Epath WA Pty Ltd v Adriansz
[2003] WASCA 175
•8 AUGUST 2003
EPATH WA PTY LTD -v- ADRIANSZ [2003] WASCA 175
| WESTERN AUSTRALIAN INDUSTRIAL APPEAL COURT | Citation No: | [2003] WASCA 175 | |
| Case No: | IAC:3/2003 | 3 JUNE 2003 | |
| Coram: | SCOTT J (DEPUTY PRESIDING JUDGE) PARKER J PULLIN J | 8/08/03 | |
| 14 | Judgment Part: | 1 of 1 | |
| Result: | IAC 3 allowed IAC 6 dismissed | ||
| B | |||
| PDF Version |
| Parties: | EPATH WA PTY LTD IHANN ADRIANSZ |
Catchwords: | Industrial law Western Australia Applicability of industrial legislation and generally Appeal and cross-appeal Whether redundancy can be implied into an award or contract Whether failure to pay redundancy constitutes an "unfair dismissal" Whether amount awarded as redundancy can be characterised as compensation for "loss" within meaning of s 23A(1)(ba) of the Industrial Relations Act Meaning of "loss" |
Legislation: | Industrial Relations Act 1979, s 23A(1)(ba), s 90(1) |
Case References: | Dellys v Elderslie Finance Corporation Ltd [2002] 82 WAIG 1193 Epath v Adriansz (2003) WAIRC 07784 Rogers v Leighton Contractors Pty Ltd (1999) 79 WAIG 3551 Wynn's Winegrowers Pty Ltd v Foster [1986] 16 IR 381 Bailey v Marinoff (1971) 125 CLR 529 Hooper v Kirella Pty Ltd (1999) 96 FCR 1 HotCopper Australia Ltd v SAAB [2002] WASCA 190 In re Judiciary and Navigation Acts (1921) 29 CLR 257 McCorry v Como Investments Pty Ltd (1989) 69 WAIG 1000 Tip Top Bakeries (Canning Vale) v Federated Clerks Union of Australia (1989) 70 WAIG 289 |
JURISDICTION : WESTERN AUSTRALIAN INDUSTRIAL APPEAL COURT CITATION : EPATH WA PTY LTD -v- ADRIANSZ [2003] WASCA 175 CORAM : SCOTT J (DEPUTY PRESIDING JUDGE)
- PARKER J
PULLIN J
- Appellant
AND
IHANN ADRIANSZ
Respondent
- Appellant
AND
EPATH WA PTY LTD
Respondent
Catchwords:
Industrial law - Western Australia - Applicability of industrial legislation and generally - Appeal and cross-appeal - Whether redundancy can be implied into
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an award or contract - Whether failure to pay redundancy constitutes an "unfair dismissal" - Whether amount awarded as redundancy can be characterised as compensation for "loss" within meaning of s 23A(1)(ba) of the Industrial Relations Act - Meaning of "loss"
Legislation:
Industrial Relations Act 1979, s 23A(1)(ba), s 90(1)
Result:
IAC 3 allowed
IAC 6 dismissed
Category: B
Representation:
IAC 3 of 2003
Counsel:
Appellant : Mr G E Bull
Respondent : Mr T H F Caspersz
Solicitors:
Appellant : Chamber of Commerce and Industry of Western Australia
Respondent : T H F Caspersz
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IAC 6 of 2003
Counsel:
Appellant : Mr T H F Caspersz
Respondent : Mr G E Bull
Solicitors:
Appellant : T H F Caspersz
Respondent : Chamber of Commerce and Industry of Western Australia
Case(s) referred to in judgment(s):
Dellys v Elderslie Finance Corporation Ltd [2002] 82 WAIG 1193
Epath v Adriansz (2003) WAIRC 07784
Rogers v Leighton Contractors Pty Ltd (1999) 79 WAIG 3551
Wynn's Winegrowers Pty Ltd v Foster [1986] 16 IR 381
Case(s) also cited:
Bailey v Marinoff (1971) 125 CLR 529
Hooper v Kirella Pty Ltd (1999) 96 FCR 1
HotCopper Australia Ltd v SAAB [2002] WASCA 190
In re Judiciary and Navigation Acts (1921) 29 CLR 257
McCorry v Como Investments Pty Ltd (1989) 69 WAIG 1000
Tip Top Bakeries (Canning Vale) v Federated Clerks Union of Australia (1989) 70 WAIG 289
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1 SCOTT J (DEPUTY PRESIDING JUDGE): The respondent to appeal IAC 3 of 2003 brought an application to the Industrial Commission of Western Australia pursuant to s 29(1)(b)(i) and s 29(1)(b)(ii) of the Industrial Relations Act1979 ("the Industrial Relations Act") seeking compensation for unfair dismissal and payment of outstanding remuneration due under his contract of employment for unpaid call-outs.
2 The respondent was employed by the appellant Epath Pty Ltd ("Epath") in September 1999. In March of 2000 Epath sold its business to Clinipath Laboratories. As part of the sale some employees of Epath were transferred to Clinipath Laboratories and for a short period after the changeover Mr Adriansz worked on contract for Clinipath Laboratories to assist in the changeover of the business.
3 Mr Adriansz's was employed by Epath as a medical scientist, plant and equipment manager, technology manager and marketing support officer. He eventually became a director and shareholder of Epath and at times gave personal guarantees for loans made to the business. His remuneration package was a salary of $55,000, plus 8 per cent superannuation, sick leave, annual leave, unpaid overtime and on-call retainer at time and a half for a minimum of two hours for all call-outs. There was no provision in Mr Adriansz's contract of employment which entitled him to any redundancy payment. It is now clear, for the purposes of the Industrial Relations Act, that a redundancy term cannot be implied either into a contract of employment or into an award: Dellys v Elderslie Finance Corporation Ltd [2002] 82 WAIG 1193. It follows that at the time Mr Adriansz was made redundant he had no entitlement to any redundancy payment.
4 From the findings of Wood C who heard the case at first instance at the time of the sale of the business from Epath to Clinipath Laboratories Mr Adriansz had a reasonable expectation of obtaining a position with Clinipath. It is not necessary to review the history of the matter which is set out comprehensively in the judgment of Wood C, who concluded that Clinipath considered Mr Adriansz for employment and decided not to employ him.
5 Wood C decided that Mr Adriansz was entitled to payment for a reasonable period of notice, plus his unpaid entitlements for call-outs. In addition, Wood C referred to documents produced in the course of the hearing which indicated that another employee received redundancy payments and that Epath had indicated in correspondence that, as a
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- gesture of goodwill, it would pay employees a redundancy payment. That payment was to be made to non-transferring employees.
6 Wood C concluded that an aspect of unfairness in relation to Mr Adriansz was that he was not treated in like fashion to other employees in that he was not paid a redundancy payment. As a consequence, Wood C decided that Mr Adriansz should receive a redundancy payment of two weeks, being $2284.61, in addition to a payment for a reasonable period of notice. In addition, Mr Adriansz was awarded a contractual benefit payment for unpaid call-outs in the sum of $8492. The total amount awarded by the learned Commissioner was $14,197.26, plus a denied contractual benefit sum of $8492, (being the gross figure for the call-out payments from which income tax had to be deducted.)
7 Both Epath and Mr Adriansz appealed from that decision of Wood C. It is not necessary to detail the grounds of appeal to the Full Bench because many of the grounds of appeal are of no relevance to this appeal to the Industrial Appeal Court.
8 The grounds of appeal to this Court in IAC 3 of 2003 are:
"1. The Full Bench erred in law in interpreting the Industrial Relations Act 1979 (WA) (the Act) by holding that failure to pay an adequate redundancy payment or severance payment constitutes an unfair dismissal pursuant to s 29 of the Act.
PARTICULARS
- (i) The failure to pay an adequate redundancy payment cannot be said to be unfair absent an express or implied term in the contract of employment.
(ii) A redundancy does not give rise to the same considerations of unfairness as does a dismissal for misconduct/poor performance.
(iii) The Act does not purport to provide a remedy through s 29 where reinstatement or re-employment is not a material consideration.
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- (iv) Payment for redundancy is not compensation and cannot be connected with a claim of unfair dismissal.
(v) There can be no unfairness not to make a redundancy payment where on termination, reasonable notice has been paid or ordered.
(vi) The Full Bench (majority) did not find, nor consider relevant, unfairness based on a comparison with other employees of the Appellant.
- 2. The Full Bench erred in law in concluding that the Deed of Settlement amounted to an admission by the Appellant as to the necessity to make a redundancy payment.
PARTICULARS
- (i) An offer to settle cannot be characterised as an admission of liability whether accepted or rejected.
3. The Full Bench erred in law in finding that the E-Path Redundancy Kit, and the Deed of Release were evidence of a loss separate from a lack of reasonable notice.
(i) The Applicant was unaware of the E-Path Redundancy Kit. There was no evidence that any other employee was aware of the document and no evidence of any redundancy payment made to any employee.
(ii) The loss identified by the Full Bench of one month redundancy pay is not an amount that can be ascertained from the E-Path Redundancy Kit.
(iii) The Full Bench majority concluded that the Commissioner's calculation of loss based on what other employees allegedly received was wrong and that the authority of the Full Bench in Rogers vLeighton Contractors Ply Ltd should have been followed."
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1. The Full Bench erred in law in purporting to vary on 7 March 2003 paragraph (2) of the Order dated 21 February 2003 made by it in matter no FBA 48 of 2002 when:
(a) such purported variation was in excess of its jurisdiction in that there was no industrial matter before the Full Bench on 7 March 2003;
(b) alternatively, such purported variation was not supported by any provision of the Industrial Relations Act 1979."
10 Putting aside for a moment the grounds of appeal in IAC 6 of 2003, it is clear that the grounds of appeal in IAC 3 of 2003 focus upon the decision of the Full Bench to allow the payment of a redundancy or severance payment.
11 In dealing with the appeal concerning the redundancy payment, the President and W S Coleman CC said in a joint judgment in Epath v Adriansz (2003) WAIRC 07784, at [56 to 61]:
"Because of our reasons expressed in relation to ground 1, it is clear that it was correct to find that the dismissal was harsh, oppressive and unfair. For the reasons which we now express, it was not necessary to find that the dismissal was unfair for other reasons. However, as will be clear, it was open to so find.
By this ground, it is alleged that the Commissioner at first instance erred in finding that Mr Adriansz had been unfairly dismissed because Epath failed to pay Mr Adriansz an adequate redundancy payment. It was submitted that, in fact, there was no entitlement to a redundancy payment. Further, it was submitted that there was no evidence that any redundancy payment was made to any other employee. In support of those submissions, it was also submitted that a failure to make a redundancy payment to the respondent could not by itself be unfair.
That submission relied on the dictum of the Industrial Appeal Court in Dellys v Elderslie Finance Corporation Ltd (op cit) at paragraph 21 per Anderson P (IAC). His Honour there
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- observed that an obligation to make a redundancy payment or severance could not be implied into a contract of employment as a term, and said 'neither does it appear reasonable or equitable, that an employer should be obliged to both give reasonable notice, and as well pay a redundancy sum'. It was submitted for Mr Adriansz that the absence of a legal entitlement to a redundancy payment does not preclude a finding that a person is entitled to consideration of that matter, as a matter of fairness. The finding was, as was submitted, not based on any legal entitlement.
It was clearly, as was submitted, a finding that Mr Adriansz had been treated unfairly because he was not paid a redundancy payment, or an adequate redundancy payment, which accorded with the finding made in Rogers v Leighton Contractors Pty Ltd (1999) 79 WAIG 3551 (FB). That finding was based on the fact that other employees were to be paid an amount equal to two weeks wages or salary for a redundancy or severance payment. It was submitted for Epath that there was no evidence of that fact.
Exhibit A2 is a document called 'E-Path Redundancy Kit' (see pages 144 - 152 (AB)). That document bears the name 'Julian Johnson Lawyers'. (It was formally marked as an exhibit without objection (see pages 114 - 117 (TF1)). It is not dated but contains, inter alia, an example of a letter of advice of redundancy to be forwarded to employees. That letter is dated, quite clearly, 25 February 2002. By the letter it is advised that, as a gesture of goodwill, a redundancy payment will be made in the case of a person employed for more than one year but not more than three years, in an amount equal to two weeks wages or salary. There are other provisions for employees employed for different periods of time. Further, Epath, on Mr Adriansz's uncontroverted evidence, had clearly gone to the trouble of obtaining legal advice as to what were appropriate severance or redundancy payments to employees who were retrenched. In our opinion, in the absence of a denial by Epath, there being no evidence adduced to the contrary, it was open to find that Epath, through its directors, had approved and/or embarked on such a course. It was therefore open to the Commissioner to so conclude, on the balance of probabilities, accordingly.
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- It is necessary to make clear that the fairness or unfairness of a dismissal in a case such as this does not depend on whether there is a legal obligation to pay redundancy payments. Whether one can imply such a term is, we think, irrelevant. Rogers vLeighton Contractors Pty Ltd (FB) (op cit) is authority for the proposition that a termination of employment for redundancy not accompanied by a reasonable redundancy or severance payment may be harsh, oppressive and unfair (see also the cases cited in Rogers v Leighton Contractors Pty Ltd (FB) (op cit). including, in particular, Wynn's Winegrowers Pty Ltd vFoster [1986] 16 IR 381 at 392). (We refer also to Commercial Computer Centre Pty Ltd v Holman (2001) 105 IR 222, Fosters Brewing Group Ltd v Industrial Commission of South Australia (1993) 51 IR 228 and Matthews v Coles Myer Ltd (1993) 47IR 229). As was properly observed in Rogers v Leighton Contractors Pty Ltd (FB) (op cit) at page 3554 by Beech C, as he then was, severance or redundancy payments may also include compensation for accrued benefits lost, or foregone, the lack of availability of alternative employment, and other items. Beech C also characterised the unfairness of the failure to pay an adequate redundancy payment. Again, it is to be emphasised that whether there is a failure to pay an adequate redundancy payment depends on the circumstances of the case."
12 As can be seen from that passage of the joint judgment, the learned President and the Chief Commissioner considered that although a redundancy provision could not be implied into a contract of employment, from the other evidence in the case the conclusion was open that payment of a redundancy sum could be ordered as part of the compensation to which Mr Adriansz was entitled, notwithstanding the fact that there was no legal obligation on Epath to make such a payment.
13 In reaching that conclusion, the learned President and the Chief Commissioner relied upon the decision of Rogers v Leighton Contractors Pty Ltd (1999) 79 WAIG 3551 and Wynn's Winegrowers Pty Ltd vFoster[1986] 16 IR 381, at 392. The Full Bench at [61], in the joint judgment of the President and Coleman CC, concluded that redundancy payments could include compensation for accrued benefits lost or foregone, the lack of availability of alternative employment and other items. The Full Bench concluded that an amount equal to one month's salary should have been paid to Mr Adriansz by way of redundancy payment given that he had also received payment for a three months' notice period.
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14 The Full Bench referred to a deed of release which had been provided to Mr Adriansz and which referred to payment of a redundancy payment. That deed was clearly an offer by Epath to settle Mr Adriansz's claim and whilst the document referred to a redundancy sum of $10,000, it was, in my view, clear, on the evidence, that this amount, although expressed as redundancy, was to include the outstanding amounts due to Mr Adriansz for his unpaid call-outs. It may be that there were tax advantages to Mr Adriansz in having that sum designated as "redundancy pay" rather than analysing the components into "unpaid call-outs" and redundancy.
15 In their conclusion the learned President and Coleman CC concluded that Mr Adriansz was entitled to compensation for loss suffered as a result of the industrial unfairness of his dismissal which included an amount equal to one month's salary as the redundancy component of the claim.
16 In a separate judgment the third member of the Industrial Commission, Beech C, concluded that it was not proper for the Full Bench to take into account the offer of settlement to Mr Adriansz tendered in evidence.
17 It should finally be mentioned in passing that, in disposing of the matter, the Full Bench ordered that a sum of $4583.33 for one month's redundancy payment should have been awarded to Mr Adriansz. That was the order finally made by the Commission following the opportunity given to the parties to speak to the minutes. However, it became clear following the issue of the final order that the Full Bench had made an error in the calculation of the appropriate figure for redundancy. The Full Bench later recalled its order and corrected its decision by deleting the figure of $4583.33 and substituting $2665.39. It was not in dispute in these appeals that the correct figure to be awarded to Mr Adriansz, if a redundancy figure was payable, was $2665.39. In appeal IAC 6 of 2003, however, Mr Adriansz contends that it was not lawful for the Full Bench to revisit its order so as to make an adjustment. For reasons to which I will come, in my view, it is not necessary to consider that appeal further.
18 Mr Adriansz's claim for redundancy was made under the provisions of s 23A(1)(ba) of the Industrial Relations Act as in force at the relevant time. This empowered the Commission to deal with claims of harsh, oppressive or unfair dismissal. Where such a claim was made out, and there is no dispute here that such a claim was made out by Mr Adriansz, s 23A(1)(ba) provided relevantly:
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- "23A(1) On a claim of harsh, oppressive or unfair dismissal, the Commission may:
(ba) subject to subsections (1a) and (4), order the employer to pay compensation to the claimant for loss or injury caused by the dismissal."
20 In my opinion, Mr Adriansz could only have suffered a "loss" within the meaning of s 23A(1)(ba) of the Industrial Relations Act if he was deprived of something to which he was lawfully entitled. As I have said, the judgment of this Court in Dellys is authority for the proposition that where there is no provision in an award or term of a contract which provides for redundancy, then it cannot be implied into the terms and conditions of service. It follows that Mr Adriansz had no entitlement to redundancy and, as a consequence, he suffered no "loss" by reason of the failure by Epath to pay him a redundancy sum.
21 For these reasons I would allow appeal IAC 3 of 2003.
22 In view of the conclusions reached in relation to appeal IAC 3 of 2003, it is not necessary to consider the issues raised in appeal IAC 6 of 2003. That appeal only falls for consideration if appeal IAC 3 of 2003 is dismissed.
23 In view of these conclusions, it is not necessary to determine other aspects of the appeal argued in the course of this hearing. In particular, it is not necessary to determine whether Mr Adriansz's claim for a redundancy payment fell within the definition of industrial matter in s 7 of the Industrial Relations Act. For the purposes of these reasons and
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- without deciding that point, I have assumed that Mr Adriansz's claim for redundancy was an industrial matter.
24 It is also not necessary to deal with the argument that the Industrial Appeal Court does not have jurisdiction to deal with this appeal. Section 90 of the Industrial Relations Act was amended by the Labour Relations Reform Act 2002. The section formerly provided under s 90(1):
"Subject to this section an appeal lies to the court in the manner prescribed from any decision of … the Full Bench on the ground that the decision is erroneous in law or is in excess of jurisdiction but upon no other ground."
25 That section was amended with effect from 1 August 2002 and now provides:
"Subject to this section, an appeal lies to the Court in the manner prescribed from any decision of the … Full Bench … -
(a) on the ground that the decision is in excess of jurisdiction in that the matter the subject of the decision is not on an industrial matter;
(b) erroneous in law in that there has been an error in the construction or interpretation of any Act … in the course of making the decision appealed against; or
(c) on the ground that the appellant has been denied the right to be heard,
but upon no other ground."
26 In the light of the conclusions to which I have come, as set out in these reasons, the error of law which has been identified turns upon the meaning of the word "loss" in s 23A(1)(ba) of the Industrial Relations Act as in force at the relevant time. That being the case, the right of appeal is governed by s 90(1)(b) and it is unnecessary to traverse the other arguments advanced in relation to the jurisdiction of this Court.
27 I would add, however, that even if the old provision governed this appeal, in my view, the appeal would still come within its terms.
28 For these reasons I would allow appeal IAC 3 of 2003 and delete from the order of the Full Bench the amount allowed for redundancy.
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29 It is not necessary to consider further appeal IAC 6 of 2003.
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30 PARKER J: I agree with the orders proposed by Scott J for the reasons given by his Honour.
31 PULLIN J: I have read in draft the reasons of Scott J and have nothing further to add.
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