Morante v SA Superannuation Board No. Scgrg-97-900 Judgment No. S6909

MORANTE v SA SUPERANNUATION BOARD
[1998] SASC 6909

Full Court: Millhouse, Olsson and Debelle J

MILLHOUSE J

My brother Debelle will give his reasons first.

DEBELLE J

The appellant, Mr Morante, was dissatisfied with the decision of the South Australian Superannuation Board (“the Board”), made on 4 July 1997, whereby the Board determined that the appellant was not entitled to superannuation under the Superannuation Act 1988. The issue before the Board was whether the appellant's employment had been terminated by retrenchment. The Board held that it was not. The Board relied on the fact that the South Australian Government has a policy that there is to be no retrenchment of persons employed by government and that work will be found for redundant employees by a process of redeployment.
The appellant appealed to this court pursuant to s.44 of the Act. He relied on the decision in this court in Blaikie v South Australian Superannuation Board (1995) 65 SASR 85 and submitted that he had been constructively retrenched. Lander J did not accept the appellant's submissions. He upheld the decision of the Board and dismissed the appeal. The appellant now appeals to this court. In the appeal to this court the appellant has re-canvassed the issues which were before Lander J. The issues turn on questions of fact and this appeal can be resolved by reference to them.
The history of the matter is recited at length in the reasons of Lander J. It is unnecessary to repeat all of the facts but refer only to those which are essential to the resolution of this matter.
It is common ground that the appellant's employment was terminated on 29 April 1997. The only issue was whether he had been constructively retrenched. The appellant had held a number of positions, both temporary and permanent. For present purposes, it is sufficient to note that in 1991 he was employed at an SO1 level in the Department of Agriculture. In December 1991 he was assigned to a PSO1 position as assistant National Land Care Plan Coordinator and he remained in that position until he was asked to perform certain duties in 1996. On 22 April 1993, the appellant was appointed to a permanent position at PSO1 level in the Department of Primary Industry. He was, however, paid at a PSO2 level, having been earlier reclassified to that level. For the purpose of resolving the issues in this action, it is sufficient to start with his appointment to this permanent position on 22 April 1993. That appointment is central to the resolution of the issues in this action. But for that appointment, the appellant would not be able to advance the arguments upon which he now relies.
As I said earlier, the appellant had been employed as assistant National Land Care Plan Coordinator. There were some disputes between him and managers in his department but it is unnecessary to refer to them other than to note that the appellant sought legal advice which was not promptly given causing delay. Lander J found that the appellant did a minimum amount of work over this time. It is sufficient to note that on 26 August 1996, the general manager of the department wrote to the appellant, assigning him to a position for two years in relation to the detection of the rabbit calicivirus. The letter referred to the fact that the appellant had not performed scientific work in recent times - a matter of which the appellant had, himself, complained - and provided him a position which, according to the letter, would require some laboratory skills. The letter goes on:

“I have assessed the position and your skills and while you may not have worked with the techniques to be employed, I am sure that with your laboratory skills, it will be within your capability.
The position is for two years, the length of the national monitoring program, commencing in September 1996. It will initially be based at the Veterinary laboratories to learn the techniques, and may be relocated to the Animal and Plant Control Commission laboratory, Waite Road, Urrbrae, at a later date.”

The appointment did not involve any change in the appellant’s level of remuneration.
The appellant refused the appointment. As Lander J found, he took exception to the letter. On 13 September 1996, he wrote to Mr Wickes, his departmental manager, accusing him of intimidating him by the appointment. I agree with Lander J that this was an overreaction and an unreasonable response on the part of the appellant. I quote from Lander J:

“The appellant seems to have taken a position that he was entitled to do a minimum of work, not to co-operate, and wait upon legal advice in relation to the “employment matter”. It does not seem to have occurred to the appellant during this time that it might be unreasonable to call upon his employer to wait more than 12 months while he obtained legal advice. It may have been that the appellant's frustration was heightened by his inability to obtain legal advice over this period of time, but, again, that is not a matter which can be visited upon the employer. During this period of time the employer was trying to resolve an impasse. The appellant, on the other hand, made no efforts to assist.”

The appellant did not report for work. On 18 September 1996, the chief executive officer of the Primary Industry Department advised the appellant that he had decided to conduct a disciplinary enquiry under s58 of the Public Sector Management Act 1995. The appellant was suspended from duty pending the outcome of the enquiry. The appellant objected to the procedures. After obtaining advice, the chief executive officer of the department affirmed the decision to suspend the appellant from duty, the decision to be effective from 7 October 1996. The suspension was to remain in force pending the outcome of the enquiry.
The appellant lodged a grievance appeal pursuant to s64 of the Public Sector Management Act. The appeal was heard by the Promotions and Grievances Appeal Tribunal. On 30 December 1996, the Tribunal dismissed the appeal. In its reasons the Tribunal said:
“Irrespective of Mr Morante's circumstances in terms of seeking legal advice about the Department's prior treatment of him, it is our view that that does not alter the fact that he was directed to report for duty to perform certain duties and he did not do so.
We understand that Mr Morante is an excess “permanent” employee whose substantive remuneration level is PSO2. Consequently, we believe that the decision to assign Mr Morante to an available PSO2 position was consistent with the duty that a Chief Executive has to place excess employees. We therefore regard the assignment decision as being properly made in accordance with law, and that Mr Morante's failure to do his directive constitutes a breach of s.57(a)(ii) of the Act....
Therefore, based on what we know, we consider that the decision to assign Mr Morante to the Rabbit Calicivirus position was a proper one to make, and Mr Morante's failure to comply with that direction was a serious breach of the Act which warranted a stern and considered response.”

The hearing of the disciplinary enquiry was re-scheduled for 28 October 1996. For a number of reasons, which it is unnecessary now to examine, the enquiry did not proceed on that day. It did not resume until 29 April 1997.
On 29 April 1997, the appellant met Mr Jackson, a manager in the department, and advised him that he was ending his employment on that day. On the same day the appellant applied to the Superannuation Board for a pension on the ground of retrenchment.
On 2 May 1997, the appellant wrote to the chief executive officer of the department and said:
“The conduct of my employer, its servants agency (sic) has destroyed the relationship of confidence and trust and that the breach of the agreement was so fundamental that I have brought our relationship to an end. I verbally stated the above to Mr Peter Jackson on 29 April 1997.”
On 8 May 1997, the appellant informed the Board that he had ended his employment with the department on 29 April, stating that he had been constructively dismissed and was, therefore, entitled to a pension and other benefits under the Superannuation Act.
That was the background against which Lander J made his findings. He concluded:
“There is nothing in the conduct of the employer in the relevant period leading up to 29 April 1997 which could allow the appellant to successfully assert that the conduct of the employer had evidenced a repudiation of the contract of employment between the parties. Moreover, there is nothing in the conduct of the employer which would allow the appellant to say that the employer followed a course of conduct with the deliberate and dominant purpose of coercing the appellant to resign.
Indeed, the facts and circumstances to which I have referred show the opposite. The employer, and, in particular, Mr Wickes, for the two years or so immediately prior to the cessation of the employment, persisted in attempts to obtain a satisfactory position for the appellant. It was not because a position was not available which the appellant could not be placed. It was because the appellant was unreasonable in his conduct towards his employer...
I find that during the period between May 1995 and April 1997 the appellant failed to carry out duties to which he was assigned. He failed to carry out his obligation pursuant to his contract of employment.
I find that he did so because of a misconception of his position. He was not entitled simply to stand back from his obligations while he waited on legal advice. Moreover, it was unreasonable of him to suggest that the employer had to wait some fifteen months or so whilst he obtained that legal advice.”
The learned judge then agreed with the decision of the Promotions and Grievances Appeal Tribunal. He concluded that the appellant had failed to make out his case that the termination of his employment arose out of a constructive retrenchment.
At the heart of the appellant's submissions was the contention that he had been wrongly assigned to duties which did not require any exercise of his scientific skills. His argument portrays a misunderstanding of the meaning and effect of s44. As Lander J noted, s44 provides a statutory power compulsorily to assign or deploy staff who become excess to requirements and who would remain in areas where there is no work to perform. The department was exercising that power when it sent the appellant the letter dated 26 August 1996. The appellant’s argument both misunderstands the nature of that power and overlooks the fact that, on 26 August 1996, he was assigned to other duties without any reduction in his remuneration for a limited period of time, namely, two years. After that period had expired, the appellant would either return to his former position or another position would have to be found for him at the same level. There was no possibility of the appellant losing his position: see s31(4)(a) of the Public Sector Management Act.
The appellant also contended that the letter of 26 August 1996 was offering him a contract for a limited period of two years. The appellant has misunderstood the meaning and effect of the letter. There is nothing in the letter which points to a contract. The letter did no more than assign the appellant to a position for two years to perform certain duties. Thereafter, the appellant would either return to his existing duties or be reassigned to other duties at the same level of remuneration.
The arguments advanced by the appellant portray a misunderstanding both of the terms of the letter of 26 August 1996 and of the provisions of s44 of the Public Sector Management Act. Lander J has carefully reviewed the facts. In my view, he has properly applied the terms and provisions of the relevant legislation. The appellant has advanced no argument that justifies this court in interfering with his decision.
In my view, for the reasons that the judge has stated and for these reasons, his decision was correct. The appeal must, therefore, be dismissed.

MILLHOUSE J:

I agree with what Debelle J has said.

OLSSON J

I also agree that this appeal should be dismissed.
The reasons which follow are published as foreshadowed at the hearing of the appeal.
This is an appeal, by an appellant in person, against a judgment of a single Judge of this Court. On 2 July 1998, for reasons then expressed by him, he dismissed an appeal from a decision of the respondent, whereby it determined that the appellant’s former employment as an officer of the public service of this State had not been terminated by retrenchment.
In his reasons for decision the learned Judge analysed the evidentiary material before him in considerable detail. Much of it was non contentious as to its provenance and, at the end of the day, the appeal essentially fell to be decided on the basis of the factual inferences which arose from the material proffered by the parties.
In a claim for a pension and lump sum made by the appellant pursuant to section 35 of the Superannuation Act 1988 he asserted that he had been constructively dismissed from his employment within the Department of Primary Industries as of 29 April 1997.
As the learned Judge pointed out, there can be no doubt that the employment relationship came to an end by reason of the appellant unilaterally terminating it on the date in question. A primary question which arose was whether or not that termination had been brought about by reason of conduct on the part of the Department the deliberate and dominant purpose of which was to coerce the appellant to resign, or which was otherwise a repudiation of his contract of employment.
From 9 March 1983 up to 22 April 1993 the appellant held several temporary positions as a scientific officer with the former Department of Agriculture. During that time he was dissatisfied with his classification and sought a review of it. A Classification Review Panel held, on 29 May 1990, that he ought to be reclassified to the SO2 level. However, that finding was not immediately acted upon.
On 21 June 1991 he was advised that, due to budgetary difficulties, he may have to be declared redundant and that, in such an event, his personal particulars would be sent to the Redeployment Unit of the Department of Industrial Relations.
Between 30 June 1991 and December of that year he worked with the State Chemical Laboratories. During that time the appellant challenged a decision to revert him to a position at the PSO1 classification level. The Promotions and Grievance Appeals Tribunal upheld his contention.
Notwithstanding that conclusion, on 10 June 1992, the Commissioner for Public Employment, on the advice of the permanent head of the Department of Agriculture, agreed that the appellant ought to be appointed to a permanent position at the PSO1 level within the Department of Agriculture, but determined that he be paid a special allowance to bring his salary up to about the equivalent of that paid to a PSO2 officer. This was to be on the basis that he be retained on the redeployee list within the Department. It was intimated that steps would be taken to endeavour to place the appellant in a PSO2 position when possible.
In December 1992 the Department of Agriculture was split into two entities, one of which was a new Department of Primary Industries. The appellant was assigned to that Department. He was appointed to the permanent position of Analytical Chemist PSO1, with the continuing additional allowance. He was told that steps would be taken to assist him to find a PSO2 position within the Public Service if possible.
On 22 April 1993 formal steps were taken to formalise the permanent status of the appellant by means of an appointment approved by the Governor in Executive Council.
On 6 April 1994 the appellant was advised that a Targeted Separation Package was available to assist in meeting Departmental restructuring strategies. This provided financial incentives to resign. However, it was made clear to the appellant that the offer was a standard offer made to a class of employees and he was not required to take it.
Very shortly afterwards the appellant sought medical advice and was referred to a psychiatrist. It seems obvious that, from about that time, he became somewhat obsessed with what appeared to him to be the injustice of his situation. He did not react well to his status as a redeployee.
By letter dated 19 July 1994 the appellant was formally advised that his position was to be abolished and that he would become redundant.
He sought appointment to other positions as an analytical chemist, but does not seem to have been successful.
The learned Judge found that, early in May 1995, the Department advised the appellant of the possibility of an OPS2 position at Turretfield. The appellant contended that he was advised by a senior officer, Wickes, that he should either accept redeployment to that position or a TSP. This was a non professional position.
There was a clear dispute between the appellant and Wickes as to what was said at that time.
Having carefully considered all of the material before him the learned Judge preferred Wickes’ accounts of what was said and concluded that the appellant had over-reacted to what occurred. He concluded that Wickes did not deliver any form of ultimatum to the appellant and was merely endeavouring to assist him.
Shortly thereafter a meeting took place between the appellant, an officer from the Public Service Association and an officer from the Commissioner for Public Employment office. It was agreed that a variety of strategies would be taken to endeavour to assist the appellant to resolve his long term employment situation.
At a further meeting on 16 June 1995 it was made clear by an officer of the Department for Primary Industry that it would be unable to provide a suitable position for the appellant in the future. It is said that the outcome of the meeting was that the appellant would undergo a formal vocational assessment.
On 22 June the appellant sought legal advice. It took him a very long time thereafter to obtain legal advice which was, apparently, acceptable to him.
By letter dated 26 September 1995 Wickes offered the appellant a temporary position of Extension Officer (Residues), as a retraining exercise, at the PSO2 rate of pay. The appellant responded to the effect that he wished to seek legal advice.
The appellant refused that position, which was not one directly related to his professional qualifications. He continued to do temporary work in assisting with the National Land Care Programme. It was not disputed that the appellant’s contribution to that work was not high, because he declined to accept relevant training in respect of it without legal or industrial advice. On 11 October 1995 he declined to perform any further duties in relation to the programme, lest he prejudice his legal position.
This unsatisfactory situation persisted for some time, with the appellant saying that he was seeking legal advice satisfactory to him and Wickes complaining that the appellant was not fulfilling satisfactory work functions.
As of 6 November 1995 the appellant was reclassified to the PSO2 level in lieu of the payment of an allowance to him above the PSO1 classification.
On 26 August 1996, following the escape of the calicivirus it became necessary to establish an ongoing testing programme. On 26 August Wickes wrote to the appellant and informed him that he was assigning him to duties associated with the programme for two years, the initial portion of which was to be a training programme in the Veterinary Laboratories.
The letter was expressed in these terms:-
“26 August, 1996
Mr Carmine Morante
Sustainable Resources
Primary Industries SA
Soil & Water Environs Centre
Entry 4, Waite Road
URRBRAE SA 5064
Dear Carmine

Position for Rabbit Calicivirus Detection
Please find attached a position to undertake diagnostic work in the Rabbit Calicivirus program. This work is required to underpin the proposed release and monitoring of the Rabbit Calicivirus so that the impact of the disease can be improved by understanding its behaviour in the field.

The position requires some laboratory skills and will involve training in the use of ELISA techniques and development of the laboratory technique into a field assessment technique. This will require a literature review and adaption of the techniques so that researchers may have a simple method of detecting Rabbit Calicivirus, particularly when they are conducting monitoring experiments a long way from the laboratory.
I have assessed the position and your skills and while you may not have worked with the techniques to be employed, I am sure that with your laboratory skills, it will be within your capability.
The position is for two years, the length of the national monitoring program, commencing in September, 1996. It will initially be based at the Veterinary laboratories to learn the techniques and may be relocated to the Animal and Plant Control Commission laboratory, Waite Road, Urrbrae, at a later date.
I propose to assign you to these duties on 16th September, 1996 and expect you to report to Peter Durham at the PISA laboratories, Flemington Street, Frewville at 9.00 am on that day.
Please feel free to discuss this with me over the next week, as if you have any concerns, please let us both work through them.
I trust that you will find these arrangements satisfactory.
Yours sincerely
(signed)
Roger B Wickes
GENERAL MANAGER, SUSTAINABLE RESOURCES”

The learned Judge had this to say concerning the letter:-
“The calicivirus programme was based in the Sustainable Resources Group PISA and the location of the work was at the veterinary laboratories at Frewville. Indeed the veterinary laboratories occupied the same location as the Amdel Laboratories. He previously had worked at Amdel. The position involved no loss of salary. Mr Wickes offered him the position, so he says, because he thought the appellant was a good candidate in light of his laboratory based experiences as an industrial chemist. The position required laboratory skills and also involved training in the use of the ELISA technique, a routine laboratory technique used to identify antigens and used widely in a rapid test in determining the presence of proteins. There was also some research required to turn the laboratory technique to a field assessment technique.

Mr Wickes believed that the appellant would benefit from the position as it would permit him to extend his laboratory techniques used in relation to chemicals to biological matter. By working with a competent laboratory manager Mr Wickes believed that the appellant would be able to sharpen up his general laboratory skills which Mr Wickes believed was important to the appellant as the appellant claimed he had lost those skills over the years.”

On 4 September the appellant met with Wickes and refused the job.
He reinforced that refusal by letter dated 13 September in which he accused Wickes, in quite remarkable terms, of coercion and bullying.
The learned Judge commented as under:-
“The appellant’s reaction is, in my opinion, an over-reaction. The offer put by Mr Wickes is apparently reasonable. The reaction is quite extraordinary. The reaction is unfortunately consistent with Mr Wickes’ file note which also indicates an unreasonable attitude on the part of the appellant.
It may have been that the appellant was disappointed with his employer. It may have been that he was suffering from considerable frustration by reason of an inability to be placed in his employment.
This letter indicates no co-operation whatsoever with his employer in attempting to resolve the issues between them.
Regrettably, this reaction appears to be consistent with his attitude over the fifteen months or so prior to this offer.
The appellant seems to have taken a position that he was entitled to do a minimum of work, not to co-operate and wait upon legal advice in relation to the ‘employment matter’. It does not seem to have occurred to the appellant during this time that it might be unreasonable to call upon his employer to wait more than twelve months while he obtained legal advice. It may have been that the appellant’s frustration was heightened by his inability to obtain legal advice over this period of time. But again that is not a matter which can be visited upon the employer. During this period of time the employer was trying to resolve an impasse. The appellant on the other hand made no efforts to assist.”
The appellant refused to comply with the direction given to him in the letter of 26 August, with the consequence that disciplinary proceedings were initiated against him under s58 of the Public Sector Management Act. He was suspended without pay during the conduct of those proceedings.
The appellant appealed to the Promotion and Grievances Tribunal against his suspension. Not unsurprisingly that appeal was rejected.
The disciplinary enquiry was postponed at the request of the appellant to enable him to obtain legal advice. It was eventually scheduled for 9 May 1997.
The appellant refused to attend or participate. On 2 May 1997 he wrote to the Chief Executive Officer of the Department of Industries SA asserting that his employer’s conduct was such that the relationship of employer/employee had been brought to an end.
The disciplinary enquiry was conducted in the absence of the appellant.
On 4 July 1997 the appellant was advised that he had been found liable for disciplinary action. He was invited to make submissions as to penalty.
Certain further exchanges occurred but, as the learned Judge pointed out, these became irrelevant because the parties agreed that his employment had ceased, at the instance of the appellant, on 29 April 1997.
The learned Judge concluded, on the facts, that the appellant had not been constructively retrenched.
He said:-
“In my opinion, the facts do not support the appellant’s claim.
There is nothing in the conduct of the employer in the relevant period leading up to 29 April 1997 which could allow the appellant to successfully assert that the conduct of the employer had evidenced a repudiation of the contract of employment between the parties. Moreover, there is nothing in the conduct of the employer which would allow the appellant to say that the employer followed a course of conduct with the deliberate and dominant purpose of coercing the appellant to resign.
Indeed, the facts and circumstances to which I have referred show the opposite. The employer, and in particular Mr Wickes, for the two years or so immediately prior to the cessation of employment, persisted in attempts to obtain a satisfactory position for the appellant. It was not because a position was not available that the appellant could not be placed. It was because the appellant was unreasonable in his conduct towards his employer.
The appellant seems to think that by seeking legal advice the employer was not entitled to direct him to carry out his duties. That is a fundamental misunderstanding on the part of the appellant. The appellant also seems to think that, having taken legal advice, he was entitled to do a minimum of work and disobey the instructions of his employer in relation to his particular employment.
I find that, during the period between May 1995 and April 1997, the appellant failed to carry out duties to which he was assigned and failed to carry out his obligations pursuant to his contract of employment.
I find that he did so because of a misconception of his position. He was not entitled simply to stand back from his obligations whilst he waited on legal advice. Moreover, it was unreasonable of him to suggest that the employer had to wait some fifteen months or so whilst he obtained that legal advice.
As the Promotions and Grievance Appeal Tribunal has found, the conduct of the employer was reasonable in the circumstances. I agree with that Tribunal’s finding.
In my opinion, accepting the correctness of the decision in Blaikie v SA Superannuation Board, the appellant has failed to make out his case that the termination of his employment arose out of retrenchment. In particular, he has failed to make out his case that the employer’s conduct caused the cessation of the contract of employment.”
He went on to find:-
“It was the respondent’s case that the appellant had resigned voluntarily and was not retrenched and therefore not eligible for retrenchment pension. In the end result, I accept the argument of the respondent. I accept that the instruction to the change of duties was in the circumstances of this case quite reasonable and was empowered by s44 of the Act. In these circumstances it did not evince an intention on the part of the employer to bring the appellant’s employment to an end. More specifically it was not even for the purpose of coercing the appellant to resign. It was done for the purpose of attempting to place the appellant in gainful employment.”
It follows from these findings, all of which are amply supported by the evidence, that, as a matter of fact, there was simply no basis for any finding of constructive retrenchment of the nature adverted to in Blaikie’s Case.
The employer’s conduct was not unconscionable in any sense. On the contrary, it bona fide sought to assist him in every way possible; and at all times adhered to the no retrenchment policy of the government.
The appellant was the sole author of his own misfortune, due, largely, to the fact that he chose, as a redeployee, to misconstrue the various attempts to place him in a suitable permanent position.
His appeal in this matter in effect seeks, for the third time, to recanvass the issues which were fully debated both before the learned Judge and the Promotion and Grievances Tribunal. There is simply no basis for asserting that the learned Judge erred. On the contrary, given the factual scenario clearly evidenced by the documentary material before the court, his conclusion was well nigh inevitable. This was particularly so as, having unsuccessfully challenged the direction given to him before the relevant statutory tribunal, he sought to relitigate the same issue in this Court. Moreover, as the learned Judge pointed out the appellant has, at all stages, chosen to ignore (or at least misconstrue) the provisions of s44 of the Public Sector Management Act. Under that section it was open to the appellant’s chief executive officer, unilaterally, to assign him to the duties of another position. This he did, for a projected period of two years.
The appellant has construed the direction given to him as being one which, impermissibly, sought to change his employment status to that of a contract employee. This was never suggested. The letter in question does no more than give a s44 direction to perform the duties of a specific position for two years, at the end of which the appellant remained entitled to the protection of s31(4) of the Public Sector Management Act ie he remained as a permanent officer of the public service, subject to redeployment.
There was simply no basis for inferring that there had been an attempt to convert him to a contract employee as he perceived the situation to be.
When the situation is viewed in that manner it is at once apparent that the decision of the learned Judge was patently correct. The facts fell far short of meeting the test of constructive termination by retrenchment or otherwise.
It should be stressed that s44 and s50 respectively of the statute are obviously designed to confer considerable flexibility on management within the public service sector, (inter alia) to cater for restructuring and downsizing exercises. They are capable of application generally to persons holding office within the public service and confer specific powers in extension of any common law rights of an employer. On the evidence in this case it is beyond question that the s44 power was exercised bona fide and reasonably. That being so, the appellant’s contentions fall to the ground.
For those reasons I agreed that the appeal ought to be dismissed.

[1998] SASC 6909

6 October 1998