INDUSTRIAL LAW - Claim of UNLAWFUL TERMINATION OF EMPLOYMENT - Review of Judicial Registrar's decision - Whether employment terminated by employer or employee - Forced resignation - Critical conversation prior to commencement of Division 3 of Part VIA of the Act - Division inapplicable. Industrial Relations Act 1988, Part VIA Division 3. ASSOCIATION OF PROFESSIONAL ENGINEERS, SCIENTISTS & MANAGERS AUSTRALIA and CARL SPARRE v DAVID GRAPHICS PTY LIMITED NO. NI. 94/0174 CORAM: WILCOX CJ PLACE: SYDNEY DATE: 12 JULY 1995 IN THE INDUSTRIAL RELATIONS COURT) OF AUSTRALIA ) No. NI 94/0174 NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: ASSOCIATION OF PROFESSIONAL ENGINEERS, SCIENTISTS & MANAGERS AUSTRALIA First Applicant and CARL SPARRE Second Applicant AND: DAVID GRAPHICS PTY LIMITED Respondent CORAM: WILCOX CJ PLACE: SYDNEY DATE: 12 JULY 1995 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The application for review of the decision of the Judicial Registrar made on 31 March 1995 be allowed. 2. The orders made that day by the Judicial Registrar be set aside. 3. The application under Division 3 of Part VIA of the Industrial Relations Act 1988 be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules. IN THE INDUSTRIAL RELATIONS COURT) OF AUSTRALIA ) No. NI 94/0174 NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: ASSOCIATION OF PROFESSIONAL ENGINEERS, SCIENTISTS & MANAGERS AUSTRALIA First Applicant and CARL SPARRE Second Applicant AND: DAVID GRAPHICS PTY LIMITED Respondent CORAM: WILCOX CJ PLACE: SYDNEY DATE: 12 JULY 1995 EXTEMPORE REASONS FOR JUDGMENT WILCOX CJ: The respondent to an application for unlawful termination of employment, David Graphics Pty Limited, has sought review of a decision of a Judicial Registrar made in a case brought by two applicants, the Association of Professional Engineers, Scientists and Managers Australia, a registered organisation, and Carl Sparre, a former employee of David Graphics. The Judicial Registrar found that there was a breach of Division 3 of Part VIA of the Industrial Relations Act 1988 and awarded Mr Sparre compensation in the sum of $4,000. A number of matters were raised in the application for review but I heard argument on only one of them. It is a critical matter which, if answered in favour of the employer, requires the original application to be dismissed. The question is whether the crucial actions in connection with the termination of employment occurred prior to the commencement of Part 6A of the Act on 30 March 1994. Mr Sparre was employed by David Graphics as a computer technician. He had two young children. As his wife was working outside their home, he found difficulty accommodating requests by his employer for him to work overtime. There was a history of conversations about that matter which it is not necessary to recount. It seems that the issue reached a climax in late March 1994. On 22 March, there was a conversation between Mr Sparre and Mr John Moroney, the General Manager of David Graphics. On 23 March, Mr Moroney issued a memo to Mr Sparre in which he stated that it was a requirement of employment that any employee work reasonable overtime at overtime rates. He said that Mr Sparre's supervisor had repeatedly asked him to work overtime and he had repeatedly refused. The memorandum went on: "I have spoken to you on two occasions of the need for overtime to meet our customers' requirements. If you cannot avail yourself for reasonable overtime as your working companions, I have no option but to ask you to find another position so we can replace you with somebody who can accommodate the above. Following the delivery of this memorandum, there was a conversation between Mr Sparre and Mr Moroney. There is some dispute about the terms of the conversation but it is common ground that, at its end, both men understood that Mr Sparre would finish his employment with David Graphics on Friday 8 April. It seems to me that what happened was that Mr Moroney put the proposition to Mr Sparre, quite bluntly, that either he worked the demanded overtime or found another job. This, indeed, is what the memorandum said. Mr Sparre gave evidence to the Judicial Registrar that, as a matter of pride, he preferred to resign rather than be dismissed. Having regard to that evidence, I think the correct analysis of the position is that he said he would leave, but only because he felt he had no other option. The proper description is that it was a forced resignation. It was a termination of employment at the instance the employer rather than of the employee. It follows that, from the employee's point of view, there is no problem in relation to categorisation of the conversation. His problem relates to the date of the conversation. It took place before the relevant legislation came into effect. It appears that, between 23 March and 8 April, Mr Sparre looked for another job. He found another job, although only on a part-time basis. I am not certain whether he found the other job before 8 April. This is not important. What is important is that he looked for a job before 8 April. This fact confirms an understanding that he was going to finish up on 8 April. That was Mr Moroney's understanding. He issued a note to the pay mistress in which he said that Mr Sparre would "finish up" on 8 April and asked her to make up his pay accordingly. It seems that, between 20 March and 8 April, Mr Sparre became aware of the existence of the new legislation. He obtained advice about the matter and was advised that it was important that he be dismissed rather than resign. On 8 April he had another conversation with Mr Moroney in which he asked Mr Moroney for a letter of dismissal. Mr Moroney declined to give a letter, saying that he was not being dismissed; he had resigned. There was some further discussion during which, according to Mr Sparre, he said: "If that is the case then there is a misunderstanding, I am not resigning. I understood that I had been fired, if you are not firing me then I will be back at work on Monday". Mr Sparre says Mr Moroney replied: "There is no job for you here". Mr Moroney agrees that Mr Sparre asked him for a letter of termination and when he refused Mr Sparre said: "If you don't give me the letter I will be turning up to work on Monday".After this was said, according to Mr Moroney himself, he said: "Are you available to work overtime?" Mr Sparre replied: "No". Mr Moroney said: "The situation has not changed". Mr Sparre then left his office. A number of submissions are put to the Court by Mr Ingmar Taylor, appearing for the organisation and the employee. He says that: "The termination of an employee's employment may involve more than one act of an employer and that it is sufficient that the last in the chain of actions occurred after 30 March 1994". I agree with the proposition that termination may involve more than one action. But I think it is necessary to ask oneself what was the critical action, or what were the critical actions, that constituted a termination of the employment. If the critical action or actions occurred before 30 March, it would make no difference that there may have been some discussion after 30 March in relation to the future of the employment. I think this is what occurred in the present case. One can test the matter by imagining that there had been no conversation on 8 April, would Mr Sparre have finished up on that day? The answer, I think clearly, is yes. What happened on 8 April was that Mr Sparre endeavoured to put himself in a position where he could point to a dismissal, hopefully after the new legislation came into force. Mr Moroney was not prepared to accommodate him. There was a moment when Mr Moroney flirted with the possibility of the employment being continued, if the overtime position could be resolved. It could not be resolved; so that possibility disappeared. But this would have required a new decision by Mr Moroney. If nothing happened, if no new decision was made, the employment would come to an end pursuant to what happened on 23 March. It seems to me that the critical action was the insistence by Mr Moroney on 23 March that Mr Sparre accommodate himself to the overtime demands of the employer or leave. Mr Taylor also submits that the word "termination" simply means "end" and that one should look at the time when the contract of employment, or the relationship of employer/employee, came to an end. He says this occurred on 8 April. I do not think this is the correct construction of the legislation. I agree that "end" and "terminate" often mean the same thing. However, this legislation is structured as a series of commands addressed to employers. Many provisions of Subdivision B of Provision 3 commence: "An employer must not terminate an employee's employment unless". These provisions address actions by employers that have the effect of terminating employment. There is a difference between myself and Gray J regarding the jurisprudential basis of an act of termination: see Siagan v Sanel Pty Limited (1994) 1 IRCR 1 and Association of Professional Engineers, Scientists, Managers of Australia v Skilled Engineering Pty Limited (1994) 1 IRCR 106. However, although we might reach the answer in a different way, we would come to the same conclusion in regard to the facts of this case, if the operative action took place on 23 March. Indeed, Gray J dealt with this precise situation in Skilled Engineering, it being category 2 of the three categories of facts he considered: see 117-118. I come with regret to the conclusion that the application for review must succeed on this ground, without any reference to the merits of the case. It is unfortunate for Mr Sparre that the critical events occurred just one week before the new legislation came into force. However, these situations always occur when new legislation comes into force. Whatever sympathy I might have, I have to construe the legislation according to its terms. Although I think Mr Sparre's employment was terminated by his employer, not himself, the relevant act of termination took place before the commencement of the new legislation. It follows that the legislation does not apply to the claim. The Judicial Registrar should have dismissed the application on this ground. Review having been sought, I must so order. The orders that I make are as follows: (1) I allow the application for review of the decision of the Judicial Registrar made on 31 March 1995; (2) I set aside the orders made by the Judicial Registrar on that day; (3) I order that the application under Division 3 of Part VIA of the Industrial Relations Act 1988 be dismissed. I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment of Chief Justice Wilcox. Associate: Dated: 12 July 1995 APPEARANCES Representative of APESMA: I Taylor Respresentative of David Graphics Pty Limited: G Knespal Date of hearing: 12 July 1995