Karamitsios, Vasilios v Alan Beckwith Macbro Pty Ltd [1997] FCA 1306

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VI 5788 of 1995

BETWEEN: VASILIOS KARAMITSIOS

Applicant

AND: ALAN BECKWITH MACBRO PTY LTD

ACN 006 296 635

Respondent

JUDGE(S): SPENDER J

DATE OF ORDER: 24 OCTOBER 1997

WHERE MADE: MELBOURNE

THE COURT ORDERS THATthe application be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY VI 5788 of 1995

BETWEEN: VASILIOS KARAMITSIOS

Applicant

AND: ALAN BECKWITH MACBRO PTY LTD

ACN 006 296 635

Respondent

JUDGE(S): SPENDER J

DATE: 24 OCTOBER 1997

PLACE: MELBOURNE

REASONS FOR JUDGMENT This is a review pursuant to s 377 of the Industrial Relations Act 1988 (Cth) ('the Act'), now the Workplace Relations Act 1996 (Cth), of a decision of a Judicial Registrar dismissing an application by Mr Karamitsios for compensation subsequent to the termination of his employment. On 14 November 1995, the respondent ('Beckwith Macbro'), terminated the employment of Mr Karamitsios, the applicant. He had been employed as a labourer at the foundry conducted by Beckwith Macbro which had taken over the business at the foundry in June 1995. Previously, the foundry had been run by the Stanley Group, and earlier by the Siddons company, the manufacturers of Sydchrome. On 17 November 1995, the applicant made an application under s 170EA(1) of the Act for compensation in respect of the termination of his employment, including a component of compensation for the loss of pro rata long service leave in respect of the nine years and nine months continuous employment at the Coburg foundry he had rendered prior to his termination. On 21 October 1996, this court, constituted by Judicial Registrar Ryan, dismissed Mr Karamitsios's application. The present application to the court, as it is now constituted, is by way of re-hearing. The hearing proceeded by way of oral evidence. The central contentions of the applicant are that there was no valid reason for his termination and that he was given no adequate opportunity to respond to any allegation of poor performance. Further, Mr Karamitsios says that he was given no warning at any time for poor performance. Included in his general denial, he denies that he was formally warned on 7 September 1995 or again on 17 October 1995. He claims that a written warning from his employer of 9 November 1995 in evidence was not accompanied by any oral advice that his employment was in jeopardy. It is for the respondent to prove in the present proceedings that there was a valid reason or valid reasons pursuant to s 170DE of the Act for the applicant's termination. That section provided: (1) An employer must not terminate an employee's employment unless there is a valid reason, or valid reasons, connected with the employee's capacity or conduct or based on the operational requirements of the undertaking, establishment or service. (2) A reason is not valid if, having regard to all of the circumstances of the case, including the employee's capacity and conduct and those operational requirements, the termination is harsh, unjust or unreasonable. This subsection does not limit the cases where a reason may be taken not to be valid. Section 170DC provided: An employer must not terminate an employee's employment for reasons related to the employee's conduct or performance unless: (a) the employee has been given the opportunity to defend himself or herself against the allegations made, or (b) the employer could not reasonably be expected to give the employee that opportunity. The meaning of "valid reason" in the first subsection of s 170DE was the subject of observations by Northrop J in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371. His Honour said at 373: Section 170DE(1) refers to "a valid reason, or valid reasons", but the Act does not give a meaning to those phrases or the adjective "valid". A reference to dictionaries shows that the word "valid" has a number of different meanings depending on the context in which it is used. In the Shorter Oxford Dictionary, the relevant meaning given is: "2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value." In the Macquarie Dictionary the relevant meaning is "sound, just or well founded; a valid reason". In its context in s 170DE(1), the adjective "valid" should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must "be applied in a practical, commonsense way to ensure that" the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd (1995) 60 IR 1, when considering the construction and application of s 170DC.