. " ~ Atg CATCHWORDS Industrial law - 'breach of award --. termination of. employment - whether effective - when employment terminated. Employer and employee - contract of employment - notice of termination - whether capable of unilateral withdrawal - whether withdrawn by consent. Evidence - refreshing memory - document used outside court - whether cross-examiner can compel production of document. Conciliation and Arbitration Act 1904 s. 119, s. 882, s. 28, s. 88V, s. 118A. Mather v. Morgan £1971] Tas.5.R. 192 R. v. Pachonick £19731 2 N.S.W.L.R. 86 Emerv_ v. Commonwealth of Australia [19631 V.R. 586 The Australian Wool Selling Brokers Employers' Federation v. The Federated Storemen and Packers Union of Australia (1976) 176 C.A.R. 884 Riordan v. War Office £19591 1W.L.R. 1046 Harris and Russeli Ltd. v. Slingsby £19731 I.C.R. 454 Martin v. Yeoman Aggregates Ltd. £1983] I.C.R. 314 Tallerman and Co. Pty. Ltd. v. Nathan's Merchandise (Victoria) Pty. Ltd. (1957) 98 C.L.R. 93 RODNEY BIRRELL v.:' AUSTRALIAN NATIONAL AIRLINES COMMISSION 7th DECEMBER 1984 GRAY J. MELBOURNE. IN THE FEDERAL COURT 'OF AUSTRALIA VICTORIA DISTRICT REGISTRY ~ : ros INDUSTRIAL DIVISION it Cl Ll No. V 22 of 1984 BETWEEN : - RODNEY BIRRELL Applicant AND: AUSTRALIAN NATIONAL AIRLINES COMMISSION Respondent JUDGE: GRAY J. DATE: 7TH DECEMBER 1984 REASONS FOR JUDGMENT By his application, which was filed on 12th April 1984, the Applicant seeks the imposition of a penalty for a breach or non-observance of the Airline Pilots' (TAA) Agreement, 1981, an order for the payment of salary, a declaration that the Applicant's employment with the Respondent was not terminated on. 9th or 10th May 1983, or at any other time,-and a declaration. that the Applicant thas been 'continuously since. 9th.May 1983, and. remains, in the employ of the Respondent.. + - The Respondent conducts the business of an airline under the name Trans 'Australia Airlines, or TAA. I shail refer to the - Respondent as -"TAA".-~-The Applicant was first employed by- TAA - as-+ an airline pilot in February 1978. The Australian Federation of Air Pilots ("the Federation") is a declared body for the purposes of s. 88% of the Conciliation and Arbitration Act 1904 ("the Act"). By virtue of this status, the Federation has the right to appear before the Flight Crew Officers Industrial Tribunal ("the Tribunal"), which is established under s. 88J of the Act. The Airline Pilots' (TAA) Agreement, 1981 ("the Award") is a memorandum of an agreement between the Federation and TAA, certified by order of the Tribunal. By a combination of the definition of "Award" ins. 4(1), and 5s. 28 and 88V of the Act, the Award is enforceable as an award under the Act. By a combination of the provisions of ss. 118A and 119 of the Act, together with those provisions previously referred to, the Court has power to impose a penalty for a breach of the Award. - Clause 4-20B of the Award provides as follows: "B. The services of a pilot shall be terminable by either the employer or a pilot - (1) During the first six months: 'of---service, by = :.-.- seven days notice in writing; - - (2) After the completion of six months of service, by one month's notice in writing; (3) By the payment to the pilot of seven days' or one month's salary in lieu of notice as aforesaid; OR (4) By the forfeiture by the pilot of the last seven days or one month's salary paid to hin, in lieu of notice as aforesaid. Provided that the period of notice set out herein may be reduced or waived by mutual agreement and provided that nothing shall derogate from the employer's right at common law to dismiss a pilot without notice for misconduct or other sufficient cause. A pilot who is dismissed shall be given the reasons for such dismissal in writing. 7 A pilot whose services are terminated whether by summary dismissal or notice, is entitled to have recourse to 16-84 except as provided in 4-20.E." Clause 4-20E relates only to pilots during the period of their initial service, and is not applicable to the Applicant. Clause 16-84 contains the grievance procedure. This involves a right to hearings at three stages with respect to, among other things, the termination of employment. Certain subjects are excluded from the grievance procedure, among them being matters relating to operational safety. Eariy in 1983, the Applicant was employed by TAA as a first officer on Boeing 727 aircraft. He was assessed by officers of TAA as failing to demonstrate satisfactory command potential. Bytletter dated 19th April: 1983, TAA informed the Applicant of this assessment... A.further.letter,. dated 2lst April 1983, notified the Applicant that he -was watheld from flying operations. The effect of this was that the Applicant continued to be employed by TAA, and to be paid, but was not called upon to undertake any flying duties. In the week beginning Monday 2nd May 1983, TAA resolved to terminate the employment of the Applicant. Negotiations "took place between TAA .and the Federation, of which the Applicant was. and is a member. : From TAA's- point of- view, these negotiations were an attempt to ensure that the Federation and its members would raise no opposition to the termination of employment of the Applicant. Two senior airline pilots, members of the Federation, were shown TAA's reports on the Applicant's command potential, in an endeavour to satisfy the Federation that termination was appropriate. It had been intended to terminate the Applicant's employment, and to pay him one month's salary in lieu of notice, during the week beginning 2nd May 1983. For this purpose, a letter advising the Applicant of these matters was prepared. That letter was not, however, delivered to the Applicant. At the yequest of the Federation, it was agreed to postpone the termination of employment until early in the following week, to give the Federation and the Applicant an opportunity to consider his position. There was some conflict on the evidence as to whether the deadline was put back to Monday 9th, or Tuesday 10th May 1983, or as to whether one of those dates was chosen and later aitered, but it does not seem necessary to decide precisely what was the -position.:- From the -Applicant's point of:view, he desired time .to consider whether :.:to suffer termination, or:::: whether to resign his employment and go with.a clean record. Over the weekend of 7th and 8th May 1983, the Applacant made up his mind. that he «would -attempt: to persuade TAA~ to''.:* reconsider its decision to terminate. his employment. If -he- were unsuccessful in.this,..he would. resign. -~He typed out and .signed a letter, erroneously dated 9th May 1982, which was in the following terms: "Capt G.W. Lushey Line Operations Flight Manager Trans Australia Airlines Melbourne Airport Sth May 1982 Dear Sir, It is with considerable regret that for personal reasons I hereby resiqn as pilot first officer from TAA with one months notice. I request that my resignation be effective from today. Yours sincerely, Rodney Birrell" On the morning of Monday 9th May 1983, the Applicant attended on Captain Lushey at Tullamarine Airport. It is undisputed that-he asked. Captain.~Lushey=to reconsider the proposed termination of = his-employment, Captain-Lushey ~2refused ,-~-- and the Applicant 'handed: over:the -better:- - At. the time he 'did to; -- he fully intended:: to resign. With respect .to much 'of this .. conversation, there is a conflict of evidence; it -will be necessary to examine the evidence in detail at a later stage. As a result of the receipt of this letter, Captain Lushey gave instructions to Mr. O'Rourke, TAA's Flight Administration.Manager., to: prepare a letter. -in response. This instruction was probably given during the -afternoon -of- Monday 9th May. Having examined the letter, Mr. O'Rourke raised with Captain Lushey what he saw as a problem. I shall discuss in detail later the precise characterization of this problen. It related to the meaning of the letter. Asa result of his conversation with Mr. O'Rourke, Captain Lushey telephoned the Applicant just after 5.00pm on that day. There is a conflict between the Applicant and Captain Lushey as to what was said in that conversation, and its content is crucial to the outcome of the proceeding. [I shall discuss it in detail later. During the afternoon of 9th May, Mr. O'Rourke prepared a letter to the Applicant, which was to be signed by Captain Lushey. The signing and sending of this letter was delayed by an error which appeared in its .text, when it was first printed out by the word processor. In the result, the letter was signed by Captain Lushey on the morning of 10th May, and posted in an official post box at Tullamarine airport prior to 10.00am that . day. As drafted, the ietter' was.intended 'to be:--piaced in-a pigeon hole assigned to the Applicant at the Tullamarine Airport, Apparently, it was decided that this would be inappropriate, 50 the letter was placed in an envelope addressed to the Applicant and posted. Unfortunately;'the address on the:.envelope was an address at which; the Applicant had ..lived prior to.August - 1982, but at which he no longer resided. As a result, the letter was not received by the Applicant in the ordinary course of post. On the evening of Monday 3th May, the Applicant contacted Mr. Coysh, the Executive Director of the Federation, who had been in Sydney during part of the weekend and part of that day. On the morning of 10th May, the Applicant attended at the offices of the Federation in South Melbourne, and spoke to Mr. Coysh. Mr. Coysh expressed concern about the Applicant's resignation; his view was that the Applicant should accept termination and avail himself of the grievance procedure, if it were applicable to his particular case. The Applicant and Mr. Coysh decided to try and retrieve the letter of 9th May. The Applicant went to Tullamarine Airport for this purpose. Captain Lushey had flown to Sydney, and the Applicant saw Mr. O'Rourke. Mr. O'Rourke asked Captain Davidson, TAA's Flight Superintendent, Line Operations, whose office was next door to Mr. O'Rourke's, to join them. The question of termination of employment of a pilot was not part of Captain Davidson's responsibilities, but Mr. O'Rourke felt -that.: there. ought to -be - more.than:one [TAA officer present during. -his: conversation: with -the Applicant. :-Ttiuis. cemmon ground that the Applicant asked for the return of his letter of Sth May, and that Mr. O'Rourke refused this request. 'It is aiso common ground that the Applicant was told that a letter had been sent to him, and was invited to examine the file copy of that letter. He declined this offer. Again, as to other features. of this conversation, there is conflict, but its resolution is not crucial to the outcome of..the case. . be The Applicant went back to the offices of the Federation, where he and Mr. Coysh drew up a letter. This letter was signed by the Applicant, who then took it back to Tullamarine Airport, and delivered it to Captain Lushey's secretary. The letter was in the following terms: "10th May, 1983 Capt. G.W. Lushey, Line Operations Flight Manager, Trans Australia Airlines, MELBOURNE ATRPORT VIC. 3045 Dear Capt. Lushey, I refer to my letter of 9th May, 1983 and your subsequent advice that the resignation could not be accepted in its present form. Pending the re-drafting of the letter please disregard my correspondence of 9th May, 1983. (1982) Yours faithfully, F/O R. Birrell") + bacress This letter was freely acknowledged by Mr.-Coysh in His "evidence to have been a:"ploy" to get back the letter of -9th 'May, not for the purpose of redrafting, but-for the purpose of withdrawing any notice of termination. The Applicant's letter of 9th May was not at any time returned to him. a On 13th May, the Applicant delivered another letter to Captain Mar, 'the Senior Regional. Captain, Southern. Region, . of ' TAA, at Tullamarine Airport. 'This-:-letber was -in the - following.- - terms: "13th May, 1983 Capt. S.R.H. Marr, Csic.J Senior Regional Captain, Sourthern Es1c.3 Region, T.A.A, MELBOURNE AIRPORT VIC. 3045 Dear Capt. Marr, Pursuant to Section 16-84B.Step 1 (i) of the Airline Pilots' (T.A.A.) Agreement 1981, I hereby advise that I consider myself adversely affected by your decision to withhold me from service on 21st April, 1983. In your letter of that date you said, inter alia, "pending clarification of your circumstances, you are hereby advised you are withheld from Flying Operations". Since that time, and having regard to my employment record in T.A.A. over the last five years and three months, the circumstances have not been clarified, indeed they have become somewhat confused. Accordingly I request you to initiate action to clarify the position once and for all by returning me to the line. Yours faithfully, On the same day, 13th May 1983, - Captain Lushey wrote to..the:- Applicant a lengthy -letter, purporting to. set out the events which had occurred. This letter advised that the Applicant's resignation "has now been put into effect and as earlier advised, = ey lo. your final payments will be made available to you on the return of all TAA property." This letter was sent to the Applicant's correct residential address...It arrived on 19th May, at the same time as Captain Lushey's letter, which had been. signed on the morning of 10th May, and posted to the wrong address. That letter was in the follaving terms: "9th May, 1983 First Officer R.P Birrell C/- Senior Regionil Captain, Southern Region, MELBOURNE AIRPORT Dear Mr. Birrell, I Poustinnee reeipt of your letter dated Sth May, 1983 an which youtendered your resignation as of the Flight Staff. # member This letter confims the receipt of your resi i which w1ll take 'ffect from the close of businese on Sth May, 1983. Would you please lrrange to return at the i time to the Senir Regional Captain, Southern' Region items of equipmer such as J.D. Card, car park/locker keys, manuals ancuniforms which are currently in your care. This will facilitate a prompt calculation of your final salarypayment. Tax will not be é¢ducted from your final Superan i payment unless avised to the contrary. ° muation Yours faithfully G.W. Lushey, & ie as Line Operations light Manager". .2..- sanare- On 24th Ma 1983, a cheque was prepared for the U Applicant. A calculaon of the amount of this cheque included one month's pay inlieu of notice, superannuation, accrued ll. recreation leave entitlements, and certain other minor amounts. The cheque has never been sent to the Applicant.-..It appears that TAA has withheld it on the basis that. the Applicant is still in possession of TAA property. -- --- - At a date which has not been established by evidence, the grievance procedure was put into effect with respect to the Applicant. Tt is not clear precisely what question was the subject of this procedure. At all events, the chairman of the appeal board hearing the alleged grievance cast his vote in favour of the view that the board had no jurisdiction, on the ground that the Applicant had resigned his employment. In October 1983, there was a further exchange of correspondence. On 13th October, the Applicant wrote to TAA to say that he was ready for assignment to flying duties. Mr. Reynolds, the Industrial Relations Manager of TAA, replied on 24th October, claiming that the Applicant's employment had ceased on 9th May 1983. He also repeated the request to the Applicant to return ali TAA property, and indicated that final payments would then be made available. The Applicant has not, since 9th May 1983, undertaken any other employment,.. exceptifor a hobby business.which. he ...had .- run while he was performing-flying duties.:.-:.- . i1_7 A problem arose in the .course of evidence given by Captain Davidson. In cross examination of Captain Davidson by 12. Dr. Jessup, who appeared for the Applicant, the following exchange occurred: Question: "In-some of: the matters you -have been giving evidence about, Mr.:Davidson, you have chad a fairly. good- - recollection of who said what and what happened at various times?" Answer: "Yes." Question: "And on some of the other matters you have been unable to recall things or a bit uncertain about your recollection?" Answer: "Yes." Question: "Have you spoken to anyone other than TAA's legal advisers about the evidence you are to give in this case?" Answer: "No. I think I can explain why I am more accurate or more sure of what I am saying in some areas. In order to prepare for a grievance board hearing on the same subject in duly of last year I was asked to make out a statement covering the events of Mr. 0O''Rourke's office on the .Tuesday afternoon, or on the 10th. Consequently I have been able to refer back to that statement and therefore my mind is refreshed on those matters, but not on other matters that have been raised on other days... wee Question: "Do' you have a''copy.of.that.with you?".. oe Answer: "I have got a copy in my brief case.". -- Question: "Could I have a look at it, please?" Mr. Young, appearing for TAA, objected to the witness being required to produce his statement. I heard argument on the ane nena 13. objection, and ruled that the document should be produced to Dr. Jessup. It was 50 produced. I cannounced that I would give my reasons for the ruling ata later date. - . The document concerned was document No. 30 in the list of documents filed on behalf of the Respondent on 3rd July 1984, and verified by the affidavit of John Denis O'Rourke, sworn on and July 1984. In the list of documents and affidavit, a claim was made for privilege against production of various documents, including document No. 30, on the ground "that the disclosure may incriminate the Respondent". No claim was made for privilege from production of any document on the ground that such document may tend to subject the Respondent to the penalty claimed in the proceeding. The distinction between this privilege and the privilege against self incrimination was referred to in an interlocutory judgment given in this proceeding, on 26th June 1984. The question before me was whether a witness who had used a document to refresh his memory, before entering the witness box, could be compelled to produce the document for the purpose of inspection by cross-examining counsel. It is well established that a witness whose memory is refreshed by means of a document while :the. witness is: giving evidence can be required to produce the document, .without -the party.. requiring its . production being compelled to tender the document. Refreshment of memory in the witness box is subject to certain restrictions, notably that the document must be reasonably contemporaneous with the events as to which evidence is given, and must have been made 14. or checked by the witness. See generally Cross on Evidence, Second Australian Edition, at pages 220-222. Refreshment of memory outside court, before giving evidence, is not subject to the same restrictions; itis in the nature of things that a witness may look at any document for the purpose of refreshing memory, whether such document be the witness's own or some other person's, and whatever its date may be. Perhaps for this reason, there has been some controversy as to whether, and in what circumstances, a document used to refresh the memory of a witness outside court needs to be produced. This was one of the guestions dealt with by the Full Court of the Supreme Court of Tasmania in Mather v. Morgan £1971] Tas.S.R. 192. In their joint judgment, at pages 196-207, Burbury C.J. and Neasey J. (with whom Chambers J. expressed agreement on this point) dealt at some length with the authorities. Their Honours' conclusion was expressed at pages 206-207: "In our view the decisions which clearly establish the right of cross-examining counsel to inspect a document used in the witness box by a witness to refresh his memory justify the conclusion that he should be given the opportunity to exercise the same right in relation to a document used by the witness to refresh his memory before he comes into court. The rationale of the decisions is that in the interests of justice cross-examining counsel should be able to check the source of the witness's memory. stimulus, and test the ' reliability of the witness's oral testimony by reference to it. vee In our opinion' it. is not possible to 'lay:down a thard and: -- - fast rule that the document must _always be produced. For example, the document may not. be in the control of the witness (as it is when he uses it in the witness box). It may have been destroyed or become unavailable Since it was used to refresh memory. Upon the assumption, which we make for present purposes, that a document used to refresh memory out of court may be any document (not being confined to & contemporaneous record made by the witness) it may contain matter which it 15. would not be fair to let cross-examining counsel see. It may for instance be part of the brief of the opposing side. However, we are satisfied -that this court -should affirm- - the general rule to be-- that in the absence of any :good: -- =: reason to the contrary -the document should be produced on the cross-examiner's demand. This is a procedural rule and not one going to admissibility, because the evidence is admissible whether the document is produced or not, in contrast to the situation where the witness has no independent recollection apart from the document. If there is a legitimate reason for its non-production, therefore, that fact can only according to circumstances affect the weight of the testimony. If the court hearing the matter takes the view that the document should be produced, we-are-of opinion--that- it is --within the court's inherent jurisdiction to direct that cross~examining counsel be permitted to inspect it, Since this is a direction to a witness for the purpose of enforcing a rule of practice." A similar approach was taken by Lee YF. in R.v. Pachonick £19731 2 N.S.W.L.R. 86, at page 88, where his Honour said: ",...there is no basis which can be urged as to why there should be a distinction between the practice which applies when the witness refreshes his memory in the witness box as compared with the case where he does it outside the court before coming into court." In my view, I should follow these decisions. The interests of justice clearly dictate that every possible safeguard should apply when a witness gives evidence after having refreshed his 'or 'her:memory 'from a:document..: The reasons which . lie behind the rule -requiring production .of -a document used -hy _a.. | witness to refresh his or" her memory in*the witness box apply - with even greater force when the refreshment of memory has taken. place outside the court. It is even more important that cross-examining counsel be permitted to inspect the document used to refresh memory if that document may not be a contemporaneous 16. account of the events concerned, and may not be a document in the production of 'which the witness has played any part. - Mr. Young did' not seek: to cargue that-: the=privilege., .. against self incrimination was applicable. In my view, the failure to claim any other privilege from the production of Captain Davidson's statement at the time when discovery of documents was given constituted a waiver of any such other privilege which might have existed. No question therefore arises whether privilege would override the requirement to produce a document for inspection by cross-examining counsel in the circumstances. In argument before me, reference was also made to Collaton v. Correll £19261 S.A.S.R. 87, King v. Bryant (No. 2) Ci956] St.R.Qd. 570, and R. v. Alexander £19751] V.R. 741. Each of those cases was concerned with a question different from that which arose in the present case. Those cases dealt with questions such as whether the evidence of a witness who has refreshed his or her memory outside court is admissible at all in the absence of production of the document, whether or not production is requested by cross-examining counsel. For this reason, it is unnecessary to engage in further discussion of those authorities.- cwucri. &- The facts of this tase, which I have already set out in broad terms, may lead to any of the following three results: 1. The Applicant''s employment was terminated on 9th May 1983; this would result if his letter of 9th May were i7. construed as giving notice of termination of the contract of employment in accordance with clause 4-20B(2) of the Award together: with a request:-for -waiver - of the period of motice,.dn taccordance with the...proviso. ~..:, to clause 4-20(B), and TAA agreed to that request. 2. The Applicant's employment was terminated one month after 9th May 1983; termination by this means would occur if the Applicant's letter of Sth May constituted notice of termination of the contract of employment, but a: if no agreement for waiver of the period of notice resulted. 3. The Applicant's employment was never terminated; this result might be achieved in a number of ways. If any notice of termination of employment were validly withdrawn, either unilaterally, or by consent, no termination would result. In addition, if no valid notice in accordance with clause 4-20B of the Award were ever given, and if the letter of 9th May 1983 did not ' amount to a repudiation by the Applicant of his - contract, or if any such repudiation were -never accepted . by TAA as bringing the contract to.an end, the contract would continue as a matter of law. See Turner v. Australian Coal and Shale Employees Federation, Federal Court of Australia, u:constbituted by Evatt,.Northrop - and. ' Gray JJ., 26th-September -1984 ,-.unreported. rene Mr. Young contended for the first or second possibilities. In the event that the third was found to have existed, he argued that the only entitlement of the Applicant 18. would be to damages as if he had been wrongly dismissed, and that this amounted to the equivalent of one month's salary in lieu of notice. Dr. Jessup argued for the third possibility. His .case was that the contract of employment remained and still remains on foot, and that the Award entitles the Applicant to continue to be paid each month the guaranteed minimum pay applicable to a pilot who is not called upon to perform any flying duties. Dr. Jessup also sought a declaration that the contract was still on foot, on the basis that such a declaration would force TAA to take steps to terminate the contract, if it wished to rid itself of the Applicant, and those steps would entitle the Applicant to pursue the grievance procedure, if that procedure is otherwise applicable. The resolution of the issues in this matter has not been made easier by reason of the way in which the participants seem to have perceived events as they took plate. Comparing the Applicant's letter of 9th May 1983 with clause 4-20B -of the Award, it would have been reasonable to conclude that the letter constituted notice of termination of the contract of employment, coupled with a request that the period of . notice be waived by TAA. The Applicant gave evidence that this was his intention in drafting the letter. No-one at TAA, or at the Federation, seems to have undertaken -a comparison of the - letter and the Award --in any detail, or -to-have dealt 'specifically. with the letter. in this. way. In addition, the Applicant and all who saw the letter of 9th May seem to have assumed that it involved a request that the Applicant receive one month's salary even if he ceased to be employed on that day. On its face, the letter does not say that. 19. Nevertheless, the Applicant believed that he was asking for a month's pay, Captain Lushey seems to have thought the same, and it was this very assumption that caused Mr.--O'Rourke 'to raise with Captain Lushey'--on the afternoon of 'Sth May.the problem of « the wording of the letter. Dr. Jessup argued that the Applicant's letter of 9th May was totally ineffective as a notice of termination of the contract of employment under clause 4-20B of the Award. His argument was that the letter must be read as a whole, and as understood by all parties. So read, it amounted to notice of immediate termination of the contract on the basis that the Applicant would receive one month's salary. Because the Award makes no provision for termination by a pilot in this fashion, it was said that no termination had occurred. There are problems in reading the letter in this way. If it did not amount to a notice under clause 4-20B, the letter may have amounted to a repudiation of the contract of employment. If construed in the way contended for by Dr. Jessup, the letter demonstrated an intention on the part of -the Applicant no longer to be bound by his contract of employment. If such a repudiation were accepted by TAA, that would bring the contract to an immediate end, -without any -'entitlement- on -the -part --of - the - Applicant to a:month's pay. . ros In any event, the language of the letter is inappropriate to the argument put forward by Dr. Jessup. The first paragraph of the letter is clearly phrased in terms of the 20. right which the 'Applicant had to give notice of termination of the contract, pursuant to clause 4-20B of the Award. The second paragraph is worded as _a request; the change of:language is important. In my view, on its true construction, the letter amounted to the giving of one month's notice of termination by the Applicant, together with a request for that period of notice to be waived. If there were no agreement by TAA to waive the period of notice, that period would run its course hefore the contract was terminated. Although the subjective intention of the maker of a document cannot be taken into account in its construction, I note that, on his own evidence, this is what the Applicant understood and intended when he drafted, signed and delivered the letter. Any failure on the part of officers of TAA to perceive the true nature of the letter cannot alter its legal effect. The giving of notice of termination of a contract, in accordance with the terms of that contract, is a unilateral right. Its exercise does not depend in any way on the acceptance or rejection of the notice by the other party to the contract. The giving of such a notice operates to determine the contract by effluxion of the period of notice. It is clear that such a notice could be withdrawn by the consent of both parties to the contract; it seems unnecessary to determine whether,--in the case bf withdrawal _.of:: aunokice 'by consent, the .existing = contract continues or a new contract comes into being. A question does arise, however, whether unilateral withdrawal of a notice is possible. There is surprisingly little authority on this question. It has been assumed in some quarters that Emery v. 21. Commonweaith of Australia [1963] V.R. 586 decided that unilateral withdrawal of a notice is not possible. . An examination of the report of thab case, especially at pages 589 and:590, indicates that counsel for the Commonwealth conceded that the ~ Commonwealth could not have withdrawn unilaterally the notice which it had given; the case seems to have proceeded on the footing that that concession was correct. Reliance was placed upon Emery by Moore J., the President of the Australian Concilation and Arbitration Commission, in The Australian Wool Selling Brokers Employers' Federation v. The Federated Storemen and Packers Union of Australia (1976) 176 C.A.R. 884. In that case, his Honour heid that a purported withdrawal of notice of termination is in law no more than an offer to treat for a new contract; if that offer is not accepted, the original notice continues and the employment is terminated. In Riordan v. War Office £19593 1 W.L.R. 1046, Diplock J. held that certain regulations could not validly remove the right of the Crown to terminate the service of an employee at pleasure. His Lordship then went on to hold that, in any event, notice of termination given by the employee, and purportedly withdrawn by him, was effective to bring his contract of employment to an end. At page 1054, his Lordship said: "The giving of a notice terminating a contractual employment, whether by employee or employer, is the exercise of the right under the contract of employment to bring the contract 'to an end, either immediately or in the future. It- is .a-+unilateral act, requiring no-= _ acceptance by -the 'other party, and, like a notice to - ; quit a tenancy, once ~given it cannot-inmy -view be withdrawn save by mutual consent." A note of the dismissal by the Court of Appeal of an appeal from the judgment of Diplock J. appears in each of £19603 3 A11.E.R. 774, and £19613 1 W.L.R. 210. The latter note (but not' the 22. former) indicates that the Court of Appeal upheld the finding that the form of resignation was effective. In Decro-Wall international S.A. v. Practitioners in Marketing Ltd. £19713 1 W.L.R. 361, at page 382, Buckley L.J. said: "A repudiation and a notice of determination are clearly different things. A repudiation may be withdrawn at any time before acceptance: a notice of © determination validly given cannot thereafter be withdrawn without agreement." These observations, so far as they relate to a notice of determination, can be regarded as not being essential to his Lordship's reasoning, and are made by one member only of the Court of Appeal. Reference should also be made to Harris and Russell Ltd. v. Slingsby £1973] I.C.R. 454, in which the National Industrial Relations Court held that, where one party to a contract of employment gives a notice determining that contract, he or she cannot thereafter unilaterally withdraw the notice. It was held that, where an employee had been unfairly dismissed during the running of a period of notice given by him, he was only entitled to compensation on the basis that his employment would have continued up to the end of the period of notice; the Industrial Tribunal had erred in assuming that the notice could have been withdrawn by the employee, and awarding him compensation on the basis that his employment could have continued. These authorities all support the view that unilateral withdrawal of a notice of termination of a-contract of employment is not possible. In principle, this conclusion must be correct. The purpose of providing in a contract for a period of notice of 23. termination is to enable the party receiving the notice to make other arrangements. An employee given notice by his or her employer has a period of time in which to seek another job; - an. employer who receives notice has time to arrange for a substitute employee. It would be harsh if arrangements so made during the running of the notice could be disrupted, and parties could be held to their contracts by unilateral withdrawal of the notice at the last minute. Such withdrawal, if possible, could lead to an employee being bound by contracts of employment with two employers, or an employer being bound by contracts of employment with two employees, each being required to give notice to one or the other in order to be extricated from this position, or possibly to suffer the requirement to forfeit or pay wages for a period of time. In my view, I should lean against the adoption of any principle which could lead to such unfortunate consequences, and I should follow the authorities which tend to establish that withdrawal of a notice of termination of a contract of employment can only be effected by consent of both parties. This conclusion is consistent with authority to the effect that unilateral withdrawal by a landlord of notice to quit is not possible: see Tayleur v. Wildin (1868) L.R. 3 Exch. 303. Dr. Jessup relied on Martin v. Yeoman Aggregates Ltd. £19833 I.C.R. '314,:a decision of the Employment Appeal 'Tribunal, as establishing an 'exception: to the general rule as to withdrawal : of notice of termination, where the notice was given by a person ina highly emotional state, and retracted upon recovery from that state. In that case, a director of an employer company had engaged in an argument with an employee, which resulted in the - 24, director telling the employee he was dismissed. Within five minutes, the director cooled down and retracted the dismissal. The employee insisted that he was dismissed,.-and sought to -pursue his statutory remedies for unfair dismissal. The Employment Appeal Tribunal held that it was possible to have second thoughts, and that words of dismissal spoken in the heat of the moment were ineffective if withdrawn immediately the heat died down. In the present case, I have no hesitation in accepting that the Applicant was in a state of emotional turmoil; over the weekend of 7th and 8th May 1983, he was involved in making a choice between accepting termination or resigning, a choice which might have profound effects on his livelihood, his family and his future standing as a pilot. All this having been said, I regard the decision in Martin v. Yeoman Aggregates Ltd. as confined to its facts, and therefore as not extending beyond permitting the withdrawal of words uttered in the heat of the moment, when those words are retracted swiftly. A principle such as that does not at all fit the present case. The Applicant did not speak in the heat of the moment, but rather took the considered and deliberate step of giving notice to terminate his contract of employment. At the time when he handed over the letter, he did intend to resign. His subsequent reconsideration of this step, in the light of what he..took to. be. the reaction of TAA.to it, does not approximate to-the:action of a person. who, realizing that he has said something -*in anger -'which he-~did::not intend,- immediately makes amends. There was, therefore, no valid unilateral withdrawal of the Applicant's notice of resignation. Dr. Jessup's alternative 25. argument was that a withdrawal by consent took place. He relied upon the telephone conversation at about 5.00pm on 9th May 1983, between the Applicant and Captain Lushey, as evidence of this. consent. On the other hand, Mr. Young argued that the resignation had already been accepted on TAA's behalf by Captain Lushey when it was handed to him on the morning of 9th May. As I have indicated earlier, there is a conflict of evidence as to what occurred in these two conversations. It is necessary for me to make findings as to the content of the conversations, for the purpose of determining these issues. Captain Lushey gave evidence that, on the morning of 9th May 1983, when he was handed the Applicant's letter, he told the Applicant that his resignation was accepted on the basis that he cease work on that day, and that he would receive a month's pay. I do not accept this evidence. I do not regard Captain Lushey as a dishonest witness, but I am convinced that he has reconstructed the conversation in his own mind. At the time when the conversation occurred, the question of the taking effect of the Applicant's resignation on the same day, and of his receipt of a month's pay, would not have seemed important; it became important subsequently, in the light of the events which occurred, especially the attempt to invoke the grievance procedure and the contentions of TAA in that procedure that the Applicant had « resigned. It -is «significant that, although a letter to the Applicant was drafted on 9th May, and signed by Captain Lushey and posted on the morning of 10th May, nothing was said in that letter about the payment of one month's pay. If Captain Lushey had made an instant decision that a month's pay 26. would be paid, it would be expected that this would have been included in the letter. In addition, at one stage during his evidence in chief, Captain Lushey said that he had no recollection of discussing with: Mr. Birrell during this conversation the date from which his resignation would take effect. For these reasons, I accept the Applicant's version of this conversation, which was that Captain Lushey told him that he would receive a letter from TAA, and that nothing more was said then about the taking effect of his resignation, or about a month's pay. As to the telephone call later on the same day, the Applicant gave evidence that Captain Lushey told him that the letter was unacceptable in its present form and would have to be redrafted. His evidence was that Captain Lushey gave him a choice between resigning immediately without a month's pay, and suffering termination of his employment by TAA with a month's pay. According to Dr. Jessup, the Applicant took this, and it was properly to be taken, as a consent to withdraw his letter. Captain Lushey's evidence was that he again told the Applicant that it was accepted that his employment would terminate on that day, and that he would be paid a month's pay. Again, Captain Lushey's evidence in this respect seems to have been the product of reconstruction -in: the light of subsequent events. 'At 'some time on the afternoon of. Monday 9th May, Captain Lushey did. have a conversation with Mr. Reynolds about the Applicant's resignation. Something was said in .this conversation about paying the Applicant for a month. On the evidence, however, there is some doubt whether this conversation took place before 27. or after Captain Lushey's telephone call to the Applicant. I accept that the conversation between Captain Lushey and the Applicant was 'largely .about deficiencies vin-the.form of the letter. I also accept the Applicant's evidence that, during the conversation, he formed the view that TAA was not going to allow him to resign immediately and to receive a month's pay. It was as a result of his forming this impression that he decided he would retract his notice. As a result of this decision, he sought advice from the Federation that evening and again on 10th May. Even accepting this evidence, however, in my view it is not possible to construe the telephone conversation between the Applicant and Captain Lushey as containing TAA''s consent to the Applicant to withdraw his notice of termination. TAA had already decided that it would terminate the Applicant's employment. His resignation was more convenient from TAA's point of view, in that it prevented the operation of the grievance procedure, and avoided any possibility of trouble from the Federation or its members, which might have resulted from dismissal. Mr. O'Rourke had spoken to Captain Lushey on the afternoon of 9th May, and had drawn to the attention of Captain Lushey what Mr. O'Rourke saw as a problem with the terms of the Applicant's letter. Mr. O'Rourke took the view .that the letter did not make sense, or that it contained a contradiction; it did not make sense to-him that- "a man wanted to finish today and give a month's notice." At the heart of this may have been the problem of authority to make a payment of one month's salary, when instant resignation occurred. Mr. O'Rourke did think that there would be some difficulty on the 28. part of himself, and TAA staff supervised by him, in processing the letter. He communicated this to Captain Lushey. In the light of this discussion, it is unlikely that Captain Lushey would have communicated to the Applicant intentionally consent to the complete withdrawal of his notice of termination. The Applicant himself conceded in cross-examination that, in this conversation, Captain Lushey wanted the resignation to take effect, but that his preferred position was that it be reworded. I do not accept the construction that Dr. Jessup attempted to place on this evidence, namely that the Applicant understood Captain Lushey to be hopeful that the Applicant would put in a new resignation, in appropriate form. In my view, this evidence of the Applicant is inconsistent with TAA's consenting to any withdrawal of the Applicant's letter of 9th May. In addition, I am satisfied that the only question in the mind of the Applicant before this conversation was whether he would have to continue to be employed for another month. It was being told that he may have to do so in order to receive a month's pay that caused him to change his mind about resignation. There was also evidence from Mr. Coysh that he was told by Captain Davidson, or possibly Mr. Reynolds, that the Applicant's resignation was not acceptable to TAA, because of its form. His evidence in chief was that he had such a conversation with Captain Davidson on the -afternoon. of Monday 9th May. ~ This evidence as to date and time is inconsistent with Mr. Coysh's evidence that he had seen a copy of the Applicant's letter before his conversation with Captain Davidson; at the earliest, a copy of that letter could only have come into his possession on the perc wren 29. evening of 9th May, and it is more likely to have done so the following morning. Having heard Captain Davidson's evidence as to his movements on that afternoon, and as to his. lack of involvement in matters concerning the resignation of the Applicant until he was called in by Mr. O'Rourke as a witness on the following morning, I do not accept Mr. Coysh's evidence as to the date and time of any such conversation. Any conversation between Mr. Coysh and any officer of TAA about this matter took place, in my view, after the Applicant saw Captain Davidson and Mr. O'Rourke on the Tuesday morning. Moreover, any such conversation did not contain consent to the withdrawal of the notice of termination; it was more a discussion of the fact that the Applicant's letter was seen by Mr. O'Rourke, and others at TAA, as confusing, in that it purported to contain a month's notice but to be effective immediately. It is necessary also to consider the effect of the conversation between the Applicant and Mr. O'Rourke and Captain Davidson on 10th May 1983. It is common ground that nothing in that conversation could be construed as a consent to the Applicant's withdrawal of his letter of 9th May. On the contrary, Mr. O'Rourke refused to return the letter, and offered to show the Applicant a copy of the reply which-had already _heen sent to it. The 'Applicant refused this -offer:because the - felt: that if he saw the réply his chances of withdrawing his. own letter might be affected adversely. I am satisfied that the Applicant was told that this letter accepted his resignation. There was conflict over whether Mr. O'Rourke told the Applicant that he was going to receive a month's pay in any event. I 30. incline to the view that nothing was said about this, but it is unnecessary for me to make a specific finding on this issue; even if reference were made to a month's pay, it was made after the Applicant -had made it clear- that he wished his letter to he returned to hin. This request was made at the start of the conversation, before Mr. O'Rourke had an opportunity to mention acceptance or payment of a month's salary. Whilst the Applicant could not withdraw unilaterally his notice of termination of the contract, and whilst, as I have found, it was not withdrawn by consent, it was possible for him to withdraw his letter so far as it sought agreement to waive the period of notice, unless TAA had already agreed to such waiver. I am satisfied that, in the conversation on 10th May with Mr. O'Rourke and Captain Davidson, the Applicant said enough to constitute a withdrawal of his letter so far as he was able to. He made this indication before it was revealed to him that a letter had been sent in reply. A question therefore arises whether 50 much of the Applicant's letter of 9th May which sought the waiver of the period of notice was withdrawn before it was accepted. This issue boils down to a question whether by posting a letter of reply on 10th May 1983, TAA accepted the Applicant's offer to have the period of notice waived, thereby bringing about an agreement to this.-effect, for:the 'purposes of-cclause 4-20B of.___. the Award. There is mo doubt-that the letter: which was 'posted by ---- TAA on 10th May was in form an acceptance of this offer. The question is whether the mere posting of the letter amounted to an acceptance, or whether its receipt by the Applicant was necessary to bring about an agreement. 31. As Dixon C.J. and Fullagar J. said in Tallerman and Co. Pty. Ltd. v. Nathan's Merchandise (Victoria) Pty. Ltd. (1957) 98 C.L.R. 93, at-page 11: - - "The general rule is that a contract is not completed until acceptance of an offer is actually communicated to the offeror, and a finding that a contract is completed by the posting of a letter of acceptance cannot he justified unless it is to be inferred that the offeror contemplated and intended that his offer might he accepted by the doing of that act." In the present case, the Applicant's letter of 9th May was delivered by hand. There was an established system whereby TAA communicated with its pilots by leaving letters addressed to them in pigeon holes assigned to them at Tullamarine Airport. The manner in which the letter from TAA itself was addressed indicates that it was intended to use this procedure. Someone thereafter made a decision to post the letter to what was believed to be the Applicant's home address. On these facts, it cannot be inferred that the Applicant contemplated that his offer for a waiver of the period of notice might be accepted by the mere posting of a letter in response. It follows that the Applicant's employment was determined by the effluxion of the period of notice. His contract of employment came to an end one month after 9th May 1983. The first and third possibilities,:.to:which.I -have-~ referred earlier, must be rejected. It is therefore unnecessary to consider whether, if the contract of employment had been held not to have been terminated, special circumstances would have existed to justify a declaration that the contract of employment is still on foot, or whether remuneration would be payable in 32. respect of the whole of the time since Sth May 1983. Reference is made to Turner v. Australian Coal and Shale Employees Federation, cited above. The contract of employment having continued for a month after 9th May 1983, there has been a breach of clause 4-20B of the Award, in that TAA has failed to pay to the Applicant one month's pay. Perhaps more correctly, there is a continuing breach, or a new breach on each day on which TAA fails to make the requisite payment. See Brammer v. Deery Hotels Pty. Ltd. (1974) 22 F.L.R. 276, and Jones _v. Lorne Sawmills £19231 V.L.R. 5B. It is unnecessary, however, to be concerned with questions of multiple breaches, as plainly all breaches arose out of a course of conduct, within the meaning of s. 119(1A) of the Act, and all must be treated as constituting a single breach. No provision pursuant tos. 41(1)(c) of the Act is made in the Award. By virtue of 5s. 119(1D)(a)(i) of the Act, the maximum penalty applicable is $1,000.00. I do not regard this as a case in which it is proper to impose a heavy penalty. There are mitigating circumstances. The -determination whether the Applicant's employment ceased on 9th May 1983 or continued for one month thereafter is not easy. In addition, the Applicant has taken the stand that his employment continues, which is a stand fhat I have rejected, and _accordingly has retained certain property belonging to TAA..... It is. understandable that TAA -would-- want this property returned, and it has effectively notified the Applicant that he will not be paid until such time as he returns that property. On the other hand, I am satisifed that the case is not a proper one for a purely nominal penalty. The case is s 33. not unusual in the difficulty of determining exactly what occurred, and it is a well known maxim that ignorance of the law is no excuse. In addition, nothing in the Award entitles TAA to withhold any payment due to an employee on the ground that the employee is refusing to deliver up property belonging to TAA. The proper course for TAA to take would have been to make payment, and to pursue in the appropriate court its claim for the return of property. In all the circumstances, I regard a penalty of §100.00 as appropriate. In my view, this is a proper case to order payment of the penalty to the Applicant pursuant to 5s. 120 of the Act. I also propose to make an order under s. 119(3) that TAA pay to the Applicant the amount of the underpayment which I have found to exist. On the evidence, one month's pay was $2,618.76, this being the amount included in the calculation made by TAA of the Applicant's entitlement. No argument was addressed as to whether I should find that the whole of the sum of $10,851.10, calculated by TAA as being due to the Applicant, falls within os. 119(3). It was suggested by both counsel that I should give my reasons for judgment and adjourn to enable the parties to bring in minutes of the order. I propose to take this course. i \ a Ce eh ad cay ur the ga Ube PEAT DL we Bs Mare 2