Lawrence, Q.D. v Clutha Development Proprietary Ltd
[1985] FCA 190
•10 MAY 1985
Re: QUENTIN DERRICK LAWRENCE
And: CLUTHA DEVELOPMENT PROPRIETARY LIMITED
No. V 27 of 1984
Industrial Law
COURT
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Keely J.
CATCHWORDS
Industrial Law - proceeding for payment due under award - whether employee who agreed to "voluntary retrenchment" was retrenched
HEARING
MELBOURNE
#DATE 10:5:1985
JUDGE1
The applicant's counsel, Mr. Heerey, has urged upon the Court every consideration that could be put in support of the applicant's claim. However, the claim must fail for reasons which will be apparent from the difficulties which have been raised with Mr. Heerey during his final address this morning and this afternoon. Having regard to the lengthy discussion of those difficulties that has taken place, the reasons for dismissing the claim need only be stated fairly briefly.
The applicant claims that he is entitled to $5,816-00 as "retrenchment pay" from the respondent under clause 28(1) of the Coal Mining Industry (Mechanics) Award, 1982, New South Wales, as amended (the award). In the alternative it is claimed that that amount is due under an agreement between the applicant and the respondent, made in December 1982, that his employment would be terminated and that, in the words of paragraph 9 of the statement of claim, "the respondent would pay to the applicant the full retrenchment entitlement prescribed by the award without regard to whether the termination of his employment with the respondent was voluntary or otherwise". It was said that that entitlement was three week's ordinary pay for each completed year of employment with the respondent.
Clause 28(1) of the award, as varied by an order made on 28 January, 1983, included the following provisions :-
"28. Severance and Retrenchment Pay
(1) Southern and Western District, New South Wales
(a) Subject to sub-clause (b) hereof, when a reduction of hands is decided upon by an employer respondent to this award an employee who is retrenched shall be entitled to receive from his employer severance pay calculated at the rate of one ordinary week's pay for each completed year of employment.
....
(c) Subject to sub-clause (d) hereof, when a reduction of hands is decided upon by a employer respondent to this award by reason of technological change, market forces or diminution of reserves, an employee notwithstanding the provisions of clause 5 herein shall receive one month's (four working weeks) notice of retrenchment and in addition to the payment required to be made under sub-clause
(a) hereof shall be entitled to receive from his employer retrenchment pay calculated at the rate of two ordinary weeks pay for each completed year of service with a minimum payment notwithstanding his length of service of two ordinary weeks pay."
The material variation, included in the clause set out above, introduced sub-clause (c) in that form, and deleted from sub-clause (a) a qualification which limited the entitlement conferred by that sub-clause to employees with at least five years of continuous employment with the employer. Those variations, insofar as they were relevant to these proceedings, were both to operate on and from 12 November, 1982. It is common ground that the applicant was paid one week's ordinary pay for each completed year and was not paid any amount under sub-clause 28(1)(c) of the award.
The applicant, in order to show his entitlement under clause 28(1)(c), had to establish, amongst other things, that "a reduction of hands" had been "decided upon by (the) employer". In my opinion, there is no evidence that the respondent had so decided. Mr. Frew, who, at the material time, was Management Services Manager of the respondent was an impressive witness and I accept his evidence that the respondent had not decided to reduce hands - notwithstanding the gloss which Mr. Heerey this morning sought to place upon that evidence. It may be noted in this connexion, that, on or before 6 December, 1982, the respondent had given an undertaking to the combined mining unions that it would not retrench employees before 7 February, 1983 - an undertaking which was later extended for six months beyond 7 February, 1983. The applicant was a member of the Federal Mining Mechanics Association of Australasia which was one of the unions which formed the combined mining unions.
I accept Mr. Frew's evidence that the applicant was not dismissed by the respondent and that he left of his own free-will, although, of course, he had been offered, by the respondent, an inducement to do so. The applicant gave evidence that, on 8 December, 1982, he gave to the respondent an application for "voluntary retrenchment", which he had not signed until after obtaining the advice of his solicitor as to its meaning. That application, addressed to the Colliery Manager, was in the following terms :-
"Dear Sir,
I wish to apply for "voluntary retrenchment".
I make the application in the knowledge that if it is approved I will receive my award entitlements accrued at agreed severance date and also redundancy pay of one weeks pay for each completed year of service, as per the agreement between management and the Burragorang Valley Combined Mining Unions.
Your approval would be appreciated.
Yours faithfully,
(Signed) Q. Lawrence"
In my opinion it has not been shown on the evidence that "a reduction of hands" had been "decided upon by" the respondent at or shortly before the termination of the applicant's employment in December 1982. The respondent wished that a reduction in its labour force would occur but on the evidence in my opinion it did not "decide" upon a "reduction of hands". Instead of so deciding, it offered to its employees an inducement for them to voluntarily retire - doubtless hoping to avoid having to "decide" upon retrenchments. As the respondent said in its letter dated 6 December, 1982 to the combined mining unions :-
"Finally we formally acknowledge our appreciation of the co-operation that you and your colleagues have extended to management in our attempt to avert retrenchments." (underlining added)
Accordingly, clause 28(1)(c) in my opinion did not operate to confer upon the applicant the right to an additional "two ordinary weeks pay for each completed year of employment" with the respondent.
There are two other matters which in my opinion support the conclusion that the applicant did not obtain any entitlement under clause 28(1)(c). One is that that sub-clause, as varied, should be read as if the words "who is retrenched" were inserted immediately after the reference to "an employee" in the third line of the print. That opinion is based upon (i) the construction of clause 28(1) as a whole, (ii) the similarity of wording in sub-clauses (a) and (c) of that clause, (ii) the fact that the entitlement under sub-clause (c) is expressed as being "in addition to the payment required to be made under to sub-clause (a)", and (iv) the use of the words "retrenchment pay" in sub-clause (c), in dealing with the employee's entitlement.
The other matter is that clause 28(1)(c), which entitled an employee to receive an additional "two weeks ordinary pay for each completed year of employment", also provided that the employee "shall receive one month's ... notice of retrenchment ..."; in the present case there has been no suggestion that the applicant received - or that he was entitled to receive - such a "notice' of retrenchment".
Mr. Heerey has submitted that the applicant was "retrenched". He submitted that in clause 28 the word "retrenched" was not limited to a termination by unilateral act of the employer but included any cutting back of employment involving some positive act by the employer, including the offering, by the employer, of "voluntary retrenchment". However, in my opinion, in order to constitute "retrenchment" within sub-clause 28(1)(c) of the award the "cutting back of employment" must be done directly by the employer's own decision and not by the decision of the employee - even where he so decides because he has been offered an inducement to leave his employment.
In considering whether employees who applied to their employers for "voluntary retrenchment" were entitled under sub-clause 28(1)(c) to be paid three weeks ordinary pay for each completed year of employment (as claimed by the applicant), it may be noted that Mr. Heerey told the Court in his opening address that the hearing before the Coal Industry Tribunal, which led to the insertion of sub-clause 28(1)(c) in the award, took place in November, and December, 1982. There is no evidence as to what was the claim advanced by the unions in that hearing i.e. the claim to which the variation related. However, there is uncontradicted evidence that, on 6 December, 1982 the unions put to the respondent's management a proposal for (only) "one week's pay for each completed year of service" (which led to the "agreement" referred to in the applicant's application dated 8 December, 1982 - set out earlier in these reasons). It is unlikely that such a proposal would have been advanced to the respondent by the unions had they, in the hearing in November and December 1982, been advocating the grant by the Tribunal of a claim by them that employees who had applied for "voluntary retrenchment" should be entitled to three weeks pay for each completed year of service.
For those reasons the applicant's claim to be entitled to "retrenchment pay" by reason of the provisions of clause 28(1)(c) of the award cannot succeed.
The applicant's alternative claim was based upon an alleged agreement with the respondent. Paragraph 9 of the statement of claim stated that it was a term of the agreement that "the Respondent would pay to the applicant the full retrenchment entitlement prescribed by the Award without regard to whether the termination of his employment ... was voluntary or otherwise".
However, the applicant's own evidence failed to establish any agreement that he was to be paid additional amounts "without regard to whether the termination ... was voluntary or otherwise". His evidence was that he asked the pay clerk, Mr. Martin Hiscock, "with regards to the award, if it were to be changed, ... would the changes be honoured, and he agreed that they would be. He said the company would honour the award". Having obtained advice from his solicitor that evening, the applicant on the following day again saw Mr. Hiscock. The applicant's evidence was that - "I asked him, again, if it would be honoured and he again replied yes, it would be".
I accept the evidence of the applicant, who was also an impressive witness, and do not accept the evidence of Mr. Hiscock where it conflicts with that evidence. However, the applicant's evidence does not support the allegation in paragraph 9 of in the statement of claim in my opinion. Nor does it support the particulars to paragraph 8 of the statement of claim, that "the Applicant asked whether or not he would get the full entitlement for the flow on of any changes to the Award and the Pay Clerk said he would. The Respondent's Manager, Mr. Charles was present at the conversation and acquiesced in what was said by the Pay Clerk". There was no evidence of any statement using the words "flow on" and there was no evidence of any "acquiescience" by Mr. Taylor. In my opinion, assuming that Mr. Hiscock had at the time either actual or ostensible authority to speak for the respondent, the applicant's own evidence does not support the alternative way in which the claim has been put to the Court.
As mentioned earlier, the combined mining unions had put to the respondent a proposal that anyone who "wished to leave the company on their own volition should be paid one week for each year of service". That proposal was accepted by the respondent by letter dated 6 December, 1982. It is true that that letter did not specifically say "one week" but instead said "redundancy entitlements as per the award" and Mr. Heerey has sought to rely upon the words "as per the award". However, at the time of the letter the award entitlement for retrenchment under clause 28(1) was only "one ordinary week's pay"; given the existence of that award provision and the fact that the proposal put to the respondent by the unions was only for "one week's pay" per year of service, in my opinion the respondent's letter of 6 December, 1982 must be read as agreeing to pay only one weeks pay per completed year of service to those employees who were accepted for "voluntary retrenchments".
Accordingly, the application is dismissed.
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