Jeremy Edward Wilson v IPC Corporation (Australia) Pty Ltd
[1995] IRCA 653
•08 December 1995
CATCHWORDS
INDUSTRIAL LAW - termination of employment - review of decision of Judicial Registrar - whether Court has discretion to refuse to order reinstatement - whether offer of re-employment immediately after termination relevant to exercise of power to order re-instatement - whether income earned since termination can be considered in determining remuneration lost.
Industrial Relations Act 1988 S170EE(1) and (2)
Liddell v Lembke (1994) 127 ALR 342
No. AI 0206R of 1994
JEREMY EDWARD WILSON v IPC CORPORATION (AUSTRALIA) PTY LTD
MOORE J
CANBERRA
8 December 1995
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. AI 0206R of 1994
)
NEW SOUTH WALES DISTRICT REGISTRY )
BETWEEN: JEREMY EDWARD WILSON
Applicant
AND: IPC CORPORATION (AUSTRALIA)
PTY LIMITED
Respondent
JUDGE: Moore J
PLACE: Canberra
DATE: 8 December 1995
ORDER OF THE COURT
THE COURT ORDERS THAT:
The applicant be reinstated by the respondent to a position in Melbourne which is substantially the same as that occupied by him in Canberra immediately prior to the termination.
The location of the position in Melbourne to be as agreed between the parties. The Court notes that a position at Box Hill, Heidelberg, the Central Business District of Melbourne or the companies Head Office is practicable. Leave is granted to either applicant or respondent to approach the Court on 24 hours notice to the Court and other parties to determine this issue if the parties can not reach agreement on the location.
The respondent to reinstate the applicant on, the same terms and conditions including commission as applied to the applicant at the date of termination and that such commence from the date of termination.
The period between the date of termination and the date of this decision be treated as continuous employment of Mr Wilson by the respondent for all purposes.
-2-
The respondent pay the applicant the sum of $30,374 by way of remuneration lost.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. AI 0206R of 1994
)
NEW SOUTH WALES DISTRICT REGISTRY )
BETWEEN: JEREMY EDWARD WILSON
Applicant
AND: IPC CORPORATION (AUSTRALIA)
PTY LIMITED
Respondent
JUDGE: Moore J
PLACE: Canberra
DATE: 8 December 1995
REASONS FOR JUDGMENT
Introduction
This is an application under s377 of the Industrial Relations Act 1988 ("the Act") by IPC Corporation (Australia) Pty Limited ("the Corporation") seeking the review of the determination by a Judicial Registrar of an application under s170EA of the Act. That application had been made by Mr Jeremy Edward Wilson ("Wilson") who claimed the termination of his employment on 24 October 1994 contravened certain provisions of Division 3, Part VIA of the Act.
The Judicial Registrar ordered that Wilson be reinstated, that the period between the date of termination and the date of the decision be treated as continuous employment of Wilson by the Corporation and that the Corporation pay him commission of $300.
The course of proceedings before the Judicial Registrar and in the review
The application under s170EA, dated 3 November 1994, was filed on 7 November 1994 and in answer to question 21 of the standard form, "What are you asking the Court for", the applicant did not indicate that reinstatement was sought but indicated that compensation, general damages and exemplary damages were sought. The form had been completed, I infer, with the assistance and advice of a solicitor. The hearing before the Judicial Registrar took place on 23 and 24 February 1995 and initially the applicant only pursued the remedy originally sought of compensation. However, during the hearing the remedy sought became an order for reinstatement.
It was accepted by both parties in the review that if the Court were to award reinstatement then an order should be made generally in the terms of the order of the Judicial Registrar's of 24 February 1995, namely:
The applicant be reinstated by the respondent to a position in Melbourne which is substantially the same as that occupied by him in Canberra immediately prior to the termination.
The location of the position in Melbourne to be as agreed between the parties. The Court notes that a position at Box Hill, Heidelberg, the Central Business District of Melbourne or the company's Head Office as practicable. Leave is granted to either applicant or respondent to approach the Court on 24 hours notice to the Court and other parties to determine this issue if the parties can not reach agreement on the location.
The respondent to reinstate the applicant on, the same terms and conditions including commission as applied to the applicant at the date of termination and that such commence from the date of termination.
The period between the date of termination and the date of this decision be treated as continuous employment of Mr Wilson by the respondent for all purposes.
The respondent to pay the applicant the remuneration lost, (including commission based on the new location) by the employer because the termination between 25th November 1994 and 27th February 1995 within 7 days of today.
Respondent to pay commission of $300.00 for the period until 23rd October 1994 within 7 days of today."
At the commencement of the hearing of the review, the solicitor acting for the Corporation indicated he had difficulties in securing the attendance of two witnesses who were employees of the Corporation during the relevant period. They had not been served with subpoenas to give evidence, though subpoenas had issued from the Court. Those witnesses had appeared in the proceedings before the Judicial Registrar and according to the solicitor were in senior management positions within the Australia Capital Territory at the relevant time. They are no longer employees of the Corporation. The solicitor acting for Wilson indicated he wished those two witnesses to give evidence again and the result was an application by Wilson that the application for review be struck out or dismissed for want of prosecution. This application was not successful. An application was then made by the solicitor for the Corporation that the matter be adjourned. This was refused because, inter alia, the applicant had flown from Melbourne for the purpose of the hearing. The matter then proceeded on the evidence of Wilson and an affidavit of a Mr Kingston, an employee of the Corporation, who was not cross-examined.
The Issues
The Corporation contended that because Wilson refused to accept an offer of reinstatement volunteered by the Corporation shortly after Wilson's dismissal, he is not entitled to an order of the Court that he be reinstated. Rather, s170EE creates a discretionary power not to award the remedy of reinstatement, and, in this matter, the discretionary power should be exercised by refusing to make an order reinstating Wilson. A review conducted under s 377 is a hearing de novo: Association of Professional Engineers, Scientists and Managers v Deniliquin Council (1995) 129 ALR 418 and Gibson v Bosmac Pty Ltd (1995) 130 ALR 245 and the issues as they arose before a Judicial Registrar may not be the issues arising in the review. It is important, in this matter, to identify what is in issue in the review and what is not.
It was conceded by the Corporation that Wilson's termination was in contravention of the Act. It was also common ground that if the Court was proposing to order reinstatement, reinstatement was not impracticable. As I earlier indicated, it was agreed that if reinstatement was ordered it should be in the same terms ordered by the Judicial Registrar, that is, reinstatement to a position in Melbourne, on the same terms and conditions.
During the course of the review proceedings four issues emerged, namely, given an admitted contravention of the Act, whether there was a discretion created by s170EE not to award a remedy. Secondly, the effect, if any, of the offer by the employer to reinstate the employee. Thirdly, whether s170EE(1) of the Act entitles the Court to order payment of all lost remuneration and to disregard earnings of the employee in other employment after dismissal. Finally, whether the applicant is entitled to any commission.
Evidence of events leading to termination
The following emerges from the evidence and represents finding of fact I have made. Wilson commenced employment with the Corporation in Canberra, ACT in the position of Retail Sales Representative/Retail Software Co-ordinator on 6 April 1994. The Corporation's business is the retail sale of computer products. He remained in that position until 18 April 1994, when he was appointed by the Corporation to the position of ACT Retail Co-ordinator/Regional Software Co-ordinator. In late July 1994 he was then appointed to the position of Acting Retail Manager in the ACT. Three days later he was then appointed to the position of Trainee Retail Manager in the ACT. The positions of Acting Retail Manager and Trainee Retail Manager were governed by terms and conditions set out in a letter dated 15 April 1994 from the Corporation to Wilson appointing him to the position of ACT Retail Co-ordinator. Wilson remained in the position of Trainee Retail Manager for approximately ten days. He was then appointed to the position of ACT Regional Retail Co-ordinator. On 16 September 1994 Wilson was appointed to the position of Corporate Account Manager in the ACT. He remained in that position until 26 September 1994, when he was appointed to the position of Centre Manager at the Corporation's Centre at Tuggeranong, ACT which is a retail outlet for selling computer products.
The employment of Wilson was terminated on 24 October 1994 by a Mr Lagerway who was the Corporation's Retail Manager and second in charge in Canberra. Lagerway supervised Wilson and Wilson was answerable to him.
The following represents Wilson's version of events which ultimately led to his termination. I found Wilson to be a credible witness. His evidence was uncontradicted and I accept his account of those events. On the morning of 24 October 1994 Lagerway unexpectedly arrived at the Tuggeranong store at which Wilson worked and was the Centre Manager. Lagerway informed Wilson that he was conducting a formal review. The following conversation took place between Lagerway and Wilson during the review:
"Mr Lagerway - "How are things going out here?".
I said - "Fine".
Mr Lagerway - "Do you do any reading outside of work?"
I said - "No".
Mr Lagerway - "Do you recall a conversation we had in my office when I first joined the company?"
I said - "Which conversation?"
Mr Lagerway - "The conversation relating to matters of confidentiality."
I said - "No, I do not".
Mr Lagerway - "I would like to reiterate that point and make it quite clear. Are you telling me you don't recall a conversation I had with you in my office when I first started when I said that anything I said in the office was expected to stay in the office".
I said - "No, I do not".
Mr Lagerway - "Jeremy, you strike me as someone who has more than common intelligence. I find it hard to believe that you can't remember a conversation of this importance that I pointedly tried to make so clear".
I said - "I'm sorry, but I do not recall that conversation".
Mr Lagerway - "Well I'm telling you that all things that take place within this office are expected to stay in this office , whether they are about company confidential matters or my personal opinions".
I said - "Excuse me, do you expect me to treat your own personal opinions in the same light as what I'm expected to treat company confidential matters."
Mr Lagerway - "Yes".
I said - "So hang on, if you go around saying something personal about another person, am I then expected to treat that the same way as I would treat company matters?"
Mr Lagerway - "Yes, that is right".
I said - "I have a problem with that".
Mr Lagerway - "Well explain what you mean?"
I said - "Well, I can't be expected to keep confidential comments which you have made about Ian McLean and James Ellingford".
Mr Lagerway - "Well, if you cannot guarantee 100% confidentiality on all company matters and all of my personal opinions, then I must advise you that I do not have a position for you and nor do IPC. Think over what I have just said and now ask yourself whether you're able to guarantee me 100% confidentiality on all company matters and my personal opinions".
I said - "It is not a question that I can answer on the spot, it is a moral issue for me".
Mr Lagerway - "Again, I'm telling you, if you cannot guarantee me 100% confidentiality on all company matters and personal opinions, then there is no position for you here".
I said - "I can't guarantee that I will keep your personal opinions confidential. Do you want to sack me?"
Mr Lagerway - "You leave me no choice, yes. Give me your master code for the alarm, your key, get your personal effects, put them in your brief case and leave the building".
I said - "Can I have a copy of my review?"
Mr Lagerway - "The review isn't finished and so you can't have a copy of it".
I then walked out of my office and said to a colleague, Mr Brent Kingston, "Lagerway's just given me the sack".
Shortly afterwards, Mr Lagerway approached Mr Kingston, Mr Barney O'Connell (another colleague) and myself. To the best of my recollection words to the following effect were said:
Mr Lagerway - "Jeremy has been sacked because he won't guarantee me 100% confidentiality".
I said - "That's not what I said, John. I will give you 100% confidentiality as far as IPC business is concerned".
Kingston confirms in his affidavit that Wilson, upon emerging from his office, said words to the effect "He has just fired me". He also confirms that Lagerway then approached Wilson in the presence of Kingston and another employee and stated "I have fired you because you would not give me complete confidentiality". Wilson then replied, "I will give you complete confidentiality as far as IPC business is concerned".
The reference to Ian McLean and James Ellingford concerned comments made by Lagerway to Wilson about them. According to Wilson, Lagerway in mid 1994 engaged in a conversation with him in which Lagerway said words to the following effect:
"Ian McLean has made a series of unkeepable promises in Canberra and that is the real reason why he is not here any more. He will never be employed by IPC again."
Wilson states Lagerway said to him on 15 September 1994:
"James Ellingford has a habit of ordering products from suppliers at $120.00, turning it around the next day, cancelling the order for $140.00 and pocketing the difference in his back pocket."
The offer of reinstatement
The following evidence relates to the contentious issue as to whether an offer of re-instatement made by the Corporation was a genuine one.
Approximately ten minutes after Wilson's dismissal he telephoned Ms Maxine Ritchie who was a superior of Lagerway in the Corporation's hierarchy. Wilson advised her that his employment had just been terminated by Lagerway. Ritchie extended an invitation to Wilson to attend her office the following day, 25 October 1994, with a view to resolving the situation. Wilson accepted this invitation.
The meeting of 25 October 1994 was attended by Ritchie, Lagerway and Wilson. Ritchie expressed concern that the situation had gotten out of hand. Wilson said he attended the meeting with a view to resolving the situation to enable him to "return to work". At the meeting Lagerway said words to the effect:
"Your position has been reinstated. All you have to do is sign this piece of paper and you can come back to work."
He then stated:
"The law says that what I did yesterday was "ee-ee" and therefore I have to give you this. Please sign it."
Wilson understood that Lagerway had offered to reinstate him to the position he had held the previous day. It was put to Wilson by the solicitor for the Corporation that the offer of reinstatement on 25 October 1994 was a genuine one.
Wilson's explanation in his affidavit for not accepting the offer of reinstatement was:
"I did not accept Mr Lagerway's offer of reinstatement on 25 October 1994, because having regard to my perception of his demeanour and statements on that date, I was not assured that his offer was genuine. I also believed in the circumstances that my name and reputation would have been sullied or tarnished throughout the respondent's organisation and that it would proceed to get rid of me legally at some time anyway in the near future. I decided to rely on my entitlement to have the court resolve the situation."
his oral testimony was:
"And how did you inform Ms Ritchie of your decision?---I rang her the next morning and told her that I didn't believe that the offer of reinstatement was a genuine one. There was still hostilities that had to be resolved before the matter could be settled."
"And why do you say there were hostilities?---The meeting that we actually had on that 24 October was not a conducive meeting to discussing reinstatement. It was a hostile meeting with John Lagerway being there and being quite upset. It just wasn't working towards that goal."
The reference to 24 October should have been a reference to 25 October 1994.
The testimony continued later:
"And I put to you that there was nothing in that to suggest to you that Ms Ritchie was being other than genuine in her offer that she was making to you?---No, I don't agree.
Now what was it that you say you do not agree with that proposition?---The whole meeting. I mean, the whole meeting - as the meeting progressed it came out that the offer looked less and less genuine. I mean, on face value on the start of the meeting it was signed by John Lagerway. The meeting took place. It looked like a genuine offer. As the meeting progressed and John Lagerway launched into various tirades, it looked anything but a genuine offer by the time that document was thrown at me."
The day after the meeting, 26 October 1994, Wilson visited Ritchie in her office, Lagerway was not present. Wilson was cross-examined as to the discussion that occurred:
"If I tell you that Miss Ritchie opened the conversation to this effect: "Jeremy as you are aware, your position has been reinstated and you are effectively still employed by IPC. If you choose to leave now it will be your decision". Do you recall her saying that to you?---At some point in the conversation words to that effect were said.
And you said in response to that, at whatever point in the conversation it was, words to the effect that you had legal opinion advice to the contrary?---Yes."
In my view, it cannot be said that the offer of reinstatement by Ritchie and Lagerway on behalf of the Corporation was not a genuine one. It was genuine in the sense that, had it been accepted, Wilson would have been re-employed to his previous position. However it is plain that the offer was motivated by a desire to avoid the legal ramifications of a dismissal that was likely to have been in contravention of the Act. It could not however be classed as a "sham" offer in the sense of a sham as discussed by Toohey J in State Public Services Federation; Ex parte Attorney-General (WA) (1993) 113 ALR 385 at 405 in which Toohey J said:
"The term "sham" has been considered by Australian and English courts on a number of occasions since Evatt J wrote. The consideration has generally arisen in the context of a commercial transaction, very often for the purposes of the Income Tax Assessment Act 1936 (Cth). As a result of those decisions the term has come to be applied where persons have entered into an ostensible transaction as a disguise to conceal their real transaction. In Sharrment Pty Ltd v Official Trustee in Bankruptcy Lockhart J concluded, after a review of the authorities:
'A "sham" is therefore, for the purposes of Australian law, something that is intended to be mistaken for something else or that is not really what it purports to be. It is a spurious imitation, a counterfeit, a disguise or a false front. It is not genuine or true, but something made in imitation of something else or made to appear to be something which it is not. It is something which is false or deceptive.'"
Wilson proffered two reasons for not accepting the offer. Firstly he believed that he had in the circumstances gained a "black mark" against his name and secondly, he was in fact offered a position that would have left him being supervised by a person with whom he had fallen out in a significant way.
Wilson's belief that he had a black mark against his name, emerged from his affidavit, examination in chief and cross-examination. During the meeting with Wilson, Ritchie and Lagerway the following conversation took place between Wilson and Ritchie:
"If I come back to work at IPC, will I face any future recriminations over yesterdays event?
Ms Ritchie - "You have no black marks against your name."
I said - "What about the comment I made to John yesterday about his comment about James Ellingford?"
Ms Ritchie - "Oh yes, you still have a black mark against your name over yesterday's event".
Wilson further states in his affidavit:
"... I also believed in the circumstances that my name and reputation would have been sullied or tarnished throughout the respondent's organisation and that it would proceed to get rid of me legally at some time anyway in the near future. I decided to rely on my entitlement to have the court resolve the situation".
During cross-examination, Wilson explained why he did not wish to be re-employed in a position in which he would have to report to Lagerway:
"Alright.Well why do you say it is not as simple as a no or yes answer?---I went back to that meeting with the express purpose of trying to resolve the matter that had taken place yesterday and that is the light that I approached that meeting. The meeting was hostile because John Lagerway chose to make it so. I understood the meeting was to be between Maxine Ritchie and myself. I did not actually know that John Lagerway would be on [sic] that morning either. At the conclusion of that meeting, Maxine told me to think about it and I then said to her I want to come back and work at IPC but can I be offered an alternative where I don't have to report directly to John Lagerway. She said no, that wasn't possible. She then said that I have to ...
THE WITNESS: As I said, I asked if I could have another position within the company where I wouldn't have to report to John Lagerway and she told me that wasn't possible and then I said, "that is going to make the whole thing rather difficult," and she then said, "Well please take the time. Go away and consider it further."
In view of the conclusion I shortly express about the operation of s170EE, it is unnecessary to express any view as to whether the position adopted by Mr Wilson was a reasonable one. Nonetheless I should indicate that I consider it was. I have already said I do not view the offer of re-employment as a sham. However it was in terms that would have resulted in Wilson reporting to Lagerway. Not unreasonably, in view of what had happened, Wilson did not want this. If evidence had been led by the Corporation that no other position was available then my view might be different. It did not. It is plain on the evidence that the Corporation conducts a large business in Canberra. I am not satisfied Wilson's request could not have been met and accordingly I am not satisfied the position he adopted was an unreasonable one.
Whether there was a discretion created by s170EE not to award a remedy
The solicitor for the Corporation submitted that s170EE created a discretion not to award a remedy and that in the present case no remedy should be ordered. Section 170EE provides:
"170EE(1)In respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, the Court may make the following orders:
(a)an order requiring the employer to reinstate the employee by:
(i)reappointing the employee to the position in which the employee was employed immediately before the termination; or
(ii)appointing the employee to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination; and
(b)if the Court makes an order under paragraph (a):
(i)any order that it thinks necessary to maintain the continuity of the employee's employment; and
(ii)an order requiring the employer to pay to the employee the remuneration lost by the employee because of the termination.
170EE(2)If the Court thinks, in respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, that reinstatement of the employee is impracticable, the Court may make an order requiring the employer to pay to the employee compensation of such amount as the Court thinks appropriate.
170EE(3)In working out the amount of the compensation for the purposes of subsection (2), the Court is to have regard to the remuneration that the employee would have received, or would have been likely to have received, if the employer had not terminated the employment, but the amount of compensation:
(a)must not exceed, in respect of any employee, the amount of the remuneration that would have been received by the employee in respect of the period of 6 months that immediately followed the day on which the termination took effect if the employer had not terminated the employment and the employee had continued to receive remuneration in respect of the employment at the rate at which he or she received remuneration immediately before the termination took effect; and
(b)must not exceed, in respect of an employee who is not employed under award conditions, the applicable amount on the day on which the termination took effect; and
170EE(4)The applicable amount for the purposes of paragraph (3)(b) is:
(a) subject to paragraph (b), $30,000; or
(b)if regulations made in accordance with Subdivision CA prescribe a formula for the annual indexation of the amount referred to in paragraph (a) - the amount worked out using that formula as it applies from time to time.
170EE(5)In respect of a contravention of section 170DB constituted by the termination of employment of an employee, the Court may make an order requiring the employer to pay to the employee an amount of damages equal to the amount of the compensation which, if it had been given by the employer to the employee when the employment was terminated, would have resulted in the employer not contravening that section.
The prefatory words in s170EE speak in terms of the "Court may make the following orders". The effect of the word "may" on the nature of the powers conferred by s170EE was considered by the Full Court in Liddell v Lembke (1994) 127 ALR 342.
Wilcox CJ and Keely J in their joint judgment say at 359:
"It is true that s170EE uses the word "may" not "shall" and that "may" connotes the conferral of a discretion, not a duty: see s33(2A) of the Acts Interpretation Act 1901 (Cth). However, as the Industrial Relations Act does not specify any criteria for the exercise of that discretion, they are those emerging from "the subject matter and the scope and purpose" of the legislation: see R v Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd (1979) 144 CLR 45 at 49; 27 ALR 321. The subject matter of this legislation is unlawful termination of employment. Its scope and purpose is the provision of legally enforceable remedies for people whose employment is terminated in breach of the internationally-accepted standards introduced by the Act into Australian domestic law. Because of these considerations, and the fact that the Commonwealth Act makes a termination in violation of the requirements of s170DC unlawful in itself, whatever the employee's merits or lack of them, it would not be right to withhold a remedy for a breach of s170DC because of considerations listed in s170DE(1). They are factors that permit an employer acting fairly to terminate an employee's employment. Still less would it be correct for the court to exercise its discretion adversely to an applicant because of factors extraneous to the Industrial Relations Act, such as a respondent's financial position or personal likes or dislikes.
The situation is similar to that which applied in Ward V Williams (1955) 92 CLR 496. The High Court there discussed the use of the word "may" in connection with the grant of statutory power to a magistrate to specify the works to be executed by a property owner to abate a nuisance. The court held that the magistrate had a discretion whether to make an order. Their Honours went on, at 508:
"It is, however, a discretion which must be exercised judicially and upon grounds which do not go beyond the scope and object of Pt VII of the Public Health Act 1902-1952. Plainly the purpose of the provisions contained in Pt VII is, by a summary remedy, to secure the abatement or removal of the various causes of public inconvenience or offence which s64 enumerates as nuisances, and the prevention of the recurrence of those likely to arise again. Prima facie, therefore, proof of the existence of such a nuisance should lead a magistrate to make an order when a complaint comes before him. [Emphasis added]
At the time of Ward v Williams, New South Wales law did not contain an equivalent of s33(2A) of the Acts Interpretation Act, but that makes no difference to its continuing authority.
If any further indication of the fact that Parliament did not intend this court to have an open discretion in relation to the granting of relief under s170EE is required, it is provided by the word "impracticable" in s170EE(2). The court may order the payment of compensation for unlawful termination (as distinct from an order under s170EE(1)(b)(ii) concerning remuneration lost in the period between termination and reinstatement) only where it thinks "the reinstatement of the employee is practicable". Plainly, it was Parliament's intention that the primary remedy for unlawful termination should be reinstatement and that compensation should be available only where this was impracticable."
Gray J in Liddell v Lembke (supra) also dealt with the issue of whether the court has a discretion to refuse a remedy. At 367 Gray J states:
"This argument is plainly at odds with the terms of the federal Act. It is true that the use of the word "may" in the legislation empowering the court to grant remedies is to be regarded as discretionary. This is the effect of s33(2A) of the Acts Interpretation Act 1901 (Cth), which came into operation on 18 December 1987, a date prior to the enactment of the Industrial Relations Reform Act 1993 (Cth). A discretion is nevertheless required to be exercised "bona fide having regard to the policy and purpose of the Act conferring to the power": see Bowling v General Motors-Holden's Pty Ltd (1980) 33 ALR 297; 50 FLR 79 at 94. In that case, the Full Court of the Federal Court of Australia dealt with the exercise of a power of reinstatement, consequent upon conviction under s5 of the Conciliation and Arbitration Act 1904 (Cth). (The equivalent provision in the federal Act is s334.) At FLR 90-5, the Full Court, relying on authorities such as Finance Facilities Pty Ltd v FCT (1971) 127 CLR 106 and Ward v Williams (1955) 92 CLR 496, provided useful guidance on the proper construction of the word "may" when that word is used in the grant of a discretionary power.
Thus, when this court finds that a contravention of a provision of Subdiv B, (other than s170DB or 170DD) has occurred in relation to a termination of employment, it will ordinarily grant the remedy of reinstatement specified in s170EE(1). It does not possess an unfettered discretion to refuse that remedy upon any view as to the relative merits of the parties. The only circumstance in which it can refuse to grant the remedy is if both forms of reinstatement specified are "impracticable". The word "impracticable" means "that cannot be carried out, effected, accomplished, or done; practically impossible" (Oxford English Dictionary) or "that cannot be put into practice with the available means": Macquarie Dictionary. Attention is directed to the practicability of the remedy, not to its practicality. Section 170CB of the federal Act provides that an expression used in Div 3 of Pt VIA has the same meaning as in the Convention. Article 10 of the Convention uses the expression "not ... practicable". The French text of the Convention (which is equally authoritative with the English) renders the relevant part of Art 10 as "n'estiment pas possible dans les circumstances", which I understand to translate directly as "do not consider it possible in the circumstances". The use of the French word "possible" shows the extent to which the court must go before it can refuse to reinstate.
If s170EE(1) of the federal Act were to be construed as giving the court an overriding discretion to refuse to order reinstatement in circumstances where reinstatement was practicable, the employee concerned would have no remedy at all when the discretion was exercised against him or her. Pursuant to s170EE(2), the remedy of compensation is available only "If the Court thinks ... that the reinstatement of the employee is impracticable...". It is extremely unlikely that the Parliament intended there to be a discretion not to order reinstatement the exercise of which against the employee must result in the employee receiving nothing."
The Corporation's submission was based on the argument that the Corporation realised it was at fault when Wilson was terminated on 24 October 1994 but quickly remedied the situation by offering Wilson, the following day, reinstatement to his previous position. It was Wilson's choice not to return to the position. It was submitted that the Act should not be construed in such a way so as to "punish" employers in such circumstances.
The approach of Gray J was that the discretion arising in s170EE(1) not to make an order for reinstatement where there has been a termination in contravention of a provision of Division 3 of Part VIA of the Act, other than ss170DB and 170D, may only be exercised if reinstatement is impracticable in the way contemplated by s170EE(2). It is not entirely clear whether Wilcox CJ and Keely J viewed the discretion as so confined though it would seem they may not have. Their Honours say at 359.7, the Act does not specify any criteria for the exercise of the discretion. However at least implicit in the approach of Gray J is that the criterion is identified in s170EE(3), namely if reinstatement is impracticable the discretion not to make an order of reinstatement may be exercised and may only be exercised in that situation. However Wilcox CJ and Keely J later speak, at 360.7, of the criterion of impracticability as a stringent limitation "inconsistent with the notion that Parliament intended the Court to have an open discretion whether to intervene at all".
In my opinion the construction of s170EE adopted by Gray J is correct for the reasons his Honour gives. Wilcox CJ and Keely J did not express a clear contrary view. Accordingly given the admitted termination in contravention of the Act and the concession by the Corporation that reinstatement is not impracticable, it follows that there is no scope for the exercise of any discretionary power not to make an order reinstating Mr Wilson in employment with the Corporation. The scope of s170EE(1)
In issue is whether s170EE(1), when dealing with lost remuneration, empowers the court to order payment of lost income discounted by income the employee has earned after dismissal and if so, what orders should be made in the present case. Section 170EE(1)(b)(ii) provides that if the court makes an order for reinstatement then it may make "an order requiring the employer pay to the employee the remuneration lost by the employee because of the termination".
The structure of s170EE(1) is such that the power to make an order under s170EE(1)(b)(ii) is subject to the prefatory words in s170EE(1) which includes the expression "may make the following orders", the meaning of which I have just discussed. The discretion conferred by that expression operates on the power to make an order concerning remuneration. However, unlike the power to make orders for reinstatement in s170EE(1)(a), s170EE provides no clear indication of how the discretion should be exercised and, in my view, it is a discretionary power to be exercised in the manner Wilcox J and Keely J discuss when considering s170EE(1) more generally in the passage I earlier set out from Liddell v Lembke supra. Thus it can be expected that ordinarily an order will be made ordering the payment of lost remuneration if an order of reinstatement is made.
Before considering how the discretion should be exercised in the present case I should indicate whether, as a matter of power, the court can take into account, and reflect in the order, any remuneration earned by the dismissed employee in employment with another employer after the dismissal and before the order for reinstatement is made. Section 170EE(1)(b)(ii) speaks of "the remuneration lost by the employee because of termination" (emphasis added). The use of the word "the" together with the expression "because of the termination" indicates that sub paragraph (ii) concerns only the remuneration the dismissed employee would have earned in the employment which was terminated in contravention of the Act. It is payment of that remuneration that may be ordered.
However paragraph (ii), in my opinion, identifies the character of the order that may be made. The paragraph does not prescribe the form of the order which, if it did, would mean that the Court may only order the entire remuneration lost or nothing. If paragraph (ii) identifies the character of the order then it follows that the court may make an order of that character but framed to meet the circumstances of the case. Generally, the remedies available under s170EE are, in my opinion, intended to enable the court to protect employees from the effect of a termination in contravention of the Act and are not intended to empower the Court to penalise employers for the contravention. It is beneficial legislation: see Grout v Gunnedah Shire Council (1994) 125 ALR 355 at 372 and has been aptly described as a "charter of rights for employees" see Gray J in Fryer v Systems Service, Pty Ltd (1995) 130 ALR 168 at 189.
Thus the employee is to be protected by maintaining his or her income during the period between termination and reinstatement at the level it was before the unlawful termination. This is done by means of an order under s170EE(1)(b)(ii). While such an order penalises an employer in the sense that a payment in the nature of a salary or wage is made without the corresponding benefit of the work of the former employee, that is immaterial given that the purpose of the order is to protect the employee from the effect of the employer's act of unlawfully terminating the employment. The termination had the immediate effect of depriving the employee of the opportunity of earning his or her income. However if an employee was able to obtain other employment, the prior level of income can be maintained after termination in whole or in part. I do not view as inconsistent with the purpose of s170EE(1)(b)(ii), if an order made under that section simply augments income derived from another employer. The order I will make in this case will take other income into account.
At the time of his termination on 24 October 1994 Wilson's remuneration was $42,000 per annum. Wilson gave evidence that he earned approximately $480 per week from 5 December 1994 to 20 February 1995. He did not receive any commission or employer sponsored superannuation contributions whilst engaged in such employment. Since 3 March 1995 Wilson has been self-employed, his weekly income has varied between $200 to $600 per week.
Taking into account these figures I determine that the sum of $30,374 should be paid for remuneration lost by Wilson since his termination. While, in the circumstances, this may appear burdensome to any employer who offered to re-employ the employee the day after the unlawful termination, it must be remembered that the Corporation resisted the making of an order for reinstatement and has challenged the order made by the Judicial Registrar in February 1995. Had the Corporation not persisted in resisting a court order giving effect to what it had been earlier prepared to do voluntarily, the magnitude of the remuneration lost and thus, the amount ordered, would have been considerably less.
Whether the applicant is entitled to commission
Paragraph 3 of Wilson's statement of facts and contention states:
"The applicant was entitled to commission payments for the position of "ACT Retail Co-ordinator/Regional Software Co-ordinator" as set out in paragraph 2(b) of exhibit 3 in the initial proceedings."
The entitlement to commission is said to arise from the combined operation of two documents. The first is the letter of appointment of Wilson to the position of ACT Retail Co-ordinator. The letter is dated 15 April 1994. While there is an issue as to whether the applicant has proved that this letter applied to his subsequent employment in other positions in the Corporation, I am satisfied it did. The relevant part of the letter, which was paragraph (b), read:
"Commission
Revenue: $200 per month per Centre for any individual or multiple Centre that has achieved its revenue target for that month.
Gross Profit: $200 per month per Centre for any individual or multiple Centre that has achieved its Gross Profit target (defined as being 20% of its revenue target) pro rata from 70% up.
Software: $12,000 per annum as per the Regional Gross Profit Commission Plan against your software GP target.
Over achievement
Revenue: Reward shall be by way of a $100 payment per month for each 10% achieved above the ACT area target that the ACT area achieves.
Gross Profit: GP commission over achievement shall be a pro rata payment of $100 per month per Centre provided that the ACT area is on or above GP target on a Year to Date basis.
Software: As per Regional Gross Profit Commission Plan.
TARGET TO DECEMBER 1994
Three sales staff per Centre at $18,000 per week revenue each.
Each three sales staff Centre is therefore targeted at $2,808,000 revenue per annum.
Four salesperson Centre's target is $3,744,000.
Naturally in a start up mode the individual monthly targets shall be different to those above as will the ACT retail target as a result. these targets shall be advised to you separately from this letter.
Creativity Bonus
Should you devise any idea that the company then uses for bundling or selling IPC product a creativity bonus shall be paid to you. The value of any such bonus will be judged on each situation (e.g. local use only, national use, standard offering, international).
Note:Total commission plan is subject to change to meet changing business requirements. One month's written notice of such change shall be provided by IPC to you."
The second document is a series of pages dealing with commission payments. From that document it can be inferred that the relevant Australian Capital Territory targets were "$0.00" for the periods in issue. However Wilson must demonstrate that paragraph (b) was intended to confer a benefit, by way of commission if, in substance, no "target" was set.
It appears to me that the plain intention of paragraph (b) was to create a scheme in which those participating would derive a benefit if certain targets were met or exceeded by their diligence and application. Properly construed, the paragraph contemplated the setting of a target that was one of substance and the achievement of which would depend upon diligence and application. That was the nature of the contractual arrangement.
It is not apparent to me that the mere proof of a document identifying "$0.00" as a target proves that the target was determined for the purposes of the operation of the scheme. Indeed the identification of a zero sum would suggest otherwise. It was incumbent upon the applicant to prove that the target of "$0.00" was determined for the purpose of the operation of the scheme. This, the applicant has not done. Accordingly I dismiss the applicant's claim for commission.
I certify that this and the preceding twenty-four (24) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore.
Associate: ........ ........ ......
Dated: ..../..../....
APPEARANCES
Counsel for the Applicant: Mr J Wilson
Solicitor for the Applicant: Crossin Barker Gosling
Counsel for the Respondent: Mr J W Constance
Solicitor for the Respondent: Sneddon Hall & Gallop
Dates of Hearing: 6 September 1995
Written Submissions Complete: 21 September 1995
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