WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES AWI ADMINISTRATION SERVICES PTY LTD

APPELLANT/RESPONDENT

 -v-

 ANDREW BIRNIE

RESPONDENT/APPELLANT

CORAM FULL BENCH

  HIS HONOUR THE PRESIDENT P J SHARKEY

  CHIEF COMMISSIONER W S COLEMAN

  COMMISSIONER J H SMITH

DELIVERED FRIDAY, 26 OCTOBER 2001

FILE NO/S FBA 22 OF 2001, FBA 23 of 2001, FBA 24 of 2001

CITATION NO. 2001 WAIRC 04015

_______________________________________________________________________________

Decision  Appeal No FBA 22 of 2001 dismissed.  Appeals Nos FBA 23 of 2001 and FBA 24 of 2001 upheld in part and the decision at first instance varied.

Appearances

AWI Administration  Mr R L Le Miere (of Queens Counsel), by leave, and with him

Services Pty Ltd   Mr D Howlett (of Counsel), by leave 

Mr A Birnie   Mr S P Kemp (of Counsel), by leave 

_______________________________________________________________________________

Reasons for Decision

THE PRESIDENT:

1                 These are three appeals, all brought pursuant to s.49 of the Industrial Relations Act 1979 (as amended).  They were all heard together, by direction of the Full Bench.

2                 The decision appealed against is contained in an order made on 20 April 2001.  That order, formal parts omitted, reads as follows:-

  “(A) DECLARES

   (1) That the dismissal of Andrew Birnie was harsh and unfair; and

   (2) That reinstatement is impracticable.

  (B) ORDERS THAT:

   (1) A.W.I. Administration Services Pty Ltd pay, within 7 days of the date of this Order, Andrew Birnie a sum equivalent to eight weeks’ salary by way of a further redundancy payment; and

   (2) A.W.I. Administration Services Pty Ltd pay, within 7 days of the date of this Order, the sum of $5,000.00 by way of compensation for the injury caused by the dismissal.

  (C) (1) DECLARES THAT Andrew Birnie has not been allowed by A.W.I. Administration Services Pty Ltd a benefit to which he is entitled under his contract of service, that is that A.W.I. Administration Services Pty Ltd will at its cost relocate him, his family and reasonable effects to Melbourne.

   (2) ORDERS THAT this claim be re-listed for further hearing as to the Order to issue.

  (D) ORDERS THAT the application otherwise be dismissed.”

3                 The order was made upon the hearing of consolidated applications numbered 1198 and 1457 of 2000.

APPEAL FBA 22 OF 2001

4                 The first appeal, No FBA 22 of 2001, is an appeal by AWI Administration Services Pty Ltd (hereinafter referred to as “AWI”) against the decision of the Commission, constituted by a single Commissioner, given on 20 April 2001 in matters numbered 1198 of 2000 and 1457 of 2000.

Grounds of Appeal FBA 22 of 2001

5                 AWI appeals on the following grounds, as amended:-

  “Relocation

  The Commissioner:

  1. Erred in deciding that the terms of the Individual Employment Agreement, with the exception of the fixed term, did not govern the applicant’s employment after 1 March 1997.

  2. Erred in not identifying all the terms of the applicant’s contract of employment.

  3. Erred in not reaching a conclusion about or alternatively not identifying, from the exhibits, or the evidence, the precise terms of the benefits, pertaining to relocation, that the applicant had been denied.

  4. Erred in not deciding that the applicant had agreed to be bound by the respondent’s policies, as determined by the respondent from time to time, by signing the Individual Employment Agreement.

  5. Erred in not deciding that the respondent’s policy in relation to relocation had been replaced or modified and provided different benefits than those referred to in declaration (C)(1) of the Commissioner’s decision, and that the respondent’s policy, at the time of the applicant’s termination was as contained at page 66 and 67 of Exhibit 1.

  6. Erred in deciding that  the document dated 29 June 1995, contained in Exhibit 1, bound the respondent, contractually, when the Individual Employment Agreement, that was valid between 1 March 1994 and 1 March 1997, was an entire agreement.

  7. Erred deciding that the applicant was entitled to be relocated or returned to Melbourne on the terms contained at page 21 of Exhibit 1.

  8. In reaching the decision in paragraph 7, the learned Commissioner used the wrong test for determining the benefit to which the applicant was entitled.  He decided on the basis of fairness and not a judicial approach to ascertaining the entitlements.

  9. Erred in deciding that paragraphs 1 to 5 of the document at page 21 of Exhibit 1 applied to the applicant on his return to Melbourne to the extent that it did to his relocation to Perth when the document does not create that entitlement.

  10. Erred in deciding that the respondent unilaterally changed the applicant’s entitlements under his contract of employment in relation to relocation.

  11. Erred in ascertaining the applicant’s benefit to relocation by amending the entitlement.

  12. Erred in deciding that he had jurisdiction to hear and deal with the application when the Individual Employment Agreement contained a governing law provision that provided that “This Agreement shall be interpreted in accordance with the laws of Victoria and the Parties submit to the jurisdiction of the Courts of Victoria”.

  13. Erred in deciding that it was common ground that the applicant’s written contract of employment expired according to its terms when that was a question of law.

  14. Erred in deciding that there was no warrant to find that the terms of the written contract of employment continued in force when there was evidence to decide otherwise.

  15. Erred in deciding that the terms of the written contract of employment ceased to apply by the effluxion of time when there was either no evidence to support this or it was contrary to the evidence.

  16. Erred in not deciding that most of the terms of the written contract of employment continued in force with the exception of the fixed term itself.

  Redundancy Payment

  The Commissioner:

  17. Erred in deciding that it was unfair for the respondent not to have given the applicant a further 8 weeks pay for severance when he decided that the applicant had no contractual entitlement to a severance payment at all.

  18. Erred in deciding that the applicant had lost a fair redundancy payment when the applicant had no entitlement to any redundancy payment.

  19. Erred in not deciding that the respondent’s policy was to apply the provisions of the Federal Termination Change and Redundancy provisions - and that that policy was applied to the applicant on termination.

  Injury

  The Commissioner:

  20. Erred in not deciding that, to the extent that there was any injury, which is denied, any such injury resulted from the fact of the redundancy and not from any unfair dismissal.

  21. Erred in not having any evidence or sufficient evidence to be able to assess the applicant’s compensation for injury at the sum of $5,000.00.

  Unfairness

  The Commissioner:

  22. Erred in deciding that the respondent had breached an implied term based on section 41 of the Minimum Conditions of Employment Act 1993 by not having discussions with the applicant about the likely effects of the redundancy and the measures that may be taken to avoid or minimise the consequences, when page 112 of Exhibit 1 and the evidence demonstrated that the respondent gave the applicant the ability to raise any other issues but he declined to do so.

  23. Erred in deciding that the applicant’s dismissal was harsh in the “circumstances whereby the respondent created a situation where Birnie believed he would be offered a promotion only then to dismiss him”, especially when the Commissioner failed to have regard to the evidence of the applicant that neither Mr Gutnik nor Mr Lee advised the applicant that he was being considered for a promotion.

  24. Erred in not deciding that the respondents attempts to look for other options for the applicant constituted fair attempts to mitigate the effects of the redundancy on him.

  Orders Sought

  That the appeal be upheld and the decision and Order of Commissioner Beech be quashed.

  Alternatively, that the appeal be upheld and the decision and Order of Commissioner Beech be quashed and the matters remitted to the Commission to be dealt with in accordance with law.”

APPEAL NO FBA 23 OF 2001

6                 Appeal No FBA 23 of 2001 is an appeal by Mr Andrew Birnie against the decision, insofar as it relates to matter No 1457 of 2000.

Grounds of Appeal FBA 23 of 2001

7                 The grounds of such appeal are as follows:-

  “The appellant appeals against the whole of the decision of the Commission, constituted by Commissioner A R Beech given on 20 April 2001 in matter number 1457 of 2000 on the grounds that, having found that there was an implied term in the appellant’s contract of employment entitling him to reasonable notice, the learned Commissioner:

  1. Erred in finding that there were two claims for the payment of reasonable notice;

  2. Erred by failing to apply the tests identified in paragraph 73 and thereby erred in failing to make a finding of the length of notice to which the appellant was entitled under the implied term of reasonable notice in the contract;

  3. Erred in failing, once he had determined that length of notice, to determine whether the respondent had denied the appellant a benefit of his contract by not giving the requisite notice;

  4. Erred in finding that the factors for determining what constitutes reasonable notice overlap with the considerations involved in deciding whether a particular redundancy payment is appropriate and, by implication, that an amount paid in lieu of reasonable notice compensates an employee for the same matters as a reasonable redundancy payment;

  5. Erred in taking the appellant’s entitlement to reasonable severance pay into account in considering what amounted to reasonable notice;

  6. Erred in finding that the period of notice given to the appellant was not unreasonable in all the circumstances; and

  7. Erred, in consequence, in finding that the respondent had not denied the appellant a benefit under his contract.

  Orders sought

  That the appeal be upheld and the Order of Commissioner Beech be quashed to the extent that it deals with matter number 1457 of 2000.

  That an Order issue in the following terms:

  (A) DECLARING:

  1. The appellant was entitled to 12 months notice by way of reasonable notice of termination of his contract of employment; and

  2. The appellant was denied that benefit upon termination of his contract of employment by the respondent.

  (B) ORDERING the respondent pay, within 7 days of the date of the date (sic) of this Order, a sum equal to 48 weeks salary calculated at the full rate of remuneration of $125,846.00 per annum.

  Alternatively, that the matter be referred to the Commission to be dealt with in accordance with law.”

APPEAL NO FBA 24 OF 2001

8                 Appeal No FBA 24 of 2001 is an appeal by Mr Birnie against the same decision, insofar as it relates to application No 1198 of 2000.

Grounds of Appeal No FBA 24 of 2001

9                 This appeal is made on the following grounds, as amended:-

  “The appellant appeals against the following parts of the decision of the Commission, constituted by Commissioner A R Beech, given on 20 April 2001 in matter number 1198 of 2000 on the following grounds:

  1. Whether appellant should have been retained in preference to another employee (paragraphs 9 to 11)

  The Commissioner:

   (a) Erred in finding that experience in native title was a relevant factor in the selection of the appellant for dismissal;

   (b) Erred in finding that there was no evidence that the appellant had the requisite native title experience when the respondent’s witness conceded that the appellant had adequate experience to perform the tasks required in the remaining position;

   (c) Erred by failing to give any or sufficient weight to the evidence of the respondent’s witness that the appellant had adequate experience to perform the functions of the remaining position;

   (d) Erred by failing to give any or sufficient weight to the appellant’s greater length of service;

   (e) Erred in finding that the appellant had not demonstrated that he should have been retained in preference to the other employee;

   (f) Erred in finding that the possibility that the dismissal of the other employee would have the appearance of being unfair was a relevant factor; and

   (g) Erred in not finding that the appellant’s dismissal was not unfair on this ground.

  3. Payment in lieu of notice (paragraphs 46 to 49)

  The Commissioner:

   (a) Erred in finding that there was a term in the appellant’s contract of employment that the contract could be terminated by payment in lieu of notice;

   (b) Erred in failing to find that the appellant was entitled to be given proper notice and to use of the motor vehicle during the period of notice;

   (c) Erred in failing to find that the appellant was denied a contractual benefit when he was not allowed to use the vehicle during the period of notice; and

   (d) Alternatively, erred in failing to find an implied term in the appellant’s contract of employment entitling the appellant to be paid out in lieu of notice at the rate of his full remuneration package.

  Orders sought

  That the appeal be allowed.

  That Orders B(1) and (D) of the Order of Commissioner Beech be quashed and the matter be referred to the Commission to be dealt with in accordance with law.”

 Ground 2 was withdrawn by Mr Kemp on behalf of Mr Birnie at the hearing of the appeals.

Reasons for Decision

10              The reasons for decision are contained in one set of reasons which relates to both applications.

THE APPLICATIONS

11              By application No 1198 of 2000, Mr Birnie claimed that he was harshly, oppressively or unfairly dismissed.  He claimed compensation equal to a reasonable redundancy payment and payment of $15,000.00 for injury arising out of the dismissal.  He also claimed, as a denied contractual benefit, payment of $8,325.00, representing a shortfall calculated by him as the difference between the payments made to him upon termination calculated on his base rate of salary and a recalculation based upon his total remuneration package.  He also claimed payment of $25,000.00 in lieu of 10.4 weeks’ long service leave under AWI’s long service leave policy.  In addition, he claimed payment of all amounts which might become payable upon his relocation to Melbourne, in accordance with the terms of a relocation agreed between him and AWI when he was located from Melbourne to Perth in 1995.

12              Application No 1457 of 2000 was a claim for denied contractual benefit by the abovenamed appellant, the benefit alleged to have been denied being payment in lieu of reasonable notice upon termination.

BACKGROUND

13              There was evidence before the Commission at first instance from Mr Birnie and for AWI from Mr Peter James Lee, the Company Secretary of Astro Mining NL (hereinafter referred to as “Astro Mining”), AWI and certain other companies.  An important figure who did not give evidence was Mr Joseph Gutnick, the Chairman of Directors of both AWI and Astro Mining, as I understood the evidence.  There was also an amount of documentary evidence.

14              Mr Birnie was an employee of AWI, commencing employment in March 1992, and his employment was terminated on 14 July 2000.  From 1997 onwards, he was employed as the Regional Exploration Manager for AWI, being, by profession, a Geologist specialising, in his employment by AWI, in diamond exploration.  Astro Mining is and was, at the material times, only an exploration company, exploring for diamonds.  AWI employs geologists and provides them to Astro Mining projects covered under service agreements, and it was on Astro Mining projects that Mr Birnie was working whilst he was in AWI’s employment.

The Individual Employment Agreement - 1994

15              Mr Birnie entered into a written employment agreement signed by him and on behalf of AWI on 7 April 1994.  The agreement was referred to in evidence as an Individual Employment Agreement (hereinafter referred to as the “IEA”) and was entered into whilst Mr Birnie was in Victoria (see pages 47-63 of the appeal book for FBA 22 of 2001 (hereinafter referred to as “AB”)).

16              The IEA was a fixed term written agreement for a period of 3 years which purported to operate from 1 March 1994.

17              Mr Birnie’s job title, as identified in the IEA, was “Manager Nabberu Diamond Exploration”, which was not the position which he occupied in this State.  The IEA recognised the commencement of his employment, for the purposes of annual leave, long service leave and similar benefits, as 26 March 1992 and prescribed his remuneration and leave entitlements, inter alia.

18              By Clause 16 of the  IEA, there are prescribed the public holidays which the employee is entitled to take without deduction in pay.

19              Clause 17 of the IEA deals, inter alia, with relocation and, significantly, permits transfer of employees, requiring employers to pay reasonable relocation expenses, and reads as follows:-

  “17. PLACE OF WORK

   i) The Employee may be employed at any of the establishments of the Employer.  The Employee will be deemed to have as a place of work those establishments and the registered place of business of the Employer.

   ii) If the Employer requires the Employee to transfer interstate, the Employer shall pay for reasonable relocation costs.”

20              Clause 19 of the IEA binds employees to the policies, procedures and instructions of the employer in the following terms:-

  “19. POLICIES, PROCEDURES AND INSTRUCTIONS

   i) Policies, procedures and instructions exist for the effective and safe operation of the Employer’s business and the welfare and interests of Employees.

   ii) The Employee is expected to comply with all policies, procedures and instructions which are applicable to their work area and responsibilities.  When required during the term of this Agreement, the Employer shall exercise its right to replace or modify existing policies, procedures or instructions or introduce new ones with which the Employee will be required to comply.

   iii) A transgression of a policy, procedure or instruction may render the Employee liable to disciplinary action or termination.

   iv) Information about particular policies, procedures and instructions will normally be provided in circulars, on notice boards and otherwise brought to the attention of Employees required to observe them.”

21              Mr Birnie admitted in evidence that he was aware from the IEA  that  the employer could, in accordance with Clause 19(ii), exercise its right to replace or modify any existing policies, procedures or instructions, or introduce new ones and that he had agreed to comply with them if he had been made aware of them (see pages 133-134 of the transcript at first instance (hereinafter referred to as “TFI”)).  The clause, on a fair reading, gives the right to the employer to replace or modify existing policies or instructions or to introduce new ones.  (It gives no right to unilaterally vary terms and conditions of employment.)

22              Clause 28 of the IEA makes provision for the termination of the agreement and no period of notice on either side is prescribed.

23              Clause 33 of the IEA provides that the law of Victoria and the jurisdiction of the Courts of Victoria be applied to the agreement and its interpretation.

24              Clause 34 of the IEA provides that the written agreement, the IEA, is an entire contract containing all of its terms.

Relocation to Perth 1995

25              In 1995, Mr Birnie had been “relocated” (sic) with his family from Melbourne to Perth.  When Mr Birnie moved, he and his wife had three young children and his wife was working as a cardiac technician in Melbourne at one of the clinics.  She had to give up her work when they moved.

26              Mr Birnie forwarded a memorandum as to relocation expenses dated 26 April 1995 to Mr Neal Stewart, General Manager, Human Resources, of AWI (see page 64(AB)).  By a memorandum dated 29 June 1995, Mr Stewart approved a set of relocation terms which, formal parts omitted, reads as follows:-

  “1. Relocation Allowance

   An allowance of one (1) months salary to offset the incidental costs associated with relocation.

  2. Travel

   2.1 One transfer economy class travel for the family to Perth from Melbourne.

   2.2 On completion of each twelve (12) months service return economy class fares for the family to Melbourne.

  3. Removal of Personnel (sic) Effects

   Cost of removal of a reasonable amount of effects plus one vehicle from Melbourne to Perth.  Insurance in transit is also covered by us.

  4. Selling and Buying Residence

   We will carry the costs associated with the sale and purchase of your home.  These include advertising, fees, stamp duty, commissions and the like.

  5. Temporary Accommodation

   Th (sic) cost of providing temporary suitable accommodation for a period of up to four (4) weeks while you locate permanent accommodation.

  6. Redundancy Provisions

   Should your position be made redundant at any time we will at our cost relocate you, your family and reasonable effects to Melbourne.”

 (See pages 65-66(AB).)

27              By that memorandum, the AWI undertook, inter alia, to pay reasonable costs of relocation in the case of a redundancy, which took the employer’s obligations beyond the existing obligation in the IEA to pay for reasonable relocation costs.  The employer undertook a specific obligation, in the case of Mr Birnie, to pay the costs of relocating him and his family and reasonable effects to Melbourne.  The word “relocate”, in the context of the memorandum, obviously meant the payment of the expenses referred to in that memorandum.  The evidence was that Mr Birnie accepted this memorandum.  This was, as far as Mr Lee, the Company Secretary, was aware, the only memorandum dealing with Mr Birnie’s relocation from Melbourne to Perth.

The Contract of Employment after the Transfer to Perth

28              There is no provision in the IEA for the IEA to still have effect after its termination.

29              As to the contract itself, nothing was said when Mr Birnie moved to Perth and, since he was now employed in Western Australia, he was now entitled to the Western Australian public holidays.  That was the evidence.  His posting to Perth was as second in charge to Mr Stefan Myer, the Exploration Manager, a new position.  Nothing happened at the end of February 1997 when his formal contract of employment (the IEA) expired.  He heard nothing further from the company and raised nothing with the company about his terms and conditions of employment.  It had been explained to Mr Birnie, he acknowledged, that this was a fixed term contract and his belief was that everything in that applied for that fixed term and he reverted to whatever conditions applied to before that.  According to Mr Lee, the same terms and conditions as were contained in the IEA would have operated after its expiry.

30              After 1997, when the company had had a number of redundancies, Mr Birnie took on responsibility for a number of other contracts which had been acquired and, at about that time, Mr Myer changed Mr Birnie’s title to that of “Regional Exploration Manager” because he was looking after virtually all of the exploration projects in Western Australia.  This was not the position which he occupied in Victoria, quite clearly.  It was a new one.

The Dismissal

31              Mr Birnie’s employment was terminated, it was said, for redundancy.  AWI stated that it had restructured its organisation and that, as a result, Mr Birnie’s position became redundant.  He was paid four weeks’ pay in lieu of notice and a further eight weeks’ pay by way of severance.  The payments made to him were calculated on his salary of $100,000.00 per annum.

32              In the early part of 2000, the AWI and Astro group of companies was requested to put together budgets for exploration for the coming year.  (Mr Birnie was manager of a number of projects in various places including India, the Northern Territory and what remained in Western Australia and submitted their budget to Mr Myer.)  In due course, Mr Myer advised him that what they requested had not been accepted; Mr Myer told Mr Birnie that Mr Gutnick was still very interested in India and still wanted to pursue the Northern Territory; but Western Australia was an area in which Mr Gutnick thought they had spent long enough looking at.  Mr Myer told Mr Birnie that he did not have to worry about the future because exploration was going to continue on in those areas and, as far as work in Western Australia was concerned, Mr Birnie would probably take on some responsibility for the Bow River project in the north of this State.

33              On 28 June 2000, the staff in the Perth office were informed that Mr Gutnick was going to be visiting the office to go through the progress of the various projects which they had been working on and that they should have the relevant information ready.  Mr Gutnick did not turn up until late and a number of employees had left by that time, but some remained behind, including Mr Myer and Mr Birnie.

34              After a meeting which Mr Gutnick had with Mr Myer, Mr Gutnick came out and spoke to Mr Birnie and said:-

  “I’m sorry I’m late.  I’ve been held up.  I can’t speak to you fully now, but I wanted to discuss elevating your profile within the company.  I’ll be back next Wednesday and will speak about it to you then.”

 (See page 25 (TFI).)

35              Mr Birnie took this to mean that he would have an added role within the company.

36              The next week, on 5 July 2000, Mr Lee telephoned Mr Birnie from a conference room and asked him to come and speak to him.  That was at about 11.00 am.  Mr Lee told him that Mr Gutnick wished to see Mr Birnie that afternoon, but that he, Mr Lee, wanted to inform him what the discussion would be about.  Mr Lee said that Mr Myer was being asked to retire and that Mr Birnie would be taking on his responsibilities.  Mr Lee said :-

  “Do you have any problem with this?”

 (See page 26 (TFI).)

37              Mr Birnie said that he would be willing to undertake the new responsibilities.  Mr Lee asked how long the hand over period would be between when Mr Myer left and Mr Birnie took over.  Mr Birnie told Mr Lee that, basically, he was aware of the status of all of the projects.  However, Mr Birnie said, there were some legal aspects regarding Bow River and Native Title with which he was not familiar.  Mr Lee told him that this would not be an issue and that the lawyers in the Melbourne office could update him on that.  Mr Lee then said that Mr Gutnick would see him, Mr Birnie, that afternoon.

38              Mr Lee said in evidence that he made it clear that this proposal was subject to the final decision of the Chairman.  He said that he discussed the possibility of a wider role for Mr Birnie with him, but made no mention of his taking the position of Mr Myer as Exploration Manager (see page 57(TFI)).  The evidence of both witnesses, however, referred to increased responsibilities or a wider role for Mr Birnie.

39              Mr Gutnick left the office that afternoon at about 4.00 pm.  He said nothing to Mr Birnie, but smiled and left.  Mr Birnie was still happy with what he believed was going to occur.

40              Mr Lee affirmed in evidence  that the ability to develop the Northern Territory tenements was subject to Native Title clearance which had not yet been obtained (see page 98(TFI)).  Thus, the only active project which Astro Mining was going to continue with was Bow River.  At Bow River, there was a geologist in the position, Mr Grant Boxer, and he had occupied that position for eighteen months.  He also had experience with Native Title matters.  That was as at 5 July 2000.  There had also been discussion about Mr Myer leaving, but Mr Lee said that he was unable to remember whether a formal decision had been taken.

41              The next day, 6 July 2000, Mr Birnie was asked to come and speak to Mr Lee.  Ms Delwyn Spence, AWI’s Human Resources person in Western Australia, called him in and she was present.  Mr Lee made a note of the discussions (see page 155(AB)).

42              Mr Lee’s first words were “Unfortunately, things have changed since yesterday.”  He told Mr Birnie that he was being made redundant and that Mr Gutnick was not going to fund exploration, and that all they were going to fund was the Bow River project.  Therefore, Mr Lee said, there was no place for him.  Mr Lee said that, at this time, Astro’s cash position was deteriorating and it had about $120,000 in the bank.  The slump applied to all of the client companies of AWI, he said.

43              Mr Birnie was shocked because he had walked in there thinking that he was being confirmed as a sort of Exploration Manager of Astro Mining, and now he was told that he was to be made redundant.  He was devastated.  He immediately started thinking “Well, you know, where does that leave me?  I can’t get a job.  It will be very difficult,  I have specialised in diamond exploration.” (see page 28(TFI)).  He knew that the industry was in a slump.  He asked Mr Lee how things had changed from yesterday and Mr Lee informed him that Mr Gutnick had changed his mind.

44              Mr Lee said that Mr Birnie was very upset.  Mr Lee said that he, too, was very upset, having known Mr Birnie since 1992.

45              Mr Lee told Mr Birnie that the exploration industry was tough and that things were tight.  Based on his knowledge of Astro Mining’s position, Mr Birnie was unaware that it had little or no budget for further activities, he said.  He became aware of this when he was made redundant, he said.  The industry, Mr Birnie admitted, however, was in a slump.  Mr Lee told Mr Birnie that they had to concentrate on what they believed were the best areas and that Mr Boxer would be looking after Bow River.

46              As Mr Lee put it, the decision was made that Mr Boxer was the Project Manager and geologist at Bow River and that he was the best person for the job, given his experience.  Then, the next step was to consider Mr Birnie’s position and make a decision.  They considered whether they had work for Mr Birnie in other projects which AWI were managing on behalf of its other client companies.  They were considered and there were no opportunities for Mr Birnie with them (see pages 56-57 (TFI)).

47              Mr Lee said in evidence that they had given up a number of projects, including projects in China and India.  They were then left with one project, the Bow River Diamond Project, and some tenements in the Northern Territory which were awaiting Native Title clearance before they could do any work.  With only one project to be proceeded with, there were then staff “excess to requirements” (see page 56 (TFI)).

48              Mr Birnie told Mr Lee that he had equal the amount of experience which Mr Boxer had in alluvial diamond exploration and more recent experience, as well as knowledge of other projects.

49              In cross-examination, Mr Birnie admitted that Mr Boxer was in the position at Bow River, and had been for eighteen months.  Mr Boxer’s position, Mr Lee said, was not being made redundant.  Mr Birnie in evidence said that terminating Mr Boxer’s position would have appeared unfair.  He disagreed, however, with the decision not to make Mr Boxer’s position redundant.  The decision to make Mr Birnie’s position redundant had only been reached on 5 July 2000.  Mr Birnie, in evidence, disputed that there was no work for him.

50              Mr Lee gave Mr Birnie a letter on 6 July 2000 (see page 97(AB)).  He was paid until 14 July 2000 and paid, too, four weeks’ pay in lieu of notice.  In addition, he was paid eight weeks’ severance pay as a reasonable payment, as the payment was termed.

51              On Monday, 10 July 2000, Mr Birnie rang Mr Lee in Melbourne and told him that the redundancy package which was offered to him was inadequate and because of that inadequacy, he would probably have to sell his house.  He said that his wife would not be able to support them so they would have to return to Melbourne.  He said that he had been involved in diamond exploration with the company for the last eight years and it was highly unlikely that he could obtain employment in Western Australia.

52              Mr Birnie asked Ms Spence about his long service leave.  She told him that he was not entitled to long service leave and that all he was entitled to was four weeks’ notice and two weeks’ salary for every year of service, capped at eight weeks.  He asked her for a copy of the relocation agreement and she told him that he would have to get that from Melbourne.

53              Mr Lee admitted in evidence that it was accepted practice that AWI paid a redundancy payment.  There is and was, at the material time, no written redundancy policy (see page 86(TFI)), particularly none specifying quantum to be paid for severance pay.

54              The next day, Mr Birnie telephoned Mr Lee to discuss the relocation policy because he knew that the policy offered more than what he had been paid or was entitled to when he was transferred from Melbourne to Perth.  He was told that Mr Lee was too busy and would ring back, which he did not do.  Mr Birnie telephoned Mr Lee again, but was told that he was on the phone and could not speak to Mr Birnie.  Mr Birnie then e-mailed Mr Lee, asking him to forward a copy of the relocation policy (see page 101(AB)).  There was no response.  Mr Birnie then searched through the computer network and found a relocation policy and that confirmed the policy as he understood it to be (see pages 103-105(AB)).

55              Mr Lee said that that policy was an old version of the relocation conditions for employees which had since been updated.  Mr Lee admitted in evidence that the document at pages 111 to 113(AB) was a copy of the policy current at the time of Mr Birnie’s redundancy for interstate relocation.  It was, he said, the policy as it existed in mid to late 1999 which had caps on the sale value and purchase value of property (see page 90(TFI)).

56              Mr Birnie e-mailed Mr Lee a further two times and received no response (see pages 102 and 106 (AB)).  He then prepared and forwarded a facsimile communication outlining what the cost of his relocating to Melbourne would be and forwarded that on to Mr Lee (see page 107(AB)).

57              On 14 July 2000, Ms Spence came to Mr Birnie, according to his evidence, and handed to him probably the same document which he had been given on the day when he was made redundant.  She also gave him a cheque for the amount outlined in it.  He reiterated to her that, for a senior employee who had been with the company for 8 years, the redundancy payment being offered was below industry standard and inadequate.  He had, at this time, received no reply from Mr Lee informing him what his relocation conditions were.  Ms Spence said that Mr Lee was working out the terms of Mr Birnie’s relocation.

58              Mr Birnie faxed Mr Lee and reminded him that he was at least entitled to those conditions which he had signed with Mr Stewart when he had been transferred from Melbourne to Perth (see page 108(AB)).  There was no response and he heard nothing more from Mr Lee until 18 July 2000, when Mr Birnie received an e-mail at home with a document attached to it outlining what AWI were offering as a relocation package from Perth to Melbourne.  The letter acknowledged that, when Mr Birnie was originally transferred to Perth in 1995, AWI indicated that they would pay his reasonable expenses.  Mr Lee advised in his memorandum of 18 July 2000 that Mr Birnie was entitled to the following:-

  “1. Economy class airfares from Perth to Melbourne for your family.

  2. Reasonable costs of relocating your family and motor vehicle.  Please obtain quotes and send them to me for review prior to me providing any formal authorisation.

  3. Reasonable expenses in selling your property in Perth.  Please note that there is a cap on these costs equivalent to the costs incurred in selling a property to the value of $300,000.  Please advise me of the estimate of these costs.  The amount will be reimbursed on production of receipts.

  4. Reasonable costs of purchasing a property in Melbourne.  Please note that there is a cap on these costs equivalent to the purchase of a house to the value of $300,000.  Please advise me of the estimate of these costs.  The amount will be reimbursed on production of receipts.

  5. Reasonable storage of personal effects in Melbourne for a period of up to 3 months.

  6. Accommodation for two nights in Perth prior to your departure.

  7. Accommodation in Melbourne for 2 weeks in a company approved serviced unit.

  8. A relocation payment to cover incidental costs of $2,000 for yourself, $2,000 for your partner, $1,000 for each dependent school age child and $500 for each dependent sub-school aged child.  This relocation payment is subject to PAYG deductions in accordance with current taxation laws.  The after tax amount will be paid to you.

  9. The reimbursement of relocation costs is only available if relocation to Melbourne occurs prior to 14 October 2000.”

 (See pages 109-110(AB).)

59              Mr Lee said in cross-examination that he accepted that Mr Birnie was entitled to a relocation benefit.  If it was not a contractual, it was a moral obligation, he said.  According to Mr Lee, except for the “cut off date”, the letter of 18 July 2000 reflected the policy (see page 91(TFI)).  Mr Lee said that he read “the guidelines” and came up with what he put in the letter.  He modified the guidelines where he thought necessary or appropriate, and excluded some items which were otherwise included (see pages 111-113(AB)).

60              In re-examination, Mr Lee asserted that paragraph 17.2 of the IEA deals with the situation where an existing employee is transferred interstate.  That provides for the payment of reasonable relocation costs.  He said that the document was not a policy but a guideline (see page 92(TFI)).  As a result, i.e. because it was a guideline, he was of opinion that he could omit from the letter the guideline reference to a return airfare, to education assistance, and the reference to the provision by AWI of a professional relocation service.  (The guideline, significantly, does not refer to the relocation of redundant employees.)

61              Based on what Mr Birnie knew of other employees’ relocation packages and the document which he had printed off the network, it was less than that to which he was entitled, he said.  It imposed conditions which he found financially penalising.  Mr Birnie’s evidence was to the following effect.  He had not accepted the offer contained in that letter because he disagreed with the terms (see page 134(TFI).  Points 3 and 4 limit the value of a house to be purchased to $300,000.00.  The house which Mr and Mrs Birnie purchased in Perth was worth more than that, as was the house which they had sold in Melbourne.  AWI were going to reimburse Mr and Mrs Birnie in an amount less than the cost of selling and repurchasing a house in Melbourne and they, AWI, knew this.

62              At the time of his redundancy, Mr Birnie was on a cash salary of $100,000.00 gross.  (That had been increased on or about September 1999.)  He also had the use of a company four wheel drive vehicle, he said.  Mr Lee said that his search of the company’s records indicated that there was nothing on file to indicate that Mr Birnie could use a company vehicle for private purposes.  The company also paid airfares to Melbourne, annually, for the Birnie family.

63              Mr John Henry Addison, the Western Australia Land Access Officer of AWI, gave evidence that Mr Birnie did have full use of a company Toyota Landcruiser for private and work purposes.  This use was agreed to, he said, by Mr Myer.  Mr Addison said this both in evidence in chief and in cross-examination.

64              The reportable fringe benefit amount was $25,846.00 (see page 114(AB)).  Mr Birnie was also, as Mr Lee pointed out, entitled to superannuation in accordance with the superannuation legislation.  Mr Lee said that it was, at the direction of the Managing Director, whether long service leave was paid after three years.  It was not paid in all cases.  Mr Birnie could point to no policy to the contrary.  Mr Lee also said that Mr Birnie, according to his agreement, was only entitled to long service leave after ten years.

65              Mr Birnie also had share options.  He received the share option certificates on 5 May 2000 (see page 124(AB)), but one of the conditions of redundancy, it was said in evidence, was that the shares be purchased back from the company.

66              Mr Birnie was well aware of the downturn of the mineral exploration industry in Western Australia and throughout Australia.  He made a number of inquiries (see pages 129-130(AB)) and made a number of unsuccessful applications for jobs (see pages 131-143(AB)), but was unable to get other employment.  He had contacted fourteen different “entities” in looking for new employment.  He also said that he considered that he had experience and qualifications going beyond the diamond exploration industry.

FINDINGS AT FIRST INSTANCE

Claim of Unfair Dismissal

The Reason given for the Dismissal

67              Mr Birnie disputed the reason given to him by Mr Lee for his dismissal.  Mr Lee explained that AWI is one of a number of companies in a corporate group.  AWI is set up to provide management and geological services to the public.  Its only clients are, in fact, the other companies within that group to which AWI provides services.  Relevantly, one of those other companies is Astro Mining.

68              Although AWI employed Mr Birnie, it provided his services to Astro Mining.  Astro Mining decided that it would no longer pursue diamond exploration in a number of areas and instead concentrate on diamond exploration at Bow River in the Northern Territory, and it decided that Mr Birnie’s position was no longer required.  As AWI  provides services only to the client companies, Mr Lee knew that there was no other client company which required Mr Birnie’s services and, accordingly, his position became redundant.

69              Mr Birnie maintained, however, that there was still some exploration work being done in Astro Mining’s office which he would have been able to perform, and that, therefore, his position was not redundant.

70              On the evidence, a substantial proportion of Mr Birnie’s work was office based.  Mr Birnie, in his evidence, acknowledged that he knew that the diamond exploration industry was “in a slump” and that Astro Mining proposed to reduce its exploration activities.  He understood, at the time of his dismissal, that there was little funding available for exploration work and admitted that, to his knowledge, there was no other on-the-ground exploration undertaken by Astro Mining other than at Bow River.  That evidence agreed with Mr Lee’s evidence.

71              Mr Lee’s evidence was that the whole mining and exploration industry was a fairly volatile industry; and that it goes through cycles when there are some very good times and some very hard times.  Diamonds, he said, are an even more difficult area.  There are few diamond mines, and only one in Australia.  When things are going badly, there is very little employment and people tend to come and go.

72              The Commissioner was not persuaded by the evidence of Mr Birnie that there was alternative work still available for him to do.  He concluded that, because of the evidence of a slump in the industry, AWI’s reasons for the termination of his employment was valid and, therefore, that this part of Mr Birnie’s claim was not made out, given that Astro Mining needed to reduce the number of geologists.  Mr Lee, the Commissioner found, did not suggest that there was work for Mr Birnie in any other of the client companies.

The Commissioner found that Mr Birnie should not have been retained in preference to another employee

73              The evidence before the Commission referred to another geologist employed by AWI called Mr Boxer.  Mr Birnie’s position was made redundant, but Mr Boxer was retained.  Mr Birnie claimed that his dismissal was unfair because he should have been retained in employment in preference to Mr Boxer.  Mr Birnie relied upon his greater length of service than that of Mr Boxer to support his claim.

74              Mr Boxer was employed on the Bow River project at the time of Mr Birnie’s redundancy and had been employed there for some time.  There was also evidence that Mr Boxer had experience in Native Title matters and there was no suggestion that Mr Birnie had that experience.  Mr Lee admitted that Mr Birnie’s experience was adequate enough for him to have taken over the Bow River project.

75              The Commissioner found that the balance of evidence overall did not establish that Mr Birnie should have been retained in employment in preference to Mr Boxer.  The Commissioner noted that Mr Birnie bore the onus of proving this part of his claim, but was not persuaded on the evidence that, even if discussion had occurred, there could have been a different result.

76              The Commissioner noted, from his reading of the Astro Mining NL Annual Report, which was tendered in evidence, that Native Title was an issue relevant to that company’s operations and the experience of Mr Boxer was, therefore, in the Commissioner’s view, a factor of relevance.

The Requirement under s.41 of the Minimum Conditions of Employment Act 1993

77              Mr Birnie complained that there was no consultation with him regarding his redundancy.  He claimed that he was presented with a fait accompli and that his redundancy was unfair as a result of the lack of consultation.

78              Mr Birnie relied, in large part, on a term which is implied into every contract of employment to which the Minimum Conditions of Employment Act 1993 (hereinafter referred to as “the MCE Act”) applied.

79              The Commissioner held that even a breach of s.41 of the MCE Act was not determinative of Mr Birnie’s claim.  Rather, the issue was whether or not AWI was in breach of the contract of employment between it and Mr Birnie for the purposes of the claim before the Commission (see Gilmore and Another v Cecil Bros and Others 78 WAIG 1099 (IAC) per Kennedy J at page 1100).

80              The Commissioner held that the term implied into Mr Birnie’s contract of employment by the MCE Act entitles him to be informed by AWI, as soon as reasonably practicable after the decision has been made to make him redundant, and for him to discuss with AWI the likely effect of the redundancy and the measures which might be taken by him or AWI to avoid or minimise the effect of the elimination of his job.  It is not a right to be consulted, it is a right to have a discussion.

81              Mr Birnie was informed of the decision to make him redundant as soon as practicable after the decision to do so had been made, but there was not a discussion, as envisaged by the implied term.  A meeting did occur between Mr Lee and Mr Birnie in the presence of Ms Spence.  Mr Lee said words to the effect that “unfortunately, things have changed from yesterday, you are to be made redundant and there is to be no further diamond exploration other than Bow River”.  Mr Birnie was told that Mr Gutnick had changed his mind, that the exploration industry was tough and that funds were tight.

82              Mr Birnie raised the question of Mr Boxer’s position, but Mr Lee replied with words to the effect that Mr Birnie’s comments were noted, but that the decision had been made.

83              The Commissioner accepted Mr Birnie’s evidence that he was presented with a fait accompli, noting that after Mr Gutnick had advised Mr Lee a day before that Mr Birnie was to be made redundant, there was “no alternative”.

84              He was given no reasonable opportunity to put to AWI any alternatives.  He was not given the opportunity to discuss Mr Boxer’s position relative to his own.  Mr Lee’s evidence was that he had used his knowledge of the client companies and had reached a conclusion that there was no other position available for Mr Birnie.  However, Mr Birnie was never given an opportunity to try to persuade Mr Lee that there was any alternative.

85              AWI was in breach of the statutorily implied term in the contract of employment that there would be discussions between AWI and Mr Birnie regarding the likely effects of the redundancy and measures that may have been able to be taken by Mr Birnie or AWI to avoid or minimise its consequence.

86              The Commissioner found that there was no substantial compliance with the requirements of s.41 of the MCE Act, even if substantial compliance was applicable.  The finding that AWI was in breach of the contract of employment, the Commissioner held, was a finding which supported Mr Birnie’s claim that his dismissal was unfair.

87              I would add, by way of footnote to the findings, that the word “discuss” is defined in the Macquarie Dictionary (3rd Edition) as follows:-

  “1.  To examine by argument; sift the consideration for and against; debate; talk over.”

88              The noun “discussion” is defined as follows:-

  “1.  The act of discussing; critical examination by argument; debate.”

The Timing of the Dismissal

89              Mr Birnie claimed that an additional reason why his dismissal was unfair was that, when he went into the meeting on 6 July 2000, he was expecting to be told that he would be promoted and not that he would have no job at all.

90              The Commissioner found that Mr Gutnick, when he came to Perth on 28 June 2000, said to Mr Birnie that he had wanted to discuss elevating Mr Birnie’s profile in the company and that he would be returning the following Wednesday.  The Commissioner also found that Mr Birnie was entitled to assume that these words might herald a promotion for him.  The Commissioner found that he preferred Mr Birnie’s evidence to Mr Lee, when Mr Birnie gave evidence that Mr Lee said to him words to the effect that “Mr Meyer would be retiring and you are to take over Mr Meyer’s responsibilities”.

91              The Commissioner therefore found that Mr Birnie was entitled to infer from the comments of Mr Gutnick and Mr Lee that he was to take over Mr Meyer’s job and that this involved some kind of promotion.  Thus, when Mr Birnie entered the meeting on 6 July 2000, believing he was to be offered a wider role within the company, he was in fact told that he would have no future role in the company at all.  He was shocked and devastated and his evidence in this respect was accepted.  It was supported by the evidence of Mr Lee that Mr Birnie was visibly shocked and upset and that that was understandable.

92              The Commissioner found that the circumstances whereby AWI created a situation where Mr Birnie believed he would be offered a promotion only then to dismiss him, rendered Mr Birnie’s dismissal harsh, oppressive and unfair.  He applied the principle in Miles and Others t/a Undercliffe Nursing Home v FMWU 65 WAIG 385 (IAC).  The well known implied term requiring an employer to be good and just to his employees (see Nettlefold v Kym Smoker Pty Ltd (No 469 of 1996) (unreported) delivered 4 October 1996 (IRC of Aust) and the Full Bench’s approval of it in Gilmore and Another v Cecil Bros and Others 76 WAIG 4434 (FB)), would apply and it could be said was thereby breached.

Quantum of Severance Pay

93              AWI paid Mr Birnie eight weeks’ salary as an ex gratia “severance” payment.  It is common ground that there was not a term in Mr Birnie’s contract of employment entitling him to a redundancy payment if he were made redundant.  Mr Birnie relied upon Rogers v Leighton Contractors Pty Ltd 79 WAIG 3551 (FB) to argue that eight weeks’ salary is not a fair severance package and, for that reason, that his dismissal was unfair (see also Thompson v Gregmaun Farms Pty Ltd 80 WAIG 1733 (FB)).

94              The Commissioner held that the issue was whether or not a dismissal for redundancy, without the payment of a redundancy payment sufficient to compensate the employee for matters such as age, length of service, seniority, period of notice, availability of alternate employment, benefits forgone and the reasons for retrenchment, depending on circumstances, might be harsh to the employee.

95              The Commissioner then held that the determination of the claim involved an assessment of the circumstances and the adequacy of the payment made.  It was not necessary, he held, for Mr Birnie to prove an industry standard for redundancy payments against which the severance payment may be compared, nor does the test of adequacy require a distinction to be made between “adequate” and “totally inadequate”.

96              Within the reasoning of Rogers v Leighton Contractors Pty Ltd (FB)(op cit) and Thompson v Gregmaun Farms Pty Ltd (FB)(op cit), the Commissioner found that Mr Birnie’s dismissal was unfair by reason of the inadequate severance payment made to him, holding that a payment of eight weeks’ was inadequate compensation for his loss.

Rate at which payments were made

97              Mr Birnie also claimed that his dismissal was unfair because “certain benefits due under his contract of employment” were based only on the cash component of his salary and not upon “his entire remuneration package”.  The difference between the two to which Mr Birnie referred included, for example, the value of the motor vehicle supplied to him.

98              The Commissioner held that it was not immediately apparent that payment of termination payments at the employee’s salary rate, rather than at a rate reflecting the employee’s total remuneration, may constitute a ground, of itself, to find a dismissal unfair.  The claim was therefore not made out.

99              To an extent, the claim under this heading overlapped with the claim made that payment of the salary rate constituted a denial of Mr Birnie’s entitlement under his contract of employment, the Commissioner held, too.

Commissioner’s Conclusion

100           The Commissioner held that Mr Birnie’s claim of unfair dismissal was made out by reason of:-

(a) AWI being in breach of the implied term referred to earlier.

(b) Being made redundant when he was expecting to be given a wider role.

(c) The inadequacy of the severance payment made to him.

Remedy

101           The Commissioner noted that reinstatement was not sought and therefore considered the remedy of compensation.

102           The Commissioner held that the loss of a fair redundancy payment was the measure of loss.  He therefore ordered a further eight weeks’ salary to be paid to Mr Birnie by way of redundancy payment, noting that a redundancy payment equivalent to sixteen weeks’ salary would have been a reasonable payment for the long service leave credit forgone and his length of service and position, together with the reduced likelihood of him finding suitable alternative employment.

103           The Commissioner then went on to hold that, although Mr Birnie was indeed entitled to believe that he was likely to be playing a wider role within the company, there was no evidence that he had, in reliance upon that belief, altered his position to his detriment.  The Commissioner held that he had no doubt that there was injury suffered by Mr Birnie in this regard and assessed compensation at $5,000.00.

Mitigation of Loss

104           The Commissioner held that it had not been demonstrated that Mr Birnie failed to mitigate his loss.

Claim for Contractual Benefits

105           Mr Birnie claimed that he had been denied benefits due to him under his contract of employment.  The Commission was therefore required to determine whether the items claimed by him were benefits due to him under his contract of employment which had been denied him.

Payment in Lieu of Notice

106           The Commissioner was unable to find that it was a term of Mr Birnie’s contract of employment that he would be paid in lieu of notice at the package rate.  Further, Mr Birnie’s contract of employment did not provide for a payment to be made upon redundancy and, thus, there could not be a valid claim that it was a benefit under the contract that the redundancy payments made would be paid at the value of his remuneration.

Long Service Leave

107           Mr Birnie claimed that it was a term of his contract of employment that he would be paid pro rata long service leave after three years of employment, but this claim was dismissed.

Relocation

108           Mr Lee admitted that, if Mr Birnie was made redundant, AWI would relocate him back to Melbourne.  Indeed, Mr Lee’s evidence was that, at the meeting at which Mr Birnie was dismissed, he referred to the term of his contract regarding relocation.  The Commissioner therefore found that Mr Birnie had been denied a benefit to which he was entitled under his contract of employment, that is, that he would be relocated with his family and reasonable effects, to Melbourne.

Reasonable Notice

109           The Commissioner held that Mr Birnie was not entitled to an award of monies in lieu of reasonable notice because of the redundancy payment.

ISSUES AND CONCLUSIONS

110           The decision appealed against is a discretionary decision, as such a decision is defined in Norbis v Norbis (1986) 161 CLR 513 (see also Coal and Allied Operations Pty Ltd v AIRC (2000) 74 ALJR 1348 (HC)).  To succeed, the appellant must establish that the Commission at first instance erred in the exercise of discretion, and that that error was of the kind identified in House v The King [1936] 55 CLR 499 (see also Gromark Packaging v FMWU 73 WAIG 220 (IAC)).

111           Unless it is established that the Commission erred in that manner, the Full Bench can have no warrant to interfere with the decision made at first instance and, in particular, cannot substitute the exercise of its discretion for that of the Commission at first instance.

What was the Contract?

112           It is necessary to ascertain what the contract of employment was, so that the benefits said to be contained in it can also be ascertained.  This is not easy and depends on the actions of the parties and their evidence of conditions which were agreed to apply.  As I said in Sargant v Lowndes Lambert Australia Pty Ltd 81 WAIG 1149 at 1155 (FB):-

“It is always necessary, if a contract is relied upon, to determine the terms of a contract (whether it is an employment contract or any other contract) (see Re Transport Workers Union of Australia (1993) 50 IR 171 at 196 per Munro J).  A contract may be oral or in writing, partly oral and partly in writing, the contractual terms may be express or implied, there may be a series of contracts, and indeed the written terms of the contract may not reflect the substance of the agreement between the parties.  There may be terms of the contract derived from custom and usage too (see Macken, McCarry & Sappideen “The Law of Employment”, 4th edition, at page 94).”

 (See also my discussion of contracts and contractual benefits in Hotcopper Australia Ltd v Saab (FB) (unreported) (No FBA 15 of 2001) 2001 WAIRC 03827 (delivered 21 September 2001) and Ahern v AFTPI 79 WAIG 1867 (FB).)

113           In this case, it is fair to observe that the actions of the parties and the implication of some terms, in accordance with cases like Lawson and Others v Joyce Australia Pty Ltd 76 WAIG 20 (FB), demonstrate which terms continued as part of the new contract, and what terms were possibly added or removed by variation.  Then, the question was what terms should be implied.

114           Mr Birnie and AWI indisputably entered into a written contract of employment on 7 April 1994 (the IEA), which, by its express terms, expired on 1 March 1997 (see Clause 35 (page 62(AB))).  Further, there was clearly no express agreement to extend its operation or to otherwise apply its terms to Mr Birnie’s employment.  By virtue of a written memorandum dated 26 April 1995 from Mr Birnie to Mr Stewart, and Mr Stewart’s reply dated 29 June 1995, there was a variation of the IEA to provide for relocation expenses (see pages 64 to 66 (AB)).  That variation did not purport to relate to anything but the relocation from Melbourne to Perth and any relocation because of redundancy.

115           Alternatively, this was a separate agreement evidenced by the memorandum of 29 June 1995 and not terminated at the time that Mr Birnie was made redundant and dismissed.  It was therefore a term of the written variation to the IEA (a new separate agreement) that, should Mr Birnie’s position be made redundant “at any time” (my emphasis), AWI would, at its own cost, relocate him and his family to Melbourne.   The entitlement to relocation expenses on redundancy was express and unlimited as to time.

116           The variation specifically prescribed relocation expenses, as I have identified them above, in the event of redundancy.  Those relocation expenses were, as defined in that memorandum.  That agreement applied to any future redundancy unless specifically varied, revoked or discharged.

117           Significantly, the agreement or variation to agreement, in its terms, did not purport to vary the provision in Clause 17 requiring AWI to pay reasonable relocation costs of an interstate transfer.  However, what it did do significantly was to make specific provision for Mr Birnie’s entitlements on relocation in the event of his being made redundant.  That was new.

118           It was common ground that the IEA was not renewed, at least, expressly at its expiration.

119           It was submitted, too, that the undisputed evidence was that Mr Birnie would be relocated on terms no less favourable than those which applied when he was relocated to Perth in 1995.  That, I think, is implicit on a fair reading of that term of the agreement or variation.

120           In my opinion, the evidence of Mr Lee and Mr Birnie disclosed that the actions of the parties meant that, insofar as it was possible to do so, except where it was clearly inapplicable, and notwithstanding that there were changes in position and remuneration, the terms of the IEA would apply and did, as part of a new contract of employment following the expiry of the IEA.  The IEA in its terms, of course, contained no provision that it should continue or that its terms should continue past the date of its prescribed expiry.  What the evidence clearly shows was that that agreement was evidence of the new agreement, which did not contain all of its terms and which new agreement included implied terms of the agreement of 29 June 1995 and variations as to matters such as public holidays.

121           Mr Lee’s clear evidence in chief and in cross-examination was that the IEA set out the terms and conditions of Mr Birnie’s employment after 1 March 1997 (see pages 51, 63 and 64 (TFI)).  Mr Birnie’s evidence was that he had, he thought, reverted back to the terms which applied before he entered the IEA on 1 March 1997.  Mr Birnie, as he said, did not seek to “clarify” the matter with his employer.

122           The evidence was expressly and by inference that there was no reversion to the terms and conditions of employment which applied to Mr Birnie’s employment prior to the parties entering into the IEA.  There was no attempt to reverse them, nor could there be.  It had been replaced by the IEA.

123           First, the pre-IEA agreement could only be renewed and it was agreed that it was not renewed.  It could not, it is trite to say, be unilaterally renewed by Mr Birnie.  Next, it had been replaced by the IEA.

124           Further, as I indicate later in these reasons, Mr Birnie acknowledged that other terms of the IEA applied after its expiry, such as Clause 19.  Moreover, he had been promoted to a new position as Regional Exploration Manager.  He did not revert to Project Geologist, as he was in 1992.  His salary was plainly different.  The evidence was that some of the terms of the IEA became terms of a new contract.  However, there were a number of “new” and significant terms.  In addition, there was no express extinguishment of the separate agreement or agreement to vary of 29 June 1995 as to relocation expenses.

125           In my opinion, the evidence was that the parties applied no conditions except those of the IEA, as varied and applicable from time to time, to a new agreement between them.  There were, however, both oral and written variations to it and other oral agreements.  Mr Birnie, himself, admitted, for example, that Clause 19 of the IEA, which provided for employees to be bound by policies and alterations of policies provided that they were advised of them, bound him.

126           What clearly occurred, looking at the evidence, the conduct of the parties, and their performance on either side of the contract of employment, was that the relevant conditions of the IEA expired, and that the parties, however, agreed to some of its terms as part of, but not the entire, new contract of employment.  There were agreements as to new employment, increased salary, provision of a motor vehicle and others.  The 29 June 1995 agreement continued until after Mr Birnie was made redundant and until it was repudiable.

127           Significantly, it was not submitted for Mr Birnie that a number of its terms did not apply.  There was no evidence of any entire written contract being in force.  Indeed, the evidence, as I have indicated, was to the contrary, that the new contract was part writing and part oral and some of the terms of the IEA were incorporated in the new contract.

128           Neither party said that none of the terms of the IEA did not apply.  There were clear variations, however, such as relocation provisions, salary increases, use of motor vehicles, all of which were specific variations.  Another clear variation was that Victorian law and, in particular, Victorian public holidays, did not apply to Mr Birnie’s contract of employment and had not, by admission, after his arrival in Western Australia.  Further, there was a separate agreement as to relocation for transfer and for redundancy still afoot, evidenced by the memorandum of 29 June 1995.

What then was the policy and what was its effect, if any? 

129           Mr Birnie’s evidence was that he believed that the policy as to relocation had changed (see page 31(TFI) because he thought that the current policy was contained at pages 103-105(AB).  It was not the policy.  Further, Mr Birnie was not made aware of the change in policy, if there was one, which there was not.

130           Mr Birnie could and did rely on the memorandum dated 29 June 1995 (see page 65(AB)) as to relocation costs.  He was entitled to.  It was an agreement or a part of an agreement which was not revoked or extinguished or varied, on the evidence.  It could certainly not be revoked, varied or extinguished by a policy or by guidelines not advised to Mr Birnie and not agreed to by him, because it was an express agreement and it was inconsistent with Clause 19 of the IEA.  The entire agreement provisions of the IEA did not apply because of the actions of the parties which had effected a number of variations and additional agreements, which might have been said to be an agreed variation of the IEA and a negation of the clause prescribing the IEA to be an entire contract.  Alternatively, as I have said, a new agreement was entered into of which the basis was the IEA with agreed variations, such agreements as I have outlined them being reached from time to time.  Accordingly, the memorandum dated 29 June 1995 was contractually binding on AWI.  What Mr Birnie was entitled to was said to be that prescribed by that document, because of his redundancy.  The entitlement is that AWI pay the reasonable costs of relocation of Mr Birnie and his family to Melbourne, as evidenced by and prescribed in Mr Stewart’s memorandum of 29 June 1995.

131           Mr Birnie’s evidence that he knew that there was an updated policy which delivered better terms can be given no weight.  It is, in fact, evidence that he did not know the policy.  It is evidence not derived that, even if Clause 19 applied, he was not bound by any purported policy because he was not made aware of it as Clause 19 required.  When he located what he thought was the policy on a computer, he was told that it was not the policy and had been replaced by what Mr Lee described as, not a policy, but a set of guidelines, which he was free to vary to suit his view of the circumstances.  No policy had been brought to Mr Birnie’s notice.  Further, there was no policy but a set of guidelines which, on Mr Lee’s evidence, enabled him to unilaterally vary what was to be paid to an employee, in this case, Mr Birnie.

132           Significantly, there was a similar vagueness about what redundancy payments were payable, even though AWI did have a policy of making redundancy payments.  However, there was evidence of an express agreement to pay employees redundancy payments.  Such findings are the consequence of the finding which should have been made, that most of the terms of the IEA remained in force as part of the new contract of employment, as varied.  An obligation to pay reasonable redundancy payments was acknowledged and, in any event was an implied term, as I hereinafter observe.

133           For those reasons, the contract of employment, as I find, at the time of dismissal was contained in or evidenced by:-

(a) The written terms of the IEA, as varied by oral or written agreement and, as the evidence revealed, were applied or applicable.

(b) Oral agreements or agreements evidenced by writing or performance in relation to new positions and remuneration.

(c) Oral agreements or agreements evidenced by writing or performance as to holiday pay, use of cars, etc.

(d) Policies and instructions of which the employee had been given proper notice, it being trite to observe that Mr Birnie could not be subject to a term of the contract contained in a policy or instruction of which he had no notice, as a matter of his contract or of law.

(e) Implied terms, such as but not restricted to, the entitlement to severance pay or redundancy, or an agreed term that Mr Birnie be paid a redundancy payment (but said to be unilaterally quantifiable by AWI, which term was not agreed), which would impliedly be a promise to pay a reasonable payment.  Such a term would not exist, in my opinion, if its wording evidenced merely a unilateral or gratuitous intention to pay a redundancy amount.

(f) The term requiring payment of the cost of relocation on redundancy contained in Mr Stewart’s memorandum of 29 June 1995 (supra).  That agreement which applied to a redundancy “at any time” could not be unilaterally extinguished by a policy, but required an express variation by agreement.  There was none.

(g) There was no prescription for  the giving of notice of termination in the contract.

Such an approach is, I think, consistent with that referred to in Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd (2000) 74 ALJR 1094 at 1098 per Gleeson CJ, Gaudron, McHugh and Hayne JJ, and Concut Pty Ltd v Worrell (2000) 75 ALJR 312 at 316 per Gleeson CJ, Gaudron and Gummow JJ.

What then was the contractual entitlement to relocation expenses?

134           In my opinion, properly read, the cost undertaken for relocation on redundancy was for the same items as expressed in Mr Stewart’s memorandum of 29 June 1995.  The cost of providing those items, which are numbered 1 to 6 in that memorandum, as quantified in terms of that agreement, is and was Mr Birnie’s contractual benefit.  He was denied it.

135           I would dismiss the appeal, there being no cross appeal, and would make no other  order.

Was the dismissal unfair because of any inadequacy in a redundancy payment?

136           It was submitted on behalf of AWI that it was unfair for AWI to have to give Mr Birnie a further eight weeks’ pay for severance, when the Commission decided that Mr Birnie had no contractual entitlement to a severance payment at all.  There was, of course, although the contract was partly evidenced by written terms, no express entitlement to payment in the event of a redundancy.

137           There is and was in this contract an implied term, even if there was no policy, that, whilst employees would be paid benefits including, in the case of Mr Birnie, relocation expenses, an employee is entitled to be paid a reasonable severance payment (see Rogers v Leighton Contractors Pty Ltd (FB)(op cit); Thompson v Gregmaun Farms Pty Ltd (FB)(op cit); Coles/Myer Ltd t/a Coles Supermarkets v Sweeting and Others 73 WAIG 225 (FB); and Lawson and Others v Joyce Australia Pty Ltd (FB)(op cit)).

138           AWI accepted that it had an obligation and its practice was to honour that obligation to pay severance pay in accordance with industry standards.  AWI unilaterally applied Termination Change and Redundancy Standards (see pages 59, 60 and 86 (TFI)).  These are not applicable in this State by any express provision.  Instead, the criteria to be applied in assessing what is a fair redundancy payment where none is prescribed are those to be laid down as prescribed in Thompson v Gregmaun Farms Pty Ltd (FB)(op cit) and Rogers v Leighton Contractors Pty Ltd (FB)(op cit) (see also Lawson and Others v Joyce Australia Pty Ltd (FB)(op cit)).

139           It might also be properly submitted and held that, in the case of Mr Birnie, given his circumstances, an amount for relocation, even if there was no prescription for it in his contract, should be provided for in any severance pay and that would itself justify a substantial severance payment.

140           Accordingly, in the absence of a cross-appeal, the amount ordered cannot be set aside as excessive, but the payment of a plainly inadequate amount for a severance payment patently rendered the dismissal unfair (see Rogers v Leighton Contractors Pty Ltd (FB)(op cit) and Thompson v Gregmaun Farms Pty Ltd (FB)(op cit)).

141           The Commissioner, except as to quantum, made no error.  I will deal with the question of quantum hereinafter.

Unfairness – Other Aspects

142           I have already held that the dismissal was unfair in that the amount paid by way of a severance payment was inadequate.  In my opinion, the dismissal was also unfair because no notice was given, because Mr Birnie’s hopes were raised, then dashed, overnight in a most inconsiderate and unfair manner, and that the conduct of AWI also was such as to constitute a breach of the term that AWI should have been good and just to Mr Birnie, its employee (see per Lee J in Nettlefold v Kym Smoker Pty Ltd (IRC of Aust) (op cit) (referred to in Gilmore and Another v Cecil Bros and Others (FB)(op cit)).

143           S.40 of the MCE Act prescribes “redundant” as follows:-

 ““redundant” means being no longer required by an employer to continue doing a job because, for a reason that is not a usual reason for change in the employer’s work-force, the employer has decided that the job will not be done by any person.”

144           Further, s.41 of the MCE Act applied.  It was clear that the abolition of Mr Birnie’s position was a redundancy.  It could be nothing else.  There was no position left for him.  His position was abolished and Mr Boxer’s was not (see s.40 of the MCE Act).  S.41 of the MCE Act reads as follows:-

  “41. Employee to be informed

  (1) Where an employer has decided to — 

   (a) take action that is likely to have a significant effect on an employee; or

   (b) make an employee redundant,

   the employee is entitled to be informed by the employer, as soon as reasonably practicable after the decision has been made, of the action or the redundancy, as the case may be, and discuss with the employer the matters mentioned in subsection (2).

  (2) The matters to be discussed are — 

   (a) the likely effects of the action or the redundancy in respect of the employee; and

   (b) measures that may be taken by the employee or the employer to avoid or minimize a significant effect,

   as the case requires.”

145           By s.41 of the MCE Act, conditions are implied into contracts of service.  One obligation cast on an employer in redundancy situations by s.41 of the MCE Act is to enter into discussions with the employee.  In this case, AWI had decided on the evening of 5 July 2000 to make Mr Birnie, an employee, redundant.  The employee was then entitled to be informed by the employer as soon as the decision to make him redundant was made.  The employee was also entitled to discuss with the employer the likely effects of the redundancy in respect of the employee and the measures to be taken by either or both to avoid or minimise a significant effect, as the case requires.

146           The word “discuss” has a plain and clear meaning, as outlined earlier in these reasons (supra).  It is not a neutered word, such as the words “consult” or “consultation” are these days, within the plain meaning of “discussion”, in its definition in the Macquarie Dictionary.  There was no discussion, within the meaning of the section.  There was a redundancy, within the meaning of the section.  Moreover, there was no or no sufficient discussion of the likely effects of redundancy and certainly no or no sufficient discussion of measures that might be taken to avoid or minimise a significant effect.  There was some talking over, some sifting of the considerations for and against, but the decision had been made.  (The attempts to find other employment do not remedy this defect.)  S.41 of the MCE Act was not complied with.

147           Significantly, no offer was made to provide counselling or assistance to or for Mr Birnie.  Mr Lee, significantly, took it upon himself to exclude such assistance from the relocation benefit offered.  Evidence of the inadequacy of discussion and indeed an element of clear unfairness was the failure by Mr Lee to reply to Mr Birnie when he rang and forwarded e-mails to inquire what relocation benefits would be offered.  Mr Birnie had been retrenched without notice and no offer of relocation benefit was made for twelve days.  He was treated with discourtesy and unfairness.  This was entirely unjustified.  The dismissal was harsh, oppressive and unfair, within the meaning applied in Miles and Others t/a Undercliffe Nursing Home v FMWU (IAC) (op cit), for all of those reasons.

Injury

148           The Commissioner held that Mr Lee had, with authority, given the clear impression that Mr Birnie was being considered for promotion.  Further, Mr Birnie was given no warning that he was to be dismissed.  Within 24 hours of his being advised and implicitly relying on the advice that he was being considered for promotion, Mr Birnie, who had served the company well for over six years, was dismissed as redundant on 6 July 2000.  He was upset.  He was shocked.  He was humiliated and treated with callousness.  That was exacerbated by his being ignored for some days when he sought to establish and agree his entitlement to a relocation payment.  There was ample evidence of shock and humiliation and of the nature of the actions which caused it (see pages 25 to 29, 59, 67, 71 to 74, and 113 to 115 (TFI)).  He was injured.  The Commissioner was right to so find.  There was no error in that approach or that finding (see Rogers v Leighton Contractors Pty Ltd (FB)(op cit) at 3552).

Redundancy – Unfair by Selection?

149           I now deal with Mr Birnie’s appeals.

150           The redundancy, however, was not unfair, because of Mr Birnie’s selection instead of Mr Boxer.  It was quite clear, as Mr Birnie admitted and on all of the evidence, that there was going to be only one active project, namely the Bow River project, which was to be pursued.  Mr Boxer had managed that project for eighteen months.  There was no criticism of his work or ability.  There was no complaint that his work was not competent.  The Northern Territory project was not even active, whether Native Title experience was required or not, nor was there evidence as to when it would become active.  It would have been, as Mr Birnie himself admitted, on the face of it, wrong to dismiss Mr Boxer from a project which he had managed and, it would seem, competently, for eighteen months.

151           Mr Birnie established no unfairness, as he was required to do, in the selection of his position for redundancy, nor was there any evidence, that there were no other positions available to him in AWI or through AWI or associated companies other than Astro Mining.  The Commissioner’s detailed reasons for so finding were open to him.

Reasonable Notice and the Redundancy Payment - Adequacy

152           The appeal is against the finding as to reasonable notice, since there was no express provision for notice of termination in the contract, as I have found.  Reasonable notice was required to be given, such a term being implied in the contract.

153           An order was sought that there be paid, as a contractual benefit denied, in lieu of notice, a sum equal to the remuneration which would have been earned during the period of reasonable notice.  That is within jurisdiction and power, having long been the view of this Commission and it has recently been decided in Hotcopper Australia Ltd v Saab (FB)(op cit).

154           There was no term which permitted the payment of a sum of money in lieu of reasonable notice.  (That is, of course, different from a valid claim for that amount in lieu of reasonable notice.)  There was no reasonable notice given in this case.  An amount for reasonable notice in monetary terms was, however, claimed.

155           The primary claim was for an amount by way of a severance package.  There was an implied term requiring that it be paid, as I have said.  Further, the payment of no or no adequate amount would, in this case, render the dismissal unfair, or be a factor, which it is open to find and should have been found, rendered the dismissal unfair.  Similar factors can be taken account of in quantifying an amount for severance pay, as are taken into account to identify a period of reasonable notice (see Rogers v Leighton Contractors Pty Ltd (FB)(op cit) and Thompson v Gregmaun Farms Pty Ltd (FB)(op cit); see also Tarozzi v WA Italian Club (Inc) 71 WAIG 2499 (FB)).  They are not necessarily the same factors, however, and are not a finite or exclusive range of factors.  The factors can include age, seniority, length of service, opportunities for new employment, amount of remuneration, the opportunity given to prepare for redundancy, and what other assistance the employee received.

156           In considering the question of the severance pay, I consider, too, the following:-

157           In this case, no provision was made for relocation.  Mr Birnie had been employed and given good service for nine years.  He had moved across a continent at some disadvantage to his family and for the benefit of his employer and himself.  He was a Project Manager, but not the senior manager in the State, was dismissed during a slump when prospects of obtaining employment were bad, and he had, for his employer’s benefit, limited himself to the narrow employment area of diamond exploration.  He was earning $100,000.00 in salary, together with other remuneration.  His redundancy was not discussed before he was made redundant so that he had time to prepare for it.  He was not given “outsourcing” assistance and, indeed, it was specifically denied to him.  He should have received “outsourcing” assistance or its equivalent in money.

158           It has not been established to me that Termination Change and Redundancy methods of calculation, if any, are applicable.  AWI’s unilateral assessment of a reasonable payment for a redundancy payment was neither binding nor reasonable in the context of what I have referred to in the preceding paragraph.

159           Even if that was the policy, it could not be established to apply unless Mr Birnie had been made aware of it, and there was no evidence to that effect.  In any event, Clause 19 of the IEA, in my opinion, did not apply to matters of redundancy.  There is a strong argument, not canvassed for and against, for the proposition that Clause 19 relates to matters of duty, safety and discipline in the workplace (on a fair reading) and does not empower the employer to unilaterally determine benefits which are a part or should be part of the terms of the contract of employment.  In any event, I am not, on this occasion, persuaded otherwise.

160           For those reasons, six months’ pay would be an adequate redundancy payment or severance pay.  In my opinion, a sum equivalent to six months’ or 24 weeks’ salary, having regard to those factors was reasonable.  That amount of severance pay would not obviously include other separate entitlements such as holiday pay, long service leave, etc.

161           The quantum of the amount ordered for severance pay, namely an amount equal to eight weeks’ salary which was to be added to eight weeks paid by the employer, was not the subject of appeal.  However, the amount paid by the employer was manifestly inadequate and rendered the dismissal unfair.

Reasonable Notice

162           I wish now to deal with the question of reasonable notice.

163           There was no provision in the contract of employment which enabled the contract to be terminated by pay in lieu of notice or prescription of what notice of termination of the contract might be or was required to be given.

164           As a matter of law, a period for the giving of reasonable notice is impliable as a matter of law (see Tarozzi v WA Italian Club (Inc) (FB)(op cit); see also Thompson v Gregmaun Farms Pty Ltd (FB)(op cit)).  It was not possible to find that there was no implied term as to reasonable notice because such a term is implied as a matter of law.

165           By the appeal, it is sought that Orders B(1) and (D) be quashed and the matter be conferred to Commissioner Beech to be dealt with according to law.  Those orders are, first, by Order B(1), that AWI pay an amount of eight weeks’ salary by way of redundancy payment on top of the amount unilaterally paid by the employer.  By order (D), the application was otherwise dismissed.  The Commissioner had found that the notice period of eight weeks given to Mr Birnie in lieu of the redundancy payment was not unreasonable and dismissed the claim for a sum of money equal to the salary for a period of implied reasonable notice.

166           I would also add, on reflection, that the appeal against the dismissal of the application by an order that AWI pay Mr Birnie an amount equal to a period of twelve months’ reasonable notice is raised more directly by Appeal FBA 23 of 2001.

167           There are a number of observations which I now make.

168           First, a reasonable redundancy payment was payable by virtue of an implied term of the contract (see Coles Myer Ltd t/a Coles Supermarkets v Coppin and Others 73 WAIG 1754 (IAC); and see Rogers v Leighton Contractors Pty Ltd (FB) (op cit) and Thompson v Gregmaun Farms Pty Ltd (FB)(op cit)).

169           Second, the failure to pay a reasonable redundancy payment is also recoverable as a loss, in the alternative, directly caused by the unfair dismissal.  Although it might be regarded as somewhat unnecessary to so observe, an applicant could not claim such an amount as a loss if he/she received it as a contractual benefit to which he/she was entitled, because there would then be no loss suffered.

170           Next, I deal with a matter which was the subject of submissions on this appeal. 

171           As a contractual benefit, Mr Birnie was entitled to reasonable notice or to an amount in wages equal to the value of that reasonable notice.  First, the redundancy payment awarded was inadequate.  As I have observed above, the quantum of the redundancy payment was not challenged upon this appeal because Ground 2 of  Appeal No FBA 24 of 2001 was abandoned.  Hence, Ground 3(d), as I understand the submissions, is not now an alternative ground and effectively seeks an order that Mr Birnie be paid a sum equal to the reasonable notice of termination which he should have been given.

172           For the reasons which I have advanced above (and conditionally) in relation to the adequacy of the redundancy payment, I am of opinion that reasonable notice would be a period of six months, not the twelve months urged upon us by Mr Kemp.

173           Mr Birnie’s contractual benefit is quantifiable by the amount of six months’ salary.  I am not at all certain, nor was it adequately submitted, what other amounts should be taken into account in assessing the value of the contractual benefit constituted by a term of six months’ reasonable notice.  As I indicate in these reasons, the use of his employer’s vehicle or its value is a separate contractual benefit.

174           I now turn to the question considered by the Full Bench in Rogers v Leighton Contractors Pty Ltd (FB) (op cit) and the subject of submissions in these proceedings.  I do not purport to decide this issue finally.  I would require more detailed submissions.

175           However, I would say this.  An employee may be entitled to be awarded contractual benefits separately, being for his/her express or implied entitlements under a contract of employment to a redundancy or severance payment on the one hand, and being an amount equal to reasonable notice of termination on the other.

176           Insofar as a redundancy or severance payment contains an element to provide for notice and/or to provide an amount to enable the employee to “recover from” the redundancy and/or to retrain and/or seek other employment, there will often be an amount payable which, in quantum and nature, could be either an amount equal to a term of reasonable notice, or severance pay.  In that event, there is not and will not be an entitlement to both under the contract.  In particular, one such benefit will not be wholly denied or may be only partially denied if it is comprehended within the other.

177           Whether that is the case will depend on notice implied as reasonable, and the nature and quantum of the severance or redundancy payment, and the elements which are required to be comprehended in such a payment.  In this case, the elements of the redundancy payment, on a reasonable examination, did not manifest themselves in a quantum which would account for an amount payable as reasonable notice.  The amount paid by the employer, as I have found above, for redundancy and notice combined was an insufficient amount for that payment and for reasonable notice of termination.

178           The amount ordered to be paid for notice and redundancy, under either head, was inadequate for the reasons expressed above.  Further, nothing was advanced to persuade me that, in accordance with Rogers v Leighton Contractors Pty Ltd (FB) (op cit) and Tarozzi v WA Italian Club (Inc) (FB)(op cit) and the sort of factors identified in both and referred to me above, a reasonable redundancy payment would be greater than or should not be absorbed as a contractual entitlement in the overall requirement for an amount by way of quantification of reasonable notice.

179           Alternatively, I was not persuaded that the elements (and I do not include entitlements to separate benefits such as long service leave, holiday pay and others in this) of a redundancy payment are so different or quantifiable so differently as to represent a contractual benefit different in nature and quantum from the benefit represented by the value in salary of reasonable notice.  By way of example, there might be a difference where there was a substantial cost reasonably attendable upon relocation otherwise denied, or upon assistance with finding new employment or being retrained.

180           In this case, Mr Birnie was entitled to reasonable notice equal to six months’ salary.  He was entitled to a redundancy payment in the same amount.  I am not persuaded that these benefits did not coincide.  Accordingly, the amount of the order would be reduced by the amount received for both, namely twelve weeks.

181           Accordingly, I would find that the Commissioner had erred in failing to find that a total equal to twenty-four weeks’ salary should not be paid for reasonable notice, a benefit which Mr Birnie was entitled and which he was denied.

182           I would uphold the appeal and order that, by way of varying the order appealed against, that AWI pay to Mr Birnie, within seven days, a sum equal to twelve weeks’ salary for reasonable notice.

183           That, added to the amount of four weeks’ salary for notice, and eight weeks’ salary for severance pay, already paid to him by AWI, makes for a total equal to twenty-four weeks’ salary (six months’ notice).

The Use of a Motor Vehicle

184           As to the claim for the use of a motor vehicle, according to Mr Addison’s uncontroverted evidence, had the contract been complied with and reasonable notice been given, Mr Birnie would have had the use of the vehicle, both at work and partly for private benefit during the period of notice, namely six months (twenty-four weeks).  I would vary the order at first instance to order that an amount be paid as the value of that benefit.

AN OBSERVATION

185           At common law, a month means a lunar month (i.e. 28 days) prima facie, unless that meaning is displaced by the terms of a contract or instrument (see Development Underwriting (Queensland) Pty Ltd v Weaber [1971] Qd.R.182 and Police v Maindonald [1971] NZLR 417 at 419).  In written laws, both Commonwealth and State (including Federal awards), unless a contrary intention appears, a month means a calendar month (see s.62 of the Interpretation Act 1984 (WA) and the Acts Interpretation Act 1901 (Cth)).

186           The reference to months in an implied term in a contract of employment should therefore, in the absence of cogent submissions to the contrary and where it is the case, as here, that the express terms of the agreement do not displace that rule, be read as a lunar month.

187           In any event, I am of opinion that notice in the event should best be expressed in weeks to coincide with the order made and the amounts calculated and paid, for consistency’s sake (see paragraphs 182, 183 and 184 (supra) for example).

FINALLY

188           Accordingly, I would find, for those reasons, that there was no miscarriage in the exercise of the Commissioner’s discretion insofar as he found that Mr Birnie’s dismissal was unfair, and as to his findings on the question of injury.  Appeal No FBA 22 of 2001 is not made out.  I would dismiss it.

189           As to Appeal No FBA 23 of 2001, it will be clear from what I have said that the appeal should be upheld, the Commissioner’s discretion having miscarried, having regard to the principles laid down in House v The King (HC)(op cit).  In my opinion, the Full Bench can and should substitute the exercise of its discretion, making the findings which I have identified above as requiring to be made by way of variation.

190           That appeal is upheld, for the reasons which I have expressed and in the terms which I have expressed above.  The appeal should be upheld to that extent, but otherwise dismissed.

191           As to Appeal No FBA 24 of 2001, that appeal should be upheld in relation to Ground 3(b), (c) and 3(d) in part.  The discretion miscarried and the appeal should be upheld to that extent, but otherwise dismissed.  I would observe that there was no cross appeal as to the quantum of severance pay.

192           I would therefore uphold the appeal and vary the order made at first instance by deleting Order B(1) and substituting an order that the amount equivalent to reasonable notice of termination of contract, namely an amount equal to twelve weeks’ salary, be paid by AWI to Mr Birnie within seven days of the date of the Full Bench’s order.

193           I would make an order varying the orders made at first instance by ordering that AWI pay an amount equal to the value of the benefit of the AWI car provided to Mr Birnie to be paid to him within seven days of the date of the Full Bench’s order.

194           I would also order that, if that amount or any amount, is in dispute, then the matter be remitted to the Commission at first instance for hearing and determination.

195           I would otherwise dismiss the appeals.

196           Finally, I would issue a minute to reflect these reasons.

CHIEF COMMISSIONER W S COLEMAN & COMMISSIONER J H SMITH:

197           These are our joint reasons for decision.

198           The relevant facts and grounds of Appeal are set out in the President's reasons for decision. 

199           We agree for the reasons set out by the President that FBA 22 of 2001 should be dismissed.  As to Ground 21, we would add that Ground 21 should be dismissed for the reasons set out below.  In relation to FBA 23 of 2001, we are of the view that for the reasons set out below Grounds 2, 6 and 7 should be upheld and the remaining grounds be dismissed.  As to FBA 24 of 2001, Ground 2 was abandoned at the hearing of the Appeal.  We are of the view that for the reasons set out in the President's decision Grounds 1(a) to (g) and Grounds 3(a) and (d) of FBA 24 of 2001 should be dismissed.  Further, we are of the view for the reasons set out below that Grounds 3(b) and (c) of FBA 24 of 2001 should be upheld.

Injury – Ground 21 of FBA 22 of 2001

200           It is accepted that there is an element of distress associated with almost all employer initiated terminations of employment. For injury to be recognised by way of compensation and thereby fall outside the limits which can be taken to have normally been associated with a harsh, oppressive or unfair dismissal there needs to be evidence that loss of dignity, anxiety, humiliation, stress or nervous shock has been sustained. Injury embraces the actual harm done to an employee by the unfair dismissal. It comprehends “all manner of wrongs” including being treated with callousness (Capewell v Cadbury Schweppes Australia Limited (1998) 78 WAIG 299). The injury may be manifested by the detrimental impact on the physical or emotional wellbeing of the person whose services were terminated. However dismissals will impact to varying degrees on individuals and while the need for professional care may be evidence of that impact, this will not necessarily always be the case in order to establish the causal link between the termination of employment and the injury. While it is necessary to exercise a degree of caution to ensure that compensation is confined to reasonable limits (Timms v Phillips Engineering Pty Ltd (1997) 70 WAIG 1318 and Burazin v Blacktown City Guardian Pty Ltd 142 ALR 144) that is not to say that every claim for injury necessarily involves expert evidence of emotional trauma.

1 The circumstances in which the dismissal from employment has been effected may be sufficient to demonstrate the injury which is experienced.  Situations where an employee is locked out of the workplace or is escorted from the premises, or the termination has been conducted in full view of other staff are examples of callous treatment justifying recognition for compensation for injury (Lynham v Lataga Pty Ltd (2001) 81 WAIG 986).

2 However, the Commission is not able to adjust the measure of compensation according to the opinion of the employer or employee or of the conduct of the respective parties (Capewell v Cadbury Schweppes Australia Limited (op cit)).

3 In the circumstances of this matter on the day before he was made redundant, Mr Birnie was given to believe that his career prospects were promising; he was told that he would have a position with a higher profile in the company.  The next day it all changed.  He was shocked when he was told that there was no longer a position for him at all.  The Managing Director had changed his mind.  The Company Secretary who informed Mr Birnie that he was being made redundant noted the shock that he experienced.  The callous treatment was compounded by the actions of the respondent in ignoring Mr Birnie’s repeated requests for information concerning the terms of the redundancy and in particular his entitlement for relocation to Melbourne.

201           On the evidence before him it was open to the Commissioner to find that the distress felt by Mr Birnie was exacerbated by the failure to hold discussions and by the comments made to him the previous day.  It has not been shown that the discretion miscarried.

Implying a term of Reasonable Notice

202           Mr Birnie was employed by AWI Administration Services Pty Ltd for a period of approximately 8 years and 3 months.  On termination of his employment Mr Birnie was given 1 week's notice and paid 12 weeks' salary, being 4 weeks' pay in lieu of notice and 8 weeks' severance pay.  The 12 weeks' pay was calculated on his salary of $100,000 per annum. 
Mr Birnie claims he has been denied a benefit due under his contract of employment in that he should have been paid 12 months' remuneration as pay in lieu of notice and that the rate of remuneration should have been calculated by having regard to the value of the use of a fully maintained motor vehicle during the period of notice.

203           We agree with the President for the reasons that he expresses, that Mr Birnie's contract of employment was partly in writing and partly oral and there was no express term as to termination of the contract by the giving of notice or payment in lieu of notice.

204           It is well established that if parties to a contract of employment make no provision about the circumstances of bringing the contract to an end, the law will imply a term to the effect that either party can terminate the contract by the giving of notice.  (Richardson v Koefod [1969] 1 WLR 1812 and McClelland v Northern Ireland General Health Services Board [1957] 1 WLR 594).  It is, however, not clear at law whether a term should be implied that where no reasonable notice is given, payment in lieu of notice should be made.  However, determination of this question is not in our view necessary.  Where reasonable notice is not given the Commission awards an amount equivalent to the amount, which would have been paid if notice were given (see for example Tarozzi v WA Italian Club (Inc) (1991) 71 WAIG 2499).  This approach was approved recently by the Full Bench in Hotcopper Australia Ltd v Saab unreported [2001] WAIRC 3827 in which it was held that the Commission has power to make an award of damages if the specific terms of the contract cannot be awarded.  It is clear that where a contract of employment should have been terminated by the giving of notice but notice has not been given, there is no scope for the Commission to make an order in the nature of specific performance.

Period of Reasonable Notice and Redundancy Pay

205           The requirement to make a severance payment and the calculation of a period of reasonable notice are distinct.  There is, however, some interdependence between the two (Thompson v Gregmaun Farms Pty Ltd (2000) 80 WAIG 1733 and AFMEPKI v Goldfields Contractors Pty Ltd [2000] WAIRC 1469 at [29]–[30]; (2000) 80 WAIG 5346 at 5347).  The difference between the two was clearly explained by Justice Moore in Black v Brimbank City Council [1998] 74 FCA where he observed;

  "A period of notice is to give an employee the opportunity to adjust to the change in circumstances which is to occur and to seek other employment; Mathews v Coles Myer Ltd (1993) 47 IR 229.  The period may be worked out, as s 170DB allows, and it often is, as it is recognised that the employee's prospects of obtaining other employment may be better if the search is undertaken while the employees remain in employment: see for example Sinclair v Anthony Smith & Associates Pty Ltd (IRC of A, von Doussa J, 1 December 1995, unreported at 8).

  A severance payment, however, is intended to provided (sic) a payment as compensation for the loss of non-transferable credits and entitlements that have been built up through length of service such as sick leave and long service leave, and for inconvenience and hardship imposed by the termination of employment through no fault of the employee: Termination, Change in the Redundancy Case (1984) 8 IR 34 at 62, 73.  The inconvenience and hardship includes the disruption to the employee's routine and social contacts and the competitive disability to long term employees arising from opportunities foregone in the continuous service of the employer: Food Preservers Union of Australia v Wattie Pict Ltd (1975) 172 CAR 227.  Such a payment is taxed on the favourable terms which apply to an eligible termination payment.  It is quite inconsistent with the nature and purpose of the payment, and the taxation regime, that the severance entitlement should be worked out as if the number of weeks used to calculate the entitlement were weeks of notice."

206           Madgwick J made similar observations in Westen v Union des Assurances de Paris IRCA No 419/96 (28 August 1996).  Other authorities have, however, expressed the view that some of the same factors are covered by the requirement to give notice and the payment of redundancy.  The factors can overlap and there should be no double counting (see Caulfield v Broken Hill City Council [1995] NSWIRC 33 (24 March 1995)).

207           A determination of what constitutes a period of reasonable notice by the Commission is also a discretionary decision.  The range of issues which are relevant factors to consider in determining a period of reasonable notice are well established and were enunciated by the Full Bench in Tarozzi v WA Italian Club (Inc) 71 WAIG 2499 at 2501.  These are:

  “(a) The high or low grade of the appointment.

  (b) The importance of the position.

  (c) The size of the salary.

  (d) The nature of the employment.

  (e) The length of service of the employee.

  (f) The professional standing of the employee.

  (g) His/her age.

  (h) His/her qualifications and experience.

  (i) His/her degree of job mobility.

  (j) What the employee gave up to come to the present
   employer (e.g. a secure longstanding job).

  (k) The employee's prospective pension or other rights."

208           The Learned Commissioner had regard to criteria in Tarozzi's case and to the fact that the factors set out in Tarozzi overlap with the considerations relevant to considering whether a particular redundancy payment is reasonable.  He then concluded that in light of the fact that the diamond exploration industry is an industry in which employment opportunities fluctuate from time to time that a payment of 4 weeks' pay in lieu of notice could not be considered unreasonable in light of his decision that Mr Birnie be paid a further 8 weeks' redundancy pay (being a total of 20 weeks' pay).  In making this determination, the Learned Commissioner held that Mr Birnie should have been paid 16 weeks' redundancy pay on termination of his employment.

209           Whilst it is clear that an award of severance or redundancy pay and damages for reasonable notice should be global, the factors that apply to each should be first considered separately.

210           In relation to the factors to be applied to reasonable notice it is relevant that:

(a) At the time of his dismissal the Applicant was aged 38 years and is a qualified Geologist specializing in diamond exploration.

(b) AWI Administration Services Pty Ltd employed Mr Birnie for over 8 years.  Initially he was engaged as a project geologist to work out of Melbourne.  In 1995 he was re-located to Perth.  From 1997 he was employed as the Regional Exploration Manager.  There is only one operating diamond mine in Australia and at the time of termination the diamond industry was undergoing very hard times, so that there were very few employment opportunities.  Given that Mr Birnie had been principally engaged in the diamond industry for over 8 years, it was likely to be some time before he could obtain alternative employment.

(c) His personal circumstances are that he is married with 3 children.  His wife was a cardiac technician in Melbourne and had to give up her employment when they were transferred from Melbourne to Perth.

211           Having regard to the matters set out in the preceding paragraph we are of the view that a reasonable period of notice without having regard to any payment for severance pay would be 4 months’ notice. 

212           In relation to redundancy pay, in addition to the factors set out above regard must be had to the loss of non-transferable credits.  The Learned Commissioner, in our view, did not err in determining that Mr Birnie should have been paid 16 weeks' redundancy pay, as Mr Birnie had 8 years' service towards long service leave.  However when regard is had to this award and to the additional factors required to be considered in relation to reasonable notice, the Learned Commissioner erred in holding that 4 weeks' pay in lieu of notice was not unreasonable.  It is our view that if a payment of 16 weeks' pay were made as a redundancy payment, a period of reasonable notice would have been 8 weeks' notice.  As Mr Birnie was paid 4 weeks’ pay in lieu of notice we would order that Mr Birnie be paid an additional 4 weeks’ pay, as pay in lieu of notice.

Period of Reasonable Notice and Redundancy Pay

213           It is inherent in the concept of a payment or an award of pay in lieu of notice, that the payment made should be equivalent to the amount an employee would have earned had he or she been given notice.  Mr Birnie was entitled, under his contract of employment, to the private use of a motor vehicle.  Accordingly, we would after having regard to the fact that AWI Administration Services Pty Ltd paid Mr Birnie 4 weeks’ pay as notice, make an order that AWI Administrative Services Pty Ltd pay Mr Birnie an amount equal to the value of the use of the motor vehicle for a period of 8 weeks.  If the value of the private use is in dispute, we would order that the matter be remitted to the Commission at first instance for hearing and determination.

Summary of entitlements to pay in lieu of notice and redundancy pay

214           In summary, we are of the view that after having regard to the payments made to Mr Birnie on termination, (namely 4 weeks’ pay in lieu of notice and 8 weeks’ redundancy pay) together with the order made at first instance that he be paid an additional 8 weeks’ pay as a redundancy pay, we are of the opinion that Mr Birnie should have been paid a total of 24 weeks’ pay being:

(a) 8 weeks’ salary in lieu of notice, calculated by having regard to the fact that he would have had the use of a motor vehicle if he was given notice;  and

 (b) 16 weeks’ salary as a redundancy payment, calculated without regard to the value of the private use of a motor vehicle.

THE PRESIDENT:

215           For those reasons, appeal No FBA 22 of 2001 is dismissed; and appeals Nos FBA 23 of 2001 and FBA 24 of 2001 are upheld in part and the decision at first instance varied.