Mullany v Active Concrete

[1995] IRCA 262

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - Claim by truck driver of unlawful termination - Finding by Judicial Registrar of want of both procedural and substantive fairness - Reinstatement held impracticable and compensation ordered - Application by employee for review of decision as to quantum of compensation - No continuing issue regarding liability - Complaint that assessment ignored fact that employee's driving licence was lost to him a few days after termination - Evidence that employee failed to submit to a licence examination because of loss of employment - No explanation by Judicial Registrar of method of computing compensation - Necessity for Court to consider de novo the proper quantum of compensation - Deduction from net figure that would have been earned, if the employment had continued, of the moneys earned in alternative employment - No deduction of sum received by applicant from Department of Social Security by way of social security payments - Social security payments not "remuneration" within the meaning of s.170EE(3) of the Act - Necessity for assessing the chance that applicant would have been left without a licence and therefore unable to earn remuneration.

Industrial Relations  Act 1988, ss.170DC, 170DE and 170EE(3).

JIM PETER MULLANY v. ACTIVE CONCRETE

No. NI 0747R of 1994

CORAM:    WILCOX CJ
PLACE:    SYDNEY
DATE:        3 MAY 1995

IN THE INDUSTRIAL RELATIONS COURT)
OF AUSTRALIA  )        No. NI 0747R of 1994
NEW SOUTH WALES DISTRICT REGISTRY)

BETWEEN:JIM PETER MULLANY

Applicant

AND:ACTIVE CONCRETE

Respondent

CORAM:    WILCOX CJ
PLACE:    SYDNEY
DATE:     3 MAY 1995

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The determination made by Judicial Registrar Locke on 19 January 1995 be varied by substituting for the sum of $6,273.00 therein stated the sum of $6,011.00.

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. NI 0747R of 1994
NEW SOUTH WALES DISTRICT REGISTRY)

BETWEEN:JIM PETER MULLANY

Applicant

AND:ACTIVE CONCRETE

Respondent

CORAM:    WILCOX CJ
PLACE:    SYDNEY
DATE:     3 MAY 1995

EXTEMPORE REASONS FOR JUDGMENT

WILCOX CJ: The matter before the Court is an application for review of a decision of Judicial Registrar Locke in a proceeding brought by the applicant, Jim Peter Mullany, against Active Concrete, a division of Hy-Mix Industries Pty Limited. Mr Mullany claimed that his employment by Active Concrete was terminated in breach of Division 3 of Part 6A of the Industrial Relations Act 1988. Mr Mullany was a truck driver employed in driving a concrete delivery truck. His employment was terminated on Monday, 25 July 1994.

Judicial Registrar Locke found that the termination of the applicant's employment was in breach of the requirements of the Act in respect of both procedural fairness and substantive fairness; that is to say, there were breaches of both ss.170DC and 170DE of the Act. She decided that reinstatement was impracticable and made an order that the respondent pay the applicant the sum of $6,273 within 21 days.

The applicant for review, the employer, Active Concrete, does not challenge the Judicial Registrar's findings about the unlawfulness of the termination.  The debate on the review has been confined to the quantum of compensation ordered by her.  The employer says the quantum was excessive because Mr Mullany's licence was lost to him a few days after his termination, namely at midnight on 27 July, and he was without a licence until 27 October 1994.  Counsel argues that, in this situation, he would have lost his job in any event; because it was essential to his employment that he have a current licence.  The reason for the loss of the licence was that Mr Mullany had accumulated more than the permissible number of debit points for traffic offences committed by him.  It appears that he unsuccessfully appealed against the prospective loss of his licence and on the Thursday or Friday before his termination he learnt that the Roads and Traffic Authority had rejected an application made by him that it not enforce the stipulated period of suspension of licence.  However, it was open to him to avoid the consequences of his loss of the licence, if he could obtain a provisional licence by examination.  The evidence is that on Saturday, 23 July he undertook a test.  Apparently, this was confined to a test about road rules.  I gather that it took the form of answering questions thrown up by a computer.  Mr Mullany narrowly failed the test and he made an appointment to have a further test on the afternoon of the following Monday, 27 July.  He studied for the test on the Sunday.  But during the Monday he was terminated.  He gave evidence to the Judicial Registrar, which was accepted, that he reacted to the termination by thinking it was pointless to take the test; as he had no job, it did not matter that his licence would be lost for three months.  Apparently, there is a long-term advantage in actually serving the three months suspension.  If the suspension is served, at the end of the period the person obtains a new licence with the full number of points available before any further disqualification; whereas, if a provisional licence is obtained, it applies for 12 months and any offence means a loss of that licence.  Under these circumstances, whether or not it was wise for Mr Mullany to adopt the attitude he did, it is understandable why he did.  The Judicial Registrar accepted his reasons for decision and they have not been challenged today.

The fact remains, however, that, as from the Friday following his termination, Mr Mullany was without a licence until October.  The evidence is that in October he presented himself for examination in order to obtain a licence.  I am not sure whether this was a provisional licence or whether the examination was necessary in order to terminate the suspension.  On the fourth try, he was successful in passing the test and he thereupon became entitled to a licence.  Since that time he has engaged in various driving jobs.

The Judicial Registrar disposed of the matter in an extempore judgment that comprehensively reviewed the circumstances surrounding the termination.  As I say, there is no complaint made about that part of her decision.  Unfortunately, her reasons for decision do not explain how she computed the compensation which she awarded, namely $6,273.  Counsel have endeavoured to work out for themselves how this sum was obtained; but they have been unsuccessful.  The figure does not seem to have any direct relationship to the figures discussed at the hearing before the Judicial Registrar.  There was apparently an agreement between the parties at that time that, if no account was taken of the fact of the loss of licence, the loss sustained by the applicant was $6163.21, that is to say some $110 less than that awarded.  In the absence of any explanation of how the figure was made up, it has seemed to me more sensible to consider the question upon the basis of figures put before me; and, indeed, this is appropriate given that the hearing is a hearing de novo.

Counsel have helpfully done some calculations, the correctness of which is agreed.  It appears that the net wage of the applicant whilst employed by Active Concrete was $450.50 per week.  If one takes this figure for the period of 24 weeks to 13 January, which was the date of the hearing before the Judicial Registrar and which date the applicant is content to adopt for the purpose of calculating the compensation, the resultant figure is $10,812.  It is agreed that, during the period 27 July 1994 to 13 January 1995, the applicant earned $3,900 in various short term employments.  The difference between those two figures comes to $6,912.  It is also agreed that during this same period the applicant received the sum of $2,081.10 by way of social security payments from the Department of Social Security.  A question has arisen today as to whether this amount should be deducted from the compensation otherwise awarded.  I do not think that it should. 

The Court is required under s.170EE(3), in working out the amount of compensation, "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 must not exceed the amount of remuneration that would have been received by the employee in respect of the period of six months that immediately followed the date of termination.

I think that the subsection directs attention to remuneration received in respect of work done, not money received from other sources and unrelated to work done; for example, social security receipts or gifts received from organisations or persons who take a charitable interest in the employee's plight.  Accordingly, I do not propose to reduce the amount of compensation to which I think the applicant is otherwise entitled because of the social services payments. 

Counsel for the employer submits that the matter of the licence is of critical importance.  He says that, if the applicant's employment had not been terminated, the licence would have anyway expired on the evening of the 27th; the applicant would have lost his job and the remuneration he would have received at the hands of the respondent would have been nil.  Alternatively, he says that there was no loss from the termination for three months because during that period there was no licence. 

I do not think it is legitimate to approach the matter in that way.  It leaves out of account the effect of the termination, which, the employer accepts, was unlawful.  Mr Mullany gave evidence, accepted by the Judicial Registrar, that the effect of the termination was to cause him not to take the test that he had intended to take on the Monday afternoon.  As I have said, this was an understandable reaction.  It might also have had the effect that, had he failed the Monday afternoon test, he would have been dissuaded from having any other test before the licence ran out.  It would be unfair to him to say that because, in the events that happened, he had no licence after the Thursday night, he would have had such no licence if these events had not happened.  On the other hand, I think it would be unfair to the respondent to take the course advocated on behalf of the applicant; namely, to disregard entirely the licence problem.  The fact is that the applicant was about to lose his licence and there was a prospect of some period when he would be without a licence. 

Apparently, the applicant had successfully negotiated with the employer to take three weeks paid leave from the end of the week in which he was dismissed.  This would have given him the opportunity of undertaking as many tests as might prove necessary.  I think it is likely that he would have obtained the test during this period.  But, of course, in doing so, he would have used up some of the leave entitlement to which he was entitled. 

It is impossible to reach a conclusion, in a matter such as this, that is demonstrably correct.  A great deal depends upon one's personal judgment.  Different people may see the matter in different ways; but it seems to me that it would be fair to discount the loss, as otherwise calculated, by a sum representing two weeks earnings.

I will take that approach, and start with a figure of $6,912.  I will deduct from it the sum of $901, leaving a total award of $6,011.  I think the appropriate course is for me to award compensation in that sum and I so order.

I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment of his Honour Chief Justice Wilcox.

Associate:

Dated:     3 May 1995

APPEARANCES

Solicitor for the Applicant:        F Hicks of Marsdens

Counsel for the Respondent:         R S Warren

Solicitor for the Respondent:       Employers' Federation of New South Wales

Date of hearing:  3 May 1995