Victoria v Australian Teachers Union

HER MAJESTY THE QUEEN IN RIGHT OF THE STATE OF VICTORIA v. AUSTRALIAN
TEACHERS' UNION
No. VI29 of 1993
FED No. 375
Number of pages - 17
Industrial Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Northrop(1), Keely(2) and Ryan(3) JJ

CATCHWORDS

Industrial Law - Interpretation of award - voluntary separation package - Victorian Teachers Redundancy Interim Award 1992 - whether further voluntary redundancy offers prohibited

HEARING

MELBOURNE, 24 May 1993

#DATE 8:6:1993

Appellant's Counsel: Mr R.R.S. Tracey QC with Mr B.J. Lacy

Appellant's Solicitors: Victorian Government Solicitor

Respondent's Counsel: Mr K.H. Bell

Respondent's Solicitors: Holding Redlich

ORDER

THE COURT ORDERS THAT:

1. The appeal be allowed.

2. Order 2 of the Order of the Court made on 28 April 1993 be set

aside and in lieu thereof the following declaration is made: "2. That on the proper construction of cl.3(d) of the Victorian Teachers Redundancy Interim Award 1992

(a) the duty of the employer described in cl.3(d) is confined to not terminating the employment of an employee covered by the award otherwise than in accordance with the provisions of the Teaching Service Act 1981 described in cl.3(d);

(b) the right of an employee described in cl.3(d) is confined to not having his or her employment terminated by the employer otherwise than in accordance with the said provisions of the Teaching Service Act;

(c) neither the said right nor the said duty has any operation:

(i) in the case of an employee whose employment is terminated by virtue of acceptance of a voluntary separation package as defined in cl.3(a)(i);

(ii) in relation to termination of employment of an employee where that termination is brought about by the agreement of the employer and employee."

Note: Settlement and entry of orders is deal with in Order 36 of the Federal Court Rules.

JUDGE1

NORTHROP J The issue raised by this appeal is whether the Victorian Teachers' Redundancy Interim Award 1992 prohibits the termination of employment of a teacher in the teaching service pursuant to an agreement between the State of Victoria, as employer, and the teacher, as employee. For present purposes the agreement can be described as a redundancy agreement under which the State of Victoria agrees to make a payment to the teacher and the teacher agrees to resign from the teaching service.

The Victorian Teachers' Redundancy Interim Award 1992, the "Interim Award", was made by the Industrial Relations Commission on 24 December 1992. The Interim Award is a short document and can be set out in full. The clause relevant to the present issue is clause 3(d). The Interim Award is as follows:

" 1 - TITLE

This award shall be known as the Victorian Teachers Redundancy Interim Award 1992.

2 - APPLICATION OF AWARD

This award is binding on the Australian Teachers' Union, its officers and its members and on Her Majesty The Queen in the right of the State of Victoria in respect of all its employees engaged as teachers.

3 - REDUNDANCY

(a) For the purposes of this clause:

(i) "voluntary separation package" means a voluntary separation package offered and accepted in accordance with terms set out in the circular appearing at page 40 of Exhibit N1 in matter C No. 32353 of 1992 as amended to 16 December 1992,

(ii) "employer" means Her Majesty The Queen in the right of the State of Victoria, and

(iii) "employee" means a teacher covered by this award.

(b) Where an employee has, between 20 November 1992 and 24 December 1992, accepted a Voluntary Separation Package, that employee may, by notice in writing given on or before 31 December 1992 to the Director of School Education, withdraw such acceptance.

(c) Where an acceptance is withdrawn in accordance with sub-clause (b) above, the employment of such employee shall not be terminated by virtue of his or her earlier acceptance of the voluntary separation package.

(d) Except in the case of an employee whose employment is terminated by virtue of acceptance of a voluntary separation package in relation to the termination of employment of any employee covered by this award, it shall be the duty of the employer not to terminate that employment and it shall be the right of an employee not to have that employment terminated, otherwise than in accordance with the disciplinary, dispensation with services or efficiency provisions contained in the Teaching Service Act 1981

(Victoria).

4 - DURATION

This award shall come into force on 24 December 1992, and remain in force for a period of three months."

On 28 April 1993 the Court, pursuant to an application brought by the State of Victoria under s51 of the Industrial Relations Act 1988, made two declarations, the declaration relevant to this appeal being:

"2. That, on the proper construction of cl.3(d) of the Victorian Teachers Redundancy Interim Award 1992:

(a) the expression "voluntary separation package" bears the meaning of that phrase as defined in cl.3(a)(i), namely a voluntary separation package offered and accepted in accordance with the terms set out in the circular appearing at page 40 of exhibit N1 in matter C No. 32353 of 1992 as amended to 16 December 1992;

(b) the employer is under a duty not to terminate the employment of any employee covered by the award, and any employee has a right not to have employment covered by the award terminated otherwise than:

(i) in the case of an employee whose employment is terminated by virtue of acceptance of a voluntary separation package as defined in cl.3(a)(i), namely a voluntary separation package offered and accepted in accordance with the terms set out in the circular appearing at page 40 of exhibit N1 in matter C No. 32353 of 1992 as amended to 16 December 1992; or

(ii) in accordance with the disciplinary, dispensation with service or efficiency provisions contained in the Teaching Service Act 1981 (Vic.)."

The employer has appealed from that declaration and is seeking a declaration that, on the proper construction of cl3(d) of the Interim Award:

"(a) The duty of the employer described in cl 3(d) is confined to not terminating the employment of an employee covered by the award otherwise than in accordance with the provisions of the Teaching Service Act 1981 described in cl 3(d);

(b) The right of an employee described in cl 3(d) is confined to not having his or her employment terminated by the employer otherwise than in accordance with the said provisions of the Teaching Service Act;

(c) Neither the said right nor the said duty has any operation:

(i) in the case of an employee whose employment is terminated by virtue of acceptance of a voluntary separation package as defined in cl 3(a)(i);

(ii) in relation to termination of employment of an employee where that termination is brought about consensually by the employer and employee."

The words "consensually by", appearing in (c)(ii) are used in the sense of meaning "by the agreement of".

Under subsection 50(1) of the Industrial Relations Act the Federal Court of Australia has jurisdiction with respect to matters arising under that Act in relation to which applications may be made to it under that Act. Section 51 is set out in full:

"51.(1) The Court may give an interpretation of an award on application by:

(a) the Minister; or

(b) an organisation or person bound by the award.

(2) The decision of the Court is final and conclusive and is binding on the organisations and persons bound by the award who have been given an opportunity of being held by the Court."

Section 51 corresponds to s110 of the Australian Conciliation and Arbitration Act 1904. It has been held that the provision is designed to enable the Court to give an authoritative decision on the meaning of an award. Essentially the decision is based upon the proper construction of words used in the award. The construction is to have general application and is not directed to the particular facts of any matter in dispute between parties. At the same time it is necessary for the Court to have some background information to constitute a framework within which the award is to be construed.
The State of Victoria and the Australian Teachers' Union, "the Union", are bound by the Interim Award.
At the hearing of the appeal, counsel for the Union, the respondent to the application and to the appeal, submitted that the Full Court, in the exercise of its discretion, should refuse to give an interpretation of the Interim Award. The State of Victoria and the Union are the only parties to the award and the only persons who have been given an opportunity of being heard on the application and on the appeal. The basis of the submission by counsel for the Union was that the dispute in which the Interim Award was made is currently before the Australian Industrial Commission. The Commission, it was said, was the correct forum for resolution of the differences between the State of Victoria and the Union.
This is not a proper case to determine whether the Court has a discretion to refrain from making a declaration when an application is properly brought before it under s51 of the Industrial Relations Act. It is sufficient to say that even if there is such a discretion this is not a case where the Court should exercise its discretion in favour of the Union. A declaration has been made by the Court, constituted by a single Judge, adverse to the interest of the State of Victoria. The Union has instituted other proceedings in this Court alleging contravention of the Interim Award by the State of Victoria. Of necessity that proceeding involves the proper construction of cl3(d) of the Interim Award. The Court hearing that application would be constrained to accept the construction declared by the Court, being the construction the subject of this appeal. Any decision in that proceeding could result in an appeal to the Full Court. In the meantime the Industrial Commission is bound to accept the construction of the clause as contained in the declaration the subject of the present appeal. There are real and genuine differences between the parties to the Interim Award as to the construction of cl3(d) and the Full Court should proceed to hear and determine the appeal.
The issues argued on the appeal were more limited than those argued before the trial Judge and, to a large extent, were of a different nature. It is not for this Court to be concerned with the dispute which has been found to exist by the Industrial Relations Commission between the parties to the appeal, nor whether the Interim Award comes within the ambit of that dispute. Nor is it necessary for this Court to make any detailed examination of the facts leading to the finding of the dispute and the making of the Interim Award. It is necessary, however, to give a brief outline of those facts in order to understand the submissions of counsel and the construction of the Interim Award.
In Victoria the Teaching Service Act 1981, among other things, constitutes the teaching service which, broadly speaking, consists of persons employed by Her Majesty The Queen In the Right of the State of Victoria as teachers and principals and such other persons as are necessary for the purposes of the Teaching Service Act. Generally speaking, members of the teaching service have the right to be employed until retiring age is reached. The Teaching Service Act contains provisions by which a teacher may be dismissed from employment without the consent of the teacher. Those provisions relate to dismissal in accordance with the disciplinary, dispensation of service or efficiency provisions. Unfortunately, these days euphemisms are being used instead of well-known expressions. This often leads to uncertainty and confusion as to what the euphemisms mean and adds to the difficulties of expressing a clear intention. An illustration of this is the use of the phrase "dispensation of service" which in reality is a euphemism for compulsory dismissal from employment. For present purposes it is noted that the right of the State of Victoria to compulsorily dismiss a teacher from employment is severely restricted by the provisions of the Teaching Service Act. There appears to be nothing in that Act which prevents the State of Victoria and a teacher from entering into an agreement by which the teacher agrees to cease to be an employee of the State of Victoria whether for consideration or not. Further, it appears that a teacher can resign at any time and thus bring about the end of the employment with the State of Victoria. In addition to the Teaching Service Act, there were in existence, apparently, a number of State Awards and registered agreements relating to the relationship existing between the State of Victoria and teachers within the teaching service. It is not necessary to refer to the terms of the Teaching Service Act, the State Awards or the agreements.
The Public Sector Management Act 1992 came into operation essentially on 19 November 1992. The parties did not refer in detail to the provisions of this Act but counsel seemed to accept the fact that under that Act the State of Victoria could force teachers to accept what can be described as compulsory redundancy and thus cease to be employees of the State of Victoria. The details by which this could be done with respect to teachers within the teaching service was not made clear but it is accepted that the State of Victoria did have the right to dismiss a teacher under the compulsory redundancy provisions contained in the Public Sector Management Act.
In November 1992 the State of Victoria announced its intention to reduce the number of teachers in the teaching service and that it hoped to achieve this by what was called a "voluntary separation package", another euphemism for termination of employment pursuant to voluntary redundancy provisions. A detailed procedure was set out in the voluntary separation package pursuant to which teachers were offered payment for early retirement. The effect was that, on acceptance by the teacher, the employment of that teacher ceased in accordance with the terms set out in the package. It appears that there was a certain degree of confusion in the minds of some teachers relating to the package. A further supplementary package was offered but in any event any acceptance of either of the terms contained in those packages had to be completed by 6 January 1993 at the latest.
The Union was concerned with the actions being taken by the State of Victoria and by letter made a demand on it. The State of Victoria refused to accept the demand and in due course the finding of a dispute was made by the Industrial Relations Commission. The formal finding of dispute is not before the Court but it can be illustrated from an extract from the reasons for decision of the Industrial Relations Commission for the making of the Interim Award. In this respect the Commission said:

"The subject of the dispute is in respect of those matters pertaining to the relationship between the respective employers and teachers employed by the Crown in the Right of the States of Victoria and Tasmania and arises in respect of the rejection of a demand made by the ATU on 23 November 1992, to the effect that no teacher employed by the respective employers shall be terminated from his or her employment, whether by way of voluntary redundancy or otherwise except with the consent of the ATU. The dispute extends beyond any one State and exists particularly in the States of Tasmanian (sic) and Victoria."

The ATU referred to in that passage is the Union.

In the course of the hearing the Industrial Relations Commission requested the Union to formulate terms of the award which it desired to be made in the determination of the dispute. By this time the Union was not pursuing its claim that there should be no dismissal from employment except with the consent of the Union. The format of the Award sought by the Union was as follows:

" 1 - TITLE

This award shall be known as the Victorian Teachers Redundancy Interim Award, 1992.

2 - APPLICATION OF AWARD This award is binding on the Australian Teachers' Union, its officers and its members and on the State of Victoria in respect of all its employees engaged as teachers. 3 - REDUNDANCY

That pending determination of this matter by the Australian Industrial Relations Commission or further order:

(i) For the purposes of this clause:

(a) "Separation Package" means a Separation Package in the same or similar terms of or to the same of (sic) similar effect of the document attached hereto and marked "A";

(b) "Offer" means an offer as referred to in Annexure "A" whether made before or after the date of this Award;

(c) "Acceptance of offer" means an acceptance of offer as referred to in Annexure "A" whether made before or after the date of this Award.

(ii) The State of Victoria shall take no further step whatsoever

to process the Separation Package and without limiting the generality of the foregoing the State of Victoria shall not make any further offer;

(iii) Whilst this Award remains in force, any offer made by the

State of Victoria or any acceptance of an offer made by any teacher employed by the State of Victoria is of no effect;

(iv) Whilst this Award remains in force, the State of Victoria

shall not treat the employment of any teacher as having ended by reason of an offer made by the State of Victoria or acceptance of offer made by any teacher.

(v) The State of Victoria shall not dismiss any teacher otherwise than in accordance with the disciplinary or efficiency provisions contained in the Teaching Service Act, 1981 (Victoria).

4 - DURATION

This award shall come into force on December, 1992, and remain in force until "

In due course the Interim Award was made in the form set out earlier in these reasons. Some general comments may be made in relation to the Interim Award. The word "employer" is defined to mean Her Majesty The Queen in the Right of the State of Victoria and the word "employee" means persons engaged as teachers, presumably in the teaching service under the Teaching Service Act. The effect of cl3(b) is that teachers who had accepted a voluntary separation package, as defined, had the opportunity to withdraw that acceptance and if that were done, under cl3(c) the employment of the teacher "shall not be terminated by virtue of his or her earlier acceptance of the voluntary separation package". The word "terminate" appears first in cl3(c). The need for cl3(c) seems to flow from the fact that there is authority for the proposition that if an employee tenders a resignation an employer can insist on giving effect to that resignation even though the employee desires to cancel or withdraw the resignation. It is not necessary for this Court to pursue this concept further. It would appear that in cl3(c) the word "terminate" is used in the sense of meaning a compulsory termination of employment as distinct from a voluntary termination of employment.

For ease of reference cl3(d) is set out:

"(d) Except in the case of an employee whose employment is terminated by virtue of acceptance of a voluntary separation package in relation to the termination of employment of any employee covered by this award, it shall be the duty of the employer not to terminate that employment and it shall be the right of an employee not to have that employment terminated, otherwise than in accordance with the disciplinary, dispensation with services or efficiency provisions contained in the Teaching Service Act 1981

(Victoria)."

The syntax used in this clause is unusual. What is intended is not made clear by the words used. The clause commences by stating an exception or exclusion from the main purpose of the clause. The exception or exclusion has the effect of taking out from the clause the matters referred to in the exception. Counsel were in agreement, quite correctly, that the exception was contained in the words "Except in the case of an employee whose employment is terminated by virtue of acceptance of a voluntary separation package". The operative part of the clause is contained in the words "in relation to the termination of employment of any employee covered by this Award, it shall be a duty of the employer not to terminate that employment and it shall be the right of an employee not to have that employment terminated, otherwise than in accordance with the disciplinary, disposition with services or efficiency provisions contained in the Teaching Service Act 1981 (Victoria)." This part of the clause appears to be designed to impose an obligation on the employer with a corresponding right in the employee. Even here, however, there is a proviso or exception from that obligation and right in relation to termination of employment in accordance with the specified provisions of the Teaching Service Act. Of necessity a termination under this proviso would constitute compulsory termination by the employer without the consent of the employee. In other words this type of termination would be dismissal for cause. In reality, therefore, the operative parts of the clause are related to the termination of employment in which the obligation on the employer is not to terminate employment and the right of the employee is not to have that employment terminated.
The essence of the submissions made on behalf of the State of Victoria was that the cl3(d) did not prevent any voluntary termination of employment of an employee. It was said that an employee could resign at any time thereby bringing about the termination of employment. One could also comment that the employment could be terminated by the death of the employee. It was argued that in the relevant part of the clause, "termination" had to be construed in the sense of termination of employment by the employer without the consent of the employee.
The essence of the submissions made on behalf of the Union was that the word "terminate" applied to all terminations of employment whether compulsory or by agreement. At the same time counsel conceded that the clause would not prevent an employee terminating employment by resignation. In substance, counsel was forced to concede that, on his submission, the prohibition imposed by cl3(d) was a prohibition imposed on the employer not to make an offer to an employee to enter into a voluntary redundancy by which the employment of the employee was terminated by agreement between the employer and the employee.
The word "terminate" is defined to mean, in the relevant sense "bring to an end, put an end to". This definition is given in both The Shorter Oxford English Dictionary and The Macquarie Dictionary. Essentially the word "terminate" means to bring to an end. Of itself, the word is not determinative of how the end is brought about. It is neutral in this regard. In this respect the word "terminate" is ambiguous. Its true meaning can only be ascertained from the context in which it appears. The problems inherent in the meaning to be given to the word "terminate" is illustrated in R v Secretary of State for Social Services: Ex parte Khan (1973) WLR 187. Essentially that case involved the meaning to be given to the word "terminated" appearing in conditions of employment where an employee's employment could not be terminated unless certain procedures were followed. There Dr Khan had been employed under a contract which specified a period of two years of employment. Thereafter a further period could be confirmed. At the expiration of the two year term, his employment was not confirmed. Dr Khan claimed that he was entitled to the protection of the review procedure provided by the conditions of employment. The Court of Appeal held that he was not so entitled because, in essence, having regard to the context of the word "terminated" in the conditions of employment, that word was to be construed as meaning terminated by the action of the employer without the consent of the employee. At page 189 Lord Denning MR referred to the fact that the word "terminate" is by itself ambiguous. He said it could refer to either of two things, either to termination of employment by notice or termination of employment by effluxion of time. It is often used in that dual sense in landlord and tenant and in master and servant cases. His Lordship then went on to consider indications in the relevant document which supported the view that in that document the word "terminate" did not apply to the termination of employment by effluxion of time. It was not necessary to consider termination by agreement.
At page 191 Buckley LJ said: "As (counsel for the Secretary of State) has pointed out the word "terminate" can be used either transitively or intransitively. A contract may be said to terminate when it comes to an end by effluxion of time, or it may be said to be terminated when it is determined by notice or otherwise by some act of one of the parties. Here in my judgment the word "terminated" is used in this passage in paragraph 190 in the transitive sense and it postulates some act by somebody which is to bring the appointment to an end, and is not applicable to a case in which the appointment comes to an end merely by effluxion of time".
In order to give a meaning to the word "terminate" it is necessary to add words to explain how the termination is brought to an end. Clause 3(d) is directed to bringing to an end a contract of employment between an employer and an employee. By itself the word "terminate" would cover many different methods by which the employment is brought to an end. Thus when an employee reaches a compulsory retiring age it would be appropriate to describe the ending of the employment as being terminated by reaching the retiring age or by effluxion of time. Effluxion of time normally refers to a specified term and not a compulsory retiring age. A contract of employment could be brought to an end by agreement between the employer and the employee and it is appropriate to talk of such a case as the employment being terminated by agreement. The words "voluntary redundancy" normally imply a voluntary agreement by which the employee agrees to bring the employment to an end in return for a payment of money or other benefit. There the employment is terminated by agreement. The words compulsory redundancy merely imply an involuntary termination of employment as far as the employee is concerned. Most contracts of employment allow the employer to dismiss an employee on notice or payment in lieu of notice. Here it is appropriate to describe dismissal as the termination of the employment by dismissal. This implies action taken by the employer without the consent of the employee. The employer in the present case has no right to do that under the Teaching Service Act but it appears to have that right or power under the Public Sector Management Act. As indicated earlier, if an employee dies it is appropriate to describe the employment as having been terminated by death. It was because of the ambiguous nature of the word "terminate" that counsel for the Union had to concede that an employee must have the right to resign and thus to terminate the employment without the consent of the employer. Otherwise there would be in existence a form of conscription to force a person to continue in employment despite the desire of that person to have the employment terminated.
There are a number of indications in cl3(b) which are helpful in determining the meaning to be given to the word "terminate", or more accurately the context in which the word "terminate" is used, in the relevant part of cl3(b). In this respect the subject matter of the clause relates to the termination of employment of teachers employed by the State of Victoria. This is made clear by the phrase "in relation to the termination of employment of any employee covered by this Award". There is nothing in that phrase indicating the sense in which the word "termination" is used. The next part of the clause imposes an obligation on the employer, namely "it shall be the duty of the employer not to terminate that employment". This suggests that the duty is imposed on the employer not to terminate the employment unilaterally; in other words, not to terminate the employment by dismissal. This is supported by the correlative right conferred on the employee by the words "it shall be the right of an employee not to have that employment terminated". These two phrases seem to be directed to what might be the right of an employer to dismiss an employee, which right is taken away by the clause. To give emphasis to that obligation, a correlative right is conferred on the employee. Normally a dismissal is a termination of employment by an employer. A resignation of employment by an employee is normally the termination of employment by the employee. The words used in these two relevant phrases seem directed to a restriction on the right of an employer to dismiss and a right on the employee not to be dismissed. The exception contained in the last part of cl3(d), of necessity, is directed to compulsory dismissal by the employee. This is necessary because of the otherwise absolute form of the obligation imposed upon the employer. Compulsory termination of employment of the employee is prohibited except in accordance with the relevant provisions of the Teaching Service Act. There is nothing in the phrases to suggest that a termination by the agreement of the employer and the employee is prohibited by the clause.
As against this, it is recognized that the word "terminated", when used in the exclusion at the beginning of cl3(d), refers to voluntary termination of employment. This is made clear by the words of description following the word "terminated", namely "by virtue of acceptance of a voluntary separation package". The use of these explanatory words is in stark contrast to the absence of explanatory words in the prohibition contained in cl3(d). It would have been very simple for the Commission to have made an award to the effect that the employer was not to make an offer of redundancy payments to employees for a specified period. It did not do this. Such a prohibition would have ended at the expiration of the specified period. As it stands the Interim Award has continued in operation for an indefinite period; see sections 147, 148 and 113 of the Industrial Relations Act. The construction sought by the Union has the effect that the employer would be in breach of the Interim Award if, at any time before the Interim Award is varied or brought to an end, it made an offer of voluntary redundancy to a teacher.
The heading to cl3, "Redundancy", even if relevant, does not assist. By itself, the word is neutral. It could cover both voluntary redundancy as well as compulsory redundancy.
In my opinion, the submissions made on behalf of the employer should be accepted. All the indications in the Interim Award support this conclusion.
This conclusion is supported by the reasons for decision given by the Industrial Relations Commission. It is said that, by combination of sections 46 and 15AB of the Acts Interpretation Act 1901, the Court is able to refer to those reasons. I have formed my opinion on the construction of cl3(d) without reference to those reasons, but it is interesting to note clauses 3(ii), (iii) and (iv) of the Award as proposed by the Union and as set out earlier in these reasons. Clause 3(ii) was as follows:

"The State of Victoria shall take no further step whatsoever to process the Separation Package and without limiting the generality of the foregoing the State of Victoria shall not make any further offer". (Emphasis added.)

In its reasons for decision the Commission said:

"Substantially for these reasons we dismiss those parts of the ATU's application (clauses 3((ii), (iii) and (iv)) which would in effect freeze the VSP process and nullify the effects of acceptance of a VSP. We should not in this respect be taken to be holding that an award expressed in the terms proposed is an appropriate means of creating the rights sought."

In this respect the Commission rejected the provisions sought namely that the State of Victoria should not make any further offer to teachers in the nature of a voluntary redundancy scheme. The Interim Award, in my opinion, is consistent with the dismissal of the form of clause 3(ii) as sought by the Union.
In my opinion, the appeal should be allowed, the order already given should be set aside and in lieu thereof, the Court should make the declaration as sought by the State of Victoria but with the words "by the agreement of" being inserted in lieu of the words "consensually by" in clause (c)(ii).

JUDGE2

KEELY J The State of Victoria ("the employer") has appealed from an order made by a Judge of this Court on an application by it for an interpretation of clause 3 of the Victorian Teachers' Redundancy Interim Award 1992 ("the award"). The case presented to this Court was quite different from that put to his Honour.

The award was made by the Industrial Relations Commission under the Industrial Relation Act 1988 ("the Act"). Clause 3 of the award read as follows:
" 3 - REDUNDANCY
(a) For the purposes of this clause:

(i) "voluntary separation package" means a voluntary separation package offered and accepted in accordance with terms set out in the circular appearing at page 40 of Exhibit N1 in matter C No. 32353 of 1992 as amended to 16 December 1992;

(ii) "employer" means Her Majesty The Queen in the right of the State of Victoria; and (iii)

"employee" means a teacher covered by this award.

(b) Where an employee has, between 20 November 1992 and 24 December 1992, accepted a Voluntary Separation Package, that employee may, by notice in writing given on or before 31 December 1992 to the Director of School Education, withdraw such acceptance.

(c) Where an acceptance is withdrawn in accordance with subclause (b) above, the employment of such employee shall not be terminated by virtue of his or her earlier acceptance of the voluntary separation package.

(d) Except in the case of an employee whose employment is terminated by virtue of acceptance of a voluntary separation package in relation to the termination of employment of any employee covered by this award, it shall be the duty of the employer not to terminate that employment and it shall be the right of an employee not to have that employment terminated, otherwise than in accordance with the disciplinary, dispensation with services or efficiency provisions contained in the Teaching Service Act 1981 (Victoria). 4 - DURATION

This award shall come into force on 24 December 1992, and

remain in force for a period of three months. "

His Honour's order declared that:

"on the proper construction of clause 3(d) of the Victorian

Teachers Redundancy Interim Award 1992:

(a) the expression "voluntary separation package" bears the

meaning of that phrase as defined in clause 3(a)(i), namely a voluntary separation package offered and accepted in accordance with the terms set out in the circular appearing at page 40 of exhibit N1 in matter C No. 32353 of 1992 as amended to 16 December 1992;

(b) the employer is under a duty not to terminate the employment

of any employee covered by the award, and any employee has a right not to have employment covered by the award terminated otherwise than:

(i) in the case of an employee whose employment is terminated by virtue of acceptance of a voluntary separation package as defined in clause 3(a)(i), namely a voluntary separation package offered and accepted in accordance with the terms set out in the circular appearing at page 40 of exhibit N1 in matter C No. 32353 of 1992 as amended to 16 December 1992; or

(ii) in accordance with the disciplinary, dispensation with service, or efficiency provisions contained in the Teaching Service Act 1981 (Vic.). "

Counsel for the respondent Union submitted that sub-clause 3(d) of the award, construed in the context of the award as a whole, prohibited termination of the employment "even if it arises out of agreement". He accepted that, on that construction of the sub-clause, it prohibited the making of any offer to an employee by the employer of another voluntary separation package. He also accepted that, on that construction, termination resulting from the acceptance of a voluntary separation package would be a breach of the award even if done with the consent of the respondent Union cf. its letter of demand dated 23 November 1992.
I agree that those results would follow if the construction of the clause for which the Union contends be correct, but I am unable to accept that that is the correct construction of the clause.
In my opinion clause 3(d) of the award, on its true construction, does not impose any duty upon the employer to refrain from making an offer or from writing to its employees in terms inviting them to consider a "voluntary separation package", whether as defined in clause 3 of the award or not. The only words of prohibition in sub-clause 3(d) are:
". . . it shall be the duty of the employer not to terminate
that employment and it shall be the right of an employee not
to have that employment terminated, . . ."
The words in (d) imposing the duty on "the employer not to terminate that employment" contrast sharply with the words in (c), namely, "the employment of such employee shall not be terminated by virtue of . . . acceptance of the voluntary separation package". If sub-clause (d) was intended to prohibit the consensual termination of the employment by the acceptance of a voluntary separation package, it would have been easy for the draftsman to use the same words as in (c); instead the sub-clause used words imposing a duty on the employer "not to terminate" and conferred a right on the employee.
In my opinion the exception, which appears in the words preceding the words of prohibition, does not affect the meaning of those words. Sub-clause (d) prohibits the compulsory termination of the employment by the employer, and confers a right on each employee not to have the employment so terminated i.e. unilaterally by the employer. Sub-clause (d) does not expressly prohibit the acceptance by an employee of the employer's offer of a voluntary separation package, either as defined in clause 3(a)(i) of the award or in some other form; nor does it impliedly prohibit such an acceptance, in my opinion. When an acceptance by the employee leads to the termination of the employment by consent, it would not be correct to say that the employment had been terminated by the employer or that the employer had decided "to terminate that employment" - to use the words of prohibition.

Accordingly, in those circumstances, there would not be a breach of "the duty of the employer not to terminate that employment"; nor would there be a breach of "the right of an employee not to have that employment terminated, otherwise than . . .".
Counsel for both parties referred the Court to passages from the reasons for decision of the Industrial Relations Commission. Because of the opinion I have formed as to the meaning of clause 3(d), I have not found it necessary to consider those reasons.
Counsel for the respondent Union submitted that the Court should in its discretion refrain from expressing its opinion as to the proper construction of the clause. The submission put was "that it is not desirable or necessary for the Court to exercise its jurisdiction to give an interpretation". Assuming, without deciding, that the Court has a discretion to so refrain, in my opinion it would not be a proper course for the Court to accede to the submission. No such application was made to his Honour, and counsel for the Union told this Court that the Union, in making that submission "does not wish there to be any interference with the order made by the learned trial judge in a way that would suggest that the learned trial judge was in error".
In my opinion the appeal should be allowed and the declaration proposed by Northrop J should be made.

JUDGE3

RYAN J I have had the advantage of reading in draft the reasons for judgments of Northrop and Keely JJ. Those judgments make it unnecessary for me to set out again the background to the present appeal, the relevant extracts from the award or the declaration by way of interpretation made by the learned primary judge.

The principal consideration which weighed with his Honour at first instance in adopting the interpretation which he did, is the presence in cl. 3(d) of the phrase "voluntary separation package" which is the subject of an exclusive definition in cl. 3(a)(i). His Honour identified three classes of employees as contemplated by cl. 3(b). He observed:
"It is clear that sub-clause (b) is designed to permit an employee,
who had accepted a voluntary separation package (as defined) prior
to the making of the award, to withdraw such acceptance. The
effect of this sub-clause is that there will be three classes of
persons. The first class is those who have accepted a voluntary
separation package prior to 24th December 1992 and who withdraw
their acceptance in accordance with sub-clause (b). The second
class is those who have accepted such a package prior to the making
of the award but who do not withdraw their acceptances, or who
accept a package in the defined sense in accordance with its terms,
i.e. an offer made during the 1992/93 holiday period. The third
class is all those who have not been offered, or have not accepted
a voluntary separation package in the defined sense."
I respectfully agree that the structure of the clause 3 is predicated on the existence of three classes of employees. However, I am not satisfied that the second class includes those who "accept a package in the defined sense in accordance with its terms, i.e. an offer made during the 1992/93 holiday period." In my view, the only operative acceptance of a voluntary separation package as defined which is provided for by the terms of the clause is an acceptance occurring between 20 November and 24 December 1992 which is not withdrawn by taking the opportunity to repent afforded by sub-clause (b). Specific protection is afforded by sub-clause (c) to an employee giving notice in writing before 31 December 1992 against termination by virtue of his or her earlier acceptance of the voluntary separation package i.e. the package accepted between 20 November and 24 December 1992.
I also agree with the learned primary Judge that the better reading of cl. 3(d) is that the phrase "in relation to the termination of employment of any employee covered by this award "serves to introduce the operative part of the sub-clause and do not qualify the immediately preceding expression `voluntary separation package'. Accepting, therefore, as his Honour suggested, that cl. 3(d) is clumsily constructed to comprise an operative provision with two exceptions, it remains necessary to determine the reach of the operative provision.
There is clearly excluded, perhaps unnecessarily, from the duty not to terminate, the employment of an employee whose employment has already been terminated by virtue of the offer and acceptance of a voluntary separation package which acceptance has not been withdrawn pursuant to cl. 3(b). Equally clearly there is excluded from the duty not to terminate, the employment of an employee amenable to dismissal in accordance with the disciplinary, dispensation with services or efficiency provisions contained in the Teaching Service Act 1981 (Victoria).
What then is the extent of the duty imposed, and the correlative right conferred by operative provision of cl. 3(d)? Both are cast in negative terms more apt to cut down a presumed right and a corresponding liability, than to confer a permission or facility not otherwise available and thereby detract from an existing immunity. The central difficulty of construction seems to me to arise from the use in both the active and passive voice of the general word "terminate". That word is capable of comprehending the bringing to an end of a contract of employment whether by the employer ("dismissal"), or by the employee ("resignation"). or by effluxion of time in the case of employment for a fixed term. As Lord Denning MR (with whom Karminski LJ agreed) said in Reg. v Secretary of State for Social Services ex parte Khan (1973) 1 WLR 187 at 189:
"I think that the word "terminate" or "termination" is by itself
ambiguous. It can refer to either of two things - either to
termination by notice or to termination by effluxion of time. It
is often used in that dual sense in landlord and tenant and in
master and servant cases. But there are several indications in
this paragraph to show that it refers here only to termination by
notice. (1) The main heading speaks of "Notice of Termination."
(2) The cross-heading is "Representations against dismissal." (3)
The words "is being unfairly terminated" point to some positive
action on the part of the board by way of termination, such as by
giving notice or shutting him out, as distinct altogether from an
automatic coming to an end. (4) The words - "the board's decision
to terminate the appointment" are to the same effect. (5) The
words "before the expiry of the notice given: contemplate that the
employment will be terminated by notice, and not by an automatic
ending."
To similar effect, Buckley LJ observed, at 191:
"As Mr Slynn has pointed out, the verb "terminate" can be used
either transitively or intransitively. A contract may be said to
terminate when it comes to an end by effluxion of time, or it may
be said to be terminated when it is determined by notice or
otherwise by some act of one of the parties. Here in my judgment
the word "terminated" is used in this passage in paragraph 190 in
the transitive sense and it postulates some act by somebody which
is to bring the appointment to an end, and is not applicable to a
case in which the appointment comes to an end merely by effluxion
of time."
In the present case the learned primary judge concluded:
"The purpose of clause 3 of the award is clear from an examination
of its own terms. The intention of the framers of the clause, to
be gathered from its terms, is to prevent the State of Victoria
from terminating the employment of teachers by any means other than
the two specified, namely the voluntary separation package which
existed at the date when the award was made and the disciplinary,
dispensation with services or efficiency provisions contained the
Teaching Service Act 1981 (Vic.). The intention was not to leave
it open to the employer to devise and present to teachers further
schemes of voluntary redundancy, at least while the interim award
was in operation."
I have already expressed my view that clause 3 was not effective to preserve to the employer a right to "terminate" the employment of those employees who elected not to withdraw their acceptance of the voluntary separation package as defined. Rather, the clause was framed to preserve the termination which had already been constituted by the resignations of those employees pursuant to the agreement which was concluded when they accepted the voluntary separation package.
However, I am not able to distil from the language of the clause the intention imputed by his Honour to the framers of the award to prevent the employer from "terminating the employment of teachers by any means other than the two specified, namely the voluntary separation package which existed at the date when the award was made and the disciplinary, dispensation with services or efficiency provisions contained in the Teaching Service Act 1981 (Vic.)". I have already adverted to the first difficulty raised by that construction which is that the termination which occurs when an employee accepts a voluntary separation package is not brought about unilaterally by the employer. It occurs by force of the employee's resignation, or, on the permissible characterization most favourable to the respondent, is brought about by mutual consent.
It was argued on behalf of the employer, both at first instance and on appeal, that the duty imposed on it not to "terminate" the employment of any employee covered by the award, on the construction pressed by the respondent, would prevent the employer, on pain of committing a breach of the award, from processing even a resignation unilaterally tendered by an employee for personal reasons. The learned primary judge said that he was "by no means convinced that this last mentioned consequence would follow." I agree. What prevents it from following is the correlative "right" conferred on the employee not to have his or her employment terminated. That operates to exclude from the prohibition a termination which derives its effect solely from an election made by the employee.
This analysis clearly imports from their context a necessary limitation on the full width of "terminate" and "terminated". However, it leaves open the question of whether the limitation confines the force of the expressions to the unilateral ending by the employer of the contract of employment, or allows them to comprehend, as well, a consensual ending by the employee's acceptance of an offer made by the employer. I favour the former of those alternative constructions for two reasons.
In the first place it does not depart as far from the ordinary meaning of "terminate" when used as a transitive verb with employer as its subject. In this way it avoids the curious consequence of the alternative construction that it confers on the employee a "right" not to receive an offer. Such a departure from ordinary English usage should not readily be imputed to the framers of the award.
Secondly, had the framers of the award intended to prohibit the employer for a specified period, or until further order, from offering to any employee terms on which that employee could resign from the teaching service, they could easily have said so. Indeed, they had at hand the draft sub-cll. (ii) (iii) and (iv) proposed by the respondent Union which were in these terms:
"(ii) The State of Victoria shall take no further step

whatsoever to process the Separation Package and without limiting the generality of the foregoing the State of Victoria shall not make any further offer;

(iii) Whilst this Award remains in force, any offer made

by the State of Victoria or any acceptance of an offer made by any teacher employed by the State of Victoria is of no effect;

(iv) Whilst this Award remains in force, the State of

Victoria shall not treat the employment of any teacher as having ended by reason of an offer made by the State of Victoria or acceptance of offer made by any teacher."

However, the Full Bench of the Industrial Relations Commission expressly declined to insert a provision in the terms, or to the effect, sought by the Union, saying:

"Substantially for these reasons we dismiss those parts of the ATU's application (clauses 3(ii), (iii) and (iv)) which would in effect freeze the VSP process and nullify the effects of acceptance of a VSP. We should not in this respect be taken to be holding that an award expressed in the terms proposed is an appropriate means of creating the rights sought."

I am not unmindful of the fact that the Full Bench expressly framed the award as an "interim" prescription, and is to be taken to be concerned to preserve to employees an opportunity to benefit from any more satisfactory scheme for reducing the number of teachers employed which might emerge from subsequent negotiations or a final arbitrated award. However, that concern is reflected in the provision of the space to repent afforded by cl. 3(b) and (c), and of the immunity from termination by dismissal which I consider is afforded by the operative part of cl. 3(d). It would be an unwarranted extension of that concern to allow it to support an implication that all employees, now presumably having full knowledge of the proceedings in the Commission and of the negotiations between the employer and the respondent, are precluded, until further order, from considering, and, if thought in their own best interests, accepting, offers of terms on which they might resign from the teaching service.
This Court has been told that the appellant has made application to the Commission for a variation of the award. It might have been more appropriate for it to have sought a resolution of the present controversy by pressing for a prompt determination of that application. However, I agree with Northrop and Keely JJ for the reasons they have given that this Court should refuse the respondent's invitation to exercise its discretion by not essaying its own interpretation of the award.
Accordingly, for the reasons outlined above I would allow the appeal and make the declaration proposed by Northrop J.

[1993] FCA 375

08 JUNE 1993