Peter W. Jupp and Computer Power Group Limited and CP Consultants Pty Ltd
[1994] IRCA 57
•5 Oct 1994
C A T C H W O R D S
UNLAWFUL TERMINATION - construction of s.170DE - whether termination that is harsh, unjust or unreasonable may be for a valid reason and be a lawful termination - respondents' motion for declaration that first respondent is not a party - whether first respondent was employer at any material time - applicant's motion to include claims in contract and for alleged wrongful dismissal, negligence and misleading and deceptive conduct under the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1985 (Vic.) - accrued jurisdiction of the court.
Industrial Relations Act 1988 (Cth), ss.170DE and 170EA(4)
PETER W JUPP v. COMPUTER POWER GROUP LIMITED and CP CONSULTANTS PTY LTD
VI No. 141 of 1994
KEELY J.
MELBOURNE
5 October 1994
IN THE INDUSTRIAL RELATIONS COURT )
)
OF AUSTRALIA ) VI No. 141 of 1994
)
VICTORIA DISTRICT REGISTRY )
B E T W E E N :
PETER W JUPP
Applicant- and -
COMPUTER POWER GROUP LIMITED
First Respondent
- and -
CP CONSULTANTS PTY LTD
Second Respondent
MINUTES OF ORDERS
5 October 1994 KEELY J.
THE COURT ORDERS THAT:
The respondents' motion, notice of which was given on 6 July 1994, be dismissed.
The applicant be granted leave to amend his application by adding the claims set out in paragraphs 2A, 2B, 2BA, 2F, 2G, 2H, 2J, 2K, 2L and 2M of the amended application filed with the applicant's motion.
The applicant be granted leave to amend his application by adding the claims set out in paragraphs 2C, 2D and 2E insofar as they allege conduct by the respondent in contravention of or in breach of the Fair Trading Act 1985 (Vic.).
The applicant's motion, notice of which was given on 12 July 1994, be otherwise dismissed.
AND THE COURT DIRECTS THAT:
The issues be defined by pleadings raising all points of law upon which the parties intend to rely.
The applicant file and serve a statement of claim within 21 days.
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 ) VI No. 141 of 1994
)
VICTORIA DISTRICT REGISTRY )
B E T W E E N :
PETER W JUPP
Applicant- and -
COMPUTER POWER GROUP LIMITED
First Respondent
- and -
CP CONSULTANTS PTY LTD
Second Respondent
REASONS FOR JUDGMENT
5 October 1994 KEELY J.
There are two motions before the court. The respondents moved, on notice filed 6 July 1994, for:
"(a)a declaration that Computer Power Group Limited [the first respondent] is not a party to this proceeding or, alternatively, an order that Computer Power Group Limited ceases to be a party to this proceeding;
(b)an order that the Applicant amend his Application under Section 170EA of the Industrial Relations Act 1988 to remove all reference to Computer Power Group Limited."
The applicant filed a notice of motion on 12 July 1994 seeking leave to amend his application by adding claims for relief, the terms of which are set out later in these reasons.
The application referred to in (b) of the respondents' notice is an application under s.170EA of the Industrial Relations Act 1988 (Cth) (the Act), filed 12 April 1994, seeking the following relief:
"1.Declaration that the termination of my employment contravenes Division 3 of Part VI A of the Industrial Relations Act 1988.
2.Order that the employer pay me compensation in the sum of $1,000,000.
3.Such further or other relief as this Honourable Court deems fit and proper."
The applicant provided "information" under Order 75 of the Court's rules (A) that the nature of his employment with the respondent was General Manager - Southern Region; (B) that no award applied; (C) that his employment commenced on 2 August 1993 and terminated on 30 March 1994; (D) that the reason given for the respondent's decision to terminate his employment was "Following the business restructure the position of "Southern Region General Manager" no longer exists"; and (E) that the remedy sought in the proceeding (an applicant at that time being required to "state the amount claimed and specify how this amount was calculated") was as follows:
"Compensation in the sum of $1,000,000
Basis of calculation:
a)Annual salary of $200,000
b)representations by Managing Director at time of acceptance of position that the appointment was long term
c)on basis of representations applicant relocated himself and family from Perth to Melbourne
d)applicant did not pursue business interest in USA as a result of accepting the position with respondent
e)applicant is 49 years of age and was told by Managing Director that he was expected to stay with respondent until applicant retired - will be difficult to obtain alternative employment commensurate with position and salary from which dismissed
f)applicant's work performance was satisfactory. There was no valid reason connected with his work such as would justify the termination of his employment
g)there was no valid reason connected with the operational requirements of the business which justified the termination of the applicant's employment
h)having regard to the nature of applicant's employment, the industry in which he worked, certain comments and innuendos made at or prior to his termination of employment, the applicant has suffered emotional distress
i)in relocating from Perth to take up his position the applicant incurred significant expense.
Details will be provided."
A notice of appearance on behalf of both respondents was filed by the respondents' solicitors on 29 April 1994. It stated that:
"(a)none of the matters stated by the Applicant under paragraphs (a) to (d) of Order 75 Rule 2(1) are disputed;
(b)not applicable;
(c)the Applicant's position became redundant;
(d)the Respondent denies that the Applicant is entitled to any relief in these proceedings and further does not admit any of the allegations contained in paragraph E of the Applicant's Application under Section 170EA of the Industrial Relations Act 1988; and
(e)the Respondent does not contend that there is any adequate alternative remedy available to the Applicant which satisfies the requirements of the Termination of Employment Convention."
As to the respondents' contention that the first respondent is not a party, a letter to the applicant, dated 28 June 1993, confirmed the "offer of employment with C P Consultants Pty Ltd" and said "you will be assigned to work within the Computer Power Group of companies" and that his position "reports to George Bradbury, Managing Director". It was signed by Mr Bradbury as Managing Director of Computer Power Group Limited (i.e. the first respondent) and was typed on headed paper of that company. In addition, it enclosed an "Employee Handbook", the front page of which began with the words "Welcome to Computer Power Group Limited". The letter included the following passages:
"Duties
Your duties and responsibilities will be as discussed. During the period of your employment you will be required to devote full time attention, skill and efforts to the affairs of the Company. *Attached will be a comprehensive scope of duties mutually defined by 30 September, 1993.
. . .
Performance Review
Your performance will be reviewed with you prior to the end of the six month period at which time membership of the CP Partnership will be considered along with appropriate equity in the CP Option Plan for the 1994 calendar year."
The purpose of the asterisk in the third line, at the beginning of the sentence referring to "30 September 1993", was not clear. There is no evidence before the court at this stage of any "comprehensive scope of duties mutually defined by 30 September 1993" and no statement as to whether such a document was prepared by 30 September 1993 or at any other time.
At the hearing counsel for the applicant initially conceded that the employment was not with the first respondent but later said that at "the time that the proceedings were commenced [on 12 April 1994, 13 days after the dismissal], it was not clear in the mind of the applicant whether it was the first respondent or the second respondent that was the employer". He pointed out that the advertisement for the position carried the name "Computer Power Group" and referred to "the company" but without giving the name of the first respondent or the second respondent or any other company. He also referred to "arrangements going on for changes in positions in jobs as a result of the re-organisation" and added that he would get further instructions over the luncheon adjournment. Later he said that his instructions were that "there was at the time the proceedings were instituted, an uncertainty about who the employer was" and that that uncertainty was "because of the way the business was conducted".
Apparently the applicant, on receiving the group certificate, dated 4 July 1994, assumed that he was employed by the second respondent at all material times. However his counsel said that there "is no evidence which proves who his employer was at the material times". The applicant's contentions of fact (paragraph 32) stated that on or about 11 March 1994 i.e. almost three weeks before the applicant's employment was terminated on 30 March 1994:
"the applicant, in conformity with the direction by Leman, informed the Southern Region staff that the Southern Region would cease to exist on 1 April 1994 but that they would all be accommodated within the new structure of the first respondent."
It was stated in those contentions that Mr Leman:
"had been the General Manager Southern Region and was General Manager Health Practice and General Manager Asia during the Applicant's employment with the Secondnamed Respondent"
The respondents' motions were supported by an affidavit sworn 6 July 1994 by Mr Stephen Morrison, the solicitor who had the care and conduct of the matter on behalf of the respondents, subject to the supervision of his principals. He deposed that the applicant was employed by the second respondent pursuant to a contract of employment, dated 28 June 1993, a copy of which was exhibited to his affidavit, as was a copy of the applicant's group certificate. He further deposed, in paragraph 6, that the applicant "was therefore an employee of the Second Respondent and was not at any time the employee of the First Respondent". It seems that that statement by Mr Morrison could not have been based on his "own personal knowledge" (cp. last sentence of paragraph 1 of his affidavit). Nor did the facts recited before paragraph 6 provide the necessary foundation for his assertion that the applicant was "therefore" an employee of the second respondent "and was not at any time an employee of the First Respondent".
After those matters were raised during the hearing, senior counsel for the respondents asked for an opportunity to call evidence on that matter on the next sitting day. In an affidavit sworn and filed on that sitting day, Mr J. E. Carroll deposed to being an employee of the second respondent and "the Group Chief Operating Officer to the Computer Power Group" and that:
"2.CP Consultants Pty Ltd is a wholly owned subsidiary of Computer Power Australia Pty Ltd, which in turn is a wholly owned subsidiary of Computer Power Group Ltd. No persons are employed by the first respondent, Computer Power Group Ltd. Most of the staff employed in the Group are employed by CP Consultants Pty Ltd [which] charges time to the other member companies in the Group.
3.The applicant, Mr Jupp, was employed by the second respondent, CP Consultants Pty Ltd. . . .
4.All payments of Mr Jupp's salary were paid by CP Consultants Pty Ltd . . . [as] was Mr Jupp's payment on termination . . . "
Mr Carroll exhibited copies of various documents, which he described as:
"a duplicate employment declaration form completed for taxation purposes showing CP Consultants Pty Ltd as the applicant's employer ... a duplicate statement of termination payment, also completed for tax purposes, which shows the applicant's employer as CP Consultants Pty Ltd . . . a copy of a bank statement for CP Consultants Pty Ltd . . . [and] the calculation sheet for Mr Jupp's termination salary".
It may be noted that, although Mr Carroll deposed that no "persons are employed by the first respondent", the evidence placed before the court by the respondents does not contain any specific statement, by a person with personal knowledge of the facts, that the applicant "was not at any time the employee of the First Respondent" - as was asserted in Mr Morrison's affidavit in the passage quoted earlier which was introduced by the word "therefore".
The respondents also relied upon the presence in the Act of s.170EA(4), which provided that "Unless the Court otherwise orders, the parties to an application are the employer, the employee and, if the application is made under subsection (2), the trade union". In my opinion, notwithstanding the terms of that sub-section, no sufficient ground has been made out for granting the respondents' motions, having regard to the present state of the material before the court; the material has not established that the applicant was not an employee of the first respondent at any material time, including the date of the termination of his employment. The respondents' motions will be refused.
The applicant's motion, as amended during the hearing by the addition of paragraph 2BA, sought leave to amend his application by adding the following claims:
"2A.Declaration that the first and second Respondents jointly by their duly authorised officers, employees and agents owed a duty of care to the Applicant to provide him with a careful and properly considered assessment of the consequences of taking up employment with the second Respondent.
2B.Declaration that the first and second Respondents were negligent and in breach of their duty of care to the Applicant in providing him with an assessment of the consequences for the Applicant in taking up employment with the second Respondent.
2BA.Orders that the first and second Respondents pay to the Applicant damages for negligence in assessing the consequences for the Applicant in taking up employment with the second Respondent.
2C.Declaration that the first and second Respondents in their representations to the Applicant in relation to the employment that was offered to the Applicant engaged in conduct in trade or commerce that was misleading or deceptive or was likely to mislead or deceive in contravention of s.52 of the Trade Practices Act 1974 and/or s.11 of the Fair Trading Act 1985.
2D.Declaration that the first and second Respondents in their representations to the Applicant in relation to the employment that was offered to the Applicant engaged in conduct in trade or commerce in relation to employment that was to be offered to the Applicant that was liable to mislead the Applicant in seeking the employment as to the availability, nature, terms or conditions of or other matters relating to the employment in breach of s.53B of the Trade Practices Act 1974 and/or s.14 of the Fair Trading Act 1985.
2E.Order that the first and second Respondents pay damages to the Applicant the losses suffered by reason of the conduct of the Respondents in breach of the Trade Practices Act 1974 and/or the Fair Trading Act 1985.
2F.Declaration that the second Respondent had a duty to act in good faith in the performance of the employment agreement between the Applicant and the second Respondent and in particular in its assessment of the Applicant's performance of the contract.
2G.Declaration that the second Respondent wrongly assessed the Applicant's performance as General Manager Southern Region in breach of its duty of good faith.
2H.Order that the second Respondent pay to the Applicant damages for breach of its duty of good faith.
2J.Declaration that the Applicant was entitled to reasonable notice of termination of his employment under the terms of his contract of employment with the second Respondent and that the reasonable notice in all the circumstances is 2 years.
2K.Order that the second Respondent pay to the Applicant damages for wrongful dismissal from his employment.
2L.Declaration that the Applicant has an entitlement to Incentive Payments under the terms of his contract of employment of $5,000.00 per month for the months of August and September 1993.
2M.Order that the second Respondent pay to the Applicant the unpaid incentive payments in the sum of $10,000.00 for the months of August and September 1993."
The applicant said that his contentions of fact and law, filed on 16 June 1994, showed that he was then seeking not only the remedies or relief available under the Act, but also those available under the court's accrued jurisdiction in respect of claims based on rights under the contract of employment and claims based on allegations of negligence, misleading and deceptive conduct under the Fair Trading Act 1985 (Vic.) and unlawful dismissal.
The respondents' outline of submissions classed the relief sought in the above proposed amendments to the application as falling into the following categories:
"Negligence - paragraphs 2A and 2B. [Paragraph 2BA should be inserted here - leave to add it was sought by the applicant's counsel at the hearing.]
Breaches of sections 52 and 53B of the Trade Practices Act - paragraphs 2C, 2D and 2E.
Breaches of sections 11 and 14 of the Fair Trading Act paragraphs 2C, 2D and 2E.
Breach of an alleged duty of good faith - paragraphs 2F, 2G and 2H.
Breaches of the employment contract - paragraphs 2J, 2K, 2L and 2M."
I accept the submission of the respondents' counsel that, by reason of s.86 of the Trade Practices Act 1974 (Cth), the court does not have jurisdiction to deal with matters arising under that Act. Accordingly leave to amend the application by adding paragraphs 2C, 2D and 2E will be refused insofar as they allege conduct by the respondents in contravention of or in breach of the Trade Practices Act 1974 (Cth).
Senior counsel for the respondents submitted that the applicant should not be given leave to insert paragraphs 2A, 2B, 2BA, 2C, 2D and 2E because they relate to alleged "pre-contractual representations" which, he submitted, "stand apart" from the other proposed claims.
He referred to s.170DE of the Act which provides as follows:
"(1)An employer must not terminate an employee's employment unless there is a valid reason, or valid reasons, connected with the employee's capacity or conduct or based on the operational requirements of the undertaking, establishment or service.
(2)A reason is not valid if, having regard to the employee's capacity and conduct and those operational requirements, the termination is harsh, unjust or unreasonable. This subsection does not limit the cases where a reason may be taken not to be valid."
He accepted that "a reason will not be valid if a termination is harsh, measured against or in the context of those operational requirements" but submitted that sub-section 170DE(2) does not say that a reason is not valid merely because the termination is harsh, unjust or unreasonable. He referred to the International Convention (the Convention) set out in Schedule 10 to the Act and submitted:
" . . . that subsection 2 has been very carefully expressed to remain within the bounds of valid legislation in implementing this convention and subsection 2 goes no further than to give some colour to the word "valid" . . . It cannot go any further under the convention, we would submit, than to flesh out within the Australian municipal context, what is thought to be a valid reason. ... the convention does not permit the proscription of terminations, save upon that limited footing, that is, . . . the absence of a valid reason connected with capacity or conduct or based on the operational requirements of the undertaking."
I am not able to uphold the submission by the respondents' counsel as to the construction of s.170DE. In my opinion the words "having regard to the employee's capacity and conduct and those operational requirements", appearing in sub-section (2), are not words of limitation. They should not be read as if the word "solely" or the word "only" were inserted in the sub-section immediately after the words "having regard". The last sentence in sub-section (2) gives some support to that opinion, although the precise meaning of that sentence could be the subject of debate.
On this question the applicant's counsel referred the court to Article 9(1) of the Convention, which reads as follows:
" The bodies referred to in Article 8 of this Convention shall be empowered to examine the reasons given for the termination and the other circumstances relating to the case and to render a decision on whether the termination was justified."
I have considered the submission by the respondents' counsel in respect of that matter, including the suggestion that Article 9 is procedural and that the substance of the obligation is set out in Articles 4 and 5. In my opinion Part 11 of the Convention must be read as a whole, notwithstanding the fact that the heading to Division B expressly refers to "Procedure". In my opinion the Convention, on its true construction, was not so restricted in its meaning that the Australian Parliament was obliged to limit the provisions in the Act relating to unlawful termination in order "to remain within the bounds of national legislation in implementing this convention" - as submitted by the respondents' counsel.
The respondents' counsel accepted:
" . . . that the claim with respect to the contract of employment, that is the reasonable notice claim and the good faith claim are claims which ... are within the accrued jurisdiction of the court, but we would submit that the negligence claims and the Fair Trading Act claims are not within the accrued jurisdiction of the court."
I am not able to accept the respondents' submission that those claims are not within the accrued jurisdiction of the court.
I accept the respondents' submission that the exercise of the accrued jurisdiction is discretionary (see the Philip Morris case, (1981) 148 CLR 457 at 475 and Fencott v. Muller (1983) 152 CLR 570 at 609. Having considered carefully the submissions by the respondents' counsel as to why the court, in its discretion, should not exercise the accrued jurisdiction, including his contention that the exercise of the accrued jurisdiction would be a case of "the tail wagging the dog", I am unable to uphold them. In my opinion the exercise of the accrued jurisdiction "will lead to the speedier determination of [the] entire [controversy] between the parties without undue duplication of proceedings" - per Mason J. in Philip Morris (at 514), which passage was quoted by Mason, Murphy, Brennan and Deane JJ in Fencott v. Muller at 609.
The applicant will be given leave to amend his application by adding the proposed paragraphs: 2A, 2B, 2BA, 2F, 2G, 2H, 2J, 2K, 2L and 2M. Leave will also be given to amend by adding proposed paragraphs 2C, 2D and 2E, redrafted so as to allege conduct by the respondents in contravention of or in breach of the Fair Trading Act 1985 (Vic.).
Notwithstanding the fact that contentions of fact and law have already been filed, the court will direct that the issues be defined by pleadings. The applicant will be directed to file a statement of claim within 21 days. In their pleadings both the applicant and the respondents should raise all points of law upon what they intend to rely. After the delivery of these reasons for judgment - or so soon thereafter as counsel can be heard - the court will hear the parties as to further directions.
During the hearing the court directed both the solicitors for the applicant and the solicitors for the respondents to furnish to their respective clients information as to the costs incurred by the parties to date and the estimated costs for the future - the details of those orders appear in the transcript at page 36. That direction is intended to result in the solicitors giving such information at regular intervals. If such updated information has not been given to the parties recently, it should be done now. The solicitors should also obtain from their clients instructions as to whether they consent to the case being referred for mediation.
I certify that this and the preceding eleven (11) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Keely.
Associate:
Dated: 5 October 1994
Solicitors for the applicant : MacMillan Segal & Lenton
Counsel for the applicant : Mr B. J. Lacy
Solicitors for the respondents : Arthur Robinson & Hedderwicks
Counsel for the respondents : Dr C. N. Jessup Q.C.
and Mr M. Wheelahan
Dates of hearing : 26 and 29 August 1994
Date of judgment : 5 October 1994
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