Thickbroom v Newcastle Wallsend Coal Co Pty Ltd
[1998] FCA 867
•27 JULY 1998
IAN THICKBROOM and CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION v. THE NEWCASTLE WALLSEND COAL COMPANY PTY LTD and OAKBRIDGE PTY LTD
No. NG 665 of 1998
FED No. 867/98
Number of pages - 7
Industrial Law
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
O'CONNOR J
Industrial Law - preliminary issue - whether effective notice of retrenchment had been given to employees
Fryar v Service Systems Pty Ltd (1996) 137 ALR 321, applied
SYDNEY, 16 July 1998 (hearing), 27 July 1998 (decision)
#DATE 27:7:1998
Counsel for the Applicant: C Howell
Solicitor for the Applicant: Construction Forestry Mining and Energy Union
Counsel for the Respondent: J L Trew, QC
Solicitor for the Respondent: Dunhill Madden Butler
THE COURT ORDERS THAT:
There be a separate hearing on the question of whether effective notice of retrenchment has been given to employees of the first respondent.
THE COURT DECLARES THAT:
The purported retrenchment notices of 29 June 1998 and 8 July 1998 from the second respondent to the group members are void and of no effect.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
O'CONNOR J
REASONS FOR JUDGMENT ON PRELIMINARY ISSUE
This matter concerns the determination of a preliminary issue arising out of the application (described below) as to whether effective notice of retrenchment had been given to members of the group represented by the first applicant by letter dated 29 June 1998.
Background
An application has been filed by the first applicant as a representative of members of the Construction, Forestry, Mining and Energy Union (second applicant) employed by Newcastle Wallsend Coal Company Pty Ltd (first respondent) at the Gretley Colliery. The applicants seek a declaration and orders in respect of conduct of the first and second respondents allegedly contravening ss 170NC and 298K of the Workplace Relations Act 1996 (Cth). The first respondent is a wholly owned subsidiary of the second respondent.
From about November 1997 to June 1998 the parties have been involved in negotiations towards an enterprise agreement. In the course of negotiations eight draft enterprise agreements were produced and the employees voted on two occasions as to whether to accept two of those draft agreements.
On 29 June 1998 an employee of the second respondent sent to the applicant and other employees of the first respondent a letter (on the second respondent's letterhead) in the following terms:
"Dear IanDue to the inability of the mine to meet the required cost structures for the operation to remain viable in today's continuing increasingly competitive market place the Company has decided to downscale the mine to care and maintenance.
You are hereby given notice of Retrenchment which will take effect on 3 August 1998. Due to an Industrial Agreement with the Construction, Forestry, Mining and Energy Union, the following will apply to your period of notice:
You will not be required to attend for work until Monday 13th July and you will continue to be paid weekly for the next two weeks on a projected roster basis which includes average mine bonus.
On Monday 13th July all persons remaining in employment at the mine will attend a meeting to formally vote on acceptance or rejection of The Gretley Colliery Enterprise Agreement Draft 8.
If you vote to accept the agreement then your notice of retrenchment will be withdrawn and you will commence work on your normal shift. The first shift shall be Night Shift on Monday 13th July. Conditions of employment will be in accordance with the new Agreement.
If you vote to reject the agreement then the company will be prepared to pay out the remaining applicable weeks of notice and other entitlements. The remainder of entitlements will be paid as soon as you advise the pay office of your options in relation to eligible termination payments. (the two weeks from 29th June to 13th July is part of the period of notice).
The document The Gretley Colliery Enterprise Agreement Draft 8 presented 29th June will remain unchanged.
Yours faithfully
R C Peluchette
General Manager".
On 8 July 1998 Mr Peluchette sent to Mr Wayne Greentree and each of the employees another letter on the letterhead of the second respondent in the following terms:
"Dear WayneOn 3 July 1998, the Company decided to close the Gretley Colliery and place it on indefinite care and maintenance.
The Company does not now intend to enter into a certified agreement with anyone and therefore the Company does not require you to attend the meeting on 13 July 1998 referred to in the letter to you dated 29 June 1998. This request is withdrawn.
However, the Company does intend to proceed with the retrenchment notice given to you by letter dated 29 June 1998.
You will therefore remain in employment until 27 July or 3 August 1998, whichever date is contained in your letter dated 29 June 1998. On that date the balance of your entitlements will be paid to you. You will continue to be paid on a projected roster basis including average mine bonus until that date. You are not required to attend for work during this period.
You will also need to contact Cheryl Thompson with your rollover preferences.
Yours sincerely
R C Peluchette
General Manager".
Notice of Motion
On 13 July 1998 at the hearing of the motion already filed the applicants filed in Court an Amended Notice of Motion. After hearing the parties on a number of the issues raised in the Notice of Motion the following orders were made:
1. That leave be granted to file the Amended Notice of Motion in Court.
2. That the requirements of service be dispensed with.
3. That the motion be returnable instanter.
4. That the first and second applicants be granted leave to file in Court an amended application dated 13 July 1998.
5. That the hearing of the application be expedited.
6. That a notice pursuant to s 33X(1)(a) of the Federal Court Act be given to the members of the group in accordance with the notice as amended at annexure "A" to the affidavit of Ian Malcolme Murray affirmed 9 July 1998, on or before 17 July 1998.
7. That a notice pursuant to s 33X(1)(a) of the Federal Court Act be given to the members of the group by distribution of the notices by Ian Malcolme Murray in person, by facsimile or by registered mail.
8. That members of the group wishing to opt out of proceedings do so by Thursday 16 July 1998.
9. That the Court hear and determine as a preliminary issue whether effective notice of retrenchment has been given to members of the group.
The remaining parts of the Notice of Motion were adjourned to 16 July 1998.
Preliminary Issue
On 16 July 1998 the preliminary issue of whether effective notice of retrenchment had been given on 29 June 1998 to members of the group (ie members of the second applicant employed by the first respondent) was heard.
The applicants relied on the following evidence:
(a) An affidavit affirmed on 13 July of Mr Murray who deposes as to his knowledge of who owned and managed the Gretley mine. Mr Murray also deposes to the course of meetings he had with management of the Gretley mine and members of Boston No. 2 Lodge in relation to negotiations for a new enterprise agreement. Mr Murray then explains the term "care and maintenance" in relation to the Gretley mine and finally indicates that on a number of occasions in discussions with the company he had been advised that the company would not sell the mine and would open the mine again to extract the remaining coal on the lease or contract out the coal producing operations.
(b) a bundle of documents, being correspondence between the parties in relation to the retrenchment notices and the decision to close down Gretley mine.
(c) an affidavit of Keenan Jason Endacott affirmed on 3 July 1998, annexing a copy of the Coal Mining Industry Production and Engineering) Consolidated Award December 1997 and a copy of the Gretley Colliery UMW Enterprise Agreement 1996. Mr Endacott also deposes as to the course of meetings between the parties in relation to negotiations for a new enterprise agreement and further annexes copies of correspondence in relation to the retrenchment notices sent to members of the group by the second respondent.
The respondents relied on the following evidence:
(a) four affidavits of John Patrick Casey being:
(i) an affidavit sworn on 10 July 1998. (Mr Casey, the Director of Organisational Services of the second respondent, is responsible for human resources, safety, training, public affairs and government affairs of the second respondent) Mr Casey in this affidavit provides statistical information in relation to the Gretley mine which formed part of the basis of the company's decision to close the mine. Mr Casey also deposes as to the course of meetings and correspondence in relation to this decision including details of a meeting on 3 July 1998 between various members of management which led to the decision to close the mine and the steps taken by Mr Casey to notify the union of this decision. Finally Mr Casey deposes as to the costs involved in placing the mine on care and maintenance compared with the costs of retaining the employees who have been retrenched;
(ii) an affidavit sworn on 13 July 1998 in which Mr Casey annexes a copy of a letter dated 8 July 1998 to Mr Wayne Greentree as reproduced above;
(iii) a first further affidavit sworn on 16 July 1998 which annexes material in relation to proceedings before the Australian Industrial Relations Commission and also states that all correspondence with various subsidiaries of the second respondent, including the first respondent, is on the letterhead of the second respondent and that there has been no suggestion by the applicants that communications and negotiations have been made by anyone other than the employer;
(iv) a second further affidavit sworn on 16 July 1998 which annexes a copy of a letter dated 14 July 1998 to the applicant, a copy of which was sent to all employees of the Gretley Colliery who are members of the second applicant, disputing the view taken by the second applicant of the retrenchment notice and giving notice of retrenchment, to take effect on 18 August 1998.
(b) an affidavit of Fiona Jean Inverarity sworn on 16 July 1998 annexing material in relation to proceedings before the Australian Industrial Relations Commission.
SUBMISSIONS OF THE PARTIES
The principal submission made on behalf of the applicants was that the notice of termination was invalid or ineffective because it was uncertain and/or ambiguous. It was also submitted that the notice, which created a unilateral new condition of the employment contract could not be construed as a notice pursuant to the terms of the contract between the parties, there being no agreement between the parties.
As an alternative the applicants submitted that a notice of this kind with a condition subsequent, which is not fulfilled, is not a valid notice of termination.
The respondents however submitted that the notice was absolute in terms and that that part of the letter which offers to rescind the termination on the happening of an event i.e. a favourable vote on the eighth draft of an enterprise agreement, does not affect its validity at law.
To support the submission that notice must be certain to be valid the applicants cited a decision of Von Doussa J in Fryar v Service Systems Pty Ltd (1996) 137 ALR 321 where although His Honour was dealing with statutory unlawful termination where the termination was in the nature of a retrenchment, he had occasion to discuss the nature and purpose of notice. It was submitted that what was said in this case applies to the present case. His Honour said (at p 331)
"A period of notice is to give an employee the opportunity to adjust to the change in circumstances which is to occur and seek out other employment ..."
Applying this to the present case, these workers would not, until the outcome of the contingency i.e. the vote is known, be in a position or wish to be accept alternative employment whilst there is a contract which continues with the present employer. It would not then be an opportunity to adjust to a change in the circumstances.
The applicants made two further submissions:
(i) That the notice was invalid because it imposed economic duress on the employees; and
(i) It was a notice given by a party other than the employer.
The respondents submitted that the question of duress does not arise because the condition or offer was withdrawn prior to the date set for the vote on the agreement. Further that the second respondent was an authorised agent of the first respondent (the employer) and the applicants had dealt with both respondents on that basis. They submitted alternatively that by not putting in issue, either at the Australian Industrial Relations Commission or in pleadings, the question of authority or agency, they have waived or are estopped from arguing it in these proceedings.
Decision
In my view the letter of 29 June is uncertain and ambiguous.
The first paragraph states that the company (not specified as either the first or second respondent) has decided to downscale coal production at the mine and put it on care and maintenance. Mr Casey's evidence which I accept is that the decision to cease coal production at the mine was not taken until 3 July. Even on the face of the letter this paragraph is contradicted because there is a condition subsequent or alternatively, offer of continuing employment (as put by the respondents) which would be incomprehensible if the mine was to be downscaled to care and maintenance.
The notice of retrenchment is expressed to "have effect" from 3 August. This is, in my view, uncertain because it does not make clear whether the period of notice will begin on 3 August or the retrenchment will take effect on that date. The respondents submitted that the surrounding facts and the rest of the letter would allow the reader (and the Court) to conclude that the date was intended to apply to the retrenchment and not the notice of retrenchment and that having a potential for two meanings does not amount to ambiguity.
Another difficulty with the letter is the use of the word "you", in the singular, in relation to the vote. It was submitted that it was understood that the agreement had to be accepted by the group not each individual member of the group for the retrenchment to be withdrawn but the letter, on its face, makes the offer of re-employment or condition subsequent depend on the person to whom the letter is addressed voting in favour of the enterprise agreement.
Even if all of these difficulties with this notice could be overcome by recourse to the surrounding circumstances of the letter, known, according to the evidence, to the members of the group affected, in my view it would still be an invalid notice. The retrenchment is conditional on the outcome of the vote which is to be taken before the retrenchment (on one view) takes effect. Applying the principle set out in Fryar v Service Systems Pty Ltd which is relevant to a case such as this the "certainty" of the employment situation and thus the opportunity to adjust to a change in circumstances should it occur would not operate until after 13 July, the nominated date for the vote. This letter is either a conditional notice of retrenchment, or a notice of retrenchment subject to a condition subsequent which is not satisfied (the meeting to vote on the enterprise agreement having been cancelled by letter dated 8 July, after the decision to close the mine was taken). On either construction it is not a valid notice.
Because of the view I take on this issue of certainty, it is not necessary to consider the further submissions on economic duress, third party notice, waiver or estoppel by conduct. Some of these matters may, of course, remain of relevance to the rest of the proceedings.
The consequence of my conclusion that this notice lacks certainty is that the purported notice contained in the letters of 29 June and 8 July from the second respondent to the group members is void and of no effect and I will make a declaration in those terms.
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