CATCHWORDS INDUSTRIAL LAW - UNLAWFUL TERMINATION - MISCONDUCT - whether termination for MISCONDUCT was HARSH, UNJUST OR UNREASONABLE INDUSTRIAL LAW - ESTOPPEL - RES JUDICATA - privity of interest - whether proceedings brought by Union before the Commission gave rise to ISSUE ESTOPPEL or RES JUDICATA The Administration of the Territory of Papua and New Guinea and Another v Daera Guba(1973) 130 CLR 353 Ramsay v Pigram(1968) 118 CLR 271 Gleeson v J Wippell & Co Ltd (1977) 2 All ER 54 Hatchett v Bowater Tutt Industries Pty Ltd (1990) 26 FCR 561 Young v Public Service Board (1982) 2 NSWLR 456 Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853 Effem Foods Pty Ltd v Trawl Industries of Australia Pty Ltd (In Liq) (1993) 43 FCR 510 Effem Foods Pty Ltd v Trawl Industries of Australia Pty Ltd (In Liq) (1992) 36 FCR 406 ROBBIE RAHIF ELJAZZAR v. BHP IRON ORE PTY LTD WI 1671 of 1995 CORAM: MADGWICK J PLACE: PERTH DATE: 26 MARCH 1996 IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY No. WI 1671 of 1995 BETWEEN ROBBIE RAHIF ELJAZZAR Applicant AND BHP IRON ORE PTY LTD Respondent CORAM: MADGWICK J PLACE: PERTH DATE: 26 MARCH 1996 MINUTES OF ORDER The Court orders that: 1. the matter be remitted for hearing before a Judicial Registrar; 2. the issue of costs be remitted to Ritter JR for decision. IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY No. WI 1671 of 1995 BETWEEN ROBBIE RAHIF ELJAZZAR Applicant AND BHP IRON ORE PTY LTD Respondent CORAM: MADGWICK J PLACE: PERTH DATE: 26 MARCH 1996 REASONS FOR JUDGMENT MADGWICK J: These proceedings are a conventional enough claim for relief in respect of alleged unlawful termination of employment. The aspect that concerns me now and which was, by consent, tried separately, is whether the respondent has a threshold defence to the proceedings founded on res judicata or issue estoppel. I announced at the conclusion of argument that the defence failed and remitted the matter to the local Deputy Registrar for further directions in relation to the hearing of the matter. I reserved my reasons and now publish them. Fighting on the job The applicant, Mr Eljazzar, was employed by the respondent at Newman. On 9 March 1995, there was an altercation between him and a fellow worker, Mr Reid. In the next few days the respondent investigated the incident and, as a result of that investigation, both the applicant and Mr Reid were dismissed for conduct said to be fundamentally in breach of their contracts of employment - in a word, for fighting on the job. Both men were members of the Australian Workers' Union WA Branch ("the union"), a State-registered industrial union of workers. The union had an industrial agreement with the respondent which obliged the union to refer any unresolved disagreement about industrial matters between the union and the respondent to the Western Australian Industrial Relations Commission. Representations by the union failed to change the minds of the executive(s) of the respondent who made the decision to dismiss the two men. The matter was accordingly referred by the union to the Commission. Proceedings in the WA Commission The union gave notice that it was applying for a "conference" on the ground among others, that: "the union believes that [the] terminations are harsh, unjust and an over-reaction to a minor altercation. The assistance of the Commission is sought in an effort to resolve this matter." A conference was convened by Commissioner Beech under s 44 of the Industrial Relations Act 1979 (WA) for 5 April 1995, however, it failed to resolve the matter. The Commissioner drew up a formal "Memorandum of Notice for Hearing and Determination" in which he described the matter and said it was one which "at the conclusion of a conference held .... in accordance with section 44 of the Industrial Relations Act 1979 had not been resolved by conciliation". His description of the matter was as follows: "The applicant union claims that Daniel Reid and Robert Eljazzar were harshly and unfairly dismissed from their positions by the respondent. It seeks an order that they be reinstated in their employment without loss of entitlements. The respondent objects to and opposes the claim." On 5 May 1995 Commissioner Beech then conducted a hearing. His reasons for decision were published on 15 May. They followed the following structure: He said: "The Commission finds as follows" and then gave an account of various findings. He continued: "The union, in challenging the dismissals, does not condone the incident which occurred. ... The union argues that the incident is to be seen as a minor incident ... The respondent company disagrees ... It points to the need to maintain a safe working environment as part of the duty of care it owes to its employees. It reminds the Commission that the employees concerned work in an isolated workplace which places a greater responsibility on employees not to misconduct themselves. The decision of the Commission is as follows:" The Commissioner then directed himself to principles that would guide him, for example, that: "it is clear and accepted that fighting constitutes misconduct" and "while an employer may dismiss an employee for misconduct that dismissal may nevertheless be judged to be unfair in all of the circumstances. That is because the question is not whether there is a legal right to dismiss but rather whether the employer's legal right to dismiss has been exercised so harshly or oppressively towards the employer as to amount to an abuse of that right..." He went on to consider the facts closely. In relation firstly to Mr Reid, he concluded that the "dismissal was not unfair having regard to the relevant circumstances". The Commissioner then turned to Mr Eljazzar's case and discussed his position in some detail. The findings included the following: "Mr Eljazzar was assaulted without provocation. When he saw that he was bleeding he reacted ... [he] kicked Mr Reid on the chin causing an injury sufficient itself to warrant stitches..." The Commissioner dealt with a number of arguments put forward by the union and concluded that the decision to dismiss Mr Eljazzar was not unfair. He therefore formally ordered "that the application be dismissed". The title of the proceedings both in his reasons for decision and in his formal order was as follows: "The Australian Workers Union West Australian Branch Industrial Union of Workers v. BHP Iron Ore Pty Ltd". It was common ground that those two entities were the parties to the proceedings. The union had a right of appeal to the Full Bench from the decision of the Commission (see section 49 of the State Act), subject to subsection 49(2)(a): "an appeal does not lie ... unless, in the opinion of the Full Bench, the matter is of such importance that in the public interest an appeal should lie". Apparently, the union made no effort to appeal. The case for issue estoppel Thus armed, the respondent submits: (1) In truth and substance Mr Eljazzar was one of the parties to the proceedings and the union was but his representative. (2) The Commission is a court of record (section 12 of the State Act) and each Commissioner has in the performance of his functions the same protection and immunity as a Judge (section 13). The Commission had power to "hear and determine" the matter and to make an order binding the parties, though "only the parties": Section 44(a). As such, the Commission is sufficiently a "judicial tribunal" to found the doctrine of estoppel urged in this case. As was said in The Administration of the Territory of Papua and New Guinea and Another v. Daera Guba (1973) 130 CLR 353 at 453: "the use of the phrase "judicial tribunal" in this context is convenient as indicating that an estoppel of this kind does not result from a mere administrative decision, but the question whether such an estoppel is raised is not answered by inquiring to what extent the tribunal is exercising judicial functions, or whether its status is judicial or administrative ... The doctrine of estoppel extends to the decision of any tribunal which has jurisdiction to decide finally a question arising between parties even if it is not called a court, and its jurisdiction is derived from statute or from the submission of parties, and it only has temporary authority to decide a matter ad hoc ... It will accordingly not be necessary to canvass the authorities ... which deal either with issue estoppel or the nature of judicial power" I have no doubt that this aspect ((2) above) of the submission on behalf of the respondent is correct. (3) The precise questions that must arise here, in the claim founded on the unfair termination of employment provisions of the federal Act, of whether the termination in Mr Eljazzar's employment was "harsh" and/or "unfair" have been determined and either those questions have merged in the decision of the Commission so that those questions have become res judicata or at least as to those matters there is a plain issue estoppel. The applicant's response: lack of privity However Mr Eljazzar has sworn an affidavit, among other things saying the following: "After my dismissal I spoke with my Union. The union complained to the Western Australian Industrial Relations Commission about my dismissal and the dismissal of Daniel Reid. ... I did not make an application to the WA Industrial Relations Commission. As I understood it the union took an application to the State Commission complaining that both my dismissal and that of Daniel Reid was unfair. I am very dissatisfied with the manner in which the union represented me. I do not believe that my case and that of Daniel Reid should have been heard together. My advice from my solicitors has been that the Union should not have acted for both of us as there was a clear conflict of interest. The Union was not willing for me to bring evidence that would put in jeopardy Daniel Reid's case. My understanding was that the union wanted to get both Daniel Reid and me our jobs back but that it would not support me if it meant that I would get my job back but Daniel Reid would not. I am a migrant to Australia ... While I speak English quite well, I have some difficulty with written English and I am not always sure of formal spoken English. I had not been involved in any Court or Commission proceedings before 1995. I found the process intimidating and confusing. I do not believe that the Union understood my concerns or the facts of the case as they related to me and I do not believe that they properly represented me." It is quite clear that, on the account given by Mr Eljazzar to the Commission and indeed on the material as found by the Commission, had the two men been legally represented, there would have been a conflict of interest such that no one lawyer should have represented the pair of them. At the least, the rules about privity for the doctrine of issue estoppel are not stricter for a party claiming the benefit of the doctrine than for a party claiming the benefit of the res judicata doctrine. It is therefore sufficient for my purposes to assume that there was, subject to the question of privity of interest of the applicant, such a determination of such issues as would give rise to issue estoppel. In the view I take of the matter it is not necessary to consider questions of possible identity of the causes of action in the two sets of proceedings. The position of the applicant vis-a-vis the union It seems plain that, at least technically, the applicant was not a party to the proceedings before the Commission. But the matter goes beyond that. He was dissatisfied with Commissioner Beech's decision. He wished that further proceedings be taken about the matter. There was no effort by the union to appeal. It would be very surprising if the circumstances were such that he was in any practical position to instruct or require the union to appeal for his benefit. The union had legitimate interests of its own to consider, which may or may not entirely have coincided with those of Mr Eljazzar. In the first place it had also the interests of Mr Reid to consider. It had its own obligation to refer its dispute with the respondent to the Commission. It would have its own strategic and tactical industrial interests to consider. It would have the interests of its members employed by the respondent other than the applicant and Mr Reid to consider. It would have, in deciding whether or not to appeal, its own doubtless relatively scarce resources to consider. Thus, although the applicant was one of the intended beneficiaries of the union's application to the Commission and, in a practical sense, a necessary participant in the proceedings there, on the face of it, he really had a relatively limited capacity to control the way his case was put and the extent to which it was advanced. In particular, he had limited ability to ensure that only his own interests were taken into account in putting his case. Privity of interest - the principles For issue estoppel to apply, there must be, among other things, a sufficiently close relationship connecting the party in the latter proceedings, against whom the defence is sought to be raised, with the party in the earlier proceedings: see The Laws of Australia (Law Book Co.) at 16.1[43]. "Australian law recognises three classes of privies: of blood, of title and of interest": ibid. Only the third is relevant here. It is now settled that, until a new step be taken, either by the High Court or by the legislature, the "basic requirement of a privy in interest is that the privy must claim under or through the person of whom he is said to be a privy." (see Barwick CJ: Ramsay v Pigram (1968) 118 CLR 271 at 279). One may find attractive or otherwise the broad formulation employed by Sir Robert Megarry V-C in Gleeson v J Wippell & Co Ltd [1977] 3 All ER 54 at 60 that it suffices that: "having due regard to the subject-matter of the dispute, there must be a sufficient degree of identification between the two to make it just to hold that the decision to which one was party should be binding in proceedings to which the other is party. It is in that sense that I would regard the phrase "privity of interest"." Nevertheless, it is clear that such a view is too wide for adoption by any Australian court other than the High Court. The matter was fully considered in the Effem Foods litigation by the Full Court of the Federal Court of Australia at (1993) 43 FCR 510 and, at first instance, by Gummow J at (1992) 36 FCR 406 at 413-417. Similarly, dicta of Von Doussa J in Hatchett v Bowater Tutt Industries Pty Ltd (1990) 26 FCR 561 at 565 which preceded the Effem cases must now be understood accordingly. It was held in New South Wales by Lee J in Young v Public Service Board [1982] 2 NSWLR 456 that members of an individual union or association have no legal privity of interest with the union so as to estop them in relation to proceedings in the NSW Industrial Commission. It was regarded as relevant that (a) as here, the individual members could not appear as parties in the relevant proceedings in the Commission (at 465-6), and (b) they had no control of the proceedings in the Commission (at 466). But, decisively, the "fundamental matter" as Lee J put it, they did not claim "through or under" their association. Lee J said: "The reverse is the case - they assert rights merely as employees of the defendant and without regard to the association or membership of it." And so also it is here. I agree with the approach and conclusion of Lee J. It follows that, because of the limited scope of the doctrine of privity in relation to estoppel law in Australia, because I am content to follow Young and because of the additional factors to which I have referred above under the heading "The position of the applicant vis-a-vis the union", my conclusion is that the supposed defences are not made out. I should add that this case appears to fall short of satisfying the United States tests of privity discussed in Effem Foods, but held to be not applicable in Australia, e.g. that one has "participated so actively in the first litigation that he [sic] [has] assumed de facto the role of an actual party": see the discussion in Effem by Gummow J at 36 FCR 406 at 416. Further, even upon the formulation suggested in Gleeson, I would not think that, on what is before me, Mr Eljazzar should as a matter of law be precluded from presenting his claim to the Court. I record also that no submission was made that there is any relevant doctrine of federal law which would in this Court defeat an issue estoppel claim based upon proceedings under State legislation (cf., per Gummow J, ibid at 411). Discretionary considerations remain Nothing I have said should be taken as indicating other than my own strong attraction to the two basic justifications for the defences sought to be relied upon, namely that: "[1] there should be an end to litigation and [2] justice demands that the same party shall not be harassed twice for the same cause": Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853, 947, per Lord Upjohn. Nor will this decision inhibit the employer then arguing, if it wishes, for example, that its termination of the applicant's employment could not be said to be harsh, unreasonable or unjust in the circumstances of its investigation of the matter and vindication by the Commission or that "in all the circumstances" no relief should be granted. Neither ought these last remarks be taken as intended to influence in any way the Judicial Registrar (presumably) who will hear the substantive application for a remedy. Conclusion For the foregoing reasons the asserted defences fail. I certify that this and the preceding 9 pages are a true copy of the Reasons for Judgment of His Honour Justice Madgwick. Associate: Dated: 26 March 1996 APPEARANCES Solicitor for the Applicant: M Bennett, Dwyer Durack Solicitor for the Respondent: A J Power, Jackson McDonald Date of hearing: 22 February 1996