Industrial Relations Commission of New South Wales in Court Session CITATION : Peace v BHP Refractories Pty Ltd; Peace v BHP Refractories Pty Ltd [2000] NSWIRComm 235 APPLICANT: David Wordsworth Peace PARTIES : RESPONDENT: BHP Refractories Pty Ltd (IRC 3369 of 2000) BHP Refractories Pty Ltd (IRC 1845 of 1999) FILE NUMBER: 3369 of 2000 & 1845 of 1999 CORAM: Boland J CATCHWORDS : Unfair contract - contract of employment - sale of a business as a going concern - redundancy pay not available until purchaser determined its labour requirements from respondent's workforce - uncertainty of applicant obtaining employment with purchaser - applicant resigned to take up alternative employment prior to completion of sale - redundancy pay refused - held contract of employment unfair - contract varied - orders requiring payment of redundancy pay. Long service leave - pressing or domestic necessity - applicant had 8 years, 9 1/4 months service - sale of business as a going concern - applicant resigned to take up alternative employment prior to sale - applicant faced with choice of uncertainty of employment with purchaser or certainty of alternative employment - held that termination due to domestic or pressing necessity - orders requiring payment of proportionate long service leave. Industrial Relations Act 1996 LEGISLATION CITED : Long Service Leave Act 1955 A & M Thompson Pty Ltd v Total Australia Ltd [1980] 2 NSWLR 1 Baker v National Distribution Services (1993) 50 IR 254 Barry v Incitec Ltd (1991) 45 IR 143 Computer Sciences of Australia v Leslie (1983) 6 IR 188 Davies v General Transport Development Pty Ltd [1967] AR (NSW) 371 Incitec Ltd v Barry (1992) 45 IR 148 CASES CITED : Incitec Ltd v Industrial Court of New South Wales (1993) 45 IR 155 Jones v Dunkel (1959) 101 CLR 298 McNaught v Micador (1996) 83 IR 111 Payne v Foxboro (1998) 81 IR 404 Port Macquarie Golf Club v Stead (1996) 64 IR 53 Smith v Nutshack Franchise (Unreported, Maidment J, 28 August 1998) Swann v Ultratune (1983) 5 IR 284 Westbus Pty Ltd v Bartush (2000) 95 IR 480 HEARING DATES: 08/01/2000; 08/02/2000; 08/03/2000; 10/13/2000 DATE OF JUDGMENT: 11/23/2000 APPLICANT: Mr P Newall of counsel Solicitor: Mr P Hayward Haywards Solicitors LEGAL REPRESENTATIVES: RESPONDENT: Mr H Dixon of counsel Solicitor: Ms V MacBean Blake Dawson Waldron Lawyers JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: BOLAND J DATE: 23 NOVEMBER 2000 Matter No IRC 3369 of 2000 DAVID PEACE V BHP REFRACTORIES PTY LTD Application for recovery of money under s12 of the Long Service Leave Act 1955 Matter No IRC 1845 of 1999 DAVID PEACE V BHP REFRACTORIES PTY LTD Application under section 106 of the Industrial Relations Act 1996 JUDGMENT Introduction 1 There are two applications before the Court. The first is an application by David Wordsworth Peace ("the applicant") for relief under s 106 of the Industrial Relations Act 1996 ("the Act"). The second is an application by the same person for recovery of money under s 12 of the Long Service Leave Act 1955 ("the LSL Act"). The respondent to both applications was BHP Refractories Pty Limited ("the respondent"). 2 It was agreed that the evidence in one application would be evidence in the other. Both applications were heard together. 3 The claim under s 106 of the Act was that the contract of employment between the applicant and the respondent was unfair in a number of respects but, specifically, in that it did not provide for the applicant to be paid a redundancy payment upon the cessation of his employment in April 1998. 4 The claim under s 12 of the LSL Act was for payment of an amount owing for long service over the period 1989 to 1998 and upon the resignation of the applicant from the employ of the respondent for reasons related to domestic or pressing necessity. Background 5 The applicant commenced employment with the respondent on 10 July 1989. His employment with the respondent ceased on 17 April 1998 when his resignation took effect. At the time of his resignation the applicant was employed as Occupational Health, Safety and Rehabilitation Coordinator at the respondent's South Coast manufacturing plant at Port Kembla. He had held this position since 1996. 6 At the time of his resignation in April 1998 the applicant's base salary was $49400 per annum. However, as the applicant worked considerable overtime, in the year immediately prior to his resignation he earned around $70000 and in the year prior to that he earned between $76000 and $80000. 7 On 27 May 1997 the respondent wrote to the applicant, and other employees, and informed him that it intended to sell its refractory products business; that the business was to be sold as a package and ongoing concern; and that the sale would provide the respondent with the best prospects of "maximising employment opportunities for our people into the future". The respondent indicated that it expected the sale to be completed by the end of 1997. 8 At about this time, the applicant approached the respondent for an estimate of the amount he would receive if he was made redundant. The respondent provided this estimate on a computer print out. The computer print out was dated 15 May 1997. 9 The respondent continued to inform the applicant and other employees about the progress of the sale, and it eventually announced that its refractory plants at Unanderra, Port Kembla) would be sold to Shinagawa Thermal Ceramics ("STC"). The date of the sale was to be 31 May 1998. This announcement was made to Port Kembla employees on 13 March 1998 by Mr Jeffrey Fletcher, Manager - Manufacturing and Technology for the respondent. 10 The respondent also operated a plant at Mayfield. Unlike its Unanderra and Port Kembla plants, the respondent's Mayfield plant was not to be sold as a going concern. Mayfield was to progressively close from 31 May 1998. Employees at the Mayfield plant who wished to leave their employment prior to 31 May 1998 were advised that a "conditional VER Scheme" would be available. The Scheme involved the payment of severance pay if an employee was eligible according to a set of criteria. These criteria were designed to ensure there would be sufficient staff with the required skills available to enable the plant to close down progressively in a controlled way. 11 At some time in March 1998 the applicant became aware that one of the respondent's employees at its Mayfield plant, namely Ms Fiona Hoffman, had resigned her position and had accepted other employment. It appears that it was sometime after the applicant submitted his resignation on 26 March that he learned that Ms Hoffman had received redundancy payments. 12 In order to fulfill the conditions of the sale of the refractory plants at Port Kembla and Unanderra to STC as a going concern, the respondent was obliged to attempt to maintain all staff in employment until STC had determined its staffing needs. This would provide STC with the optimum range of individuals from which to select its workforce. Senior managers of the respondent were aware of this obligation. 13 Mr Fletcher continued to hold regular meetings at Port Kembla following the announcement of 13 March 1998. At the meeting on 13 March, Mr Fletcher informed employees that STC would not be offering all of them employment. Mr Fletcher also explained to employees that an outplacement program scheme was to be available for those employees who were not successful in gaining positions with STC. The scheme would include training designed to assist employees in gaining alternative employment. It was explained to employees that in the event they were unsuccessful in finding alternative employment with BHP, STC, or elsewhere, redundancy packages would be offered. Mr Fletcher also told employees that redundancies would not be available until after STC had determined its employee requirements. However, in response to questions from the floor of the meeting, Mr Fletcher told employees that should they find alternative employment prior to the completion of the sale of the plant they should go and see him. The evidence suggests that Mr Fletcher used the words: "If you find another job and you want to leave before an announcement is made about your future with the new company, come and see me and I will see what I can do." 14 At these meetings, employees of the respondent were also advised that should they be offered a position with STC, all of the benefits they had accrued while employed by the respondent would be carried over to their employment with STC. This included the redundancy arrangements. 15 At some time after the announcement on 13 March 1998 the applicant contacted STC to find out whether they had anyone employed in a position similar to his in their present operations on the South Coast. The applicant claims to have been informed that STC did have an employee in such a position. 16 In early March 1998 the applicant heard about an employment opportunity at Dux Water Heaters ("Dux") which operated a manufacturing plant at Moss Vale. On about 18 March 1998 he made inquiries regarding the position and an interview was arranged with a Mr Jake D'Sousa. Following a second interview, the applicant was offered employment with Dux, by Mr Phillip Whitburn, as the Occupational Health and Safety Manager. This offer was made on 25 March 1998. Mr Whitburn then reduced the offer of employment to writing and it was accepted by the applicant. 17 In the period during which the applicant had been employed by the respondent, he had entered a series of arrangements that left him with a considerable debt. At the time the applicant left the respondent his monthly repayments on his debts totalled $6160. These repayments were comprised of: Home loan, Bowral $908 per month ( since 1996); School fees, $800 per month (since 1995/96); Motor vehicle loans, $1505 per month (since 1995/96); 1990 - Personal loan, $275 per month (since 1990); St George Bank line of credit, interest of $250 per month (since 1990); Investment loan Robertson property net of rent repayment, $422 per month (since 1992/93). 18 On 26 March 1998 the applicant informed the respondent of his resignation. On 31 March 1998 the applicant forwarded a written resignation to Mr Fletcher (with copies to several other managers of the respondent), advising that he would cease work on 17 April 1998. 19 In the period between 26 March and 17 April 1998 the applicant claimed he had asked Mr Fletcher on a number of occasions, as well as Mr John Vickers, who was the Works Manager at the respondent's Port Kembla plant and the person to whom the applicant reported, whether the applicant was entitled to a redundancy package. Mr Vickers subsequently took up the issue with Mr Fletcher. 20 On 17 April 1998 Mr Fletcher advised Mr Vickers that redundancies were not yet available as STC had not made their final staffing decisions. 21 On 20 April 1998 the applicant commenced employment with Dux Water Heaters. 22 On 26 July 1998 the applicant wrote to "BHP Human Resources Department" in Melbourne. In his letter he explained the circumstances of his resignation. He also made clear that he was disappointed that he had not received a redundancy, and that he thought the way the respondent had treated him was unfair. 23 In September 1998, having received no response to the letter of 26 July 1998, the applicant's wife phoned Mr Fletcher. Mrs Peace asked why the respondent had not responded to her husband's letter. Mr Fletcher explained he had not seen the letter, but asked Mrs Peace to forward a copy to him. Mr Fletcher wrote to the applicant on 21 September 1998 and advised him that he was ineligible for any redundancy payment. 24 In October 1998 Mrs Peace telephoned the respondent's General Manager of Human Resources, Mr G T Hood. Mrs Peace was advised that one of the respondent's Human Resources officers would investigate the applicant's eligibility for redundancy. 25 On 29 October 1998, Mr Hood wrote to Mrs Peace confirming that the advice contained in Mr Fletcher's letter of 21 September was correct, that is, the applicant was ineligible for a redundancy payment. 26 Sometime after receiving Mr Hood's letter of 29 October, and before 12 November 1998, Mrs Peace wrote an undated reply to Mr Hood's letter. The respondent's Senior Human Resources Officer, Mr M McIlwaine, replied to Mrs Peace's letter on 12 November informing her that the respondent had not provided the applicant with a redundancy payment because at the time of his resignation STC had not finalised their labour requirements. Mr McIlwaine also advised Mrs Peace that in any event, the respondent could not back date a redundancy payment. 27 After receiving Mr McIlwaine's letter Mrs Peace drafted and faxed another letter to Mr Hood. Mr Hood acknowledged receipt of this letter on 16 November 1998. 28 On 20 November 1998 Mrs Peace had a telephone conversation with Ms Morena Miotto, Human Resources Officer for the respondent. Ms Miotto informed Mrs Peace that the decision regarding the applicant's eligibility for redundancy had been made and would not change. Submissions of the Applicant 29 Mr P Newall, of counsel, appeared for the applicant. He submitted that the applicant was employed by the respondent from 1989 to April 1998 under a contract of employment whereby the applicant performed work in an industry. The unfairness of the contract between the applicant and the respondent, Mr Newall submitted, arose in three ways: 1. the respondent through its management, made a representation to the applicant which could only have meant, and was taken by the applicant and others who heard it to mean, that if employees of the respondent employed at the Port Kembla plant obtained employment outside the respondent in the face of the impending sale of the operation to STC, and left for that reason before the handover, the respondent would provide a redundancy package to those employees. Upon his resignation to take up another position, however, the applicant was not paid any redundancy package. 2. the respondent knowingly applied a different policy and standard with respect to redundancy payments to employees at the Port Kembla plant and employees at the Mayfield plant, to the detriment of employees at the Port Kembla plant. Further, that different policy was adopted by the respondent entirely and solely to assist its own commercial interests without consideration of its effect on employees at Port Kembla and the applicant in particular. 3. the applicant was treated under the contract in a manner which was evasive and entirely heedless of his concerns and contemptuous of him. 30 Mr Newall submitted that the first basis of unfairness, that is the representations to the applicant, were in the context of an announcement to employees that the Port Kembla plant was to be sold as a going concern but that not all employees would be employed by the new owner. Further, that those employees who ultimately were not employed would receive a redundancy package. During the course of this announcement Mr Fletcher was asked by employees what would happen if an employee gained outside employment before the sale. Mr Fletcher, said: "If you find another job and you want to leave before an announcement is made about your future with the new company, come and see me and I will see what I can do." Mr Newall submitted that the overwhelming weight of the evidence was that these words were said. 31 The applicant understood the words to mean that if a person found another job before any decision by STC they would be given a redundancy package. Other employees, namely, a Mr Craft and a Mr Mitrevski who were present at the meeting when Mr Fletcher made the representation, also interpreted the words in a like manner to the applicant. Other employees were also at the meeting but they were not called by the respondent to say that they understood the matter differently; the Jones v Dunkel inference may be drawn. 32 Mr Newall submitted that the inference drawn by the applicant and Messrs Craft and Mitrevski from Mr Fletcher's representation was reasonable and logical. Indeed, Mr Fletcher said that he "can acknowledge that they might have drawn that conclusion themselves". It was relevant, Mr Newall submitted, that the Mayfield employees were to get, and were known by the applicant and other employees to be getting, a redundancy package and that management knew this to be common knowledge amongst employees at Port Kembla. 33 When the applicant quite reasonably relied on the respondent's representation and did obtain outside employment after enquiring of STC whether they already had an officer in the position he held with the respondent and after unsuccessfully applying for other positions with the respondents, the applicant did not receive the redundancy package. The representation was thus a misrepresentation because as Mr T R Pennifold, the General Manager of the respondent, agreed "there was never any intention on BHP's part at all to pay redundancy package to a person employed by the Refractory at Pt Kembla who resigned before that date", that date being the completion date for the sale to STC at the end of May 1998. 34 Mr Newall submitted that a misrepresentation can of itself give rise to unfairness in a contract: Swann v Ultratune (1983) 5 IR 284; Smith v Nutshack Franchise (unreported, Maidment J, 28 August 1998). 35 It was submitted for the applicant that the respondent did not approach the applicant between the date of handing in his resignation and the end of the notice period to discuss his resignation or the possibility of him getting a job at STC and that, therefore, the applicant was entitled to come to the view that no one within the respondent considered he had a good chance of obtaining employment at STC. Further, that given the poor employment climate prevailing, it was not imprudent or precipitate of the applicant to take up the employment with Dux; the applicant did not have the luxury of waiting to see what STC might offer. 36 The second aspect of unfairness, the applicant contended, was that the respondent chose to apply two different policies regarding the availability of redundancy packages to employees who left early to the detriment of the applicant and for its own commercial ends. 37 It was clear that not only were Mayfield employees to get the redundancy package when the closure occurred but they did not have to wait until closure. This opportunity was not provided to the applicant. This amounted to unfairness: Baker v National Distribution Services (1993) 50 IR 254. 38 The applicant was in the same position as Ms Hoffman who upon resigning from her employment at Mayfield received the redundancy package because she delegated her duties away. Similarly, the respondent did not fill the applicant's position after his resignation and his duties were taken over by other persons. 39 Unfairness is conclusively established when it is considered that the differential treatment accorded employees was adopted by the respondent simply for the purpose of advancing its own commercial position to enable it to hand over a working operation to STC following which any employees not needed by STC would be discarded. 40 The third aspect of unfairness contended by the applicant was the respondent's treatment of the applicant in "keeping him on a string" and not telling him the true position. This treatment was exacerbated by the contemptuous manner by which the respondent dealt with inquiries by the applicant in the post employment period regarding entitlements to redundancy payments. The employer's conduct in respect of a termination is a matter which a court can take into account in assessing the unfairness of a contract: McNaught v Micador (1996) 83 IR 111. 41 Given the fact that other employees who resigned to take up other employment were provided with redundancy payments, and the applicant resigned most unwillingly, this is a case in which it would not be just to apply the principle of mitigation so as to reduce the moneys that ought to be payable to the applicant: Payne v Foxboro (1998) 81 IR 404. 42 The applicant resigned because he was highly uncertain about his future prospect of employment with the respondent and its successor. He had intended to work for the respondent until he retired. He was, however, his family's principal breadwinner; he did not resign from the respondent except with 'deep sorrow' and under the pressure of impending termination. The applicant gave up his employment under domestic or pressing necessity. Submissions of the Respondent 43 Mr H Dixon, of counsel, appeared for the respondent. Mr Dixon argued that there was no unfairness in the contract between the applicant and the respondent. He submitted that in considering the applicant's claim it should be done in the context of what the respondent was trying to achieve, namely a transfer of the business at Port Kembla to STC as a going concern thereby preserving as many jobs and workers' entitlements as possible; that to treat the applicant in a different fashion to every other employee would in itself have been unfair. In this regard Mr Dixon said: …BHP ( the respondent) went to some lengths to try and protect the interests of employees, not only in respect of attempting to secure for them employment on a sale, but also to protect entitlements, but also to protect the terms and conditions they would be employed by any purchaser of the business, which was sold as a going concern, and one might start by recognising that BHP not only did these things, but kept the employees informed from an early stage of what it was seeking to do….. 44 Mr Dixon argued that in these circumstances "… to allow employees voluntarily to withdraw from the system and claim at the same time a redundancy payment would fundamentally undermine what must be regarded as an admirable course to try and ensure ongoing employment for employees". 45 A critical element of the respondent's case was the sequence of events. Mr Dixon described the meeting of 13 March 1998, when Mr Fletcher addressed employees at Port Kembla on the sale, as a "critical date". At this meeting, Mr Dixon submitted, the applicant was told there would be no redundancy pay until the sale of the business to STC was completed. The next critical date, according to the respondent was 18 March when the applicant applied for the position at Dux; on 25 March the applicant indicated oral acceptance of the Dux position and on 26 March gave notice of termination, orally, to the respondent. The applicant's resignation was confirmed in writing on 31 March and he indicated a departure date of 17 April 1998 to enable him to start with Dux on 20 April. Mr Dixon made the point that upon accepting the Dux appointment the applicant stated under cross examination that, once having given Dux the undertaking to start on 20 April, he would not break that date because he was "not that sort of person." Mr Dixon also made the point that the evidence showed that the applicant was actively looking for alternative employment six months prior to March 1998. Further, the evidence of Mr L A Craft, the Human Resources Officer of the respondent at the time of the sale to STC, was that Mr Peace said to him in a conversation at some time between 31 March and 17 April 1998: "I'm going to ask John Vickers and Jeff Fletcher about a VR, I have got a job offer in Moss Vale which is secure and which I intend to accept regardless of whether the VR is available or not." 46 Mr Dixon also referred to the evidence that the applicant did not become aware that Ms Hoffman, the Mayfield employee, was receiving a redundancy payment until some time after he resigned on 26 March 1998. 47 Mr Dixon drew from all this that by 26 March the applicant had decided to leave the employ of the respondent, that the decision to do so was irrevocable and regardless of whether he received a redundancy payment; no promise had been made to the applicant that he would receive a redundancy payment. The applicant knew that no one at Port Kembla could receive a redundancy payment until STC had made a decision about its manning requirements. Further, that the fact Ms Hoffman received a redundancy payment could not have been a factor in creating an expectation in the applicant's mind prior to his resignation, that he might receive a redundancy payment because he was not aware that Ms Hoffman had received a payment until after he had submitted his resignation. 48 In relation to the alleged misrepresentation by Mr Fletcher, Mr Dixon contended there was no misrepresentation. Mr Dixon contended that Mr Fletcher's words and actions had to be seen in the light of whether and at what point STC was to make a decision about its manning needs. So that Mr Fletcher's words "I'll see what I can do" was subject to him knowing STC's intentions. In other words, Mr Fletcher could continue to make inquiries of STC as to whether they intended to employ a particular person. But until STC made known its requirements, Mr Fletcher's hands were tied. Seen in that light, it was submitted, Mr Fletcher did not misrepresent the situation to the applicant but merely indicated that if STC's position became known perhaps "the matter could be looked at." Mr Dixon contended that Mr Fletcher was not representing that if the applicant, or anyone else, secured other employment prior to STC making its position known, that Mr Fletcher would see what he could do to arrange a redundancy payment. 49 In relation to the Mayfield situation, Mr Dixon argued that it was materially different; Mayfield was closing down and their would be no prospect of alternative employment for the bulk of employees. But Port Kembla was being transferred to STC as a going concern. As such, the jobs of many workers and their entitlements would be preserved. In any event, Mr Dixon submitted, if an employee at Mayfield received an offer of employment from STC and rejected it, that employee would not have had any entitlement to redundancy pay. 50 Mr Dixon referred to the evidence of Mr P H Malins, Group Manager, Engineering at STC. Mr Malins' evidence was that the applicant had fair prospects of employment with STC, not necessarily in occupational health and safety but that STC had been looking for employees who had the sort of skills and experience possessed by the applicant. The applicant, however, did not wait to be interviewed by STC. In those circumstances, Mr Dixon submitted, it would be unfair to impose on the respondent an obligation to pay redundancy pay to the applicant. 51 In relation to the alleged unfairness arising out of the post-employment period, Mr Dixon argued it was "simply unmeritorious". There was some delay in responding to Mrs Peace's correspondence, but understandably so because the business had changed hands. Mr Dixon noted that although certain allegations were made by Mrs Peace against Ms Morena Miotto in respect of the latter's refusal or failure to assist with Mrs Peace's inquiries, Ms Miotto was not called for cross examination. 52 In relation to the issue of mitigation, Mr Dixon submitted that the position with Dux was "well remunerated" with "good prospects" and there was no gap in employment of the applicant. Mr Dixon argued that what the applicant's claim amounted to was that " the redundancy payments are being sought to provide some form of capital to repay debts". 53 In relation to the claim for long service leave Mr Dixon referred to Computer Sciences v Leslie (1983) 6 IR 188 and Westbus Pty Ltd v Bartush (2000) 95 IR 480 as authorities for the proposition that the test to be applied in considering whether there was an entitlement based on "pressing or domestic necessity" was whether the reason for resigning was such that a reasonable person in the circumstances in which the worker found himself or herself might have felt compelled to terminate his or her employment. Mr Dixon submitted that on the evidence this was not such a case. Consideration 54 The respondent was a large and reputable employer which, in mid 1997, sought expressions of interest from potential purchasers in relation to its manufacturing sites at Port Kembla, Unanderra and Mayfield. Employees of the respondent were advised in May 1997 of the intention to seek a buyer of the business on the basis it would be "offered for sale as a package, and as a going concern with a view to continuing operations and employment." Subsequently, on 6 March 1998 STC was nominated as the preferred bidder. Negotiations on the sale then proceeded and these were finalised at the end of April 1998. As it happened, the Mayfield plant was not included in the sale and the respondent took the decision to close it down. 55 On 13 March 1998 Jeffrey Fletcher, the respondent's Manager - Manufacturing and Technology based at Mayfield, visited the Port Kembla site for the purpose of addressing employees on the sale of the plant. Amongst the information communicated to employees was the following: · persons taking up employment with the new owner would not be disadvantaged although that did not mean all conditions of employment would be the same; · employees of the respondent who took up employment with the new owner would be compensated for any loss in respect of such benefits as health, housing loan assistance, motor vehicles; · for the purpose of calculating leave entitlements, all service with the respondent would be counted as service with the new owner; · not all employees of the respondent would obtain employment with the new owner. Any employee who did not obtain employment with the new owner would be transferred to vacancies at other BHP centres. If there was no vacancy employees would receive redundancy payments. 56 In his evidence Mr Fletcher said that at one of a number of meetings he conducted in March and April 1998, in response to a question by an employee as to what would happen if they found another job before the sale to the new owner, he replied with words to the effect: You should all be proactive and see what's out there (by way of alternative employment) and if you find something come and see me. 57 Mr Fletcher explained that what he meant by this remark was that if employees found a new job or a new job was in prospect he might be able to assist them by, for example, attempting to find out whether they were likely to be employed by STC or by facilitating employment with one of the respondent's related companies in the BHP group. Mr Fletcher insisted that he did not mean that he might be able to get them a redundancy payment because it had been made very clear to him that there would be no redundancy payments until such time as STC had determined its labour requirements. 58 Mr Fletcher also said that in explaining the process of job offers by the new owner he said to Port Kembla employees words to the effect of: The process will be that STC will interview everyone and will give letters of offer to those they wish to employ and those employees will have some time to think about it. If they accept they will be employed by STC. If anyone rejects the offer with STC then we will treat them as having effectively resigned from BHP Refractories and they will not be entitled to a redundancy payment because their jobs will not have disappeared. 59 Mr Pennifold, the respondent's General Manager and to whom Mr Fletcher reported, gave evidence that one of the terms of the sale agreement was that each party would use its best endeavours to ensure that all of the respondent's employees accepted offers of employment by STC. Mr Pennifold said that the respondent was "thus conscious of the need to ensure that it did not in any way discourage employees from accepting offers of employment with STC" and further that "BHP Refractories at the same time entered into a supply agreement with STC. Ensuring that STC had as many of BHP Refractories existing workforce would, it was believed, enhance STC's ability to meet its supply commitments. For this reason as well, BHP Refractories did not wish to undermine STC's ability to operate at an effective level." 60 Mr Pennifold went on to explain: . . . to have made redundancy payments available to employees who resigned from BHP Refractories would, I believed, been contrary to our contractual commitments with STC or at the very least contrary to the spirit of the agreement. To offer David Peace or any other employee 'redundancy payments' in the event of resignation would have, in my view, undermined the sale process with STC. 61 Mr Pennifold agreed that Mr Fletcher was well aware of the respondent's policy position regarding the payment of redundancy payments prior to the sale being completed. 62 In cross examination the following questions were put to Mr Pennifold: Q. If we go back to all those matters we have already dealt with, in circumstances then where you have told us what the position was and you have told us about the scope of Mr Fletcher's knowledge, if a person said to Mr Fletcher on or after 13 March in the context of questions and answers about the primary redundancy packages, if they asked him this question, "What happens if I resign to take another job?" it was not open to Mr Fletcher or anybody to say to them, "Look, in that circumstance, if you find another job and you leave prior to the sale, see me or John and we will see what we can do" because there was nothing Mr Fletcher could do about that, was there? A. There was a clear policy position that we had developed with respect to that, that's correct. Q. And that clear policy position was , as you have told us very squarely, that this would not occur prior to the sale? A. That's correct. 63 Prior to the announcement on 13 March 1998, Mr Peace had been searching for other employment. This appears to have been prompted by the announcement of the respondent in May 1997 that it intended to seek a buyer for its business. Mr Peace, together with other staff employees including Mr Craft and Mr Mitrevski, attended the meeting on 13 March to hear Mr Fletcher announce STC's interest in buying the business. Mr Peace said that in the context of discussions about redundancy packages Mr Fletcher was asked what would happen if someone found employment prior to the proposed date of the sale to STC. Mr Peace's evidence was that Mr Fletcher said: If you find another job and you want to leave before an announcement is made about your future with the new company, come and see me and I will see what I can do. 64 Mr Peace said in relation to Mr Fletcher's comments: To me, in the context of my knowledge about the Mayfield workers receiving redundancy packages, this meant that a redundancy package would be provided. 65 Mr Mitrevski's recollection of the meeting was that Mr Fletcher said words to the effect: Not all employees will secure jobs with STC. If you find another job and are interested in leaving prior to the sale, see John or myself and we will see what we can do. 66 Mr Mitrevski said that he understood Mr Fletcher's comments to mean that "employees were encouraged to seek to obtain employment outside of BHP where they could and if they were able to secure employment, then Fletcher would ensure that they would receive their redundancy pay, irrespective of the fact that they had obtained other work". 67 In cross examination of Mr Craft the following exchange took place: Q. One of the questions you recall being asked of Jeff Fletcher was, after some discussion about redundancies, words to the effect of, "What happens if I get a job outside before a decision is made? What happens then?" Words like that; do you remember that? A. Yes. Q. And Jeff Fletcher said words like this, "Well, if you do get a job outside, or if you are lucky enough to get a job outside, come and see me and I will see what I can do." Do you recall him saying words like that? A. That is reasonably close to what I would suggest, yes. Q. Any other words that you remember that I haven't suggested to you that he said? A. It's probably a reasonable explanation. Q. And after the meeting you had a conversation with David Peace about what had been said, didn't you? A. I had discussions with quite a few people and David was one of them. Q. And do you recall Mr Peace said to you words like this, "Well, from what Jeff Fletcher has just said it seems as if someone is able to secure a job Jeff will make arrangements for the payment of redundancy entitlements"; do you remember David Peace saying that to you? A. That was what our hope was. Q. Indeed, that is what he said to you? A. That is what David and I discussed. Q. You made a remark to David, "That is what I understood him to say as well", or words to that effect? A. Yes, I have no issue with that. 68 Mr Craft also said in his evidence, however, that Mr Fletcher said at one of the meetings words to the effect: "The voluntary redundancy scheme on the South Coast will not operate until STC has conducted interviews with staff employees" and that to the best of Mr Craft's recollection the applicant was present at the meeting. 69 There is some disagreement about the precise words, but the respondent does not deny the fundamental import of what Mr Fletcher is alleged to have said about persons who obtain employment should come to see him and he would see what he could do. Indeed, Mr Fletcher's evidence was that he said: "You should all be proactive and see what's out there (by way of alternative employment) and if you find something come and see me." Mr Vickers, who apparently accompanied Mr Fletcher at the meetings to discuss the sale, simply could not recall whether Mr Fletcher said the words as it was alleged. If there had been any fundamental disagreement about the words it would have been open to the respondent to call evidence from any number of other employees who attended the meeting, but there was no other evidence. 70 I consider that, in the circumstances, it was reasonable for the applicant to draw the inference from what Mr Fletcher said and the context in which he said it, that if he were to find another job there was the prospect that Mr Fletcher could arrange for redundancy payments to be made. I think that to draw the inference that there was some form of promise by Mr Fletcher that anyone leaving prior to the sale to take up other employment would receive redundancy pay, is putting too much of a gloss on what he said. 71 The sequence of events that follow becomes important. On about 18 March 1998 the applicant made inquiries regarding a position at Dux and an interview was arranged. On 25 March Dux made an offer of employment to the applicant. On 26 March the applicant accepted the offer and orally submitted his notice of resignation to the respondent. The applicant's resignation was confirmed in writing on 31 March 1998 and he indicated a departure date of 17 April 1998 to enable him to start with Dux on 20 April 1998. In his letter of resignation the applicant expressed "deep sorrow" at having to resign but said he had a "strong feeling" that he would not obtain employment with STC. The applicant said this feeling was reinforced by the fact that since advising of his resignation on 26 March 1998 "no one has discussed with me the possible chance of continuing employment with STC" and that this "just reaffirmed my thoughts that STC was not looking to employ me post June 1st 1998." 72 The applicant's resignation on 26 March 1998 was conveyed to John Vickers. Mr Vickers recollection was that the applicant said to him words to the effect: " I've accepted another job in Bowral because I really need to guarantee my future rather than taking the risk and waiting around to see if I am retrenched from here." The applicant denied he used the words "rather than taking the risk and waiting around to see if I am retrenched from here." I note, however, Mr Craft's evidence that Mr Peace said to him in a conversation at some time between 31 March and 17 April 1998: "I'm going to ask John Vickers and Jeff Fletcher about a VR, I have got a job offer in Moss Vale which is secure and which I intend to accept regardless of whether the VR is available or not." 73 The applicant claimed that he asked Mr Vickers about a redundancy payment when he tendered his resignation. Mr Vickers' recollection was that either at the time the applicant submitted his resignation or shortly thereafter, the applicant said to him: "Is there any chance of a redundancy?" Mr Vickers claimed that his response to the applicant was words to the effect that: "The redundancy scheme isn't open here on the South Coast, its got something to do with the agreement with STC because they have first call on all employees before we can retrench any. A redundancy is not available at this stage but I'll look into it." The applicant denied Vickers said these words to him. 74 It seems to me that whether Mr Vickers said these words to the applicant or not, the applicant was well aware of statements by Mr Fletcher that there would be no redundancy pay offered until it was known what STC's labour requirements were. I have come to this view on the basis of Mr Craft's evidence that at one of the meetings addressed by Mr Fletcher he said: "The voluntary redundancy scheme on the South Coast will not operate until STC has conducted interviews with staff employees" and that to the best of Mr Craft's recollection the applicant was present at the meeting. I found Mr Craft to be a straightforward, reliable witness, very confident in his recollection of events. I note that in the latter part of 1998 Mr Craft applied for a position with Dux in an occupational health and safety role but that he was unsuccessful. I find it difficult to accept that he had some type of grudge against the applicant because he was not successful in obtaining employment with Dux. Mr Craft, in his evidence, provided critical corroboration to the applicant's claim regarding the inferences to be drawn from what Mr Fletcher said at the meeting on 13 March 1998. I also note Mr Vickers' evidence where he clearly recalled Mr Fletcher saying at one of the meetings in March 1998 words to the effect: "We don't know yet which staff will go over to STC. At some stage, STC will be interviewing to see who they require in their new structure. They have first call. No one can or will be made redundant until STC has finally decided." 75 The fact that the applicant did know about the conditions attaching to redundancy pay does not, however, entirely negate the expectation generated in his mind by the statements of Mr Fletcher about possible access to redundancy pay. As I understand it, while Mr Fletcher said to employees "The voluntary redundancy scheme on the South Coast will not operate until STC has conducted interviews with staff employees", this was then followed by questions from the floor of the meeting regarding the prospect of redundancy pay in circumstances where an employee may have found another job before the sale to STC had been completed. Mr Fletcher's response, that any such employee should come and see him and he would see what he could do, could clearly be interpreted as modifying the earlier statement but not, in my view negativing it to the extent that the applicant claims. 76 I am also prepared to accept Mr Craft's evidence that the applicant had said to him "I'm going to ask John Vickers and Jeff Fletcher about a VR, I have got a job offer in Moss Vale which is secure and which I intend to accept regardless of whether the VR is available or not". That this was said by the applicant is supported to some degree by Mr Vickers' evidence that the applicant said to him "I've accepted another job in Bowral because I really need to guarantee my future rather than taking the risk and waiting around to see if I am retrenched from here". 77 The statement by the applicant to Mr Craft about taking the Dux position whether or not the redundancy package was available, indicates that the applicant was not certain about receiving a redundancy payment because clearly no firm commitment about that had been given by the respondent. Mr Fletcher only said words to the effect "Come and see me and I'll see what I can do", against the background of his earlier statement that the redundancy scheme would not operate until STC had conducted interviews of staff employees. 78 Having been asked by the applicant was there any chance of a redundancy, Mr Vickers spoke to Mr Fletcher later on the day of 26 March and said words to the effect: "David Peace has just resigned. He's accepting another job in Bowral and wants to know if there's any chance of him getting a redundancy." Mr Vickers said that Mr Fletcher's reply was "A voluntary redundancy isn't available at the moment because STC hasn't decided who they want but I will look into it." Mr Vickers said he conveyed Mr Fletcher's response to Mr Peace. 79 Between 31 March and 17 April Mr Fletcher said that the applicant approached him on a number of occasions as to whether there was any news on his redundancy and on each occasion Mr Fletcher replied to the effect: " Look, I'm sorry there is no clarity on whether you are surplus to STC's needs and there is no voluntary redundancy scheme open until we know whether people are going to be surplus or not." 80 The applicant denied that Mr Fletcher had spoken to him about the question of redundancy at any time between 31 March and 17 April except that on 17 April, the last day of the applicant's employment with the respondent, when the applicant phoned Mr Fletcher and he was told he would not receive the redundancy package. The applicant said that this was the only time he was told that he would not be receiving a redundancy payment. The applicant said that all of his dealings on the question of redundancy were with Mr Vickers who kept saying to him he would look into it and get back to him. 81 At some point and either on one or more occasions between 31 March and 17 April, the applicant was told by either Mr Vickers or Mr Fletcher or both that no decision could be made in respect of a redundancy payment because no decision had been made by STC about its labour requirements. I also consider, however, that until the last day of his employment the applicant was not told unequivocally that he would not be receiving any redundancy payment. 82 My view of the evidence is that the applicant genuinely felt that his chances of securing employment with STC were not very good. Upon hearing of the proposed sale of the Port Kembla plant on 13 March, and having formed the impression that if he obtained employment prior to the sale, there was the prospect he might receive redundancy pay, the applicant continued to look for other employment. I accept that he was genuinely concerned about his security of employment and in his own mind and in consultation with his wife weighed up the pros and cons of waiting to see whether he might obtain employment with STC as opposed to securing other employment. The latter option obviously became the more favoured because it offered certainty over uncertainty; it meant that if he missed out on employment with STC he would not be in the precarious and stressful position of being unemployed for an indeterminate period with a very large debt hanging over his head and, of course, there was at least the possibility of redundancy pay based on what Mr Fletcher had said at the meeting on 13 March 1998. That possibility became an important consideration for the applicant because his income at Dux was to be less than the overall income he had been receiving from the respondent. The redundancy pay could obviously be used to clear all or part of the applicant's heavy debt. Even absent the possibility of redundancy pay, however, it seems that the applicant felt the need to obtain other employment rather than suffer the uncertainty of securing employment with STC and end up being without any income at all. 83 In this respect there can be no criticism of the applicant. He did what he regarded as being in the best interests of himself and his family. 84 Mr Newall submitted, however, that criticism could be levelled at the respondent; that the respondent misrepresented to the applicant that if he obtained outside employment he should approach the respondent about a redundancy package, knowing there was never any intention to pay a redundancy payment to any employee who resigned early. 85 The respondent's position was that it had an obligation according to an agreement with STC to transfer the Port Kembla plant as a going concern. That meant employees with the necessary skills would also need to transfer to the new owner. On that basis the respondent made it a condition that before there was any prospect of an employee receiving redundancy pay, STC had to determine its labour requirements - that is, which employees of the respondent it wanted to have transfer with the business. Obviously, in those circumstances the respondent was not going to offer the redundancy package to employees who left prematurely to take up other employment because that might have meant a leakage of employees with the skills needed by STC to continue operating the plant. Additionally, it might have jeopardised STC's capacity to meet its supply obligations to BHP once the sale had been effected. 86 Mr Fletcher was well aware of all this, yet he said words that left an impression with employees, including the applicant, that redundancy pay might be in prospect if an employee left prior to the sale to take up other employment. 87 Whilst it may have been somewhat careless on Mr Fletcher's part to create such an expectation, I do not consider that it amounted to misrepresentation as contended by the applicant. To find that it was misrepresentation on the part of the respondent I think I would have to find that Mr Fletcher held out a promise of redundancy pay to any employee who found other employment prior to the sale knowing that he could not keep that promise. As I found earlier, Mr Fletcher held out no more than the prospect of redundancy pay. 88 Clearly, there was a prospect of redundancy pay. Support for coming to this conclusion lies in what Mr Fletcher said in his response to the applicant's inquiry about access to redundancy pay during the period 31 March to 17 April. Mr Fletcher said in his evidence that on a number of occasions he sought to ascertain whether STC had made its decision in respect of which employees it wished to transfer with the business and which employees it did not. This inquiry was directed through Mr John Bailey, the respondent's Human Resources and Safety Manager. Up to 17 April, STC were unable to answer Mr Fletcher's inquiry. If they had and the answer had been that the applicant was surplus to STC's requirements, it would have been open to Mr Fletcher then to inquire whether there were any vacant positions within the companies related to the respondent and, if not, it would have been open for the respondent to pay redundancy pay to the applicant. 89 In these circumstances, I do not consider that the words used by Mr Fletcher at the meeting on 13 March, that he would see what he could do for employees who found other employment prior to the completion of the sale, was a misrepresentation. 90 I also note in this regard that despite the applicant's evidence that Mr Fletcher's statements "meant that a redundancy package would be provided", he did not approach Mr Vickers on that basis on 26 March. The applicant said to Mr Vickers, and this was not challenged by the Applicant, "Is there any chance of a redundancy?", not "I have resigned to take up another job so in accordance with Jeff Fletcher's undertaking that he gave on 13 March could you arrange for my redundancy pay." 91 On the basis that it was contended that the contract was unfair by virtue of a misrepresentation by the respondent, the applicant's claim fails. 92 The applicant's second primary contention was that the contract was unfair because the respondent applied two different policies regarding the availability of redundancy packages to employees who left 'early' and did so to the detriment of the applicant and purely to protect its own commercial interests. 93 The reference to two standards refers, of course, on the one hand to the receipt by Ms Hoffman of redundancy pay, notwithstanding that she left her employment before the Mayfield plant closed, and on the other hand, the non-receipt of redundancy pay by Mr Peace who also left prior to STC determining whether he was surplus to their requirements. 94 The respondent argued that circumstances at Mayfield and Port Kembla were materially different; Mayfield was closing down and their would be no prospect of alternative employment for the bulk of employees. But Port Kembla was being transferred to STC as a going concern. As such, the jobs of many workers and their entitlements would be preserved. In any event, Mr Dixon submitted, if an employee at Mayfield received an offer of employment from STC and rejected it, that employee would not have had any entitlement to redundancy pay. 95 There is no question that circumstances at Mayfield were different to Port Kembla. Mayfield was to close down altogether and any employees who did not take up an offer of employment with STC on the South Coast would be redundant and would receive redundancy pay. Moreover, any Mayfield employee wanting to leave their employment prior to the closure could apply for and receive the benefits of a redundancy scheme, provided they were eligible. At Port Kembla, no employee was entitled to redundancy until STC had determined whether that employee was to be offered employment. 96 There does not seem to me to be any question that the respondent treated its employees at Port Kembla quite differently to those at Mayfield. Provided a Mayfield employee satisfied the eligibility criteria, he or she could receive a redundancy benefit, as Ms Hoffman did. That benefit would be payable regardless of whether the very next day after leaving the respondent's employ the person commenced in employment with another employer. On the other hand, an employee at Port Kembla had no chance of getting a redundancy payment until STC decided it did not wish to employ that person. Of course, the respondent would place any employee who was not employed by STC in on outplacement program. Under this program, after three months, employees were required to make an election about their employment with BHP Steel. If they wished to seek employment with BHP Steel and a suitable job became available they would be offered the position or they could elect to take the redundancy package. If, after six months, no job became available the employee would be compulsorily retrenched. 97 The question here is whether the different treatment of employees at the Mayfield and Port Kembla plants amounted to being unfair insofar as the contract of employment between the applicant and the respondent was concerned. 98 Mr Dixon argued that I should consider this question in the context of the greater good. In other words, what the respondent was trying to achieve was the sale of a going concern where the jobs and benefits of as many employees as possible were protected. In those circumstances, to single the applicant out for special treatment by providing him with a redundancy package prior to the completion of the sale could have undermined the respondent's objectives and resulted in unfairness to all other employees. 99 I can accept that the respondent was motivated to do what it could to maximise employment opportunities and preserve benefits - although the latter would largely be achieved by the operation of the industrial laws going to transmission of business. I consider, however, that an even greater motivation in making it a condition that there would be no redundancy pay prior to completion of sale was the condition in the Sale Agreement that at least 102 employees accept employment with STC. If this was not achieved the sale would not, I presume, have proceeded. Whether this would have meant closure of the plant and a loss of jobs, I was not informed, although I expect that it was open for the respondent to look for another buyer. 100 The respondent clearly did not wish to risk opening the floodgates by providing redundancy pay to the applicant and thereby fail to meet its obligations to STC under the Sale Agreement. 101 The respondent's policy at Port Kembla, of withholding redundancy pay until it was known whether STC's labour requirements had been satisfied, was clearly designed to act as a significant disincentive, given the comparative generosity of the scheme, against employees leaving prematurely to take up other employment and to remain available for STC to determine their suitability for employment. If STC did not require a particular employee, the employee was placed in an outplacement program and after either three months or six months, if suitable employment was not found, the employee would be compulsorily retrenched. 102 The conclusion, I think, is difficult to avoid that the respondent's policy, of withholding severance pay until STC's labour requirements were satisfied, operated and was designed to operate, to protect the respondent's commercial interests much more so than the interests of the applicant. If he had not taken up the employment with Dux he could have found himself in six months time with a redundancy payout but no job and no income and, therefore, substantially worse off. Meanwhile, the respondent would have effected a successful sale. 103 Additionally, another employee of the respondent, namely Ms Hoffman, was allowed to resign and receive redundancy pay. If she had obtained other employment, she would have gained the windfall that the respondent argued that the applicant should not receive. 104 Against this, it was argued that the circumstances prevailing at Mayfield were completely different to Port Kembla; that at Mayfield the operation was closing down but in respect of Port Kembla it was to be sold as a going concern. Therefore, it was reasonable for the respondent to make provision for employees at Mayfield who wanted to leave early to receive redundancy pay provided they satisfied certain criteria. Apart from this rationale there does not appear to be any other reason why the applicant and Ms Hoffman should have been treated differently. 105 In weighing up whether the respondent's actions were unfair I have had regard to what was said about unfairness in a number of decisions which are conveniently summarised in Port Macquarie Golf Club v Stead (1996) 64 IR 53 at 56-60 where the Court (Fisher CJ, Hungerford and Cullen JJ) said: 5. The nature and degree of fairness within the purview of s 275, as a matter of law, relates to the ordinary standards of fairness by directing attention to the particular circumstances of the individual contract or arrangement concerned; whether or not a contract or arrangement is unfair is a matter to be decided upon examination of the facts of each particular case: Incitec Ltd v Barry (1992) 45 IR 148 at 154; Baker. 6. Unfairness may arise either from the terms of the contract or arrangement itself, the surrounding circumstances and/or from the manner of performance or operation of the contract or arrangement: Barry v Incitec Ltd (1991) 45 IR 143 at 146; Incitec Ltd v Industrial Court of New South Wales (1992) 45 IR 155 at 157 158 and Baker at 270-271. 7. The test of unfairness involves the commonsense approach characteristic of the ordinary juryman by applying standards providing a proper balance or division of advantage and disadvantage between the parties who have made the contract or arrangement, bearing in mind the conduct of the parties, their capability to appreciate the bargain they had made and their comparative bargaining positions when entering into the contract or arrangement: Davies v General Transport Development Pty Ltd [1967] AR (NSW) 371 at 374; A & M Thompson Pty Ltd v Total Australia Ltd [1980] 2 NSWLR 1 at 13 and Baker at 271-272. 106 In considering the "balance or division of advantage and disadvantage" the condition that there would be no redundancy payments until STC's labour requirements were satisfied was not an arrangement negotiated or even discussed with the applicant. It was simply imposed unilaterally on the applicant who was in no position to negotiate any change to the policy. Furthermore, no proper consideration was given to the applicant's situation by the respondent; no regard was had for the fact that the applicant's future, in remaining in the respondent's employ until STC decided his fate, was very uncertain. No consideration was given to whether there could be some accommodation of the applicant beyond, it seems, general inquiries being made of STC as to whether it had finalised the list of those persons to whom it was going to make an offer of employment. There was no consideration by the respondent of alternatives that might have been put to the applicant such that, if after the applicant resigned, it was found that STC did not in fact require his services, redundancy pay would become payable but if STC had required him, there would be no redundancy pay. There was no specific consideration given to whether, by providing redundancy pay to the applicant, it might in fact have jeopardised the sale of the business by opening the floodgates; there was simply a blanket imposition of the policy of no redundancy pay until STC made up its mind. 107 Mr Dixon argued that to single the applicant out for special treatment by paying him redundancy pay would have operated unfairly against other employees of the respondent. That, I think, depended to a large extent on whether there were other employees in the applicant's position. What I am concerned with here is the contract between the applicant and the respondent and whether that contract operated unfairly. In any event, if by treating one employee fairly meant that other employees were treated unfairly, it raises the question of whether the whole arrangement of discouraging employees from seeking other employment in order that a successful sale of the business could be achieved, was unfair. 108 Now, it may be said that there is nothing fair about an employee obtaining other employment and agitating for and receiving a redundancy payment. Redundancy payments may be a rather unsophisticated method for addressing the problem associated with loss of employment in circumstances of transmission of businesses, and in some other circumstances, but there is nothing unusual about that in Australian industrial life. Whatsmore, in respect of employees at the respondent's Mayfield plant, provided they satisfied the necessary criteria, they were entitled to leave prior to closure with a redundancy payment, regardless of whether the very next day they commenced with a new employer. 109 In summary, no consideration was given by the respondent to the particular circumstances of the applicant who wished to leave the employ of the respondent in order to achieve certainty and security of employment. That was hardly an unreasonable objective given the uncertainty and insecurity that prevailed in relation to the applicant's contract of employment with the respondent. 110 As to the fact that Ms Hoffman received a redundancy payment in circumstances where she resigned before the closure of the Mayfield plant in order to move to another place in the State with her husband, consideration was given by the respondent to her particular circumstances and she was treated more favourably than the applicant. 111 It is perfectly understandable that a company wishing to sell a business would make whatever arrangements are necessary and, of course lawful, to facilitate that sale. In doing so, the respondent imposed conditions on one group of its employees, but not another, the effect of which was to withhold any redundancy payments that might otherwise have been payable until the purchaser of the business had made its selection of those employees of the respondent to whom it would make an offer of employment. 112 This was not done in complete disregard for the welfare of employees because the respondent was anxious that as many employees as possible would gain employment with the purchaser and retain the benefits they had accrued with the respondent. The respondent knew, however, that not all employees, particularly staff employees, would be employed with the purchaser and, therefore, arrangements were put in place to attempt to find employment with a related company. Re-training was also provided. But at the end of the day, if no suitable alternative employment was found, compulsory retrenchment would apply. 113 In the process of gaining a sale of its business, however, for all the reasons I have expressed, I think the respondent lost sight of its obligations under the individual contract of employment with the applicant to treat him with equanimity. 114 In all the circumstances, I find that the contract between the applicant and the respondent was unfair within the meaning of s 105 and s 106 of the Act. 115 Given this finding it is unnecessary for me to consider what Mr Newall described as the third aspect of unfairness, namely the treatment of the applicant by the respondent in the post employment period, except to say I do not consider it has a great deal of substance. Mitigation 116 Mr Dixon, for the respondent, submitted that if I were to find against the respondent, the principle of mitigation should apply. That is, any redundancy payment should be reduced by moneys earned in the applicant's alternative employment. Whether or not moneys awarded to a former employee on account of the unfairness of a contract and/or arrangement should be discounted by moneys earned by the employee in alternative employment and if so , to what extent, are matters to be determined having regard to the facts and circumstances of each case (see Harcourt Brace & Co (Aust) Pty Ltd v Cory (1997) 81 IR 321; Payne v Foxboro L & N Pty Ltd (1997) 81 IR 404). 117 If the respondent had effected a "fair" termination of the applicant, then Mr Peace would have received a redundancy payment regardless of the fact that, shortly after his termination with the respondent, he took up other employment. I do not consider that it would be a just outcome to now reduce the amount of redundancy payment by an amount earned by the employee at Dux. To do so would, I think, merely perpetuate the unfairness inflicted on the applicant, especially considering that employees at Mayfield were entitled to a redundancy payment regardless of their prospects for finding alternative employment. Long Service Leave 118 It was common ground that the applicant had completed more than five years and less than ten years service with the respondent. In fact, he had eight years 9¼ months service with the respondent. The applicant claimed that he resigned because of domestic or pressing necessity and by virtue of the provisions of s 4(2)(a)(iii) of the LSL Act seeks $10,275.27 as proportionate long service leave plus interest and costs. 119 In Westbus Pty Ltd v Bartush (2000) 95 IR 480 at 481 the Commission in Court Session (Wright J, President, Hungerford and Marks JJ) held that: …. the proper approach to a consideration of the question of whether domestic or other pressing necessity had been established as the real reason for the termination of employment by the employee was as set out in the decision of the former Industrial Commission in Court Session (Watson, Bauer and Glynn JJ) in Computer Sciences of Australia Pty Ltd v Leslie [1983] AR (NSW) 828. 10 The Full Bench in that case said (at p 831): Applying that approach, the present case should be resolved, in our view, by asking the following questions. (1) Was the reason claimed for termination one which fell within the section? (2) Was such reason genuinely held by the worker and not simply colourable or a rationalisation? (3) Although the reason claimed may not be the sole ground which actuated the worker in his decision to terminate, was it the real or motivating reason? (4) Was the reason such that a reasonable person in the circumstances in which the worker found himself placed might have felt compelled to terminate his employment? 120 I referred earlier in this judgment in relation to the applicant's claim under s 106 of the Act to what I considered to be the applicant's state of mind at the time he resigned: My view of the evidence is that the applicant genuinely felt that his chances of securing employment with STC were not very good. Upon hearing of the proposed sale of the Port Kembla plant on 13 March and having formed the impression that if he obtained employment prior to the sale, there was the prospect he might receive redundancy pay, the applicant continued to look for other employment. I accept that he was genuinely concerned about his security of employment and in his own mind and in consultation with his wife weighed up the pros and cons of waiting to see whether he might obtain employment with STC as opposed to securing other employment. The latter option obviously became the more favoured because it offered certainty over uncertainty; it meant that if he missed out on employment with STC he would not be in the precarious and stressful position of being unemployed for an indeterminate period with a very large debt hanging over his head and, of course, there was at least the possibility of redundancy pay based on what Mr Fletcher had said at the meeting on 13 March 1998. That possibility became an important consideration for the applicant because his income at Dux was to be less than the overall income he had been receiving from the respondent. The redundancy pay could obviously be used to clear all or part of the applicant's heavy debt. Even absent the possibility of redundancy pay, however, it seems that the applicant felt the need to obtain other employment rather than suffer the uncertainty of securing employment with STC and end up being without any income at all. 121 There was evidence from Mr Peter Malins who was Production and Engineering Manager with the respondent at the time of the sale to STC. Mr Mallins was a member of a panel set up to interview employees to ensure that "STC got the right mix of employees" from amongst the respondent's staff employees of whom the applicant was one. Mr Malins expressed the opinion that the applicant "would have stood a good chance of being offered employment with STC" if he had not resigned and had attended an interview with STC. Putting aside the influence of hindsight on Mr Malins' opinion, between the time the applicant submitted his resignation on 26 March to 17 April when he left, no one from the respondent approached the applicant with the sort of encouraging advice now expressed by Mr Malins, despite every opportunity to do so. 122 It is quite clear from the applicant's letter of resignation that he would not have resigned from the respondent's employ but for the insecurity and uncertainty surrounding the sale of the business and, frankly, I do not think it was reasonable in the circumstances to expect him to forego the opportunity of secure employment, given the parlous state of the labour market, for the uncertainty associated with remaining in employment with the respondent pending the sale of the business. 123 I have no doubt that a reasonable person in the circumstances in which the applicant found himself placed might have felt compelled to terminate his employment. 124 The applicant has made out his case for the payment of proportionate long service leave. Orders 125 For all the reasons I have given I intend to make orders to the following effect: 1. An order declaring that the contract whereby the applicant performed work for the respondent ("the contract") was unfair. 2. An order declaring void ab initio the contract insofar as it permitted the respondent to avoid making, or permit it to fail to make, any payment in respect of redundancy upon or in relation to the cessation of the applicant's employment with the respondent. 3. An order varying the contract ab initio to provide as a term of the contract that in circumstances where the applicant's employment under the contract ceased by reason of, or in contemplation of, the sale or disposal of that part of the respondent's business in which the applicant performed work under the contract, the respondent shall make to the applicant a payment with respect to redundancy which in the circumstances would not be less than a sum equivalent to that paid to an employee of equivalent salary and service to the applicant. 4. An order that any sums payable to the applicant pursuant to the foregoing variations to the contract shall be on the basis of what the applicant would have received if he had been paid an amount with respect to redundancy at the time that his employment with the respondent terminated, namely 17 April 1998. 5. An order that the respondent pay to the applicant interest on the amount referred to in par 4 hereof at the rate of interest in accordance with s 94 of the Supreme Court Act 1970, from 18 November 1998. 6. An order that the respondent pay to the applicant an amount equivalent to 7.58 weeks proportionate long service leave on the basis the amount the applicant would have received if he had been paid proportionate long service leave at the time that his employment with the respondent terminated, namely 17 April 1998, together with interest on the amount. 126 The respondent shall pay the applicant's costs as agreed or assessed. 127 It should be noted that I have not included an amount for stress and distress. There was not sufficient material to allow me to arrive at any firm conclusion about this aspect of the claim. Further, in the same category is the claim for $15,000 as the value of training provided to other staff members made redundant. 128 The applicant is directed to file and serve orders that will reflect this judgment within 21 days. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.