The Axe unto the Root? Unfair Dismissals and Unlawful Terminations Post Work Choices
THE LAW SOCIETY OF WESTERN AUSTRALIA
Seminar: Work Choices or Worst of Choices? The New World of Workplace Relations
Federal Magistrate Toni Lucev
27 September 2006
*The views expressed in this paper are the views of Federal Magistrate Lucev. They are not, and do not purport to be, the views of
the Federal Magistrates Court or any other Federal Magistrate.
INTRODUCTION
When wandering preaching in the wilderness of Judea John the Baptist1 uttered memorable words:
"And now also the axe is laid unto the root of the trees: therefore every tree which bringeth not forth good fruit is hewn down, and
cast into the fire."2
He was speaking of the fate of the wicked, to be cast to their death in the lake of fire.3
A casual observer of the Australian workplace relations scene over the last year or so might think that, with the introduction of
Work Choices,4 the "wicked" employees had been "cast" into the "fire", and that rights and remedies upon termination of employment were dead.5
But is it so? Has that much really changed?
There is no doubt that the introduction of Work Choices has been mired in controversy, no part more so than the changes to unfair dismissal laws.
The unions oppose Work Choices – vehemently! The ACTU's Rights at Work campaign website alleges an "attack on job security, leaving 4 million employees vulnerable
to unfair dismissal."6
Small business are said not to understand Work Choices, and to "have the wrong idea that they can get rid of employees when they like."7
Legal practitioners "admit they are struggling to understand" Work Choices8 and that it is a "minefield".9
In what follows I set out in conventional form the federal rights and remedies in relation to unfair dismissal and unlawful termination.
However, I want to suggest that it may be arguable10 that:
(a) conceptually, and possibly practically, not a lot has changed with the introduction of Work Choices for many employees who will be terminated; and
(b) perhaps somewhat tentatively, there may be available alternative rights and remedies, some more powerful than "orthodox" termination
rights and remedies.
CONSTITUTIONAL BASIS
The validity of the Work Choices amendments is the subject of a current reserved High Court decision in which the applicants (the States and various unions) have
challenged the constitutional validity of the amendments, and in particular the use of the corporations power11 as the basis for the amendments. Hence, constitutional validity is not specifically analysed in this paper, beyond the somewhat cursory
discussion of the previously accepted orthodoxies which follow.12
The unfair dismissal provisions of Work Choices apply principally to employees engaged by "constitutional corporations"13 and therefore principally rely on the use of the corporations power14 for their constitutional validity, but probably also the conciliation and arbitration power15 and the incidental power16. However, the unfair dismissal provisions also extend to employees:
(a) employed in Australian Territories;
(b) employed in Victoria;
(c) employed in the Commonwealth Public Sector;
(d) engaged as waterside workers, maritime employees or flight crew officers, employed in the course of interstate or overseas trade
or commerce.17
In these respects there is also reliance upon the Territories power18, the referral power19, the Commonwealth's power to legislate with respect to its own employees20, the external affairs power21, and the interstate and overseas trade and commerce power.22
The unlawful termination provisions, applicable to all employees in Australia, rely generally upon the same powers as the unfair dismissal
provisions, but also the external affairs23 power for their constitutional validity24, and the utilisation of that power to enact into domestic law various obligations under international agreements and International
Labour Organisation standards to which Australia is party.
UNFAIR DISMISSAL (OR HARSH, UNJUST OR UNREASONABLE TERMINATION)
In common parlance, the Australian Industrial Relations Commission ("AIRC") determines whether a dismissal within its jurisdiction
was unfair. More correctly, it determines "whether a termination was harsh, unjust or unreasonable".25
Between 27 March 2006 and the end of August 2006 there was an increase in unfair dismissal applications to the AIRC in all states
except Victoria and Tasmania, and in Queeensland the number of applications had trebled.26
The phrase "harsh, unjust or unreasonable" was considered by the High Court in Byrne & Frew v Australian Airlines:27
"Clause 11(b) [the term in the relevant award] is aimed at the situation where the termination of employment brought about by the
dismissal, rather than the steps leading up to the dismissal, or lack of them, is harsh, unjust or unreasonable. A dismissal with
notice may be harsh, unjust or unreasonable because it is based on a ground defined as such by cl 11(b). This refers to such matters
as termination 'on the ground of' race, colour, sex and marital status. It may be that the termination is harsh but not unjust or
unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap.
Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer
acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before
the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate
to the gravity of the misconduct in respect of which the employer acted."28
In Bostik (Australia) Pty Ltd v Gorgevski (No 1)29 Sheppard and Heerey JJ held, in relation to the words "harsh, unjust or unreasonable":
"These are ordinary non-technical words which are intended to apply to an infinite variety of situations where employment is terminated.
We do not think any redefinition or paraphrase of the expression is desirable. We agree with the learned trial judge's view that
a court must decide whether the decision of the employer to dismiss was, viewed objectively, harsh, unjust or unreasonable. Relevant
to this are the circumstances which led to the decision to dismiss and also the effect of that decision on the employer. Any harsh
effect on the individual employee is clearly relevant but of course not conclusive. Other matters have to be considered such as the
gravity of the employee's misconduct."30
The determination of whether a termination is harsh, unjust or unreasonable is subject to mandatory statutory qualifications, in that
the Commission "must have regard to31" the following factors:
"(a) whether there was a valid reason for the termination related to the employee's capacity or conduct (including its effect on the
safety and welfare of other employees); and
(b) whether the employee was notified of that reason; and
(c) whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee; and
(d) if the termination related to unsatisfactory performance by the employee – whether the employee had been warned about that
unsatisfactory performance before the termination; and
(e) the degree to which the size of the employer's undertaking, establishment or service would be likely to impact on the procedures
followed in effecting the termination; and
(f) the degree to which the absence of dedicated human resource management specialists or expertise in the undertaking, establishment
or service would be likely to impact on the procedures followed in effecting the termination; and
(g) any other matters that the Commission considers relevant."32
The reference to "including its effect on the safety and welfare of other employees" in paragraph (a) apart, these provisions are
identical to those previously contained in s 170CG(3)(b)-(e) of the WRA as it was pre- Work Choices.
The use of the phrase "must have regard to" requires the Commission to have regard to each of the factors set out, as far as they
are relevant to the factual circumstances of the case33
An examination of the s 652(3) factors follows.
VALID REASON
A valid reason is one which is:
"… sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid
reason for the purposes of s 170DE(1) [now s 652(3)(a)]. At the same time the reason must be valid in the context of the employee's
capacity or conduct or based upon the operation requirements of the employer's business."34
The valid reason inquiry is not limited to the particular reason or reasons given by the employer: rather, the AIRC must be satisfied
that the particular conduct alleged to provide the reason for termination:
(a) actually occurred; and
(b) was sufficient to constitute a valid reason for termination.35
A valid reason must also be "lawful in the sense of not being prohibited, and genuinely must be based on those operational requirements."36
CAPACITY
Capacity relates to the employees ability to do the work the employee is employed to do.37
Capacity means more than an individual employee's personal best38, and includes physical ability to perform tasks and the ability to perform the inherent requirements of a particular job.39
CONDUCT
Conduct alleged as the basis for a termination must be proven to have occurred40. A belief as to conduct, even if reasonably held, is not sufficient.41
NOTIFICATION OF REASON
The "reason" to be notified is the alleged "valid reason", and must be notified prior to termination.42 If no, or no sufficient information, is provided in a purported notification, it may be that notification of reason has not been
given.43
OPPORTUNITY TO RESPOND TO REASONS RELATED TO CAPACITY OR CONDUCT
An opportunity to respond means a practical opportunity afforded to the employee in a reasonable way by the employer, with adequate
time to respond44. The opportunity may be afforded in writing, or orally.45
WARNING ABOUT UNSATISFACTORY PERFORMANCE
Warnings are only necessary where performance is in issue.46 Performance is more likely to relate to capacity than conduct47 Of the form of warning a Full Bench of the AIRC has said:48
"… a warning must:
identify the relevant aspect of the employee's performance which is of concern to the employer; and
make it clear that the employee's employment is at risk unless the performance issue identified is addressed.
In relation to the latter requirement, a mere exhortation for the employee to improve his or her performance would not be sufficient.
We also note that we accept that these criterion are to be applied in a practical and commonsense way taking into account the employment
context."
SIZE OF THE EMPLOYER'S UNDERTAKING AND ABSENCE OF DEDICATED HUMAN RESOURCE MANAGEMENT SPECIALISTS OR EXPERTISE
These provisions allow the AIRC to take into account the resources of businesses both small and large, and the likely effect49 of the absence or presence of size and resourcing of the business upon termination procedures.50
OTHER RELEVANT MATTERS
This provision allows the AIRC to exercise a wide discretion having regard to the circumstances of a particular matter. Matters considered
by the AIRC include:
(a) impact upon the employee;51
(b) whether termination was proportionate to reason for termination;52
(c) differential treatment;53
(d) opportunity to improve performance;54
(e) award obligation; and55
(f) communication with employee.56
EXCLUSIONS – SECTION 638
Section 638 of the WRA excludes certain types of employees from making a claim of harsh, unjust or unreasonable termination.
An examination of some of the exclusions follows:
Employee engaged under a contract of employment for a specified period of time
A contract is not a contract for a specified period of time unless commencement and conclusion dates are certain and unambiguously
identified in a manner enabling the exact duration of the contract to be able to be ascertained.57
A broad estimation of a period of time, such as "approximately 12 to 16 weeks" does not constitute a specified time.58
The possibility of employment for a further fixed term does not alter the character of a contract which is otherwise one for a specified
period of time.59
An unqualified right to terminate the employment contract is inconsistent with the contract being a contract for a specified period
of time.60 It appears that the right to terminate the employment contract, if granted by an Act, is also inconsistent with the contract being
for a specified period of time.61
Employee engaged under a contract of employment for a specified task
For a contract of employment to be for a specified task it must be a contract under which the employee is to carry out a specified
task. A specified task is different to an employer's task or project.62 In Hewitt v ACT vk Custom Engineering Pty Ltd63 Lacy SDP said:
"The phrase 'a specified task' should be interpreted narrowly so as to cover only situations where an employee has been engaged under
a contract to perform a project or job which is distinct or identifiable in its own right. The task to which the original employment
contract relates should be self contained and not leave open the possibility of the employee performing any work outside the realm
of the specific task for which the employee is being employed."64
A contract for a specified task can be extended provided that the specified task remains the same.65
Employee serving a period of probation
A period of probation has been variously described as:
(a) a time of provisional employment for the purposes of testing suitability;66
(b) as not being equivalent to a training period;67
(c) as a period to gauge the viability of continuing the employment relationship68; and
(d) as being different to trial, qualifying and evaluation periods.69
The employee must actually be "serving" the period of probation at the time of termination of employment for the exclusion to apply,
that is, it does not apply after the conclusion of the probation period.70
The period must be of a specifically limited duration, clearly spelt out (where the reasonableness requirement does not apply).71
Termination of a probationary period in advance of employment requires determination in advance of the employment relationship, and
not simply in advance of entry into the employment contract. Probationary time periods begin to run when the employment relationship
commences, not when the employment contract is signed.73
The period must be determined in advance by either contractual agreement between the parties or by a statutory instrument, such as
an Act or an industrial award.74 The parties cannot contract out of a statutory probationary period.75
In determining whether a probationary period is reasonable (where that criterion applies) the matter is an exercise of judgment based
on proved effective facts, but having regard to the nature and circumstances of the employment.76
In determining reasonableness innumerable factors might be considered, including the following:
(a) industry practice;77
(b) whether or not the work is supervised;78
(c) the seniority of the employee;79
(d) the repetitive nature of the work;80
(e) whether the work requires considerable full time training at the employer's expense; and81
(f) personal circumstances, including prior experience.82
Other section 638 exclusions include:
(a) casual employee engaged for a short period;
(b) trainees;
(c) non award remuneration capped employees; and
(d) employee engaged on a seasonal basis
OTHER EXCLUDED EMPLOYEES
Under Work Choices new grounds excluding categories of employees have been enacted.
Corporation employing 100 employees or fewer
An employee is prohibited from making an application alleging termination was harsh, unjust or unreasonable if the employee was at
the relevant time employed by an employer employing 100 employees or fewer.83
This provision has excited significant comment. It has been suggested that it "open[s] Pandora's box".84
Arguably, however, the effect of excluding corporations with 100 employees or fewer might be less than expected. There are several
reasons for this:
(a) significant numbers of the employees concerned might not be employed by corporations, and therefore not caught by the WRA;85
(b) employees of State Government and State Government instrumentalities may not be covered, depending on the scope of the corporations
power in relation to the State public corporations and the effectiveness of legislation being put in place by State Governments to
"claw back" employees of State public corporations into the State Public Service proper;86
(c) a possibility that not all local government corporations are caught by the corporations power;87 and
(d) the fact that, arguably and largely anecdotally, any employees in small unincorporated businesses are likely not to be highly
unionised, and therefore, not to have previously availed themselves of the pre-Work Choices unfair dismissal laws without union support.
Ironically, it may be that this change does open a Pandora's box. Reports indicate that employees, and their lawyers, are actively
exploring common law breach of contract claims, and possible actions under the Trade Practices Act, 1974 (Cth).88
Misleading and deceptive representations in employment negotiations concerning security of employment might give rise to actions under
s 52 of the Trade Practices Act.89 A careful analysis of the implied duty of mutual trust and confidence might also give rise to some interesting actions, particularly
in relation to an employer's duty prior to termination, and the consequences of pre-termination breaches of that duty.90
Genuine Operational Reasons
An employee is prohibited from making an application alleging termination was harsh, unjust or unreasonable, "if the employee's employment
was terminated for genuine operational reasons or for reasons that include genuine operational reasons."91 Thus, an employee harshly, unjustly or unreasonably terminated, but also terminated for genuine operational reasons, cannot make an
application.
Operational reasons are defined as "reasons of an economic, technological, structural or similar nature relating to the employer's
undertaking, establishment, service or business, or to a part" thereof.92
Dire consequences were predicted as a result of the enactment of these provisions. One high profile plaintiff solicitor was quoted
as saying that "genuine operational reasons" was so broad it "could mean almost anything", and that he had "already seen some employer
lawyers advise their clients that they had rocks in their head if they didn't fire people for genuine operational reasons".93 Others were more cautious: suggesting that employer actions would be subject to "scrutiny" and that "businesses are concerned about
their reputations" and would therefore concentrate on "getting employment issues right."94 But it is the AIRC's approach to "genuine operational reasons" which has seized centre stage.
In Perry v Savills (Vic) Pty Ltd95 Watson SDP had before him an application to dismiss that part of a harsh, unreasonable or unjust termination application that fell
within the genuine operational reasons exception. The evidence disclosed that the applicant had a significant medical condition which
in time would result in her inability to work. Income protection insurance was provided as part of her terms and conditions of employment.
The employer decided to amalgamate the applicant's role with that of another employee into a single role. A business case for the
abolition of the two roles and the creation of a new role was put forward and approved by the employer. The new role was advertised.
The applicant applied. She was unsuccessful. She was terminated on 21 April 2006. She commenced proceedings in the AIRC alleging
unfair and unlawful termination of employment.
The AIRC, despite some concerns about the nature of the restructured position, came to the view that the restructuring was genuine
and reflected genuine operational reasons. The matter did not end there however. The AIRC determined that the issue raised by ss
643(8) and (9) of the WRA was not whether there were genuine operational reasons for the restructuring of the position previously occupied by Ms Perry, but
whether the restructuring resulted in a genuine operational reason for the termination of her employment. This involved a consideration
of wider issues including:
- (a) whether or not the employer had formulated or put an alternative offer of employment in proper terms of the applicant;
- (b) the likelihood of the applicant accepting any offer of alternative employment;
- (c) whether there were other positions available within the employer's operations at the applicant's remuneration level for which
the applicant was qualified;
and in light of those considerations the AIRC determined that there was no genuine operational reason for the termination of the applicant's
employment.
In Springer & Cunningham v The Northcott Society96 Cargill C followed the decision in Perry finding that the relevant termination had to be for genuine operational reasons and not merely because
of a restructure preceding the termination. In that case, the employer failed to make out the genuine operational reasons for termination.
In Trajkovska v Australian Associated Press Pty Ltd97 Raffaelli C upheld the criteria upon which the employer AAP selected a manager for redundancy, but in doing so accepted that it focussed
on whether an employee's employment was terminated for genuine operational reasons.
Lawyers familiar with this area of the law will see that the test in Perry imports many of the pre-Work Choices criteria into the assessment of whether the termination was for genuine operational reasons. Further, it might be argued that by narrowing
the focus to genuine operational reasons for termination Work Choices has made it more difficult rather than easier to terminate
where operational reasons are the basis for termination.
Finally, it is arguable that closer examination of the "genuine" qualification to the "operational reasons" criteria might result
in further restrictions on employer's ability to terminate for genuine operational reasons. That issue does not appear to me to have
been fully explored in the cases to date.
Qualifying Period
The default qualifying period for making an application has been increased to six months employment.98
REMEDIES
The primary remedy for harsh, unjust or unreasonable dismissal continues to be reinstatement.99
As was previously the case, the AIRC may order compensation if it believes that reinstatement is inappropriate. Compensation is capped
at six months pay or $32,000, whichever is lowest.100
The AIRC cannot include compensation for "shock, distress or humiliation, or other analogous hurt caused to the employee by the manner
of terminating the employee's employment"101, and must reduce the amount of compensation if employee misconduct contributed to the decision to terminate employment.102
UNLAWFUL TERMINATION
The Federal Magistrates Court now has concurrent jurisdiction with the Federal Court to hear unlawful termination claims.103
Potentially, every employee who is terminated can bring an unlawful termination application. The restrictions and exclusions applicable
to harsh, unjust or unreasonable termination claims do not apply to unlawful termination claims.
Informed comment suggests that "there will be an increase in the number of unlawful termination claims"104 which come before the Federal Court and Federal Magistrates Court. The trend seems to have already commenced: Justice Guidice, the
President of the AIRC, recently observed that "slightly more than half of all applications under Work Choices seeking relief for
termination of employment claimed unlawful dismissal – either on its own or in combination with a claim for harsh, unjust or
unfair dismissal."105
PROHIBITED REASONS
For an unlawful termination claim to succeed a dismissed employee must satisfy the Court that employment was terminated for a prohibited
reason, or for reasons that included a prohibited reason.
The prohibited reasons are:
"(a) temporary absence from work because of illness or injury within the meaning of the regulations;
(b) trade union membership or participation in trade union activities outside working hours or, with the employer's consent, during
working hours;
(c) non-membership of a trade union;
(d) seeking office as, or acting or having acted in the capacity of, a representative of employees;
(e) the filing of a complaint, or the participation in proceedings, against an employer involving alleged violation of laws or regulations
or recourse to competent administrative authorities;
(f) race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy,
religion, political opinion, national extraction or social origin;
(g) refusing to negotiate in connection with, make, sign, extend, vary or terminate an AWA;
(h) absence from work during maternity leave or other parental leave; and
(i) temporary absence from work because of the carrying out of a voluntary emergency management activity, where the absence is reasonable
having regard to all the circumstances."106
The prohibited reasons are to be construed liberally as beneficial legislation, and interpreted in accordance with the international
conventions to which they give effect.107
Aspects of some of the prohibited reasons are dealt with hereunder.
TEMPORARY ABSENCE FROM WORK
Temporary absence is defined by regulation.108
Temporary absence includes absence for which a medical certificate is supplied within 24 hours of the commencement of the absence,
or a longer period reasonable in the circumstances,109 or where an industrial instrument requires notification and substantiation of the absence by the employee and the employee has done
so,110 or where the employee has supplied a "required document" under WRA, s254.111
The foregoing provisions do not however apply if the employee's absence exceeds three months, or three months in a twelve months period,
unless the employee is on paid sick leave for the duration of the absence or absences.112
The "not easily comprehensible"113 definition of "temporary absence" in the WRReg is intended to be exhaustive.114
TRADE UNION MEMBERSHIP AND ACTIVITIES
The formal status of membership is sufficient. Membership does not include the activities that might flow from being an "active" or
"activist" member of a union.115
Trade union activities might include activities as an elected union delegate or the circulation of union petitions.116
REPRESENTATIVE OF EMPLOYEES
In Shearer the termination of the employee was found unlawful by reason of the employer's failure to prove that it did not terminate the employee
because of his activities as a representative of employees.
FILING A COMPLAINT ALLEGING VIOLATION OF LAWS
This provision requires the making of a complaint to a body external to an employer.117 The invoking of a dispute resolution procedure under an award providing for a Commissioner of an Industrial Relations Commission
to try to resolve a dispute is an example of such a complaint.118
The employer must be made aware of the complaint119
RACE, ETC
The following are some simple case examples for some of the various heads of discrimination under s 659(2)(f).
Race
In Shackley v Australian Croatian Club120 the Secretary-Manager of the Club was dismissed because she was not Croatian, despite the Club President denying telling Shackley
that she was being terminated because she was not Croatian. Moore J found that the evidence corroborated the employee's version of
events, and the Club failed to overcome the burden of proving that the termination was not for a prohibited reason.
Sex
In Stewart v Nickles121 discrimination on the basis of sex was inferred where a female motor cycle instructor's duties were diminished over time by comparison
to her male counterparts. Again the employer failed to overcome the burden of proving that the termination was not for a prohibited
reason.
Age
In Qantas Airways Ltd v Christie122 a pilot was not discriminated against on the basis of age because of a requirement that a pilot be under 60 years of age. This was
because it was held that to be able to fly to a reasonable number of the airline's overseas destinations was an inherent requirement
of the position, and many countries excluded aircraft flown by a pilot over 60 years.
Mental disability
Termination based on "psychological symptoms" is sufficient to constitute termination for mental disability.
Family Responsibilities
In Laz v Downer Group Ltd the managing director's personal assistant proved discrimination on the basis of family responsibilities where her termination related
to her inability to work back (after 5.30pm) without notice on days where her child had to be picked up from child care.
Pregnancy
In Stojanovic v The Commonwealth Club125 Moore J held that an employer had discriminated against an employee by terminating her, with notice, consequent upon confrontation
following the employee being told there would be no job for her to return to following childbirth (she was not eligible for maternity
leave). Moore J held that whilst the confrontation was a reason for termination, so was pregnancy, and discrimination on that basis
was proven.
HEARING UNLAWFUL TERMINATION APPLICATIONS
The employee does not have to prove that the termination was for a proscribed reason.126
It is a defence for an employer to prove a termination was for a reason or reasons that do not include a proscribed reason.127
Section 664 has been described as a reverse onus of proof provision.128 Taylor says it "is similar but not identical to a reverse onus of proof."129 The section allows a mere allegation by an employee to stand as sufficient proof of fact unless the employer proves otherwise.130 The provision, then s 170CQ, was described by Moore J in Laz in these terms:
"In my opinion an applicant alleging termination in contravention of s 170CK(2) will succeed in the application unless the employer
establishes a defence by proving that the alleged reason was not the reason or one of the reasons for the termination. Perhaps it
can be put in terms that though the applicant must prove on the balance of probabilities each element of the contravention, s 170CQ
enables the allegation that a reason was a proscribed reason to stand as sufficient proof of the fact unless the employer proves
otherwise: see Davids Distribution Pty Ltd v National Union of Workers (1999) 91 FCR where Wilcox and Cooper JJ refer to R v Hush; Ex parte Devanny [1932] HCA 64; (1932) 48 CLR 487 at 507. The success of the application does not depend on the Court being satisfied, other than by reference to the allegation of
the applicant, that the termination was for a proscribed reason (or one reason was a proscribed reason) if the employer fails to
make good its defence."131
It is not lawful to terminate employment for a proscribed reason where that reason "is based on the inherent requirements of the particular
position concerned".132 As to what is meant by the expressions "inherent requirements" and "particular position" see Christie133 where a requirement that a pilot be able to fly a reasonable number of the airline's overseas destinations was held to be an inherent
requirement of the position (the case involved a pilot who was required to retire on turning 60 years because many countries excluded
aircraft flown by a pilot over 60 years). It is that which is essential to the performance of a particular position that is regarded
as an inherent requirement of the position.134
REMEDIES FOR UNLAWFUL TERMINATION
If satisfied that an employer unlawfully terminated an employee the Court can make one or more of the following orders:
impose a penalty of not more than $10,000;
reinstatement;
order compensation of such amount as the Court thinks appropriate, subject to the provisions of WRA s 665(2)-(5);
any other order that the Court thinks necessary to remedy the effects of such determination;
any other consequential orders.135
The Court is restricted in the amount of compensation it can order. It may order no more than 6 months compensation for any employee,
and for non-award employees it may order no more than $32,000 for the 2006/2007 financial year (the sum increases on 1 July each,
indexed to the cost of living). The Court may not order any amount for shock, distress or humiliation or any analogous hurt.136
CONCLUSIONS
The potentially detrimental effect of Work Choices on the law relating to employee termination may have been significantly overstated.
The substantive grounds for harsh, unjust and unreasonable termination remain almost unchanged.
The substantive grounds for unlawful termination are unchanged, but claims may now also be brought in the Federal Magistrates Court.
The genuine operational reasons exclusion appears much narrower in operation than was thought to be the case. It appears to be capable
of further narrowing in its field of "genuine" operation.
The 100 or fewer employees exception might leave those employees affected within existing State unfair dismissal jurisdictions, or
possibly unregulated. If unregulated, and in any event given the general perception of the effect of Work Choices or termination of employment rights (albeit an inaccurate perception in my view), this might lead lawyers to the exploration, and
expansion, of available causes of actions and remedies, by more detailed examination of:
(a) breach of contract at common law;
(b) misleading and deceptive conduct under the Trade Practices Act; and
(c) the implied duty of mutual trust and confidence.
Employees ought not think that Work Choices casts them into a lake of fire from which there is no escape. Lawyers ought not think the sky is falling down. Rather, for many lawyers
and their employee clients, not much will have changed in terms of available termination actions. Where it has other actions, with
which "bright mischief"137 may be made, bear exploration.
Footnotes
1. The Holy Bible (King James version) ("Bible"), Matthew 3:1
2. Bible, Matthew 3: 10.
3. Bible, Revelation 20:14.
4. Work Choices is the accepted colloquialism for the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) which extensively amended the Workplace Relations Act 1996 (Cth) ("WRA").
5. A child observing might think that, like Chicken Licken, the sky is falling down. In that ancient fable a chicken called Chicken
Licken believes that the sky is falling down because an acorn falls on her head: "The Sky is Falling", en.wikipedia.org/wiki/The_Sky_is_Falling.
6. .
7. M. Fenton-Jones, "Battling with Work Choices legislation", Australian Financial Review, Special Report – Enterprise Quarterly,
31 August 2006 p.2. ("Battling Work Choices").
8. Battling Work Choices.
9. "IR changes a legal minefield, lawyer says", (PM, 5 April 2006), s1609493.htm.
10. I say "may be arguable" because I do not have a concluded view on these issues, but consider them to possibly be arguable propositions.
11. Constitution, s 51(xx).
12. For transcript of the challenge see State of New South Wales & Ors v Commonwealth (AKA Workplace Relations Challenge) [2006] HCATrans 215, 216, 217, 218, 233 and 235. For an excellent overview of the challenge see I. Taylor, "Workplace Relations and the Federal Magistrates
Court and An Overview of the Workplace Relations Case", New South Wales State Legal Conference Paper, 28 August 2006 ("Taylor, "Workplace
Relations"").
13. A "constitutional corporation" is defined to mean "a corporation to which paragraph 51(xx) of the Constitution applies." See Quickenden v O'Connor & Ors [2001] FCA 303; (2001) 109 FCR 243 at pages 254-262 per Black CJ and French J, and pages 270-273 per Carr J. See also City of Mandurah v Hull (2000) 100 IR 406 at page 414 per Anderson J ("Hull").
14. Constitution, s. 51(xx).
15. Constitution, s. 51(xxxv).
16. Constitution, s. 51(xxxix).
17. WRA, ss 5(1), 6(1) and 636.
18. Constitution, s 122.
19. Constitution, s 51(xxxvii).
20. Constitution, ss 52, 61 and 69.
21. Constitution, s 51(xxix).
22. Constitution, s 51(i). For general discussions of the relevant decisions relating to the issues discussed above see N Williams and A Gotting "The interrelationship
between the industrial power and other heads of power in Australian industrial law" (2001) 20 Aust Bar Rev 264 and A Stewart "Federal Labour Law and New Uses for the Corporations Power" (2001) 14 AJLL 145.
23. Constitution, s 51(xxix).
24. Victoria v Commonwealth (1996) 187 CLR 416 at pages 511-521 per Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ.
25. WRA, s 652(3).
26. Workplace Express, "Every second dismissal claim cites unlawful grounds: Guidice" (1 September 2006), ("Workplace Express, "Guidice"")
27. (1995) 185 CLR 410 ("Byrne").
28. Byrne at page 465 per McHugh and Gummmow JJ.
29. (1992) 36 FCR 20 ("Bostik"). See also Australia Meat Holdings Pty Ltd v McLauchlan (1998) 84 IR 1 at page 10 per Ross VP, Polites SDP and Hoffman C ("Australia Meat").
30. Bostik at FCR 28
31. WRA, s 652(3).
32. WRA, s 652(3)(a)-(g).
33. Edwards v Giudice [1999] FCA 1836; (1999) 94 FCR 561; Annetta v Ansett Australia (2000) 98 IR 233 ("Annetta"). See also R v Hunt; ex parte Sean Investmens Pty Ltd [1979] HCA 32; (1979) 180 CLR 322 (consideration of "have regard to").
34. Selvachandran v Peteron Plastics Pty Ltd ([1995] IRCA 333; 1995) 62 IR 371 at page 373 per Northrop J. Bao Vu v Victoria (2001) 110 IR 383 at page 400 per Lacy SDP ("Bao Vu").
35. MM Cables v Zammit (unreported, Full Bench AIRC, Print 38106, 17 July 2000).
36. Cosco Holdings Pty Ltd v Thu Thi Van Do [1997] FCA 1353; (1997) 79 FCR 566 at page 576 per Northrop ACJ.
37. Crozier v AIRC [2001] FCA 1031 at para [14] per Gray, Branson and Kenny JJ ("Crozier FCA").
38. Crozier FCA at para [14] per Gray, Branson and Kenny JJ
39. Erskine v Chalmers Industries Pty Ltd (unreported, Full Bench AIRC, PR 902746, 30 March 2001).
40. King v Freshmore (Vic) Pty Ltd (unreported, Full Bench AIRC, Print S2413, 17 March 2000).
41. Australia Meat at page 14 per Ross VP, Polites SDP and Hoffman C; Burke v Reander Pty Ltd (1996) 69 IR 346 at page 359 per Millane JR.
42. Crozier v Palazzo Corp Pty Ltd (2000) 98 IR 137 at page 151 per Ross VP, Acton SDP and Cribb C ("Crozier AIRC").
43. Nicholson v Heaven & Earth Gallery Pty Ltd [1994] IRCA 43; (1994) 126 ALR 233 at pages 243-244 per Wilcox CJ ("Heaven & Earth"); Pacey v Henry Walker Eltin Contracting (unreported, AIRC, Print S7072, 15 June 2000).
44. Schaale v Hoescht Australia Ltd (1993) 47 IR 249 at page 252 per Heerey J; GH Operations Pty Ltd v Smith (unreported, Full Bench AIRC, PR 904136, 14 May 2001)
45. Targo v Southern Cross Times (unreported, AIRC, Print S7983, 13 July 2000); Slann v Western Power (unreported, AIRC, Print T1965, 13 October 2000).
46. Fischer v Telstra Corp Ltd (unreported, Full Bench, AIRC, Print R2558, 1 March 1999).
47. Annetta at page 237 per Guidice J, Williams SDP and Cribb C.
48. Fastidia Pty Ltd v Goodwin (2000) 102 IR 131 at pages 141-142 per Ross VP, Williams SDP and Blair C.
49. Sawiris v BMS Entertainment Pty Ltd (unreported, AIRC, PR 951322, 27 August 2004) at para [63] per Lacy SDP (provisions speculate upon likely impact of size and resources
on an employer's business).
50. Pergaminos v Thian Pty Ltd (AIRC, PR 920123, 16 July 2002) at paras [37] and [40] per Lacy SDP, Gates v Jordan Transport Pty Ltd (unreported, AIRC, PR 936112, 19 August 2003) at para [92] per Richards C (limited resources explain perfunctory manner of termination),
Corrin v Lunchez on Highbury (unreported, AIRC, PR 925072, 25 November 2002) at para [41] per Grainger C (classic small business behaved entirely appropriately).
51. Container Terminals Australia Ltd v Toby (unreported, Full Bench AIRC, Print S8434, 24 July 2000), Rice Growers Co-op Ltd v Schliebs (unreported, Full Bench AIRC, PR908351, 31 August 2001).
52. Byrne at page 465 per McHugh and Gummow JJ, Potter v Work Cover Corporation (2004) 133 IR 458 at page 473 per Ross VP, Williams SDP (summary dismissal disproportionate to misconduct supports conclusion termination harsh despite
existence of valid reason).
53. Donaldson v NSW National Parks & Wildlife Service (1997) 74 IR 168 at pages 180-181 per Madgwick J (differential treatment does not require equality of result but consistency of treatment); Capral Aluminium Ltd v SAE (1997) 75 IR 65 at page 68 per Madgwick J. See also Portilla v BHP Billiton Iron Ore Pty Ltd (2005) 147 IR 1 at pages 24 and 35-37 per Sharkey P and Kenner C and pages 44-48 per Beech CC, Sexton v Pacific National (ACT) Pty Ltd (unreported, AIRC, Print 931440, 14 May 2003).
54. Bao Vu at pages 411-412 per Lacy SDP, Hurskin v Australian Jewish Press Pty Ltd (1996) 69 IR 123 at page 141 per Millane JR.
55. Temp Services Ltd v Klooger (2004) 136 IR 358 at page 363 per Williams and Cartwright SDPP and Larkin C (non compliance with award obligation factor to be taken into account).
56. Barclay v Nylex Corporation Pty Ltd (2000) 126 IR 294 at page 339 per Ross VP (failure to clearly articulate disciplinary policy relevant consideration).
57. Andersen v Umbakumba Community Council (1994) 56 IR 102 at page 106 per von Doussa J ("Andersen").
58. Drury v BHP Refractories Pty Ltd (1995) 62 IR 467 ("Drury").
59. Trigar v La Trobe University (unreported, Full Bench IRC Print T2860, 1 November 2000), Lloyd v Pacific Rim Employment Pty Ltd (unreported, AIRC, Print PR 912882, 4 January 2002).
60. Andersen at page 106.
61. D'Lima v Board of Management, Princess Margaret Hospital for Children [1995] IRCA 407; (1995) 64 IR 19, Kinniburgh v Printers Press Pty Ltd (unreported, AIRC, P6340, 30 October 1997), Ogilvie v Aboriginal Hostels Ltd (unreported, AIRC, Print PR9044133, 2 March 2004). Compare, however, Dadey v Edith Cowan University (1996) 70 IR 295.
62. Drury at page 472 per Wilcox CJ.
63. Unreported, AIRC, PR904665, (25 May 2001).
64. Hewitt at paragraph [24] per Lacy SDP.
65. D'Ortenzio v Telstra (1997) 78 IR 468, D'Ortenzio v Telstra (No 2) (1998) 82 IR 52.
66. McLeod v Scicluna & Associates (unreported, Industrial Relations Court of Australia, No 77 of 1997, 13 March 1997).
67. Fielder v Casual Life Furniture Co International Pty Ltd (unreported, AIRC, PR 5244 19 September 1997).
68. Tabb v Electronic Services Canberra Pty Ltd (unreported, AIRC, Print P5892, 17 October 1997).
69. Hardie v Starcon Pty Ltd (unreported, Industrial Relations Court of Australia, No 188 of 1997, 22 May 1997), Mainpoint Enterprises Pty Ltd v Henderson (unreported, Full Bench AIRC, Print Q3750, 17 July 1998).
70. Potter v Australian Capital Territory (1997) 72 IR 163 at page 173 per Moore J, Potter v Australian Capital Territory (No 2) (1997) 74 IR 403 at pages 406-407 per Wilcox, Marshall & North JJ.
71. Conroy v Leisure Australia (unreported, Industrial Relations Court of Australia, 16 November 1994), Scott v Robison (unreported, AIRC, Print P5023, 12 September
1997).
72. Thompson v Sons of Gwalia [1997] 2-997.
73. Wilkinson v Skippers Aviation Pty Ltd (unreported, Full Bench, AIRC, PR 903635, 30 April 2001) ("Skippers Aviation").
74. CFMEU v Borg Manufacturing Pty Ltd (1997) 72 IR 263.
75. Potter (No 2), (Director-General of Education v Suttling [1987] HCA 3; (1987) 162 CLR 427.
76. Heaven & Earth Gallery at page 242 per Wilcox CJ, Potter (No 2) at page 409 per Wilcox, Marshall & North JJ.
77. Heaven & Earth Gallery.
78. McLean v Kids Korner Pty Ltd (unreported, Industrial Relations Court of Australia, 21 May 1997) ("Kids Corner"), Watt v Intercultural Management Services Pty Ltd [1997] 41 AILR at 3-520.
79. Cook v Commissioner of Police (1996) 66 IR 361 ("Cook").
80. Lion v Furneys Stock Feeds Ltd (1996) 66 IR 298.
81. Gianfelici v Qantas Airways Pty Ltd (unreported, AIRC, Print N5369, 27 September 1996).
82. Cook, Kids Korner.
83. WRA, s 643(10), and see s 643(11), (12) for method of calculating whether an employer employed 100 employees or fewer at the relevant time.
84. Stephen Smith, Shadow Minister for Industry, Infrastructure and Industrial Relations quoted in Labor eHerald, 28 June 2005.
85. As many of 30% of employees in W.A. may be employed in businesses that are unincorporated: see A.R.Beech, "The Road Ahead for
the WA Industrial Relations Commission" (7 September 2006) page 3 ("Beech, "The Road Ahead").
86. In Western Australia the State Government Employees account for about 8.6% of employees in the State: Beech, "The Road Ahead",
page 3; "States Build New Ramparts Against Work Choices", (21 September 2006) announcing the introduction by the government of South Australia of legislation to move 61,000 employees of government
owned corporations out of the reach of work choices and the new ethical purchasing policy of the Victorian Government requiring suppliers
of services to the Victorian Government to comply with a no disadvantage test measured against State awards and State laws.
87. See Hull at page 414 per Anderson J, and the cases there cited: Burrows v Shire of Esperance (1998) 86 IR 75 (municipality a trading corporation), Mid Density Development Pty Ltd v Rockdale Municipal Council (1992) 39 FCR 579 (municipality not a trading corporation) and Jazabas Pty Ltd v City of Botany Bay Council [2000] NSWSC 58 (municipality not a trading corporation).
88. Cf. Smith, "Bringing Power to the People", Australian Financial Review, 29 August 2006, page 58.
89. O'Neill v Medical Benefits Fund of Australia Ltd [2002] FCAFC 188; (2002) 122 FCR 455, Macdonald v Australian Wool Innovation Ltd [2005] FCA 105, Magro v Fremantle Football Club Ltd (2005) 142 IR 445.
90. Malik v Bank of Credit and Commerce International SA [1997] UKHL 23; [1998] AC 20, State of New South Wales v Paige [2002] NSWCA 235 at para [154] per Spigelman CJ, Intico (Vic) Pty Ltd & Ors v Walmsley [2004] VSCA 90, Bednall v Wesley College [2005] WASC 101 at para [29] and paras [58]-[72] per Newnes M. See also J. Riley "Mutual Trust and Good Faith": Can Private Law Guarantee Fair Dealing in the
Workplace?" (2003) 16 AJLL 28, K. Godfrey "Contracts of Employment: Renaissance of the Implied Term of Trust and Confidence" (2003) 77 ALJ 764.
91. WRA, s 643(8).
92. WRA, s 643(9).
93. Josh Bernstein, partner, Maurice Blackburn Cashman quoted in A. Symonds, "Dismissed, not disarmed, over Work Choices", Australian
Financial Review, Special Report – Enterprise Quarterly, 31 August 2006, p.5. ("Dismissed Work Choices").
94. Russell Allen, partner, Freehills, quoted in Dismissed Work Choices.
95. Unreported, AIRC, PR973103, 20 June 2006.
96. (Unreported, AIRC, PR973840, 1 September 2006).
97. (Unreported, AIRC, PR974086, 18 September 2006).
98. WRA, s 643(7).
99. WRA, s 654(3).
100. WRA, s 654(7), (11) and (12).
101. WRA, s 654(9).
102. WRA, s 654(8)(a).
103. WRA, s 847(4).
104. Taylor, "Workplace Relations", page 6, paragraph 19; Abbott Tout Lawyers, "Employment Law E-News issue 24" (22 September 2006),
.
105. Workplace Express, "Guidice". See also F Smith, "Bringing power to the people", Australian Financial Review, 29 August 2006,
page 58: "Spanner [head of workplace relations at Deacons] says he had also witnessed a growth in discrimination claims since the
advent of Work Choices."
106. WRA, s 659(2). Taylor notes that "the prohibited reasons include matters such as race, colour, sex, sexual preference, age, physical
or mental disability and the like, the jurisdiction has a close similarity to the Federal Magistrates Court jurisdiction in relation
to unlawful discrimination under the Human Rights and Equal Opportunity Commission Act 1986… This jurisdiction is to hear and determine complaints of discrimination under the Racial Discrimination Act 1975, the Sex Discrimination Act 1984 the Disability Discrimination Act 1992 and the Age Discrimination Act 2004. Pursuant to that legislation the Federal Magistrates Court has since its inception heard and determined claims for compensation
for unlawful discrimination alleged to have occurred in respect of a termination of employment. That experience will no doubt assist
the Court in hearing unlawful discrimination claims": Taylor, "Workplace Relations" page 7, para 22.
107. Grout v Guunedah Shire Coucil (1994) 57 IR 243, Commonwelath v HREOC [2000] FCA 1854; (2000) 108 FCR 378.
108. Workplace Relations Regulations, 2006 (Cth) ("WRReg"), Ch 2 reg 12.8.
109. WRReg, Ch 2 reg 12.8(1)(a).
110. WRReg, Ch 2 reg 12.8(1)(b).
111. WRReg, Ch 2 reg 12.8(1)(c). A "required document" for these purposes means a medical certificate from a registered health practitioner, or
where it is not reasonable practicable to provide a medical certificate, a statutory declaration made by the employee: WRA, s 254(2).
112. WRReg, Ch 2 reg 12.8(2). Nikolich v Goldman Sachs JB Were Services Pty Ltd [2006] FCA 784 at para [175] per Wilcox J ("Nikolich"), agreeing with Sallehpour v Frontier Software Pty Ltd [2005] FCA 247; (2005) 139 IR 457 at page 463 per Marshall J, [2005] FCA 247 at para [45] per Marshall J ("Sallehpour") (unpaid sick leave exceeding three months precludes the prohibition). See also Crowley v Parker Hannafin (Australia) Pty Limited [2006] FCA 901 at paras [40]-[41] per Marshall J ("Crowley").
113. Nikolich at para [169] per Wilcox J.
114. Nikolich at para [169] per Wilcox J.
115. AWU v BHP Iron Ore [2001] FCA 3; (2001) 102 IR 410.
116. Shearer v Everitt [1998] FCA 55 ("Shearer").
117. He v Lewin & Ors [2004] FCAFC 161; (2004) 137 FCR 266 at page 280 per Gray and Mansfiel JJ, [2004] FCAFC 161 at para [44] per Gray and Mansfiel JJ, Crowley at para [22 per Marshall J].
118. Fox v St Barbara Mines Ltd [1998] FCA 306. For an unsuccessful application on this basis see Griffiths v Freedom Furniture [2002] FCA 595 ("Freedom Furniture").
119. Robertson v South [2000] FCA 1402.
120. (1995) 61 IR 430.
121. 1999 [FCA] 888.
122. (1998) 193 CLR 280 ("Christie")
123. Nikolich at para [193] per Wilcox J, but in that case the mental disability also constituted an inherent requirement exception: Nikolich at para [199] per Wilcox J. Similar issues arose in Sallehpour but it was not necessary to decide them because, on the evidence, Marshall J decided that the onus of disproving mental disability
had been met by the employer: Sallehpour IR at page 463 per Marshall J, FCA at para [46] per Marshall J.
124. Laz v Downer Group Ltd (2000) 108 IR 244, [2000] FCA 1390 ("Laz").
125. (unreported, Industrial Relations Court of Australia, Moore J, No AI267R of 1994, December 1995)
126. WRA, s. 664(a).
127. WRA, s 664(b).
128. Freedom Furniture at para [35] per Mansfield J.
129. Taylor, "Workplace Relations", page 12, para 43.
130. Laz.
131. Laz IR at pages 254-255 per Moore J, FCA at para [26] per Moore J.
132. WRA, s 659(3).
133. (1998) 193 CLR 280.
134. Christie at page 305 per McHugh J.
135. WRA, s 665(1)
136. WRA, s 665(2)-(5)
137. The English poet Francis Thompson wrote of another English poet Percy Bysshe Shelley, in a poem entitled "Shelley" "The universe
is his box of toys… He makes bright mischief with the moon". Lord Denning, dissenting, in his very first decision in the House
of Lords, might have made a similar expanded point: "Whatever the outcome, I hope I may say, as Holt CJ once did after he had done
much research on his own: 'I have stirred these points, which wiser heads will settle.' ": Rahimtoola v Nizam of Hyderahad [1958] AC 379 at page 424. |
