Nelson v Scholle Industries

[1995] IRCA 588

CATCHWORDS

INDUSTRIAL LAW - UNLAWFUL TERMINATION - review - application to extend time to apply for a remedy - whether applicant received written notice of termination - what constitutes written notice - principles to be applied - no adequate explanation for a delay of several months

Matter No. 1234R of 1995
JOHN NEALE NELSON v SCHOLLE INDUSTRIES

VON DOUSSA J
ADELAIDE
17 OCTOBER 1995

IN THE INDUSTRIAL RELATIONS)
COURT OF AUSTRALIA        )
SOUTH AUSTRALIA           )
DISTRICT REGISTRY         )  No. 1234R of 1995

BETWEEN:

JOHN NEALE NELSON

Applicant

AND:

SCHOLLE INDUSTRIES

Respondent

MINUTES OF ORDER

BEFORE:   VON DOUSSA J

PLACE :   ADELAIDE

DATE  :   17 OCTOBER 1995

THE COURT ORDERS THAT:

1. The application for an extension of time be dismissed.

2. The application for a remedy under Part VIA Division 3 of the Industrial Relations Act 1988 be dismissed.

NOTE:Settlement and entry of Orders is dealt with by Order 36 of the Industrial Relations Court Rules

IN THE INDUSTRIAL RELATIONS)
COURT OF AUSTRALIA        )
SOUTH AUSTRALIA           )
DISTRICT REGISTRY         )  No. 1234R of 1995

BETWEEN:

JOHN NEALE NELSON

Applicant

AND:

SCHOLLE INDUSTRIES

Respondent

EX TEMPORE REASONS FOR JUDGMENT

Coram: von Doussa J
Place: Adelaide
Date : 17 October 1995

The applicant seeks review under s.377 of the Industrial Relations Act 1988 ("the Act") of a decision by a Judicial Registrar made on 12 September 1995. This review has been argued on the transcript of evidence received by the Judicial Registrar and on the documentary evidence that was tendered before her. No further evidence has been adduced. Although there is no new evidence the matter nevertheless remains a review and not an appeal in the strict sense. It is necessary for this Court to form its own view on the merits of the matter based on the information that was before the Judicial Registrar.

The application before the Judicial Registrar was for an extension of time within which to bring proceedings pursuant to s.170EA of the Act in respect of an alleged unlawful termination. The applicant had been employed as a factory hand by the respondent from 13 May 1993 to 29 November 1994. On 29 November 1994 his employment was terminated as he had exceeded the permissible number of points awarded for non attendance at work under the respondent's Attendance Policy. Proceedings had been brought in this Court, including the application for an extension of time, on 20 June 1995.

The limitation period provided in s.170EA(3) requires that an application be made (a) within 14 days after the employee receives written notice of the termination; or (b) within such further period as the Court allows on an application made during or after those 14 days.

Notwithstanding the application for an extension of time, before the Judicial Registrar the applicant argued that he had not received written notice of termination and that the time limit prescribed by paragraph 170EA(3)(a) had not commenced to run.  In the alternative, in the event that the Court determined that there had been written notice received by the applicant, the Court was asked to extend the time in its discretion pursuant to paragraph 170EA(3)(b).

The Judicial Registrar dismissed the application, holding that written notice had been received by the employee, and that in all the circumstances of the case it was not appropriate to extend time.  Each of these conclusions is  challenged today.

First it is necessary to determine whether the employee received written notice of termination.  Counsel for the parties for the purpose of today's argument have adopted the observations of Judicial Registrar Farrell in the case of John Goulding and Transport Workers Union of Australia v Quality Bakers Australia Limited, a decision given in Perth on 18 January 1995, as to the requirements for a valid notice under paragraph 170EA(3)(a).  Other aspects of the decision of the Judicial Registrar went on appeal and were considered by Beazley J in Quality Bakers of Australia Limited v Goulding and Others, judgment delivered in Sydney on 23 June 1995, but the Judicial Registrar's observations regarding the requirements for a valid notice were not the subject of the appeal.

The Judicial Registrar in Goulding's case said:

"In my view a written notice should be clear and unequivocal in advising the Applicant that his employment is being terminated and on what date.  It should be addressed to the Applicant and it should be signed by the Respondent or a person employed by the Respondent having the appropriate authority to terminate the Applicant's employment.  It is also preferable that the Notice should spell out the reasons for the termination of employment."

As the parties today have accepted these tests and only argued their application to the two documents referred to in the evidence said to constitute notice, it is not appropriate that I undertake a close analysis of their correctness.  However in saying that the notice should be addressed to the applicant, I do not understand the Judicial Registrar to mean there must be a formal statement of name and address as a necessary prerequisite.  For example, a document bearing the name of the employee without any further address, or even a document not being the employee's name handed specifically to a particular employee in circumstances that made it plain that the document related to that employee, it seems to me would be sufficiently "addressed" to the employee for the purposes of the section.  Such a document would be unequivocal in its intended application, namely as a notice to the particular employee to whom it was given.  Further, it is, I think, open to argument whether a notice, given specifically to an employee with the authority of the employer, need necessarily be signed by the employer.  If the notice itself is clear and unambiguous in its terms and is authorised by the employer, it is not apparent to me why such a notice would not comply with the requirements of the section if it were not formally signed.

The two documents relied upon as constituting written notice received by the employee in this case, are, first, a single sheet of paper that was produced at the time when the applicant's supervisor informed him that his employment was being terminated.  The applicant had received some forewarning the preceding Friday that his employment was under review, because he had accumulated more than the permitted number of points under the Attendance Policy.  On the following Monday when he arrived at work, his time card was not available to him.  On making inquiries as to its whereabouts, he was summonsed into the supervisor's office and informed that his employment was being terminated that day because of the Attendance Policy.

In that meeting, the supervisor produced the single sheet of paper.  It is not entirely clear on the evidence whether the face of the document was considered or explained to the applicant, but it is clear that the reverse side was.  The reverse side is headed "Resignation/Termination Declaration".  The third line of the text of the document in bold type says: "WE HEREBY TERMINATE THE EMPLOYMENT OF: John Nelson."   The next line reads: "LAST DAY OF WORK BEING: 25.11.94."  I interpose that 25 November 1994 was the preceding Friday.  The following line reads: "REASON: as per warning procedure (attendance policy)."

Then follows a space for the employee's signature and it is clear on the evidence that the applicant, when the document was shown to him and explained, affixed his signature, and the document was dated.  The lower half of the reverse side of the page contains employment details including the commencement date, date of termination ("29.11.94") and the reason for  termination ("as per warning procedure").

On the evidence, the document was given to the applicant for the purposes of him signing it.  The terms of it were clear and there is no suggestion on the evidence that he did not understand the terms of the document.  Once it was signed it was given back to the supervisor who in turn conveyed a copy of it to the pay officer to make up the applicant's termination pay.

The argument on the applicant's behalf is that because the document was not retained by him it was not "received" within the meaning of paragraph 170EA(3)(a).  I do not accept that argument.

In my view the document came into the possession of the applicant, although only briefly.  The document was in writing, it stated unequivocally that the employment was being terminated and it stated the date of termination.  Moreover it stated the reason for termination.  Whilst I do not think that the reason is a necessary requirement, I agree with the Judicial Registrar that it is desirable that the notice state the reason.  The document on being placed in the hands of the applicant achieved the legislative intention.  It put in his hands a statement in writing giving unequivocal advice that his employment had been terminated.  In my view, in the events which happened that day regarding that document, the applicant received written notice of the termination.

In my view the second document referred to at trial which the applicant received also constitutes written notice of termination.  It is common ground that within the day or two following the termination the applicant was supplied by the respondent with a Department of Social Security form headed "Employment Separation Certificate".  That document, like the previous one, had a dual purpose but in my view the fact that there is a dual purpose does not prevent the document constituting written notice for the purposes of paragraph 170EA(3)(a).  The employment separation certificate stated the employee's details including the applicant's name, his full address, the date when he commenced work and the date when he last worked.

In its text the document posed the question "Was employment terminated due to..." and then sets out under a number of bullet points, "shortage of work?" "unsuitability for this type of work?" "unsatisfactory work performance?" and "misconduct?", with boxes against each question to be ticked for a positive or negative answer.  The form was completed with a tick answering "yes" to the question "Was the employment terminated due to unsatisfactory work performance?"  Then follows the further question and answer:

"Give reason for voluntary termination of employment or for unsatisfactory work performance: As per our Warning Procedure and Attendance Policy."

The document is signed on behalf of the respondent. 

In light of the conclusion that written notice was received by the employee it is necessary to consider whether the power given to extend time should be favourably exercised.

The principles to be applied upon an application for an extension of time in a case such as this are discussed by Wilcox J, as he then was, in Hunter Valley Development Pty Limited and Others v Minister for Home Affairs and Environment (1984) 58 ALR 305. Those principles have been applied to an application for an extension of time under s.170EA(3): See Transport Workers Union of Australia v National Dairies Limited (No.2) (1994) 57 IR 186. The parties are agreed that the exercise of the discretion in the present case should be governed by those principles, and in particular having regard to the length of the delay, the explanation for the delay and the degrees of prejudice suffered by the applicant and the respondent respectively: See Ulowski v Miller (1968) SASR 277.

The limitation period prescribed by the legislation is an important matter to bear in mind in the industrial context likely to apply when Part VIA Div. 3 of the Industrial Relations Act is called in aid. The time limit prescribed is 14 days. The industrial setting will usually require the quick resolution of a dispute regarding termination of employment so that the situation of both the employee and the employer is known to enable future plans to be made. Every employer by virtue of the provisions of the Act must now be taken to know that the termination of an employee is at first only provisional in the sense that the decision to terminate may be subject to challenge under the Act. Immediate planning decisions must be made having regard to that potential, but it is of importance to employers that they can go about filling vacant positions, making budgetary decisions, and so on with confidence in the assumption that the termination has passed into history once the prescribed time limit has expired without there being a challenge to the termination.

In the present case the period of delay was substantial.  The applicant's employment was terminated on 29 November 1994.  No notice of challenge to that decision was received by the respondent until 27 March 1995.  On that day the applicant served upon the respondent proceedings alleging unlawful termination of employment issued out of the Industrial Relations Commission of South Australia.

Whilst those proceedings are not in this Court, they served to bring to the attention of the respondent that the termination was under challenge.  Proceedings were not issued in this Court until some seven months after the termination of the employment.  As Wilcox J said in Hunter Valley at 311, it is appropriate to have regard to action taken by the applicant short of issuing proceedings in time which brings to the attention of the respondent that the decision is under challenge. 

In this case however, no step was taken promptly to give notice of a proposed challenge.  Moreover the conduct of the applicant prior to 27 March 1995 would have led the respondent to believe positively that the decision would not be challenged.  There was no protest made by the applicant at the time of the dismissal which could or should have suggested that he considered the decision harsh or unfair.  Some two to three weeks later he telephoned the employer seeking a reference and again no suggestion was made that he considered the dismissal to be unfair.

The explanation for the delay is an important matter.  I am of the same mind as the Judicial Registrar.  No satisfactory explanation for a delay of some four months until the first indication of a challenge was given has been established.  The applicant initially had some housing difficulties which may have occupied part of his time and also had a dispute with the Department of Social Security but it seems that the housing difficulties were resolved before the end of January 1995 and presumably the Social Security difficulties were resolved by about that time.  Even making full allowance for the diversion of the applicant's time to those matters, no satisfactory explanation for taking no action against the employer to challenge the decision is offered.

Another matter to be considered is the degree of prejudice both to the applicant and to the respondent.  Usually the prejudice to an applicant seeking an extension of time within which to sue if time is not extended will be the loss of the cause of action that would otherwise exist.  I am prepared to approach the present matter on a similar footing, even though there are still proceedings in the Industrial Relations Commission of South Australia.  Those proceedings are presently stayed pending the outcome of these proceedings, but their success would depend in part upon a favourable exercise of discretion to extend time to bring the proceedings.  If the present application is to fail, for similar reasons an application to extend time in the Commission is also likely to fail. It cannot be said, therefore, that the potential prejudice to the applicant in this case is diminished because there are proceedings for similar relief in another jurisdiction.

The respondent has in the period between November 1994 and 27 March 1995 reorganised aspects of its work force and has promoted a casual employee to a full-time employee to take the position of the applicant.  If an order for reinstatement were made it is likely that there would be prejudice or disruption to the position of that person and to the relevant section of the employer's organisation.  In the interim period a new budget was also set for the particular unit of the respondent's operation where the applicant worked which makes no provision for this potential claim.

The operation of the Attendance Policy in the work place is such that it brings a number of benefits to the employees who work under it, and if the applicant's claim were now to be allowed and to succeed, those employees are likely to suffer the loss of some incidental benefits which accrue under the Attendance Policy.  I do not treat that as a matter of major significance but it is another example of the way in which the outcome of an application of this kind might affect people other than the respondent and the applicant.

These are matters that show that an extension of time will, or has the potential to, prejudice the employer and other employees who are not parties to the proposed proceedings.

It is further relevant to have regard to the likely chances of success of the applicant's claim for substantive relief.  If it is one that is plainly destined for success subject only to the time point, the degree of prejudice suffered by the applicant through losing the cause of action is patent.  At the other extreme, if it is apparent that the claim would be doomed to failure on the merits, the degree of prejudice to be suffered by the applicant in not having time extended is nil.

In the present case it cannot be said that the claim is doomed to failure.  On the other hand I do not think that it can be said to be a claim destined to succeed if time were extended, or even that it is a claim with a high likelihood of success.  The evidence such as it is indicates that the group of employees who work under the Attendance Policy is close-knit.  They benefit from the policy.  It was introduced substantially at the instigation of the employees.  It is far from clear that the policy, or its implementation in this case, was attended with unfairness.  The application to extend time should be assessed on the footing that the claim has some prospect of success.

Notwithstanding that it would have some prospect of success and accordingly that the applicant will suffer prejudice by not being able to pursue the possibility of succeeding, I think the length of the delay, the prospect of prejudice to the employer and other employees, and the absence of satisfactory explanation for the delay require that the discretion be exercised against the applicant.  Time should not be extended.  In my opinion the application for an extension of time should be dismissed, and so too should the application for substantive relief which was issued out of time.  I so order.

I certify that this and the     preceding pages are a true copy of the Reasons for Judgment of Mr. Justice von Doussa

Associate:

Dated:

Counsel for the applicant      : Mr E G Reinboth

Solicitors for the applicant        : Stanley & Partners

Counsel for the respondent     : Ms S Shaw

Solicitors for the respondent       : R J Manuel & Co.

Date of hearing                : 17 October 1995