Ettridge, John v Transadelaide [1997] FCA 1007

FEDERAL COURT OF AUSTRALIA

INDUSTRIAL LAW - complaint of unlawful termination of employment- whether termination at the initiative of the employer-whether frustration of the contract of employment WORKPLACE RELATIONS ACT 1996 ss.170CD, 170CK ETTRIDGE V TRANSADELAIDE SG37 OF 1997 L FARRELL JR ADELAIDE 11 SEPTEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA ) ) SOUTH AUSTRALIA DISTRICT REGISTRY ) SG37 of 1997 GENERAL DIVISION ) B E T W E E N: JOHN ETTRIDGE Applicant AND TRANSADELAIDE Respondent BEFORE: JUDICIAL REGISTRAR L FARRELL PLACE: ADELAIDE DATE: 11 SEPTEMBER 1997 MINUTES OF ORDER THE COURT ORDERS THAT: The matter be set down for hearing on the merits. NOTE: Settlement and entry of Orders is dealt with by Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA ) SOUTH AUSTRALIA DISTRICT REGISTRY ) SG37 OF 1997 GENERAL DIVISION ) B E T W E E N: JOHN ETTRIDGE Applicant AND TRANSADELAIDE Respondent BEFORE: JUDICIAL REGISTRAR L FARRELL PLACE: ADELAIDE DATE: 11 SEPTEMBER 1997 REASONS FOR JUDGMENT This application comes before the Court pursuant to the provisions of the Workplace Relations Act 1996 ("the Act"). The relevant legislation is contained in Division 3 - Termination of employment which commenced operation on 31 December 1996. The applicant initially applied to the Australian Industrial Relations Commission ("the Commission") for relief in respect of the termination of his employment by the respondent pursuant to Section 170 CE(1); SECTION 170 CE(1) APPLICATION TO COMMISSION TO DEAL WITH TERMINATION UNDER THIS SUBDIVISION (1) Subject to subsection (5), an employee whose employment has been terminated by the employer may apply to the Commission for relief in respect of the termination of that employment: (a) on the ground that the termination was harsh, unjust or unreasonable; or (b) on the ground of an alleged contravention of section 170CK, 170CL, 170CM or 170CN; or (c) on any combination of grounds in paragraph (b) or on a ground or grounds in paragraph (b) and the ground in paragraph (a). (2) Subject to subsection (6), an employee whose employment is proposed to be terminated by the employer may apply to the Commission for relief on the ground of an alleged contravention of section 170CL. (3) Subject to subsection (6), if: (a) an employee's employment has been terminated by the employer; and (b) a trade union's rules entitle it to represent the industrial interests of the employee; the union may, on behalf of the employee, apply to the Commission for relief on the ground or grounds of an alleged contravention of one or more of sections 170CK, 170CM and 170CN. (4) Subject to subsection (6), if an employee's employment has been terminated, or is proposed to be terminated, by the employer: (a) an inspector; or (b) a trade union: (i) whose members include the employee; and (ii) whose rules entitle it to represent the industrial interests of the employee; or (c) an officer or employee of such a union--if the union's rules authorise the officer or employee to act on the union's behalf; may apply to the Commission for relief on the ground of an alleged contravention of section 170CL. (5) An application under subsection (1) may not be made: (a) on the ground referred to in paragraph (1)(a) or on grounds that include that ground--unless, under subsection 170CB(1), Subdivision B applies to that application; or (b) on a ground referred to in paragraph (1)(b)--unless Subdivision C applies to that application. (6) An application under subsection (2), (3) or (4) may not be made on a ground referred to in that subsection unless Subdivision C applies to that application. (7) An application under subsection (1) must be lodged within 21 days after the day on which the termination took effect. (8) The Commission may accept an application that is lodged out of time if the Commission considers that it would be unfair not to do so. (9) An application under subsection (1) may be discontinued by the employee in accordance with rules made under section 48. The employee may do so whether or not the employer and the employee have agreed to settle the matter. Conciliation between the parties took place in an attempt to settle the matter as required by the Act. Commissioner Lewin conducted the conciliation in accordance with Section 170 CF; SECTION 170 CF CONCILIATION (1) When an application is lodged with the Commission, the Commission must attempt to settle the matter to which the application relates by conciliation. (2) If the Commission is satisfied that all reasonable attempts to settle the matter by conciliation are, or are likely to be, unsuccessful so far as concerns at least one ground of the application, the Commission: (a) must issue a certificate in writing stating that it is so satisfied in respect of that ground or each such ground; and (b) must indicate to the parties the Commission's assessment of the merits of the application in so far as it relates to that ground or to each such ground; and (c) if the Commission thinks fit, may recommend that the applicant elect not to pursue a ground or grounds of the application (whether or not also recommending other means of resolving the matter). Conciliation was unsuccessful and on 20 May 1997 Commissioner Lewin issued a certificate in accordance with the Act. The certificate indicates two grounds upon which conciliation had been, or was likely to be unsuccessful, one in Section 170 CE(1) (a) and one in Section 170 CK The applicant was then required pursuant to Section 170CFA(3)to make an election to either proceed to arbitration in relation to his claim pursuant to Section 170 CE(1) (a) that the termination of his employment was harsh unjust or unreasonable or to bring proceedings in the Federal Court pursuant to Section 170 CK; SECTION 170CFA ELECTIONS TO PROCEED TO ARBITRATION OR TO BEGIN COURT PROCEEDINGS (1) If the certificate given by the Commission under subsection 170CF(2) identifies only the ground referred to in paragraph 170CE(1)(a) as a ground where conciliation is, or is likely to be, unsuccessful, the applicant must elect either to proceed to arbitration to determine whether the termination was harsh, unjust or unreasonable or not to proceed. (2) If the certificate given by the Commission under subsection 170CF(2) identifies only: (a) the ground referred to in paragraph 170CE(1)(a); and (b) the ground of an alleged contravention of section 170CM; as grounds where conciliation is, or is likely to be, unsuccessful, the applicant must elect to do either, both, or neither of the following: (c) to proceed to arbitration to determine whether the termination was harsh, unjust or unreasonable; (d) to begin proceedings in a court of competent jurisdiction for an order under section 170CR in respect of the alleged contravention of section 170CM. (3) If the certificate given by the Commission under subsection 170CF(2) identifies: (a) the ground referred to in paragraph 170CE(1)(a); and (b) a ground or grounds of an alleged contravention of one or more of sections 170CK, 170CL and 170CN; as grounds where conciliation is, or is likely to be, unsuccessful, the applicant must elect to do either or neither of the following: (c) to proceed to arbitration to determine whether the termination was harsh, unjust or unreasonable; (d) to begin proceedings in the Court for an order under section 170CR in respect of the alleged contravention, or of any one or more of the alleged contraventions. (4) If the certificate given by the Commission under subsection 170CF(2) identifies only a ground or grounds of an alleged contravention of one or more of sections 170CK, 170CL, 170CM and 170CN as the ground or grounds where conciliation is, or is likely to be, unsuccessful, the applicant must elect to do either, both or neither of the following: (a) so far as concerns an alleged contravention of a section or sections other than section 170CM--to begin proceedings in the Court for an order under section 170CR in respect of the alleged contravention, or of any one or more of the alleged contraventions; (b) so far as concerns an alleged contravention of section 170CM--to begin proceedings in a court of competent jurisdiction for an order under section 170CR in respect of the alleged contravention. (5) If the certificate given by the Commission under subsection 170CF(2) identifies: (a) the ground referred to in paragraph 170CE(1)(a); and (b) the ground of an alleged contravention of section 170CM; and (c) a ground or grounds of an alleged contravention of one or more of sections 170CK, 170CL and 170CN; as grounds where conciliation is, or is likely to be, unsuccessful, the applicant must elect: (d) to do either or both of the things permitted in subsection (2); or (e) to do either or both of the things permitted in subsection (4); or (f) to do none of those things. (6) An election under subsection (1), (2), (3), (4) or (5) must: (a) be made in writing; and (b) be lodged with the Commission not later than 7 days after the day of issue of the certificate by the Commission under subsection 170CF(2) in relation to the application. (7) If an applicant fails to lodge with the Commission an election under subsection (1), (2), (3), (4) or (5) within the period required under subsection (6), the application concerned is taken to have been discontinued by the applicant at the end of that period for all purposes other than the making of an election out of time in accordance with subsection (8). (8) The Commission may accept an election that is lodged out of time if the Commission considers that it would be unfair not to do so, and, if the Commission accepts such an election, the original application is taken not to have been discontinued in spite of subsection (7). It was open to the applicant to pursue a claim that the termination of his employment was harsh, unjust or unreasonable. Such a claim would be pursued in the Australian Industrial Relations Commission. Alternatively the applicant could pursue a claim that his employment was terminated unlawfully in the Federal Court. A third option is expressly permitted by the legislation and that is to do nothing. The applicant elected to bring proceedings in the Federal Court pursuant to Section 170 CK for an order under Section 170 CR in respect of an alleged contravention of the Act on the basis that he believed the respondent had discriminated against him on one of the prohibited grounds. Section 170 CR - ORDERS AVAILABLE TO COURTS (1) If the Court is satisfied that an employer has contravened section 170CK or 170CN in relation to the termination of employment of an employee, the Court may make one or more of the following orders: (a) an order imposing on the employer a penalty of not more than $10,000; (b) an order requiring the employer to reinstate the employee; (c) subject to subsection (2), an order requiring the employer to pay to the employee compensation of such amount as the Court thinks appropriate; (d) any other order that the Court thinks necessary to remedy the effect of such a termination; (e) any other consequential orders. (2) Subsections 170CH(8), (9) and (10) apply in relation to an order mentioned in paragraph (1)(c) of this section as if a reference to the Commission in those subsections were a reference to the Court. (3) If the Court is satisfied that an employer has contravened section 170CL in relation to a decision to terminate the employment of employees, the Court may make either or both of the following orders: (a) an order imposing on the employer a penalty of not more than $1,000; (b) an order requiring the employer not to terminate the employment of employees pursuant to the decision, except as permitted by the order. (4) Subject to subsection (5), if a court to which an application is made under subsection 170CP(2) or (3) is satisfied that an employer has contravened section 170CM in relation to the termination of the employment of an employee, that court may make an order requiring the employer to pay to the employee an amount of damages equal to the amount which, if it had been paid by the employer to the employee when the employment was terminated, would have resulted in the employer not contravening that section. (5) If the Commission has made an order under subsection 170CH(4) requiring the employer to pay to the employee an amount in respect of the remuneration lost, or likely to have been lost, by the employee because of the termination, an order under subsection (4) of this section must not be made. (6) A court to which an application is made under section 170CP must not grant an injunction in respect of a proposed contravention of section 170CK, 170CL, 170CM or 170CN. Note: As well as the remedies provided in this Subdivision for contravention of section 170CK, 170CL, 170CM or 170CN, there are provisions in other parts of the Act that relate, in part, to termination of employment. See, in particular, sections 170MU and 298K. The applicant did not specify any particular subsection of the section but it is apparent that the only two relevant sub clauses are 170 CK (2) (a), relating to temporary absence from work or 170CK (2) (e), relating to his participation in proceedings against his employer involving alleged violation of laws or regulations or recourse to competent administrative authorities (ie. his workers' compensation claim). Section 170CK EMPLOYMENT NOT TO BE TERMINATED ON CERTAIN GROUNDS (1) In addition to the principal object of this Division set out in section 170CA , the additional object of this section is to make provisions that are intended to assist in giving effect to: (a) the Convention concerning Discrimination in respect of Employment and Occupation, a copy of the English text of which is set out in Schedule 1 to the Human Rights and Equal Opportunity Commission Act 1986 ; and (b) the Family Responsibilities Convention. (2) Except as provided by subsection (3) or (4), an employer must not terminate an employee's employment for any one or more of the following reasons, or for reasons including any one or more of the following reasons: (a) temporary absence from work because of illness or injury within the meaning of the regulations; (b) trade union membership or participation in trade union activities outside working hours or, with the employer's consent, during working hours; (c) non-membership of a trade union; (d) seeking office as, or acting or having acted in the capacity of, a representative of employees; (e) the filing of a complaint, or the participation in proceedings, against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities; (f) race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin; (g) refusing to negotiate in connection with, make, sign, extend, vary or terminate an AWA; (h) absence from work during maternity leave or other parental leave. (3) Subsection (2) does not prevent a matter referred to in paragraph (2)(f) from being a reason for terminating employment if the reason is based on the inherent requirements of the particular position concerned. (4) Subsection (2) does not prevent a matter referred to in paragraph (2)(f) from being a reason for terminating a person's employment as a member of the staff of an institution that is conducted in accordance with the doctrines, tenets, beliefs or teachings of a particular religion or creed, if the employer terminates the employment in good faith to avoid injury to the religious susceptibilities of adherents of that religion or creed. . In practical terms the election to pursue a claim is made by ticking a box on the form (R23) provided by the Australian Industrial Relations Commission. The Applicant made that election by completing a form which he then dated 16 May 1997. An earlier certificate than the one dated 20 May 1997 had been received by the applicant. It is dated 15 May 1997. It omits the word "Termination" from the fourth paragraph and the words "He maintains that he is able to perform alternate duties in particular circumstances" The Applicant was advised by the Commission that it was not necessary for him to send another Notice of Election form to the Commission after the certificate dated 20 May 1997 was received by him. Unfortunately the applicant, who was unrepresented, was unaware that the next step was to file an application in the Federal Court. Section 170 CP provides who may make an application to the Federal Court and under what circumstances. It provides that an applicant who has received a certificate must make an application within 14 days of the lodgment of an election pursuant to Section 170 CFA(6). It allows for an application that is lodged out of time, if the Court considers it fair to do so; SECT 170CP APPLICATION TO COURTS IN RELATION TO ALLEGED CONTRAVENTION OF SECTION SECT 170CK, 170CL, 170CM OR 170CN (1) Subject to subsection (5), an employee may apply under this section to the Court for an order under section 170CR in respect of an alleged contravention of one or more of sections 170CK, 170CL and 170CN by his or her employer. (2) Subject to subsection (5), an employee may apply under this section to the Court or to a court of competent jurisdiction as defined in section 177A for an order under section 170CR in respect of an alleged contravention of section 170CM by his or her employer. (3) Subject to subsection (5), a trade union that has made an application under section 170CE on behalf of an employee on the ground of an alleged contravention of one or more of sections 170CK, 170CM and 170CN may apply to a court under this section for an order under section 170CR in respect of that alleged contravention or each of those alleged contraventions. (4) Subject to subsection (5), an inspector, a trade union, or a trade union officer or employee who has made an application under section 170CE in respect of an alleged contravention of section 170CL may apply to the Court under this section for an order under section 170CR in respect of that alleged contravention. (5) An application under subsection (1), (2), (3) or (4) in respect of an alleged contravention of section 170CK, 170CL, 170CM or 170CN may not be made to a court unless the applicant: (a) has received a certificate under subsection 170CF(2) regarding conciliation of an application made wholly or partly on the ground of the alleged contravention; and (b) has elected under section 170CFA to begin proceedings in that court for an order under section 170CR in respect of the alleged contravention. (6) The application must be made within 14 days after the lodgment of an election under subsection 170CFA(6). (7) A court may accept an application that is lodged out of time if the court considers that it would be unfair not to do so. Section 170 CFA(6) An election under subsection (1), (2), (3), (4) or (5) must: (a) be made in writing; and (b) be lodged with the Commission not later than 7 days after the day of issue of the certificate by the Commission under subsection 170CF(2) in relation to the application. The applicant filed an application in the Federal Court on 4 June 1997. The applicant's claim was lodged 4 days outside the time allowed. The respondent consents to the application coming before the Court. In my view it would be unfair not to accept the application. Preliminary matter At the outset of the hearing before me Counsel for the respondent sought to have a preliminary matter dealt with by the Court. The respondent argued that the applicant's claim should be dismissed without a hearing on the merits because his employment was not terminated by the respondent rather, it came to an end as a result of the frustration of the contract of employment. Summary of the facts The applicant is now 52 years of age. The applicant commenced employment with the respondent in February 1984 as a bus driver. Sometime in early 1984 he experienced pain in his shoulder. He served a notice of disability on the respondent on 15 February 1988. Thereafter the applicant worked a split shift in accordance with medical advice. A dispute arose between the applicant and the respondent as to the rate at which he should be paid workers' compensation (notional weekly earnings). He applied to review the decision of the respondent. Since that time the applicant and the respondent have been involved in considerable litigation in relation to his workers' compensation entitlements. That litigation led to his treating General Practitioner certifying that he was unfit to drive a bus because he was unable to concentrate on anything except the litigation. Eventually whether or not the applicant was entitled to be compensated in relation to that certificate was decided against the applicant. About the same time a new manager was appointed to the respondent's Morphettville depot. He conducted a review of the sick leave "pool", an arrangement whereby workers can claim against the combined sick leave entitlement of all of the workers when they experience lengthy illnesses The applicant's sick leave was terminated. He then used up all his other leave entitlements. After those entitlements expired he presented at the workplace with a certificate from his general practitioner stating that he was fit for light duties. Mr. Sandford manager of the depot advised the applicant to remain at home until he was seen by Dr Couper-Smartt a psychiatrist who had assessed the applicant in 1995. After the applicant was seen by Dr Couper-Smartt Mr Sandford wrote to the applicant in the following terms on 18 April 1997 "I refer to your incapacity for work which has now persisted since 28 July 1995. I have considered the evidence as follows: · The report of Dr Couper-Smartt dated 22 August 1995 which states that you suffer an adjustment disorder, and that your condition is likely to persist as long as the litigation between yourself and TransAdelaide continues. Dr Couper-Smartt also took the view that you should not drive or undertake any work with TransAdelaide. · The medical certificates and medical letters of your General Practitioner Dr Carey who has certified you unfit for work continuously since 28 July 1995. · Dr Couper-Smartt's evidence at the hearing of your workers compensation stress claim hearing on 20 and 21 February 1996. Dr Couper- Smartt took the view that you do not suffer a psychiatric disorder caused by work, but that you suffer a personality disorder which incapacitates you for work and which is likely to persist indefinitely. · Your own evidence at the hearing before Review Officer Duigan that you consider yourself unable to drive because of your concentration upon the litigation between yourself and TransAdelaide and that you are incapacitated for work. · The decision of Review Officer Duigan dated 18 March 1996 in which he accepts the evidence of Dr Couper-Smartt in relation to the diagnosis and prognosis of your condition, and found you incapacitated for work but not by virtue of a compensable disability being an illness or disorder of the mind. · The decision of the Worker's Compensation Appeal tribunal dated 16 October 1996 which upheld the decision of Review Officer Duigan. · The report of Dr Couper-Smartt dated 13 March 1997 in which he states that, "I do not believe that he is suffering from any psychiatric illness attributable to work factors although I do fully agree with Dr Carey's advice that , whilst so preoccupied with litigation, it would be inappropriate to expect him to attempt to take on the responsibility of any demanding job such as operating a bus. I further do not think that it is realistic to imagine that, whatever the eventual outcome of this issue, he could ever satisfactorily return to employment with TransAdelaide in any capacity whatsoever. Give the duration and intensity of the conflict between him and his employers, common sense would suggest that this can never be resolved in such a way that all parties would ever again be able to work productively together." Having considered this evidence, I consider that the employment relationship between yourself and TransAdelaide has been frustrated by your incapacity to work due to your personality disorder. This incapacity does not arise from a compensable disability for the purpose of the Workers Rehabilitation and Compensation Act. As such, TransAdelaide considers the employment relationship to have ended. TransAdelaide will continue to compensate you for a partial incapacity due to a neck/shoulder injury which you sustained in 1988, until such time as it is authorised by the Workers Rehabilitation and Compensation Act to alter that payment. Please attend at Morphettville Depot on Thursday 24 April 1997 at 09.30am to hand in the property of TransAdelaide which is still in your possession, so that I may process payment of any outstanding leave entitlements to you." The applicant argued that the letter terminated his employment and that the termination of his employment was at the initiative of the employer. The respondent argued that this was a frustration of the contract of employment and therefore the applicant's claim was outside the jurisdiction of the Court. The respondent relied heavily on the medical report and evidence of Dr Couper-Smartt. Whilst his observations are helpful in appreciating the applicant's psychological condition I do not think his opinion can justify a charaterisation of the events that brought the applicant's employment to an end as a frustration of the contract of employment rather than a termination of the applicant's employment. Section 170CD defines termination of employment as "termination of employment at the initiative of the employer". That definition is unchanged from the definition included in the previous legislation. The many judgments of the Industrial Relations Court on the meaning of those words lend support to the view that the situation here is one envisaged as coming within the jurisdiction of the Court. Characterising the termination of the Applicant's employment here as a frustration of contract seems to me to be at odds with modern industrial practice. It is one thing to say that the respondent did not regard the continued employment of the applicant as tenable and therefore ended the employment relationship, it is quite another to say that there was no act of the respondent that terminated the employment of the applicant. The decision of Wooten J in Finch v Sayers[1976]2 NSWLR 540 lends support to this view. On the evidence before me I am satisfied that the termination of the applicant's employment was at the initiative of the respondent. The only order that I will make will be to set the matter down for a hearing on the merits. I certify that this and the preceding 10 pages are a true copy of my Reasons for Judgement. FOR THE APPLICANT : IN PERSON FOR THE RESPONDENT : MR HANKIN DATE OF HEARING : 18 JUNE, 22 JULY AND 24 JULY 1997 DATE OF JUDGEMENT : 11 SEPTEMBER 1997