Richard Thomas Maclure v Cessnock Workers Club Limited [1995] IRCA 440

CATCHWORDS INDUSTRIAL LAW - UNLAWFUL TERMINATION - Lost REMUNERATION. INDUSTRIAL LAW - UNLAWFUL TERMINATION - PROCEDURAL FAIRNESS - The opportunity to an employee to defend himself or herself against allegations related to his or her conduct or performance must be given before the decision to terminate employment is made. INDUSTRIAL LAW - UNLAWFUL TERMINATION - REINSTATEMENT - Meaning of IMPRACTICABLE. Industrial Relations Act 1988 ss 170 DC170 DE, 170 EA, 170EDA, 170EE Jason Scott Johns v Gunns Limited number TI148R of 1994 (unreported, Northrop J, 18 May 1995) Nicolson v Heaven and Earth Gallery Pty Limited (1994)126 ALR 233 Liddell v Lembke trading as Cheryl's Unisex Salon (1994) 127 ALR 342 RICHARD THOMAS MACLURE -v- CESSNOCK WORKERS CLUB LIMITED No. NI 1314 of 1995 COURT: PATCH JR PLACE: CESSNOCK DATE: 17 AUGUST 1995 INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES REGISTRY No. NI 1314 of 1994 BETWEEN: Richard Thomas MACLURE Applicant AND: CESSNOCK WORKERS CLUB LIMITED Respondent BEFORE: PATCH JR PLACE: CESSNOCK DATE: 17 AUGUST 1995 REASONS FOR JUDGMENT (Delivered ex tempore, revised from transcript) This is an application under section 170EA of the Industrial Relations Act 1988 ("the Act"). At the commencement of the proceedings today, Mr Cleaves, who appears for the respondent corporation, informed me that the corporation's board had appointed an administrator under section 436A of the Corporations Law. He also informed me that the administrator had given permission, in accordance with section 440D of that Act, for the proceedings to continue. The applicant seeks reinstatement to his former position, and an order that the respondent pay the remuneration lost since the termination of his employment. If an application alleges a contravention of section 170DE (1) of the Act, as is the case here, then section 170EDA provides that the onus of proof is on the employer to prove that there was, in the terms of the section 170DE(1): "....... 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." Here there is no such proof. The respondent's solicitor did not argue the contrary (having informed the Court part way through the applicant's case that he was instructed that the respondent would offer no evidence). It therefore follows that the termination of the applicant's employment was unlawful as it was in breach of section 170DE(1) of the Act. In Jason Scott Johns v Gunns Limited number TI148R of 1994 (unreported, Northrop J, 18 May 1995) his Honour said this: "It must be remembered that section 170DC and subsection 170DE(2) have application only if the employer establishes a valid reason or valid reasons for termination under subsection DE(1). Here, as I have said, the employer has not established a valid reason or valid reasons under that subsection." Nonetheless, as argument occurred about the matter, it seems to me appropriate to make some short observations concerning the application of section 170DC of the Act to this case. It is quite clear that the termination of the applicant's employment was a breach of section 170DC. That section is as follows: "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." In this case there was no reason why the employer acting reasonably could not have given the employee an opportunity to respond to the criticisms that the employer had of him. If the "opportunity" given by the employer to defend himself or herself against allegations constituting reasons for the termination of his or her employment is an "opportunity" given after the decision to terminate the employment has already been taken, that is not an "opportunity" within the meaning of section 170DC of the Act. In Nicolson v Heaven and Earth Gallery Pty Limited (1994) 126 ALR 233, Honour Wilcox CJ said, in reference to section 170DC(a), at page 243: "The paragraph does not require any particular formality. But this does not mean that it is unimportant or capable of profunctory satisfaction. Section 170DC carries into Australian labour law a fundamental component of the concept known to lawyers as "natural justice" or, more recently, "procedural fairness". The relevant principle is that a person should not exercise legal power over another, to that person's disadvantage and for a reason personal to him or her, without affording the affected person an opportunity to present a case. The principle is well established in public administrative law. It was accepted into international labour law when Article 7 was inserted in the Termination of Employment Convention. Section 170DC is directly modelled on Article 7. The principle is, I believe, well understood in the community. It represents part of what Australians call a "fair go". In the context of section 170DC it is not to be treated lightly. The employee is to be given the opportunity to defend himself or herself "against the allegations made"; that is, the particular allegations of misconduct or poor performance that are putting the employee's job at risk. Section 170DC(a) is not satisfied by a mere exhortation to improve." Here the applicant was not given a "fair go". He was presented with a fait accompli, informed of a decision that had already been made, and then asked what he wanted to say about it. Is Reinstatement Impractical? In Liddell v Lembke trading as Cheryl's Unisex Salon (1994) 127 ALR 342, Wilcox CJ and Keely J said, in discussing the meaning of the word "impracticable" in section 170EE(2) of the Act: "The precise meaning of "impracticable" in this context should be left to another day; the question is one of general importance and it was not fully argued in this case. But, although "impracticable" does not mean "impossible", it means more than "inconvenient" or "difficult". The imposition of such a stringent limitation on the Court's power to award compensation, rather than order reinstatement, is inconsistent with the notion that Parliament intended the court to have an open discretion whether to intervene at all." In Nicolson v Heaven and Earth Gallery Pty Limited, cited above, at page 60, his Honour Wilcox CJ said, in discussing the same section of the Act: "One of the amendments to Part VIA made in June 1994 was the substitution of a new section 170EE. Under the substituted section, the first task of the Court, in considering relief is to consider whether reinstatement is practicable. Compensation for loss of the job (as distinct from lost remuneration) may be awarded only if reinstatement is "impracticable". It is important to note that Parliament stopped short of requiring that, for general compensation to be available, reinstatement be impossible. The word "impracticable" requires and permits the Court to take into account all the circumstances of the case, relating to both the employer and the employee, and to evaluate the practicability of a reinstatement order in a common sense way. If a reinstatement order is likely to impose unacceptable problems or embarrassments, or seriously affect productivity, or harmony within the employer's business, it may be "impracticable" to order reinstatement, notwithstanding that the job remains available." Thus reinstatement is the primary remedy under the Act as amended, effective June 30 1994. The only evidence before the Court as to the practicability of the applicant's reinstatement is that given by the applicant. He gave evidence that, if reinstated, his relationship with the manager and other employees would be "fine". True it is that there were some difficulties between the applicant and the members of the Club's board over the preceding couple of years, but those difficulties were not of such a nature as to lead me to conclude that there was such a degree of disharmony in the work place that it would be impractical to order the reinstatement of the applicant. It is also true that, at a general meeting called by the applicant's union shortly after the termination of his employment, his fellow workers refused to support him. Once again, that evidence is insufficient for me to conclude that his reinstatement would create such disharmony within the workforce that to order his reinstatement would be impracticable. I therefore will order that he be reinstated. Lost Remuneration The representatives for both parties agreed that the applicant has been out of work for 26 weeks and 2 days, inclusive of today. That seems clear from a simple examination of the calendar. The applicant's wages in the period leading up to the termination of his employment varied between $580.00 and $630.00 per week (gross) depending on shifts, penalty rates and overtime. The average of these two figures is $605.00 per week. That seems to me to be a reasonable basis, although not an exact one, upon which to calculate the remuneration which the applicant has lost since the termination of his employment. I will calculate the lost remuneration on that basis. At that rate, over the 26 weeks and 2 days that the applicant has been out of work, he has lost the sum of $15,972.00 (gross). That loss is a direct result of the unlawful termination of his employment. He is entitled to be compensated for that. In other words, he is entitled to get back that which he has not received, or lost. Furthermore, by virtue of the unlawful termination of his employment, the applicant has lost certain other benefits that would have accrued during the time since the termination of his employment, such as accrued holiday pay, rights to superannuation and the like, if he had continued to work for the respondent. That is not necessarily an exclusive list, it is just a couple of examples of benefits that he may have lost. As I will order his reinstatement, to do justice fully means that he be put back into the position that he would have been in but for the unlawful termination of his employment. I will therefore make an order crafted to achieve that. The orders that I make are as follows: 1. That the respondent forthwith reinstate the applicant by reappointing him to the position in which he was employed immediately before the termination of his employment. 2. That the period from 7 February 1995 until today, inclusive, be treated for all purposes as a period of continuous employment of the applicant by the respondent in the position in which he was employed immediately before the termination of his employment. 3. That the respondent pay the applicant within 28 days of today the sum of $15,972.00 for remuneration lost by the applicant because of the unlawful termination of his employment. I certify that the preceding seven (7) pages are a true copy of the Reasons for Judgment of Judicial Registrar Patch. Associate: Caroline Sternberg Date: September 1995 Appearances: Counsel for Applicant: Mr PC Coleman Solicitor for Respondent: Mr J Cleaves