Purdue v Brown and Hatton Group Pty Limited
[1996] IRCA 188
•16 May 1996
DECISION NO: 188/96
INDUSTRIAL LAW - EMPLOYMENT - TERMINATION - Application for REVIEW of decisions by a Judicial Registrar granting relief against each of three respondents - Relief granted against three respondents because of Judicial Registrar's uncertainty as to identity of correct employer - Whether this course is permissible - Evidence on review establishing identity of original employer - Employment by this employer terminated because of sale of business - Whether this was a valid reason for termination - Offer of employment by new employer - Offer accepted but contract of employment terminated before employment commenced - Term of this contract that initial employment be on a casual basis - Effect of this term on employee's remedy.
Industrial Relations Act 1988, s.170DE.
Industrial Relations Regulations, reg. 30B.
KENNETH PURDUE v BROWN AND HATTON GROUP PTY LIMITED, BROWN AND HATTON RURAL PTY LIMITED and PARKVILLE PIG STUD PTY LIMITED
No. NI.531 of 1994
PETER JACKSON v BROWN AND HATTON GROUP PTY LIMITED, BROWN AND HATTON RURAL PTY LIMITED and PARKVILLE PIG STUD PTY LIMITED
No. NI.534 of 1994
CORAM: WILCOX CJ
PLACE: SYDNEY
DATE: 16 MAY 1996
IN THE INDUSTRIAL RELATIONS COURT)
OF AUSTRALIA ) No. NI.531 of 1994
NEW SOUTH WALES DISTRICT REGISTRY)
BETWEEN: KENNETH PURDUE
Applicant
AND:BROWN AND HATTON GROUP PTY LIMITED
First Respondent
BROWN AND HATTON RURAL PTY LIMITED
Second Respondent
and
PARKVILLE PIG STUD PTY LIMITED
Third Respondent
CORAM: WILCOX CJ
PLACE: SYDNEY
DATE: 16 MAY 1996
MINUTES OF ORDER
THE COURT ORDERS THAT:
The application for review of the Judicial Registrar's exercise of power be granted.
Orders 2, 3 and 4 made by Judicial Registrar Linkenbagh on 18 March 1996 be set aside and, in lieu thereof, it be ordered that the application under s.170EA of Kenneth Purdue be dismissed.
NB: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.534 of 1994
NEW SOUTH WALES DISTRICT REGISTRY)
BETWEEN: PETER JACKSON
Applicant
AND:BROWN AND HATTON GROUP PTY LIMITED
First Respondent
BROWN AND HATTON RURAL PTY LIMITED
Second Respondent
and
PARKVILLE PIG STUD PTY LIMITED
Third Respondent
CORAM: WILCOX CJ
PLACE: SYDNEY
DATE: 16 MAY 1996
MINUTES OF ORDER
THE COURT ORDERS THAT:
The application for review of the Judicial Registrar's exercise of power be granted.
Order 2 made by Judicial Registrar Linkenbagh on 18 March 1996 be set aside and, in lieu thereof, it be ordered that the application under s.170EA of Peter Jackson be dismissed.
NB: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.531 of 1994
NEW SOUTH WALES DISTRICT REGISTRY)
BETWEEN: KENNETH PURDUE
Applicant
AND:BROWN AND HATTON GROUP PTY LIMITED
First Respondent
BROWN AND HATTON RURAL PTY LIMITED
Second Respondent
and
PARKVILLE PIG STUD PTY LIMITED
Third Respondent
No. NI.534 of 1994
BETWEEN: PETER JACKSON
Applicant
AND:BROWN AND HATTON GROUP PTY LIMITED
First Respondent
BROWN AND HATTON RURAL PTY LIMITED
Second Respondent
and
PARKVILLE PIG STUD PTY LIMITED
Third Respondent
CORAM: WILCOX CJ
PLACE: SYDNEY
DATE: 16 MAY 1996
REASONS FOR JUDGMENT
WILCOX CJ: These are applications to review exercises of power by a Judicial Registrar in two unlawful termination proceedings. The proceedings were brought by Kenneth Purdue and Peter Jackson, respectively. They were heard together, along with a third proceeding brought by Paul Ellison. These three applicants were formerly employed in a piggery at Kootingal near Tamworth that was then called "Woodlands Piggery" and is now known as "Parkville Stud".
The applicants were confused as to the identity of their erstwhile employer. By the time the matter came for hearing before the Judicial Registrar, the respondent in each case was Parkville Pig Stud Pty Limited ("Parkville") but counsel for Parkville, Mr Raymond Moore, told the Judicial Registrar that the actual employer was one of two associated companies, Brown and Hatton Group Pty Limited ("Group") and Brown and Hatton Rural Pty Limited ("Rural"). He said that it was unnecessary to distinguish between those two companies; they were both prepared to accept responsibility for any liability that might attach to either of them. After some discussion about his authority, Mr Moore said that he now had instructions to appear for both these companies. The Judicial Registrar then amended each proceeding so as to add them as respondents.
In her decision the Judicial Registrar indicated that she was not satisfied as to which of the respondents was the employer. So she made orders "against all three respondents jointly as the employer", saying "it will be for them to determine between themselves their separate liability". In the case of Mr Purdue, the orders were for reinstatement and compensation for remuneration lost by him between the date of termination and reinstatement. Mr Jackson had suffered a period of unemployment following his termination. But he was working at the date of the hearing before the Judicial Registrar and did not seek reinstatement. The Judicial Registrar ordered the respondents to pay him $12,152.40 compensation. Mr Ellison had obtained other employment immediately after his termination; so, in his case, the Judicial Registrar only made a declaration. Because of the limited nature of the relief granted to Mr Ellison, according to counsel, the respondents did not seek review in his case.
I have difficulty with the concept of orders being made against a multiplicity of respondents, except in a case of joint employment of a person by two or more employers. The orders available to unlawfully terminated employees under s.170EE of the Industrial Relations Act 1988 are orders against "the employer"; that is, the person or persons who employed the employee at the time of the unlawful termination of employment. It follows that the Court may make an order under s.170EE only against a person whom it is satisfied, on the probabilities, was in that position.
At the hearing before me, Mr Moore appeared only for Parkville; Mr Arthur Moses of counsel appeared for the two Brown and Hatton companies. As their names suggest, they are related; Group controls Rural. Mr Purdue and Mr Jackson appeared in person.
At the commencement of the hearing, I drew attention to the Judicial Registrar's statement of findings of fact and asked the parties to indicate which findings they accepted for the purposes of the review. It turned out that most of the findings were accepted. This reduced considerably the amount of new evidence. I will set out in the following four paragraphs the important accepted findings of fact.
Mr Purdue and Mr Jackson were both employed at the piggery for some years before June 1994; Mr Purdue from September 1989 and Mr Jackson from June 1988. They worked under the supervision of Bob Finlay, the manager. Normal working hours were 7.00am to 3.30 or 4.00pm on weekdays with some regular weekend work. Prior to the events the subject of these proceedings, the employer had not taken disciplinary action or warned or counselled either of the employees.
At 11 May 1993, Group was the registered proprietor of the land on which the piggery was conducted. On that date it contracted to sell the land to Parkville, together with the livestock and the plant and equipment used for the conduct of the piggery. The contract was completed one year later, on 11 May 1994. The Memorandum of Transfer was dated that day but not registered until 29 August 1994.
In May 1994, Mr Purdue spoke to the local Department of Industrial Relations inspector, Bob Kellow, about the piggery's calculation of wages for weekend work. Mr Kellow inquired into the matter and concluded that all the piggery employees had been underpaid, in comparison with their award entitlements.
Achilles Constantinidis was a director of each of the Brown and Hatton companies and also Parkville. He was absent from Australia from late May until late June. Shortly after his return, on 28 June, he visited the piggery. He met Mr Kellow and resolved the issue of underpayment of wages raised by Mr Purdue. After that meeting, he addressed a gathering of the employees. He informed them that the wages issue had been resolved, that the piggery had a "new owner" and their employment would cease on Thursday, 30 June. On behalf of the new owner, he offered to re-employ all the staff as casuals. The men consulted together and informed Mr Constantinidis that they would accept the offer. Mr Purdue had some cattle agisted on the property and Mr Constantinidis told him he could leave them on the property "until things were sorted out". On Thursday, 30 June, about lunch time, Mr Finlay asked each of the employees to sign an employment application form. The forms he gave to them showed the employer as "Brown and Hatton Rural Pty Limited". They contained no particulars of the employment. Mr Purdue, Mr Jackson and Mr Ellison were unwilling to sign the forms until they were completed. At the conclusion of work that day, Mr Finlay told the three men that their services were no longer required.
The evidence given on the review amplified these findings. There is now documentary evidence corroborating Mr Constantinidis' oral evidence that, between the completion of the sale on 11 May, 1994 and 30 June, 1994, the piggery was operated by Rural, not Parkville, the new owner. The documents include Rural's bank deposit records. Mr Constantinidis' evidence was that a shipment of pigs was sold each week to Danpork, an entity with which Group had a substantial commercial relationship. The deposit records show that, each week before and after 11 May, a Danpork cheque was banked in the Rural bank amount. This situation continued until the end of June. According to Parkville's bank statements, no relevant deposits were made to its bank account during this period.
The documents tendered on the review also include documents concerning the payment of wages. They show that Rural continued to pay the wages of the piggery employees until 30 June. They also establish that, in the pay week ending 27 June, Rural made good the underpayments of wages that were the subject of the complaint to Mr Kellow. The documents also include a Rural weekly payroll report as at 30 June 1994. This shows that all seven employees of the piggery were paid holiday pay, in respect of the period ending 30 June. Four employees, including Mr Ellison and Mr Jackson, were paid the cash value of their long service leave. [Mr Purdue had not served long enough to become entitled to long service leave.] Mr Purdue, Mr Ellison and Mr Jackson were each paid an item identified on the report as "lump sum C" which, it is agreed, represents payment in lieu of notice.
Having regard to these documents, it is now clear that Rural continued to operate the piggery until 30 June. So the notice of termination given by Mr Constantinidis on 28 June was a notice given on behalf of Rural. The Judicial Registrar noted that the title to the livestock passed on completion on 11 May. Understandably, she thought it unlikely that the purchaser (Parkville) would be prepared to allow a company associated with the vendor to deal with its livestock after that day. I pointed this out to Mr Constantinidis. But he said that the number of stock on the property varied little during that period; weekly sales roughly matched weekly births. Mr Purdue and Mr Jackson did not dispute this statement. Mr Constantinidis also said that it was more convenient to make the change at the end of the financial year. Having regard to the fact that a period of only seven weeks was involved, I accept that there was an agreement to postpone the changeover date until 30 June.
The significance of the fact that it was Rural that gave notice of termination on 28 July is that this company is able to demonstrate a valid reason for the termination that is connected with the operational requirements of its undertaking: see s.170DE(1) of the Industrial Relations Act. It intended to cease operating the piggery at the close of business on 30 June. It had no further need for employees at Kootingal or, it seems, anywhere. It terminated the employment of all the Woodlands piggery employees because it would no longer need their services.
Section 170DE(2) of the Act provides that a reason is not valid if, having regard to all the circumstances of the case, the termination is harsh, unjust or unreasonable. In relation to that matter, I was concerned at the suggestion that there was a connection between the complaint made to Mr Kellow by Mr Purdue, on behalf of himself, Mr Ellison and Mr Jackson, and the termination of these three men. It became apparent during the review that Mr Constantinidis had learned the names of the complainants. However, I am satisfied that there was no causal relationship between these two matters. I place little weight on evidence of a "no hard feelings" conversation on 28 June; people sometimes say one thing and do another. Much more significant is the fact that Rural terminated the employment of all the employees at the piggery. This is consistent with its position that it wished to finalise its relationship with them all, including paying out their leave entitlements, because it was going out of business. In my opinion, Rural has discharged the onus of proof attaching to it in connection with s.170DE(1). On that basis, the claims against it should be rejected. The claims against Group should be rejected on the more fundamental ground that it was never the applicants' employer.
This leaves the claims made against Parkville. Mr Constantinidis' evidence was that, in his address to the employees on 28 June, he named Parkville as the purchaser. Mr Purdue, Mr Ellison and Mr Jackson all said no owner was identified. It is not clear what was the position but I do not think it matters. It is common ground that, when he offered the employees new employment as from 1 July, Mr Constantinidis represented that he was speaking on behalf of the new owner. It is clear that, after consulting amongst themselves, all employees accepted that offer. So new contracts of employment came into existence, those contracts being between the purchaser, Parkville, whether named or not, and each individual employee. Each contract was for the employment of the employee by Parkville as from 1 July.
There is a dispute between the parties as to the reason why Parkville terminated the new employment contracts of Mr Purdue, Mr Jackson and Mr Ellison. The applicants suggest that they were victimised because of the complaint to Mr Kellow. Mr Constantinidis denies this. He says they were terminated for two reasons. First, they declined to complete necessary forms (an application for employment and a taxation declaration). Second, they intimated that, if they were to be casual employees, even on week days they would work only such hours as were required to feed and water the pigs, as distinct from carrying out other farm duties.
It is clear that the three men declined to complete employment applications. The reason, they say, was that the forms were incomplete and showed an incorrect employer. And Mr Purdue agreed in evidence that he told Mr Finlay that he would work only four hours on the Friday.
If the offer of employment made by Mr Constantinidis on 28 June, and accepted on that day by each of the employees, had been an offer of permanent employment, it would be necessary to determine whether the two matters identified by Mr Constantinidis justified the termination of that employment. If I had to determine that question, I would find it did not. Whether or not the positions taken by the employees created a reason connected with the operational requirements of Parkville's undertaking, the termination of the applicants' employment on these grounds was, in all the circumstances of the case, harsh, unjust and unreasonable. Because of sloppy record keeping, in the past there had been confusion about the identity of the employer. I can readily understand the employees' reluctance to sign a document which was incomplete and mis-stated the new employer's identity. As to the working hours, this is something that could surely have been sorted out, with a little effort and goodwill. All three employees had given years of satisfactory service to the piggery. For Mr Constantinidis immediately to terminate their employment, rather than take the trouble to sort out problems that were largely of his own making, was harsh, unjust and unreasonable.
Unfortunately for Mr Purdue and Mr Jackson, however, harshness is immaterial. Section 170DE of the Act does not apply to this case. It is common ground in the evidence that Mr Constantinidis' offer, on behalf of Parkville, was for casual employment. Accordingly, it is necessary to apply regulation 30B(1)(d) of the Industrial Relations Regulations. This paragraph excludes from the operation of Subdivisions B, C and D of Division 3 of Part VIA of the Act "a casual employee engaged for a short period within the meaning of subregulation (3)". Subregulation (3) says that, for the purposes of paragraph (d), a casual employee is taken to be engaged for a short period unless the employee is engaged by a particular employer on a regular and systematic basis during a period of six months and had an expectation of continuation. Mr Purdue and Mr Jackson did not fall within the exception on 30 June 1994. They were each casual employees within the meaning of paragraph (d). The result was that they were excluded from s.170DE (which is contained in Subdivision B of Division 3). Accordingly, they have no claim against Parkville.
I regret that I am compelled to conclude that Mr Purdue and Mr Jackson have no remedy in relation to their termination of employment. They have been good, long-term employees. They lost their permanent employment because of an event over which they had no control: the sale of the piggery to a new owner. Along with the other employees, they were offered new employment but subject to a qualification that excluded them from any remedy if, as occurred, the new employer acted harshly or unjustly in terminating their employment. Mr Purdue is still unemployed. He faces real difficulties in obtaining a new job. Mr Constantinidis presented himself to the Court as a fair person, concerned for the welfare of his company's employees. I express the hope that, now that the litigation is over, he will endeavour to do something for Mr Purdue; certainly, to think first of him if a vacancy at the piggery occurs.
I propose to grant the applications for review and set aside the orders made by the Judicial Registrar. In lieu thereof, I will order that the applications under s.170EA of the Act of Mr Purdue and Mr Jackson each be dismissed.
I certify that this and the preceding eleven (11) pages
are a true copy of the Reasons for Judgment
of the Honourable Justice Wilcox.
Associate:
Dated: 16 May 1996
A P P E A R A N C E S
The Applicants appeared for themselves
Counsel for the First and
Second Respondents: A Moses
Solicitors for the First and
Second Respondents: Abbott Tout
Counsel for the Third Respondent: R Moore
Solicitors for the Third Respondent: Gadens Ridgeway
Date of hearing: 24 April 1996
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