anyway, but the employee also received a payment if no overtime, or less than the cut off figure, were worked. It is not I think an answer just to say that Clause 3.4 operates on the basis of a comparison between the actual conditions of employment of a particular employee and the provisions of the award as a whole, because the clause must surely be one which is capable of making sense in its application to someone who was paid in accordance with the requirements of the award but no more.
The defendant put in evidence the transcript of the proceedings in the Industrial Relations Commission in June 1996 when the 1996 Award was made: Exhibit 7. It was submitted and I accept that this is admissible evidence in the interpretation of the award. On that occasion the advocate of the Australian Services Union, in the course of advising the Commission about the terms of what was essentially an agreement reached between the parties as to the terms of the proposed award, said in relation to what became Clause 3.4 of the 1996 Award at pp 7-8:
“At Clause 4 … there is what we would call a unique provision in terms of social and community services award nationally in this award. It is a provision if you like that one part of the award will not apply to certain employees engaged in the industry. Those employees are deemed employees of Levels 6, 7 and 8 of the award and the part of the award that does not apply to them is Part 4. Now the general intent here is in relation to managerial employees … and the issue of overtime in particular for those employees and regularity of hours of work. It has been put to the ASU that it is difficult for the employers to accept that employees at that level with responsibilities at that level should have deemed hours of work like other employees in industry and should have the same access to overtime that other employees have. In principle the ASU does not accept that submission but we have in terms of looking at appropriate compromises and in consultation with our membership considered this issue. The arrangement that we have come up with … is such that those employees will be exempted from Part 4 of the award if you like provided that their overall terms and conditions of employment are no less favourable than the provisions of the award taken as a whole. From the ASU’s point of view this is an issue of those employees not getting overtime and not having the set range of hours that other employees have. In terms of recognising that issue I have incorporated within the award an allowance if you like into the rates of pay for employees at that level. … The rates of pay at 6, 7 and 8 incorporate an agreed allowance of 7.5% to compensate them if you like for the fact that they are not going to have regular hours and may be required to do a reasonable amount of overtime without compensation. … The ASU … are slightly nervous about this provision because of its potential for abuse … for people to be required to work extraordinary numbers of hours, receive no overtime arrangements for that. We have, however, taken the employer’s … argument to us at its face value. They have indicated that they do not believe that will be the outcome. We have put wording in there of in terms of the employee’s conditions not being less favourable than the award taken as a whole. And we would therefore like to give it a go if you like and see if the industry is responsible enough to deal with these types of flexibilities in this award. We know the employers who have been negotiating this award with have put this issue to us in good faith and we have taken on that – the value of it at that level. We will keep a close eye on that issue … and there is a review process proposed for this award that is probably one of the things that we will have a look at in that review process.”
What this comes down to is that the union wanted overtime for everybody and the employers did not want overtime for people at managerial level, and this clause reflects a compromise. That it reflects a compromise is clear enough, and like some compromises it may well have been deliberately drafted with a degree of imprecision in order to facilitate its acceptance by both sides. The fact that the union advocate referred to the union’s having some concern about exploitation of employees being required to work very large amounts of overtime at that level (which is what in practice happened to the plaintiffs) taken at face value suggests that the union advocate thought that that was still possible despite the terms of Clause 3.4, though it may be that the wording of Clause 3.4 was intended to address that concern in a way which would prevent the difficulty from arising.
It was submitted on behalf of the defendant that this passage supports the view that the intention was that Levels 6, 7 and 8 employees would just not have overtime and that they received what was described as a 7.5% loading.[15] But it does not seem to me that the passage suggests that the compromise involved simply a payment of 7.5% in return for the exclusion of Part 4. If that had been the situation, there would have been no need for the second half of Clause 3.4, but it appears the compromise included specifically the insertion of the no less favourable provision. Unfortunately the advocate did not explain how that provision was intended to operate. Overall it does seem to me that this passage supports the notion that there was to be some safeguard against large amounts of overtime being required of employees in Levels 6, 7 and 8 which was to apply in addition to the 7.5% loading. Accordingly I reject the submission that this evidence suggests that the concluding words of Clause 3.4 should in effect be interpreted as not modifying the operation of the introductory words.[16]
[15]Presumably in addition to ordinary increments within the award; I have not checked the mathematics and the figure of 7.5% does not so far as I can see appear in either Exhibit 3 or the 2001 Award; indeed the Commissioner in the transcript at the top of p 8 said that he could not find it within the documents he had either. It was made express only in an amendment to the award in march 2002: Exhibit 4.
[16]As pointed out in the submissions of the defendant, that could be achieved by reading the word “provided” as meaning “in which case”, or by reading it as “as this award has provided that”.
Counsel for the defendant relied on the decision in Commissioner of Stamp Duties (NSW) v Atwill (1972) 126 CLR 665 where the Privy Council at pp 669-70 recognised that the meaning of a provision introduced with the words “provided that” could in a particular case be the same as if the words “in which case” had been used instead, though their Lordships added that “the proviso is complementary and necessary in order to ascertain the full intention of the legislature.” They went on to refer to an earlier decision[17] where it had been said that “the latter half of it, though in form a proviso, is in substance a fresh enactment, adding to and not really qualifying that which goes before.” They went on to give other examples of provisos which were said to contain “what is called a substantive enactment”.
[17]Rhondda UDC v Taff Vale Railway Co [1909] AC 253 at 258.
The decision of the Privy Council was cited with apparent approval in Western Australia v Wilsmore (1982) 149 CLR 79 at 90 per Aickin J and at 98 per Wilson J, but the point of the decision was that in a particular case the wording of the section of the statute as a whole indicated an intention to add to rather than qualify that part of the section which was followed by the apparent proviso. In other words, notwithstanding the use of the introductory word “provided”, the clause was seen as having an independent legislative effect rather than just operating as a qualification in some way of what had gone before. That is the opposite of interpreting the provision as something which does not have any independent effect, even by qualifying that which has gone before.
Even allowing for the fact that in some circumstances words in an award could be regarded as mere surplusage, perhaps more readily than in a statute,[18] a court should still be more inclined to give a provision an award operation than not.[19] “Fractured and illogical prose may be met by a generous and liberal approach to interpretation.”[20]
[18]Federal Firefighters Union v Minister of State (ACT) (1988) 26 IR 1 at 7, 8.
[19]Nylex Industrial Products Pty Ltd v TCFUA [2007] FMCA 2084 at [90].
[20]City of Wanneroo v Holmes (1989) 30 IR 362 at 380 per French J (as his Honour then was).
I also accept that the task of interpreting an award is the search for the meaning intended by the framer of the document, bearing in mind that the document was intended to work in a practical way and formulated by someone in an industrial relations environment.[21] I also accept it is not a question of determining what would be fair or just regardless of what has been written into the award, and that ordinary or well understood words are to be accorded their ordinary or usual meaning. The difficulty in this case is not one of interpreting an expression which is clear enough on its face but seems to produce a result which strikes the court as odd; the difficulty here is one of working out just what on earth the proviso actually means. Accepting that some form of “safety net” was intended, what exactly was the safety net provided and how does it operate?
[21]Cucks v CSR Ltd (1996) 66 IR 182 at 184. I think strictly speaking the award is made by the industrial commissioner rather than the parties who prepared what was essentially an award by consent, though their common view of how it was intended to operate is I think relevant.
Ultimately, I have to give some meaning to it. I accept that it was intended to provide some form of safety net. The reference to the award as a whole was not in my view just intended to say that in some circumstances Part 4 came back in; it was intended to ensure that the safety net operated in a way which was logically consistent with the structure of the award as a whole. One of the features of the award is that by and large as one progresses up within the grading system the remuneration level increases. In these circumstances it would be odd if a person on a higher level was receiving less remuneration than a person on a lower level, or less remuneration than would have received had that person still been employed on the lower level.
There are I think logical difficulties with the notion that the section simply means that a person receives a 7.5% loading, or the benefit of the overtime provisions, whichever is the higher, because that would be no compromise at all. On the other hand, if the point of comparison is taken as a person on the top pay point of Level 5, that is the best remunerated employee under the award who is not on Level 6, 7 or 8, then the difficulties associated with establishing an objective point of reference disappear. The test becomes, is the employee better off than the employer would have been on the top pay point of Level 5 with the benefit of paid overtime, etc? That is something which is not going to be difficult to calculate in a particular case, if it had to be done on a fortnight by fortnight basis, assuming the employer keeps proper records of hours worked and so on.
The defendant’s counsel submitted there were numerous practical difficulties in taking into account the overall terms and conditions of such employees, but most of these I think were related to a comparison of incommensurables such as the benefit of the provision of a mobile phone or a car which was for use for work purposes but could also be available for private use, and other incidental benefits which came to be conferred on the parties in connection with their employment, such as contributions to overseas travel which was in part for the benefit of the employer. I do not think that is the sort of thing that the parties had in mind when speaking about the overall terms and conditions for employment. I expect that they were simply thinking in terms of money, though no doubt bearing in mind that for more senior employees there could well be flexibility of working hours which would operate in both directions, so that for example, the question of hours worked would not necessarily be decided on a fortnight by fortnight basis if the flexibility did permit say overtime worked in busy periods to be made up by time off in quieter periods. But as long as proper records are kept of hours worked, then it seems to me that there is no difficulty in principle in determining whether, in terms of remuneration for the work done, the employees on the higher levels would nevertheless have been paid more had they been paid at the top pay point for Level 5.
That has the effect of giving some practical operation to this proviso, recognising that it was intended to be a practical compromise between the union’s position, that ordinary overtime provisions should apply, and the employer’s position, which was that there should be no extra payment for overtime for such employees. Doing the best I can, and conscious of my profound lack of experience in industrial relations matters, that is the interpretation of the clause at which I arrive. In principle therefore it is possible for the plaintiffs to prove that they are entitled to more remuneration as a result of the overtime worked.
The next point relied on by the defendants was that any overtime worked by the plaintiffs was not worked with the employer’s prior approval or in defined emergency situations. Both of the awards contain restrictions in relation to the working of overtime. The 1996 Award (Exhibit 3) provided in Clause 38.6: “In consultation with the employees, each employer shall establish a procedure for approval of overtime.” Clause 38.7 said: “Overtime shall only be worked with the prior approval of the employer, provided that the above procedure may allow for employees to work overtime without specific prior approval in defined emergency situations.” Clauses 31.6 and 31.7 of the 2001 Award were in the same terms: Exhibit 4 p 19.
There was no evidence of any “procedure for approval of overtime” which had been adopted by the defendant in compliance with the obligation of Clauses 38.6 and 31.6. Clause 38.7 speaks of employees working overtime without specific prior approval in defined emergency situations, in accordance with “the above procedure.” It is clearly based on the existence of a procedure as contemplated by Clause 38.6, and the reference to defined emergency situations is I think a reference to emergency situations defined in such a procedure. Accordingly, in order to rely on that part of those provisions it is necessary for the plaintiffs at least to put in evidence such a procedure.[22] On the face of it therefore overtime is only to be worked with the prior approval of the employer.
[22]I do not propose to consider whether if the employer had failed to comply with this requirement under the award to establish such procedure, that would have any effect on this part of this restriction.
It would seem to follow that an employee who works overtime on his or her initiative is not thereby entitled to remuneration for that overtime. I accept that that reflects a general industrial practice that overtime is to be paid only if it has been authorised or subsequently ratified.[23] A difficulty with this argument of the defendant, however, is that as far as I can see it has not been pleaded in the defence.
[23]See the cases cited by the defendant in paragraph 8.7 of the written submissions: The Minister v Dey [1919] AR (NSW) 19, 27; QRSU v Commissioner for Railways (1947) 32 QGIG 938; QRSU v Commissioner for Railways (1956) 41 QGIG 719.
The claim for overtime in the statement of claim appears in paragraphs 10-13 of the statement of claim. Paragraph 10 is an allegation as to the number of hours of work in fact done, which is disputed on the facts in paragraph 10 of the defence. Paragraph 11 is a reference to the plaintiffs’ being required to be on call for four months in each year, which is disputed by the defendant. Paragraph 12 contains an allegation that the plaintiffs were paid over award payments but did not receive any payment for working in excess of 38 hours per week. In response to that the defendant denied that the plaintiffs were entitled to any payment for working in excess of a 38 hour week, and disputed the pay rates of the plaintiffs in some of the periods referred to in paragraph 12 of the statement of claim. Paragraph 13 of the statement of claim contains the allegations activating Clause 3.4 of the 1996 Award and Clause 3.3 of the 2001 Award. Paragraph 13 of the defence denies those allegations on the basis that (a) the overall terms and conditions of the plaintiffs were more favourable than the provisions of the awards as a whole, (b) as a consequence the plaintiffs were not entitled to the payment of any overtime or on‑call allowance under either award, and (c) further or alternatively in any event the plaintiffs were never on call within the meaning of either award. That does not raise any issue about the overtime not being approved. It follows that the defendant not having raised this point on the pleading prima facie cannot rely on it by way of defence.[24]
[24]The defendant has throughout the trial been particularly assiduous in keeping the plaintiffs to the cases as pleaded.
However, the point was in fact litigated during the trial. The plaintiffs were cross-examined about it. When I ran through the issues in relation to the overtime claim with counsel for the defendant on the second day of the trial, it was referred to as a matter relied on, without protest by counsel for the plaintiffs: pp 71-2. It was relied on in written submissions, again without protest. In circumstances where the point has in fact been disputed at the trial, I consider that it is open for the defendant to rely on it although the failure to plead it may be relevant to the question of costs.
Dealing with the factual issue of this line of defence, it seems clear enough that the plaintiffs and the defendant during the course of their employment in fact proceeded on the basis that they were not entitled to be paid overtime. No record of the hours actually worked was kept by either plaintiff, and there was no consideration at any time of the question of whether they were required to work overtime by Mr Aldred or anyone else. In these circumstances, there was certainly nothing purported to be an approval of the working of overtime by the plaintiffs. I think the defendant’s submission that in fact the attitude of all the parties during the course of the employment was that there was no entitlement to overtime was correct, the parties having no regard to the safety net provisions to which I have referred.
It seems it was really only when the idea of a claim for overtime was suggested to the plaintiffs by someone at the Department of Industrial Affairs that, in response to the extraordinarily insensitive treatment that they had received at the hands of the defendant at the end of their employment, they were provoked to advance a claim for remuneration in respect of overtime in reliance on the award. Since I have held that the safety nets were real, the plaintiffs were and are entitled to rely on them, but the fact that everyone proceeded on the basis that no overtime was payable meant that there was no express approval, or anything done which was intended to amount to approval to work, overtime by the employer.
It seems to me unlikely that a specific provision such as the provisions in the awards to which I have referred was intended to be triggered simply by the view of the employee, or even perhaps an objective assessment, that the work required of the employee could not be done within the ordinary working hours. Rather, I think the award operates on the basis that at knock-off time the employee was entitled to knock off unless required to keep working, a requirement which, subject to the restrictions in the award, the employer was entitled to make, but at the price of paying overtime. Nothing remotely like that happened in the present case, and the fact that the plaintiffs, because of their conscientious devotion to the interests of the defendant, have exerted themselves beyond the requirements of the award does not give them an entitlement to be paid overtime. This point is therefore fatal to the plaintiffs’ claims for overtime. In case a different view may be taken elsewhere, however, I will make precautionary findings.
The plaintiffs gave evidence about the extent of the hours that they worked, but there was no contemporaneous documentation about this matter. Although the plaintiffs did complete timesheets which, had they been properly completed, would have shown the actual hours at which they commenced and finished work each day, the sheets simply show the plaintiffs starting and finishing work at the ordinary starting and finishing times each day. The plaintiffs said that this occurred because that was the practice required of employees whose contracts did not provide for overtime, and that in doing so they were simply following the standard practice. Ultimately, that there was such a practice in the case of such employees did not seem to be disputed, and there was some other support for it in the evidence.[25] It follows that the timesheets are not reliable evidence of the actual hours worked.
[25]Bolneo p 74; McDonald p 25.
The first plaintiff gives an estimate of 55 hours per week of the hours actually worked on average between 1995 and 2005: p 13. I accept the evidence of the first plaintiff that the system of recording only nominal hours for people on Level 6 and above was introduced by Mr Aldred: p 13. According to the first plaintiff one of the things the plaintiffs did was arrange for any counsellors who were due to work on a particular day who were not able to come that day to ring one of them at about 7 am so as to enable arrangements to be made to cope with this, either to find another counsellor to take those appointments or I suppose if necessary to reschedule the appointments: p 16. He said that at 7 o’clock they would still be at home, but by 8 o’clock or later they would be driving to work: p 17.
He said that typically they stayed at the office until 6.30 pm or later, and they took a copy of the next five days’ diaries before they left so that they would be able to deal with people ringing in, and also to avoid the risk of dislocation if something went wrong at the office. Sometimes they worked later. Ordinarily he started at the office at 8.30 am, but in some circumstances he might be required to start work much earlier, for example, if providing an information session to employees at a particular client which started operations at 5 am, where the session was scheduled for 4.45 am: p 31. He also gave the example of the possibility of his travelling earlier. No doubt things like that could happen occasionally, but it sounds as though ordinarily he started work at the office at about 8.30 am.
He said he normally worked until 6.30 pm or later: p 31. He used his laptop computer which he would take home and sometimes work at home, and he said that he would also sometimes come into the office over the weekend because things needed to be done: p 32. He said most weekends he did some work at home: p 33. When pressed he said that about three days a week he either stayed longer than 6.30 pm or did some work at home: p 33. He said that on most weekends he would do about four hours’ work: p 33. He said that it would not be uncommon in some weeks to work as much as 65 or 70 hours: p 33.
The second plaintiff also spoke of receiving phone calls before she arrived at work in the morning in relation to things that had happened, particularly in connection with counsellors who were calling in because they were unable to work that day: pp 97‑8. She said the phone would sometimes ring before 7 am, and typically while the first plaintiff was driving into work she would be on the phone organising things, particularly dealing with problems that had arisen. She said that sometimes they were the first in the building in the morning and sometimes they were not: p 99. She said that usually they left the office after 6.30 pm, and sometimes they ran programs in the evening which would run until 8.30 or 9 pm: p 100.
Generally speaking they went home when the work was done, although on a Friday night they did make a point of leaving about 6 pm or a bit before just so that they would have one night to call their own: p 103. They also ordinarily did some work at weekends. She said that Mr Aldred knew that they were working as hard as this, and he would from time to time express his appreciation of their efforts, and suggested that something would be done to ease their workload, but it never was: p 105. They persisted in doing the work because they believed in the organisation, enjoyed the Interlock work which they found fascinating, and because they believed that in time the burden on them would be relieved by additional appointments.
The second plaintiff spoke highly of Mr Aldred: p 105. She said:
“We’d always had an excellent working relationship with Bob Aldred. He had been supportive of all the work that we had done. It was a very good working relationship and he often thanked us for the work that we had done and how we’d supported staff and organised the programs here. He was very pleased with our work.”
There was evidence from some other witnesses in relation to the hours worked by the plaintiffs. Ms Sergeant was employed as a personal assistant to Mr Aldred and the first plaintiff from late 2003, and remained in that position (subject to the departure of the first plaintiff) until February 2008: p 37. She said that although her hours of work were from 8.24 am to 4.30 pm she would usually arrive at the office around 8 am, and that about half the time she would have to unlock the office, whereas the other half of the time Mr Aldred was there already: p 38. She could not recall the plaintiffs arriving at work before she was there, except perhaps on their last day. She could not say at what time they left of an afternoon, except that they were still there when she left at 4.30 pm. This is reasonably consistent with the evidence of the plaintiffs, so far as it goes, except for the suggestion that sometimes the plaintiffs had to unlock the building.
Ms Brennan was a psychologist who worked for the defendant from 1999: p 60. She initially worked on a casual basis, but subsequently worked full time: p 62. She was based at Logan House until 2003, when she began to work at the head office as a senior psychologist, working closely with the plaintiffs: p 65. She said that she was at work herself before 8.30 in the morning, often there before the building opened: p 69. She said that the plaintiffs were normally still there when she left, which might be 6 or 6.30 pm: p 69.[26]
[26]She described them as being like part of the furniture.
Ms McDonald said that she worked as an accounts officer with the defendant, initially for two days a week and from 2001, three days a week, with working hours 10.30 am to 6.30 pm: pp 2-3. She said that on the days that she worked she would be the last one out and would turn off the lights, lock the office and put everything on to the night switch: pp 6-7. She said that the plaintiffs left most of the time between 5 and 5.30 pm, about 20% of the time, she could not say definitely, they would stay and sometimes they would be the ones that closed up: p 7. This happened particularly before and after periods when they were on holidays.
Mr Aldred said that the plaintiffs usually arrived at the office at about 8.30 or 8.45 am: p 58. He said he usually arrived before them and indeed usually opened up. He said that on the basis of his observations the plaintiffs would go home around about 5.30 to 6 pm: p 59. Mr Aldred was not clear about when he would usually leave work, and who would usually leave first; his evidence suggested that sometimes he did and sometimes the plaintiffs did.
One feature which strikes me as a complication of the plaintiffs’ claim in respect of overtime is that it is not limited to additional time worked at the plaintiffs’ workplace, ordinarily the defendant’s premises. It includes time spent at home working, including on weekends, either on work taken home or responding to or making telephone calls in connection with work. It is not obvious to me that the concept of overtime for the purposes of this award extends to work done outside the employer’s ordinary place of work. I accept that it would be common enough for work to be done other than at a workplace in the traditional sense, and that it would be unsurprising for an award to cover such work. I have, however, found nothing in these awards to indicate expressly either that they do cover work wherever that is performed, including at an employee’s residence, or that they do not.
With regard to the counterclaim in relation to payment made in respect of rostered days off which were said to have been not properly taken, I have already had something to say about this matter; as mentioned earlier, in my opinion the counterclaim was misconceived. It also seems to me that it is relevant to this issue to take into account the conduct of the defendant in relation to the subject matter of the counterclaim at an earlier stage, in particular the conduct of the defendant in summarily deducting, in a wholly unjustifiable way, from the termination payments of the plaintiffs an amount in respect of rostered days off. Again, I have already had something to say about that; in accordance with the approach adopted by Northrop J,[63] I consider that this is a factor which is relevant in determining whether the pursuit of the counterclaim was unreasonable, although it does not in itself have great significance.
[63]See below re objections to evidence.
The counterclaim has failed for a number of reasons, which really operate cumulatively, and I have found that it was misconceived. I find therefore that the pursuit of the counterclaim was an unreasonable act or omission. Indeed, it may be that the counterclaim qualifies as a proceeding instituted without reasonable cause within the exception to subsection (1). On the findings I have made, it was certainly instituted without reasonable cause, but it may be that the counterclaim was not a proceeding in a matter arising under the Act. It is unnecessary to determine that question, since it seems to me clear that the pursuit of the counterclaim falls within the scope of subsection (2) as interpreted by the authorities, and an order for costs in respect of the counterclaim can be made under subsection (2) against the defendant. The remaining issue, in relation to settlement offers, cannot be assessed at this stage; I will determine that after giving judgment, if the plaintiffs pursue the matter further.
I should perhaps make some findings on a precautionary basis, in case the view is taken elsewhere that the approach in the Federal Court does not apply in the State courts. Aspects of the plaintiffs’ claim have been unsuccessful, and the claim for overtime and the on call allowance were a significant part of the plaintiffs’ overall claim. On the other hand, there was I think some substance in the proposition that a safety net was available, and I was told that there had been no previous authority on the operation of the relevant provisions of that award. In those circumstances it was I think not unreasonable for the plaintiffs to have sought to rely on the safety net provisions in the award. In the event, that reliance has been unsuccessful, but the situation is not such that, if I were deciding the question of costs on ordinary principles, I would make a separate order in relation to the costs of those issues against the plaintiffs.
Another issue which arises is in relation to the costs of the evidence which was subject to objection, and the evidence which was led in response to evidence subject to objection. It is probably fair to say that overall about one day of the trial was spent on such matters.[64] In retrospect, it would have been more efficient if I had been able to decide the objections to evidence at the time. The real problem which I confronted, however, was a lack of familiarity with the law in this area, and it is really only after I have had the opportunity of considering the matter in some detail that I have been able to make what I regard as a proper determination of the limits of admissibility on the basis of relevance. As it happens, that has resulted in quite a lot (but not all) of the evidence objected to being excluded. But I do not think that the plaintiffs should bear an additional cost burden as a result of my unfamiliarity with industrial law matters. At the end of the day, both parties will have incurred additional costs because the trial went longer as a result of this evidence being led, and that should be treated as simply an additional part of the costs of each party of the trial.
[64]On the other hand, time was spent crossexamining the plaintiffs about matters of no significance to the real issues: see eg Day 4 p 31.
Another day was taken up by the defendant’s application for me to disqualify myself. That application was unsuccessful. But for s 824, I would have ordered that the defendant pay the plaintiffs’ costs of that application, on the basis that the costs should follow the event of the application. The application was a proceeding for the purpose of subsection (1), and was also an act of the defendant within subsection (2), but I would not find, bearing in mind the reasons which I gave when dealing with the application, that as a proceeding it was instituted vexatiously or without reasonable cause, or that it was an unreasonable act on the part of the defendant. Within the constraints of s 824 therefore no order for costs can be made in respect of that application.
Objections to evidence
There were a number of occasions during the trial when I admitted evidence subject to relevance notwithstanding objection on that ground from counsel for the defendant. As a result of this, some additional evidence was led by counsel for the defendant which was led, as it were, provisionally, only on the basis that the evidence objected to was admitted. Counsel for the defendant in submissions pressed those objections, and submitted that matters going to credit which arose in the course of such material should also be disregarded for the purposes of assessing credit. As to the latter point, this I think depends on whether the evidence came from the witness whose credit was in issue or another witness. As a general proposition, anything which may cause the tribunal of fact to take an unfavourable view of the reliability of a witness is material to credit, and the test here is traditionally very broad. The distinguishing feature, however, is that evidence cannot be led from a witness, in chief or in cross-examination, which is relevant only to the credibility of another witness.[65]
[65]There are four recognised exceptions: Cross On Evidence para [17595].
There were certainly on any view of the matter credit issues involving at least the plaintiffs and Mr Aldred. Although there was no claim for damages for wrongful dismissal, it did emerge that there was an issue as to the termination of the plaintiffs’ employment, as to the date on which that took effect, despite the inappropriate pleadings on this point. I think that the circumstances under which the plaintiffs’ employment came to an end, and particularly the hostility towards them associated with that, are relevant as providing a background against which the objective behaviour of the parties, and the written communications between them, are to be assessed. To some extent, therefore I consider that the evidence as to the events leading up to and indeed following the occasion on which the plaintiffs were escorted from the premises are relevant in determining that issue. They are, however, not relevant to the other matters in issue.
The matter is complicated by the provision as to costs, which I have dealt with elsewhere. I accept that in the light of those authorities the relevant act or omission which has to be unreasonable in order to activate s 824(2) cannot for the reasons given there be any act or omission occurring in the course of the employment. Nevertheless, there is some authority to support the proposition that conduct of the defendant (or, for that matter, the plaintiffs) during the course of the employment is relevant to the exercise of the discretion under s 824. In Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 Northrop J had to consider the application of the then equivalent provision to s 824(1) of the Act, s 197A of the Conciliation and Arbitration Act 1904. His Honour said at pp 274-5:
“In considering this matter the court must have regard to all the material properly before it. The test is not subjective to the party instituting the proceedings as at the time of the institution of the proceedings. The conduct of the opposing party prior to the institution of the proceedings may be relevant in deciding whether the proceedings were instituted vexatiously or without reasonable cause. The conduct of the opposing party both prior and subsequent to the institution of proceedings may be relevant to the discretion remaining in the court. It may be difficult to satisfy the test where disputed questions of fact arise and the proceedings eventually are dismissed because the court finds facts adverse to the party instituting the proceedings. Where the test is satisfied, having regard to the general policy of the section, the court may, nevertheless, in the exercise of its discretion, make no order as to costs.”
That passage was cited by Moore J in Dowling v Fairfax Media Publications Pty Ltd [2009] FCA 339 at [53], as part of a summary of the principles applicable in relation to s 824 which was approved by the full Federal Court on appeal: [2010] FCAFC 28 at [40]. It follows that conduct of the parties prior to the institution of proceedings may be relevant in deciding whether the proviso to subsection (1) applies, and whether the discretion may be exercised. At that time there was no subsection (2), but I consider that by analogy, and if a situation arose in practice where it could be relevant, the general principles stated by Northrop J would apply as well in determining whether an act or omission which fell within subsection (2) was unreasonable, and whether to exercise the discretion provided by that subsection. I accept that it is less likely that a case will arise under subsection (2) where such material is relevant. Nevertheless, in principle the conduct of the parties prior to the commencement of proceedings, which seems to me to encompass both the origins of the dispute which ultimately produces the proceedings and the pre-litigation phase of the dispute, is relevant.
Accordingly, I consider that some evidence as to the circumstances surrounding the end of the plaintiffs’ employment is relevant as at least potentially impacting on the application of s 824. I accept, however, that a good deal of the evidence objected to went further than could reasonably be justified for admission on these bases.
A number of passages were objected to in the evidence of Mr Fox. The first is at p 73 line 35 to p 76 line 15. The early part of that, on pp 73 and 74, is relevant to the background to the termination of the employment of the plaintiffs, but I consider that the further evidence on p 75 (there is no evidence on p 76 before line 15) was inadmissible as irrelevant. The passage at p 81 lines 1 to 29 was irrelevant. The passage at pp 87 to 89, which was concerned with the practice and policies of the defendant, was irrelevant. The next passage from pp 97 to 103 occurs in the cross-examination and I am not sure that counsel can object to his own cross-examination on the ground of relevance. I have not in fact had regard to its contents. The passage at pp 103-104 in the re-examination was irrelevant. Parts of Exhibit 8, at paragraphs 2 and 3(c) and (d), were irrelevant.
With regard to the evidence of the first plaintiff, there was a passage objected to on pp 43-45; a very limited part of this passage from p 44 was taken into account in relation to the sequence of events prior to the plaintiffs’ resignation, but otherwise the passage is irrelevant. With regard to the passage at pp 46-47, the early part of that is of some relevance in relation to the sequence of events, but the evidence of the conversation between the plaintiff and Mr Aldred is irrelevant. The passage on p 48 is concerned with the circumstances under which the plaintiffs ceased to attend the defendant’s premises and is relevant. The passage the next day from pp 26 to 27 was irrelevant, though it occurs in cross-examination. The passage from pp 30 to 31 is in the same category; it strikes me as essentially an unsuccessful attack on the credit of the first plaintiff. The cross-examination on pp 79 to 96 was in the nature of provisional cross-examination, and was irrelevant; I have not had regard to it, except to the extent that it touched on the sequence of events leading up to the end of the plaintiffs’ employment, which it does only to a very limited extent.
Part of the evidence of Ms Sergeant at pp 52 to 54 was objected to; I do not think there was anything relevant said in those passages. With regard to the evidence of the second plaintiff, the passage on pp 105-106 was irrelevant. The passage on p 107 concerns the circumstances in which the plaintiffs were escorted off the premises and is relevant as part of the circumstances of the termination of the plaintiffs’ employment. The passages the following day on p 3 are concerned with Exhibit 30, which is plainly relevant, and the fact that the plaintiffs were escorted off the premises. The passage in the cross-examination on pp 41-47 about the Logan House investigation was like other cross-examination in relation to that; I had not in fact had regard to it, except to the very limited extent that I have referred to the background to the termination in my reasons, none of which I believe I actually obtained from that passage. The passage on p 61 about Logan House was irrelevant but in cross-examination. The passage from pp 62 to 66 was I thought an attempt to attack the credibility of the second plaintiff, and as such was relevant.
With regard to the evidence of Mr Aldred, I consider that, insofar as matters were led in evidence-in-chief which could have been exposed in cross-examination in relation to credit, those matters could properly be taken into account in relation to credit. The same applies in relation to matters relevant to the witness’s credit in cross-examination, even if the evidence was not otherwise relevant. To some extent the passages objected to touch on the circumstances surrounding the termination of the plaintiff’s employment and are relevant for that reason. However, I accept that a good deal of evidence which was led on the provisional basis went further than was necessary in relation to those matters, and was irrelevant. Some of the evidence was relevant to the sequence of events, and to a very limited extent I have taken it into account in relation to my reasons earlier, but it is otherwise irrelevant. The cross-examination at p 103 which was objected to is irrelevant. The cross-examination at p 104, which was objected to, is irrelevant. The passage at p 105 was I think legitimate cross-examination as to credit, but the passage at p 106 was irrelevant. The passage at pp 31 to 37,[66] which actually contains questions by me, was relevant to the credibility of Mr Aldred. That I think deals adequately with the objections to admissibility of evidence on the ground of relevance.
[66]This was Day 7 rather than Day 6; Day 6 was actually 24 September 2009, the date on which the application was made for me to disqualify myself.
0