D.J. BRABYN
AUSTRALIAN INDUSTRIAL
RELATIONS COMMISSION
Workplace Relations Act 1996
s.170CE application to the Commission re: termination of employment
D.J. Brabyn
and
P.J. & H.A. Morgan Investments Pty Ltd
(U No. 80004 of 1998)
COMMISSIONER EAMES DARWIN, 10 MARCH 1998
Jurisdictional grounds.
DECISION
This matter relates to an application lodged pursuant to s.170CE(1) of the Workplace
Relations Act 1996 on 15 January 1998 by Mr D.J. Brabyn (the Applicant). A
Notice of Appearance was lodged by P.J. and H.A. Morgan Investments Pty Ltd
(the Respondent) on 21 January 1998, which contained an indication that the
Respondent objected to the Commission hearing the application on jurisdictional
grounds. The Respondent indicated it wished to be heard on this issue and
objected to conciliation before determination of the jurisdictional issues.
The grounds of objection raised by the Respondent were that:
- the employee is not covered by a federal award or agreement, and
- the employee was not covered by an award and his remuneration exceeded
$66,200 per annum.
On 18 February 1998, the matter came before the Commission as currently
constituted for a hearing of the jurisdictional questions.
Mr James, representing the Respondent, took the Commission through a brief
history of Morgan's Motors, (the Respondent's trading name) indicating that
over the past 12 months, the business had to be restructured due to lack of profits
being generated, and accordingly staff had to be reduced. The Applicant was one
of those affected. In the past, it was put by Mr James, the Applicant had
indicated he wished to retire and would consider a "package" if it
was offered to him. Ultimately he finished work on 1 December 1997, with the
date of effective termination being 31 December 1997. Originally there was some
dispute about the actual date of termination, and Mr James did raise a possible
question, that the application may have been "out of time", however
he did not press that objection.
Mr James tendered two exhibits J2 - Notice of Termination and J 3 - Computer
printout of weekly wages paid to the Respondent. He submitted, that these
exhibits clearly indicated remuneration, well in excess of the specified rate,
set out in Regulation 30BB of the Act. In addition, a motor vehicle was
supplied for the Applicants use.
Mr James also drew attention to section 13 of the Applicant's application form,
where neither a Federal or State Award box had been ticked, although some
reference was made to the "Motor Vehicles Sales Award". His
submission was, that this was evidence that no Federal Award had application to
the Applicant, in the view of the Applicant.
Mr Clift for the Applicant submitted, that the application was made within
time, as the termination document [Exhibit J2] indicated an effective
termination date of 31 December 1997, and the application was filed on 15
January 1998. He also submitted that the Motor Vehicle Sales Award did apply to
the Applicant, although he did not have a copy of the Award, to tender in the
proceedings, and he was uncertain of the scope clause contained in that Award.
He also drew my attention to s.170CB of the Act which indicated, on his
submission, that Territory employees came within the Commission's jurisdiction.
He contended, that as the Applicant was employed in the Northern Territory, and
was covered by an Award, then the specified rate had no relevance to the
question of jurisdiction.
At this point in proceedings, and with the agreement of the parties, I decided
to adjourn proceedings to allow the parties time to ascertain whether or not
the Federal Award to which reference had been made, was an Award relevant to
the proceedings. The matter was adjourned until 24 February 1998.
On 24 February 1998 the matter came on for a continuation of the hearing.
Mr Clift indicated at the outset that the Respondent had conceded to the
Applicant's submissions during discussions and research carried out over the
previous days.
The Award in question is the Automotive Services (Northern Territory)
Consolidated Award 1980 [A0188]. In addition Mr Clift tendered a document
[Exhibit C1] titled Vehicle Salesman Commission Agreement, which formed part of
the Applicant's terms and conditions of employment, and was only discovered
during the adjournment.
Following the establishment of those facts, and the concession given by the
Respondent, Mr Clift, on behalf of his client, then sought an order for costs,
by reference to s.170CJ(2) of the Act inter alia, that section reads as
follows:
170CJ(2) [Unreasonable not to discontinue or settle proceedings] If:
(a) the Commission has begun arbitrating a matter the subject of an
application under section 170CE; and
(b) the Commission is satisfied that a party to the proceeding has acted
unreasonably in failing to discontinue the matter before the Commission or to
agree to terms of settlement that could lead to the discontinuance of the
matter before the conclusion of the arbitration;
the Commission may, on an application under this section by the other party
to the proceeding, make an order for costs against the first-mentioned party.
It was put by Mr Clift, that the Commission had commenced to arbitrate a matter
which was the subject of an application pursuant to s.170CE. The argument for
jurisdiction arises from the Respondent who bears the onus. He also put, that
the particular powers being exercised by the Commission are subject to s.111(2)
of the Act which indicates that this particular matter, is for the purposes of
that section of the Act, an argument as regards an industrial dispute. He also
submitted that it was not a conciliation process, because a determination was
being sought, albeit on technical grounds, seeking to dispose of the matter
finally, after evidence is taken. s.111(1), paragraphs (a), (s) and (t) were
also sub sections within which these proceedings squarely fall, was put by Mr
Clift.
Mr Clift drew my attention to two decisions which he submitted were relevant to
his application. They were:
Re McKenzie : Ex parte Australasian Meat Industry Employee's Union High
Court of Australia Gibbs CJ, Murphy, Wilson, Deane and Dawson JJ [53 ALR 399]
Downes and Albany Printing Machinery P/L
Whelan C 12 May 1997 [Print P0862]
I have taken note of both of those decisions.
Mr Clift also put, that the Commission must be satisfied that a party acted
unreasonably in failing to discontinue the matter, after arbitration commenced.
The Respondent had alleged that the Applicant was not covered by a Federal
Award or Agreement, when a reading of the Act would have indicated that the
ground could not have applied, as the Applicant was a Territory employee by
definition and accordingly s.170CB(1)(b) had application, submitted Mr Clift.
In addition, he put that the Respondent had indicated, but it was conceded, not
pressed strongly, there was a need for the Applicant to obtain an extension of
time. It was only argued out of an abundance of caution, even though the
documentation attached to the Commissions file indicated the termination did
not take effect until 31 December 1997, and as such, the application was made
in time. The third leg of the Respondents argument according to Mr Clift was
the major reliance placed on the amount of remuneration received in the year
leading up to the termination. When one looks at Exhibit C1, the agreement,
signed by both Applicant and Respondent, one sees reference to the Award, and
so it must have been known all along that the Award had application. Under
those circumstances, Mr Clift submitted; the Applicant should not have been put
in the position of engaging legal representation, to argue the matter on his
behalf.
In response, Mr James for the Respondent, drew attention to paragraph 13 of the
application, where he stated that neither the Federal nor State Award boxes
were ticked off. Just above that, an Award is indicated, but it is a
non-existent Award. The Applicant when he became aware of the jurisdictional
hearing made no effort to make the Respondent aware of Exhibit C2, the proper
award.
Neither the Respondent, nor the Applicant were aware of Exhibit C2 up to the
time of the hearing, and in both cases if they were aware of it when the
Agreement was signed, they had both forgotten it. It was an honest mistake
submitted Mr James. Once he became aware of Exhibit C2, he took immediate
advice, and recommended to the Respondent, the engagement of counsel, which had
now occurred. That advice recommended concession, which was done immediately.
Conclusion
The Commissions power to award costs in proceedings under Part VIA, Division 3
is contained in s.170CJ of the Act, which reads:
170CJ Commission may order payment of costs
(1) If the Commission is satisfied that a person or organisation made an
application under section 170CE vexatiously or without reasonable cause, the
Commission may, on an application by the employer under this section, make an
order for costs against the person or organisation.
(2) If:
(a) the Commission has begun arbitrating a matter the subject of an
application under section 170CE; and
(b) the Commission is satisfied that a party to the proceeding has acted
unreasonably in failing to discontinue the matter before the Commission or to
agree to terms of settlement that could lead to the discontinuance of the
matter before the conclusion of the arbitration;
the Commission may, on an application under this section by the other party
to the proceeding, make an order for costs against the first-mentioned party.
(3) If:
(a) a person or organisation has made an application under section 170CE;
and
(b) the person or organisation elects, under subsection 170CFA(1), (2), (3)
or (5) to proceed to arbitration; and
(c) after the making of that election the person or organisation
discontinues the matter before the Commission; the Commission may, on an
application made under this section by the employer, make an order for costs
against the person or organisation if the Commission is satisfied that the
person or organisation has acted unreasonably in failing to discontinue the
application at an earlier time.
(4) An application for an order for costs under this section must be made
within 14 days after the determination or discontinuance of the proceedings
before the Commission arising under an application under section 170CE.
(5) A schedule of costs may be prescribed in relation to items of
expenditure likely to be incurred in respect of an application to the
Commission under section 170CE.
(6) Without limiting, by implication, the generality of the items of
expenditure for which the schedule may provide, those items may include:
(a) legal and professional costs and disbursements; and
(b) expenses arising from the representation of a party by a person or
organisation other than on a legal professional basis; and
(c) expenses of witnesses.
(7) If a schedule of costs is prescribed for the purposes of subsection (5),
then, in awarding costs under this section, the Commission:
(a) is not limited to the items of expenditure appearing in the schedule;
but
(b) if an item does appear in the schedule - must not award costs in respect
of that item at a rate of an amount in excess of the rate or amount appearing
in the schedule.
The decision of Whelan C [Print P0862] referred to earlier in this decision is
significant, and sets out clearly the Commission's powers, addresses the
question of whether or not the Commission had "begun arbitrating",
and the question of whether a party to a proceeding had acted unreasonably in
failing to discontinue the matter before the Commission. I concur with, and
adopt all of the Commissioner's reasons and conclusions, as being entirely
relevant to the application before me.
Mr Brabyn commenced employment with the Respondent in June 1988. He was
effectively terminated on 31 December 1997. His notice of termination confirms
that. His application in this matter was lodged on 15 January 1998, well within
time.
The Respondents notice of appearance lodged on 21 January 1998 indicated an
objection to the application on jurisdictional grounds related to the Applicant
not being covered by a Federal Award or Agreement, and that his remuneration
exceeded the specified rate of $66,200. The Respondent took legal advice and
pursued the objections at this hearing.
It is not satisfactory in my view to state that the terms of the agreement
which Mr Brabyn was asked to sign, which contained a specific reference to the
underpinning award, was simply forgotten about. Responsibilities lay at the
feet of both the employer and the employee, but in this case, it was the employer's
document. It was the Respondent's requirement of the employee that he sign off
on the elements contained in the Agreement. The Respondent must be aware of the
appropriate award or agreement provisions, and if for some reason he was not,
as appears so in this matter, he should have been made aware of its existence,
once legal representation was sought.
Mr Brabyn was a Territory employee clearly. He must come under the Commission's
jurisdiction pursuant to s.170CB(1)(b). The statute is clear, and should have
been understood.
Mr Brabyn sought legal advice and was represented by Mr Clift in these
proceedings. It should not have been necessary.
The explanatory memorandum of the Workplace Relations and Other Legislation
Amendment Bill 1996, states in relation to the new section 170CJ:
"This section is intended to discourage the improper use of Commission
proceedings in relation to termination of employment".
I agree with Whelan C in Downes that the procedures adopted by the
Commission in dealing with applications under section 170CE(1) have been
designed in an attempt to ensure that the Commission meets the objective of
section 170CA(2) to accord both the employer and the employee concerned a
"fair go all round".
The Respondent in these proceedings had, in my view, an adequate opportunity to
examine the Applicants terms and conditions of employment. He had an
opportunity once the application came to his attention, to peruse the
provisions of the Act applicable to this application, and seek advice, which he
did. If he wished to pursue an objection on jurisdictional grounds, which he
did, the onus was on him to be sure of his objection. As it transpired, his
advice was incorrect, and there were no grounds at all for an objection. In
addition, having lodged the objections he also indicated he wished to be heard
on his objections, before conciliation could take place. Had he proceeded to a
conciliation conference in the first instance it may have resolved the matter,
or at least clarified the employee/employer relationship, and whether or not an
appropriate award applied. He chose not too, and now suffers as a result.
I am therefore of the view that the Respondent being a party to the proceedings
has acted unreasonably and without reasonable cause in pressing his objection
to the application, and failing to discontinue the matter before the Commission
on jurisdictional grounds, in matters listed to be determined by the
Commission.
Consistent with the views expressed Imogen Pty Ltd v Sangwin
(SA95/1161R, unreported decision of Wilcox CJ, Ryan and Madgwick JJ), the
Applicant in my view is entitled to recover costs associated with preparing to
defend the application from exclusion, under the provisions of section 170CC.
The Court stated that the words "vexatiously" and "without
reasonable cause" represented two tests. They defined "without
reasonable cause" in terms of the following test:
"Whether, upon the facts apparent to the Applicant at the time of
instituting the proceedings, there was no substantial prospect of success."
In this case, one must substitute the word "Respondent" for the word
"Applicant" when one applies this test. The Court's test dooms the
Respondent in my view.
The Respondents objections are dismissed and the Application for costs is
granted. Accordingly, the Applicant will prepare an estimate of costs which
will be submitted to another member of the Commission for settlement. The
Respondent will be given the opportunity to object to the costs determined by
the Commission before any order is issued.
BY THE COMMISSION:
COMMISSIONER
Appearances:
G. Clift solicitor for the applicant.
P. Morgan the respondent with G. James solicitor for the
respondent.
Hearing details:
1998.
Darwin:
February 18, 24.
http://www.osiris.gov.au/html/decisions/98/MISC-98/1/IA008140.htm
Prepared by Bob Dalrymple, PO Box 122, Dapto, NSW Australia 2350
eMail: bob@relativelyyours.com