Jager v Australian National Hotels Pty Ltd

[2001] HCATrans 85

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Hobart  No H3 of 2000

B e t w e e n -

LOUIE PETER JAGER

Applicant

and

AUSTRALIAN NATIONAL HOTELS PTY LTD

Respondent

Application for special leave to appeal

GAUDRON J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT HOBART ON THURSDAY, 5 APRIL 2001, AT 12.44 PM

Copyright in the High Court of Australia

MR J.L. TREW, QC:   Your Honours, I appear for the applicant and my learned friend, MR J.A.V. BUCKLEY, appears with me.  (instructed by Wilson Dowd)

MR K.B. PROCTER:   May it please your Honours, I appear for the respondent.  (instructed by Murdoch Clarke)

GAUDRON J:   Yes, thank you.  Yes, Mr Trew.

MR TREW:   Your Honours, the cross‑appeal issue that is raised in the respondent’s written submissions at paragraphs 2 and 3, we have been told by our learned friend will not be pursued by them.

GAUDRON J:   Yes.

MR TREW:   Your Honours, the employment relationship and contract of employment distinction was not the subject of any of the decisions that the Full Court relied upon in reaching its conclusion in this case about the construction of section 47 of the statute.  This case clearly raises it and in reaching its decision that the statute applied to the contract of employment the court relied substantially upon the decision of this Court in Byrne v Australian Airlines and we submit that that case is not authority for the type of conclusion that the Full Court reached.

GAUDRON J:   But what about clause 17 of the training manual, which Justice Slicer found was a part of the contract of employment?

MR TREW:   And that was rejected on the appeal, your Honour, and we are seeking leave to appeal on whether there is an implication at law into the contract of employment that there is a reasonable period of notice required to terminate the employment.

GAUDRON J:   But clause 17 specifically said the contract of employment is a relationship governed by legislation and awards.

MR TREW:   Yes, your Honour, but the Full Court held, and we do not challenge, that that was descriptive and not contractual.  I can have the paragraph of the Full Court’s judgment ‑ ‑ ‑

GAUDRON J:   Well, you do not challenge it, but unless the Full Court is right in that, you do not get to first base, do you?

MR TREW:   Well, if there is no issue before this Court on it, your Honour, it just does not arise in the application.  We raise a simple question of law as to whether there is to be implied into the contract of employment this term.

GAUDRON J:   But that question itself necessarily necessitates, does it not, consideration of the terms of the contract?

MR TREW:   Not in the way the case has been decided, your Honour, because it has been ‑ ‑ ‑

HAYNE J:   But if you are going to imply terms in, you have to work out what your other terms are.  We have to come up against what is the significance, if any, to be attached to clause 17 of the training manual.  We have to address that, have we not?

MR TREW:   No, with respect to your Honour.  That has been determined by the court below as not a contractual term.  So that does not arise in the matter before this Court.  There is only one question that can arise, we not having challenged that decision, your Honours.

GAUDRON J:   Of course, it is not in your interest to challenge that decision, but I should have thought, if special leave were granted, the respondent would inevitably raise that, that being a matter on which he has a factual finding, the question whether it is open to the Full Court to depart from that factual finding, and no question of implication can be considered until the terms of the contract are identified precisely.

HAYNE J:   You cannot have your implied term if there is an express term dealing with termination.

MR TREW:   We accept that, your Honour.

HAYNE J:   Yes.  So we hit clause 17 and you want to have the penny and the bun.  You want to have a bit of what is in the Full Court but not all of what is in the Full Court.  That is what counsel are paid to do, but there we are.

MR TREW:   That was a decision that the respondent obtained from the Full Court.  It is hardly, in our submission, going to raise that against us if leave were granted on the point that we seek special leave in respect of.  If your Honours are against us on that, that is the end of the special leave application, but we submit that that just does not arise in this application.  Absent that as a clause in the contract, the implication that is said to arise, in our submission, depends upon the relationship, the relationship being silent on the question of termination of employment.

The issue then is whether or not a statutory provision dealing with employment, and not with a contract, can override or interfere with a contractual right.  It is our submission that there is nothing said ultimately in Byrne v Australian Airlines that prevents the contract prevailing and operating, irrespective of a right being given to terminate the relationship.  Indeed, that was the very point that was determined in the Kilminster Case, which was determined on a demurrer, and it would appear that the contract in terms provided that reasonable notice of termination could be given.

This Court there distinguished between the employment relationship which could be determined on shorter notice and distinguished that from a contract of employment that contained a term permitting reasonable period of termination of employment.  That is the issue that we are seeking special leave in this particular case about and it is our submission that the question of the manual just does not arise.

GAUDRON J:   There is, however, a further question as well, is there not?  You have to assert, to have ultimate success in the appeal, that reasonable notice required more than six months notice.

MR TREW:   That is so, your Honour.

HAYNE J:   In footballing terms, that is a big ask.

MR TREW:   Well, not having regard to what the trial judge determined.  He determined that it was two years.  That question was just not dealt with in the Full Court and, in any event, in the notice of appeal, if special leave were granted, we have asked the Court to determine the question of principle on that basis, because that was not determined by the Full Court, and then remit the case to the Full Court to determine the question that your Honours have just asked me about.

GAUDRON J:   It does raise the question, does it not, whether it is a suitable vehicle?

MR TREW:   On the face of it, your Honour, it is, in the circumstances where the trial judge’s finding on the facts was just not looked at by the Full Court.

HAYNE J:   Can you state as briefly as you may why two years?  Two years seems a very long time.  Why more than six months perhaps?

MR TREW:   Well, it is obviously a question of determination having regard to all of the facts.  This particular respondent had a virtual monopoly of this type of employment in Tasmania.  That was recognised by the respondent.

HAYNE J:   Senior position, special industry, one participant in the industry locally.

MR TREW:   Yes.

HAYNE J:   More than that?

MR TREW:   They are the matters that are uppermost in my mind at the moment, your Honour, and that puts that outside the class of these termination cases.  The New Zealand Court of Appeal some years ago determined 18 months for a senior executive in an advertising agency because that person was unable to get employment in New Zealand and would have to go outside the country to do so.  It is not a big step from the factual circumstances in that case to this case.

It is for those reasons, we submit, that this is an appropriate case in which to grant special leave.  This is a question that can affect – there may be other employments where there are alternative remedies available in other tribunals, but that leaves still a very large area of employment, above the amount referred to by the respondent in his written submissions, of persons that are affected by what we submit is an incorrect construction of this statutory provision.  It has important implications for employment generally.

GAUDRON J:   What do you say is the correct construction?

MR TREW:   The statutory provisions are on page 51 of the book, your Honour.  The correct construction is that this statutory provision applies to the employment relationship only and says nothing about the employment contract between the parties.  That is a distinction that has been approved ‑ ‑ ‑

GAUDRON J:   But how can you even make that distinction?

MR TREW:   In Byrne v Australian Airlines that was accepted as a proper distinction and it was made specifically in the Kilminster Case ‑ ‑ ‑

GAUDRON J:   Yes, but there has to be a contract of employment for there to be an employment relationship.

MR TREW:   Yes.

HAYNE J:   And the particular provision we are concerned with is one regulating termination, that is to say, termination of the contract.

MR TREW:   That is so, your Honour, but in the Kilminster Case, which your Honours were given a copy of the decision, can I take your Honours to that for a moment.  It is a very short decision and it appears on the last page of the judgment.  The allegation in that case was that there was a contract of employment that provided for a reasonable period of notice of termination.  There was also an award made by the Federal Conciliation and Arbitration Commission, or whatever it was called in those days, as appears on page 6 of the decision, saying that the employment could be terminated after a period of certain months upon giving a week’s notice, or something like that.  It appears in about the middle of the page.  Then in the joint judgment of the Court on page 289 they said:

We are all of opinion that the provisions of clause 22 –

that I just referred to –

of the award merely mean that the employment shall not be put an end to unless notice as therein prescribed shall be given, and they do not interfere with the rights of the parties with respect to longer notice by contract or otherwise.  The judgment of the Full Court –

et cetera.  That distinction was approved in Byrne v Australian Airlines about five years ago in this Court and, in our submission, in principle, if the Kilminster Case dealt with an express term, there is no distinction between an express term providing for it and an implied term providing for it.

GAUDRON J:   Except what you had in the clause in issue was a provision that “shall not . . . be terminated”, you had a negative restraint.  Your statute, on the other hand, says “is terminable”.  Does that make any difference?

MR TREW:   Well, it is our submission ultimately that it does not, your Honour, but at this stage that only emphasises, in our submission, the importance of the issue, that there is a line of cases that are approving a principle in the Kilminster Case and the distinction here, if anything, in our submission, would only strengthen the distinction we seek to make because the contract permits something also.  It permits something in this case which we submit is longer.  They are the grounds of the application.

GAUDRON J:   Yes, thank you.  Yes, we need not trouble you, Mr Procter.

Given the terms of the first part of clause 17 of the staff training manual, we are of the view that the present case is not a suitable vehicle for the elucidation of the question whether a term for reasonable notice is to be implied in a contract of employment.  Accordingly, special leave is refused with costs.

We will adjourn now until 2.15.

AT 12.59 PM THE MATTER WAS CONCLUDED