2016 WAIRC 00941
APPEAL AGAINST A DECISION OF THE COMMISSION IN MATTER NO. U 188 OF 2015 GIVEN ON 27 APRIL 2016 AND APPEAL AGAINST A DECISION OF THE COMMISSION IN MATTER NO. B 188 OF 2015 GIVEN ON 21 APRIL 2016

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

FULL BENCH

CITATION : 2016 WAIRC 00941

CORAM
: THE HONOURABLE J H SMITH, ACTING PRESIDENT
CHIEF COMMISSIONER P E SCOTT
ACTING SENIOR COMMISSIONER S J KENNER

HEARD
:
WEDNESDAY, 17 AUGUST 2016; MONDAY 19 SEPTEMBER 2016

DELIVERED : TUESDAY, 22 DECEMBER 2016

FILE NOS : FBA 3 OF 2016 AND FBA 4 OF 2016

BETWEEN
:
MARK DARREN RICHARDS
Appellant

AND

GB & G NICOLETTI
Respondents

ON APPEAL FROM:

JURISDICTION : WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
CORAM : CHIEF COMMISSIONER A R BEECH
CITATIONS : [2016] WAIRC 00248; (2016) 96 WAIG 504 AND
[2016] WAIRC 00240; (2016) 96 WAIG 504
FILE NOS : U 188 OF 2015 AND B 188 OF 2015

CatchWords : Industrial Law (WA) - Appeals against decisions of Commission - Declaration made that employee was unfairly dismissed and order for compensation for loss and injury made - Order for quantum of compensation for injury varied - Principles regarding assessment of compensation considered - Claim of contractual benefits for pay in lieu of reasonable notice - Whether an implied term to give reasonable notice is a term implied in law or in fact considered - The existence of a notice provision in s 117(2) of the Fair Work Act 2009 (Cth) excludes the implication of a term in the contract of employment to give reasonable notice
Legislation : Industrial Relations Act 1979 (WA) s 23(7)(c), s 23A, s 23A(6), s 23A(7)(b), s 23A(7)(c), s 26(1)(a), s 26(1)(c), s 26(1)(d), s 29(1)(b)(i), s 49(2)
Residential Tenancies Act 1987 (WA)
Industrial Relations Act 1984 (TAS) s 46, s 47(2)
Fair Work Act 1994 (SA)
Acts Interpretation Act 1901 (Cth) s 15AB, s 15AB(1), s 15AB(1)(a), s 15AB(2)(d)
Fair Work Act 2009 (Cth) s 26, s 117, s 117(2), s 117(2)(a), s 117(3), s 340(1)(a)(i)pt 6-3 div 3, s 758, s 759, s 760, s 761, s 762
Industrial Relations Act 1988 (Cth) s 170CA(1), s 170DB, s 170DB(1), s 170DB(2), s 170HA, sch 10
Industrial Relations Reform Act 1993 (Cth) s 21
Judiciary Act 1903 (Cth) s 78B
Workplace Relations Act 1996 (Cth) s 170CM, s 170CM(1), s 170CM(2), s 661, sch 10
Workplace Relations Amendment (Work Choices) Act 2005 (Cth) sch 5 Item 1
Workplace Relations and Other Legislation Amendment Act 1996 (Cth) Iterm 10 of sch 6
Australian Constitution s 109
Result : FBA 3 of 2016 - Upheld
FBA 4 of 2016 - Dismissed
REPRESENTATION:
APPELLANT : MR G MCCORRY, AS AGENT
RESPONDENTS : MR C J GRAHAM (OF COUNSEL) ON 17 AUGUST 2016 AND
Mr S R Sirett (of counsel) on 19 September 2016
Solicitors:
RESPONDENTS : BORRELLO GRAHAM

Case(s) referred to in reasons:
Anthony & Sons Pty Ltd v Fowler [2005] WAIRC 01744; (2005) 85 WAIG 1899
Australian Coal and Shale Employees' Federation v Commonwealth (1953) 94 CLR 621
Australian National Hotels Pty Ltd v Jager [2000] TASSC 43; (2000) 9 TASR 153
AWI Administration Services Pty Ltd v Birnie [2001] WAIRC 04015; (2001) 81 WAIG 2849
Bognar v Merck Sharp & Dohme (Australia) Pty Ltd [2008] FMCA 571
Bone Densitometry Australia Pty Ltd v Lenny [2005] WAIRC 02081; (2005) 85 WAIG 2981
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1997) 180 CLR 266
Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 142 ALR 99
Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 67 IR 162
Brennan v Kangaroo Island Council [2013] SASCFC 151; (2013) 120 SASR 11; (2013) 239 IR 355
Brennan v Kangaroo Island Council [2014] HCASL 153
Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410
Capewell v Cadbury Schweppes Australia Ltd (1997) 78 WAIG 299
Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169
Elliott v Kodak Australasia Pty Ltd [2001] FCA 1804; (2001) 129 IR 251
Elliott v Kodak Australasia Pty Ltd [2001] FCA 807; (2001) 108 IR 23
Fire and All Risks Insurance Co Ltd v Rousianos (1989) 19 NSWLR 57
Fowler v Anthony & Sons Pty Ltd [2004] WAIRC 13416; (2004) 84 WAIG 3855
Golding v P.I.H.A. Pty Ltd [2004] WAIRC 12971; (2004) 84 WAIG 3639
Gronow v Gronow [1979] HCA 63; (1979) 144 CLR 513
Grout v Gunnedah Shire Council (No 2) (1995) 58 IR 67
Gunnedah Shire Council v Grout (1995) 62 IR 150
Guthrie v News Ltd [2010] VSC 196; (2010) 27 VR 196
Holt v Musketts Timber Sales Pty Ltd (1994) 54 IR 323
House v The King [1936] HCA 40; (1936) 55 CLR 499
Hutt v The Cascade Brewery Co Ltd A99/1991
Industrial Inspector of the Office of Industrial Relations v Holliday (1986) 66 WAIG 477
Johnson v Millswan Holdings Pty Ltd [2003] WAIRC 07592; (2003) 83 WAIG 348
Kartinyeri v Commonwealth [1998] HCA 22; (1998) 195 CLR 337
Kuczmarski v Ascot Administration Pty Ltd [2016] SADC 65
Logan v Otis Elevator Co Pty Ltd [1999] IRCA 4; (1999) 94 IR 218
Lynam v Lataga Pty Ltd (2001) 81 WAIG 986
Margio v Fremantle Arts Centre Press (1990) 70 WAIG 2559
McGowan v Direct Mail and Marketing Pty Ltd [2016] FCCA 2227
Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 [2006] HCA 53; (2006) 231 CLR 1
Minister of State for Immigration and Ethnic Affairs v Teoh [1995] HCA 20; (1995) 183 CLR 273
Neville Jeffress Advertising Pty Ltd v Barlow (No 2) A81/1993
Polites v Commonwealth [1945] HCA 3; (1945) 70 CLR 60
Ramsay Bogunovich v Bayside Western Australia Pty Ltd (1998) 79 WAIG 8
Rankin v Marine Power International Pty Ltd [2001] VSC 150; (2001) 107 IR 117
Richardson v Koefod [1969] 3 All ER 1264
Rogan-Gardiner v Woolworths Ltd [2012] WASCA 31
Scicluna v William Paul Brookes t/as Bayview Motel Esperance WA [2016] WAIRC 00862
SGS Australia Pty Ltd v Trevor Taylor (1993) 73 WAIG 1760
Society of Lloyd's v Clementson [1995] CLC 117
Thorpe v South Australian National Football League (1974) 10 SASR 17
University of Western Australia v Gray [2009] FCAFC 116; (2009) 179 FCR 346
Vermeesch v Harvey World Travel Franchises Pty Ltd (1997) 74 IR 364
Westen v Union des Assurances de Paris (No 2) (1996) 88 IR 268
Westpac Banking Corporation v Wittenberg [2016] FCAFC 33; (2016) 330 ALR 476; (2016) 256 IR 181
Windross v Transact Communications Pty Ltd [2002] FMCA 145
Reasons for Decision
SMITH AP:
The appeals and the orders appealed against
1 These appeals are instituted under s 49(2) of the Industrial Relations Act 1979 (WA) (the IR Act) against decisions made by the Commission in U 188 of 2015 delivered on 27 April 2016 and B 188 of 2015 delivered on 21 April 2016.
2 Application U 188 of 2015 was an industrial matter referred to the Commission by Mark Darren Richards under s 29(1)(b)(i) of the IR Act. Mr Richards claimed that he had been harshly, oppressively or unfairly dismissed by GB & G Nicoletti (the respondents) on 23 October 2015. In U 188 of 2015 a declaration was made that the summary dismissal of Mr Richards on 23 October 2015 was harsh and unfair and an order was made requiring that the respondents forthwith pay Mr Richards the sum of $3,991.72 gross being compensation for the loss and injury caused by his summary dismissal ([2016] WAIRC 00248; (2016) 96 WAIG 504). This amount was calculated as compensation:
(a) for two weeks' pay for a period of time Mr Nicoletti should have implemented as a fair procedure to give Mr Richards a period of time to improve his performance;
(b) one week's pay in lieu of notice which is an amount that should have been paid to Mr Richards pursuant to cl 5(b) of the Farm Employees' Award 1985 (WA) (the Award); and
(c) $1,000 for injury to Mr Richards caused by the dismissal.
3 Chief Commissioner Beech made an order to dismiss Mr Richards' claim for contractual benefits in B 188 of 2015 ([2016] WAIRC 00240; (2016) 96 WAIG 504). In this application, Mr Richards sought damages for breach of an implied term of reasonable notice or payment in lieu of notice of termination of employment (amended statement of claim dated 23 February 2016 (AB 42)). Chief Commissioner Beech dismissed this claim on grounds that there was no need to imply a term of reasonable notice in the contract of employment as cl 5(b) of the Award applied to Mr Richards' employment which entitled the respondents to terminate Mr Richards' employment by one week's notice or by payment of one week's pay.
Grounds of appeal
(a) FBA 3 of 2016
4 In FBA 3 of 2016, Mr Richards seeks only to challenge the award of compensation of $1,000 for injury made in U 188 of 2015. The amended ground of appeal in FBA 3 of 2016 is that Beech CC was wrong in law in assessing damages for the injury occasioned by the unfair dismissal by comparing Mr Richards' treatment by the respondents with that of the dismissed employee in Golding v P.I.H.A. Pty Ltd [2004] WAIRC 12971; (2004) 84 WAIG 3639. The particulars of the ground state that Beech CC failed to take into proper account, as required by s 23(7)(c) of the IR Act, the very material consideration that Mr Richards and his partner were subjected to threats and physical intimidation by the respondents during the termination of Mr Richards' employment.
(b) FBA 4 of 2016
5 The amended ground of appeal in FBA 4 of 2016 is that Beech CC erred in law in holding:
(a) that the Award notice provisions applied to Mr Richards' employment; and
(b) that there was no scope for the implication of reasonable notice to terminate Mr Richards' employment.
6 The particulars to this ground state that the notice provisions in the Award did not apply to Mr Richards by reason of the operation of div 3 of ch 6, pt 6-3 and s 762 of the Fair Work Act 2009 (Cth) and the notice provisions in both the Award and s 117 of the Fair Work Act do not operate to exclude the implication of a term requiring reasonable notice to terminate the contract of employment.
The relevant facts and findings found at first instance
7 Mr Richards was employed as a stockman by the respondents for approximately three weeks. He commenced employment on 5 October 2015 and was dismissed without notice on 23 October 2015 for alleged incompetence.
8 The evidence of Mr Richards and Mr Nicoletti was different in respect of most material matters. After considering all of the evidence given by the parties, including each of the witnesses who gave evidence in support of each party's case, Beech CC substantially accepted the version of events given by Mr Richards and made a number of findings of fact which are relevant to the disposition of these appeals.
9 Before determining the facts, Beech CC observed that the reasoning in Industrial Inspector of the Office of Industrial Relations v Holliday (1986) 66 WAIG 477; Margio v Fremantle Arts Centre Press (1990) 70 WAIG 2559 and Johnson v Millswan Holdings Pty Ltd [2003] WAIRC 07592; (2003) 83 WAIG 348 established that incompetence may be sufficient justification for the exercise of the right of summary dismissal:
(a) where there has been an express or implied representation by the employee that he or she was competent to fulfil the job;
(b) the employee has been shown to be incompetent; and
(c) the employee has been warned that his or her employment has been unsatisfactory before terminating his or her employment.
(a) Mr Richards' previous farming experience
10 Mr Richards was born on a wheat and sheep farm near Dumbleyung in Western Australia and he spent all his childhood working on that farm and his grandfather's farm at Needilup. He worked at all aspects of farming - tractor driving, harvester driving, fencing, sheep work, shearing, crutching, dipping and anything to do with the day-to-day workings of a normal farm until the age of 17. At the time of giving evidence, Mr Richards was 51. After the age of 17 he served in the armed services for 15 years and then worked offshore on oil rigs on a fly-in/fly-out basis. Whilst working on oil rigs, on some of his 28 days off he returned to the family farm for a couple of his days to help out at shearing time, seeding time, harvest time and assist in fencing or general work.
(b) Mr Richards' employment interview
11 Mr Richards came to be interviewed by Mr Nicoletti after he responded to a job advertisement for a full-time stockman position located in the Central Wheatbelt. The advertisement was for an 'experienced hardworking stockman' to join a large farming operation. Mr Richards telephoned the number in the advertisement and spoke to Mr Nicoletti. Mr Richards told Mr Nicoletti that he was a shearer and had been brought up on the farm and had worked with sheep most of his life. They arranged for a time to meet in Welshpool.
12 Mr Richards and his partner, Ms Anna Marie Evans, met Mr Nicoletti in Welshpool. At that meeting, Mr Richards made Mr Nicoletti aware of his past employment.
13 Mr Nicoletti was impressed by Mr Richards having started shearing at the age of 10 because, in his view, 'anyone who starts shearing at 10 years of age must be ok'. He was aware that Mr Richards had left the farm at a very young age.
14 Mr Richards suggested he move up for a couple of months as a trial period 'to see what it was like and how everything went', but Mr Nicoletti replied that he had already had a couple of applicants like that and he wanted a family to move up there and stay together, and therefore they should come up as a family and he should commence work. Mr Nicoletti did not ask for a period of probation, which he might have been expected to in the circumstances. In fact, it was Mr Richards' evidence that he offered to come up for a period (as a single man) to 'see how it goes', but Mr Nicoletti had not wanted this.
15 Mr Nicoletti discussed with Mr Richards the salary, that it would involve working seven days a week and the accommodation. Mr Richards asked whether Mr Nicoletti would have a job somewhere for his son. His response was that if Mr Richards came up to look at the houses for the accommodation, the son should be brought along and Mr Nicoletti would speak to him.
16 Mr Richards did not make a misrepresentation to Mr Nicoletti that he had current farming experience. Mr Nicoletti did not ask for references. Mr Nicoletti knowingly agreed to employ in the position a person he knew had not been farming for some time and who had not been employed full-time on a farm for at least 15 or 20 years.
(c) The three weeks' employment
17 Mr Richards and his partner, Ms Evans, moved to the farm on 30 September 2015. They moved into a house supplied by the respondents, and spent some money making it 'liveable'. Mr Nicoletti arranged for paint and some electrical work to be done to the house.
18 On the day Mr Richards commenced employment he signed an employment agreement (AB 46).
(d) The dismissal
(i) Dismissal on grounds of incompetence - harsh and unfair
19 Mr Richards was dismissed because in the view of the respondents, Mr Richards took on a job that required previous experience, yet he did not have that experience, would talk over them and would not listen.
20 Mr Nicoletti decided very shortly after Mr Richards commenced work that the working relationship was not going to work.
21 Mr Richards' summary dismissal on grounds of incompetence was both harsh and unfair.
22 Chief Commissioner Beech found that Mr Nicoletti dismissed Mr Richards in part because Mr Nicoletti considered Mr Richards was not a team player, and in part because he formed the view that he and Mr Richards could not work together. Chief Commissioner Beech found these are not grounds justifying summary dismissal for incompetence. Not being a team player, or even being quite confronting, is not incompetence.
23 Mr Nicoletti has been farming in his own right since 1979. He has 26 people employed in his farming operations and 120 employees in other businesses. The very first day that he and Mr Richards drafted some rams, when Mr Richards was telling him to stand out of the way, Mr Nicoletti's evidence was he thought to himself, 'It doesn't quite work like that.' Mr Nicoletti formed the view that Mr Richards' handling of the sheep and trying to get them into the shed was incompetent and Mr Nicoletti made the decision there and then he was 'never going to last with us'.
24 Chief Commissioner Beech observed, however, that employing someone without recent full-time farming experience implies a period of familiarisation, if not learning. Yet, Mr Richards was not warned that he was considered incompetent and that he would be dismissed if he did not improve.
25 On the Friday morning that Mr Richards was dismissed, a co-worker had asked him to set up the yards and shut the gates so when the sheep came in they would go straight into the yards. This Mr Richards proceeded to do. He was shutting the last gate when Mr Nicoletti arrived, leant out of the window of his vehicle and asked what the hell he was doing. Mr Richards told Mr Nicoletti he was setting up the gates for when the sheep came and Mr Nicoletti replied, 'That's not how we do it here. You both go and get the sheep in.' Mr Richards told Mr Nicoletti he was doing what his co-worker had asked him to do. Mr Nicoletti started raising his voice, yelling at him and abusing him. Mr Richards asked Mr Nicoletti to please explain to him what it was he was doing wrong so that he could fix it. Mr Nicoletti kept yelling and abusing Mr Richards saying he was useless, not doing the right thing. Mr Nicoletti got out of the ute and continued to yell and scream at Mr Richards. Mr Richards was bent back over the ute and Mr Nicoletti was a couple of inches from Mr Richards' face. Mr Richards put his hands between himself and Mr Nicoletti and pushed Mr Nicoletti away. Mr Nicoletti then told him to leave.
(ii) Immediate loss of accommodation - harsh
26 Chief Commissioner Beech found that Mr Richards' summary dismissal was also harsh because it had the effect that he would immediately lose the accommodation provided for him and his partner when Mr Nicoletti had preferred them to come up as a family and Mr Richards had only recently incurred the costs of moving himself and Ms Evans to the house and making some alterations. Dismissing Mr Richards summarily had an immediate and dramatic effect upon not only Mr Richards but his family. Summary dismissal immediately cut off Mr Richards' source of income and his entitlement to accommodation.
(e) Compensation - loss caused by the dismissal
27 Chief Commissioner Beech then went on to find that one measure of the loss caused by the dismissal was to consider how long Mr Richards would have continued in employment had the dismissal on 23 October 2015 not occurred. He found that when Mr Nicoletti realised it was not going to work out, a fair procedure should have followed. Further, Beech CC found that Mr Nicoletti should have arranged to meet Mr Richards and tell him he needed to improve his standard of work or his interaction with other employees and himself, to warn him that his job was in jeopardy if he did not do so, and give him a further period of time to improve.
28 Chief Commissioner Beech finally found that:
(a) taking into account that Mr Richards had not recently been employed full-time on a farm, and that he had been working there for only three weeks, that he had come to the position as a family, that he is 51 years of age and his dismissal meant that he would immediately lose the entitlement to accommodation for him and his partner, a fair further period of time would have been two weeks to implement this procedure;
(b) however, the evidence does not suggest that it is likely that Mr Richards and Mr Nicoletti would have established a better working relationship during that timeframe; and
(c) the evidence of how Mr Richards views his own skills, and how he and Mr Nicoletti reacted to each other, leads to a conclusion that it is more likely than not that Mr Richards would have been dismissed at the conclusion of that further two-week period. Mr Nicoletti would then have been required to give Mr Richards one week's notice of termination or payment in lieu of notice as the notice period and provision for pay in lieu of notice is prescribed by the Award in cl 5(b).
29 Thus, Beech CC concluded that the loss caused by the dismissal was the wages Mr Richards would have earned for two weeks plus one week's pay in lieu of notice which was calculated as $52,000 ÷ 52.144 = $997.24 per week x 3 = $2,991.72.
(f) Events subsequent to the dismissal
30 Chief Commissioner Beech then went on to consider the conduct of the respondents and their employees that occurred subsequent to the dismissal. The events he found were as follows:
(a) Mr Richards went home on the Friday he was dismissed and did not hear anything further until the following Monday morning when a ute pulled up with two employees. One of the employees told Mr Richards that Mr Nicoletti had asked them to retrieve Mr Richards' ute and everything else that had been given to him to use.
(b) On the Monday or the next day, Mr Richards drove to Albany to speak to his family. He returned to the farm on the Friday and on the following Monday he received a phone call from Mrs Nicoletti asking when he was going to vacate the house, at which time he informed her that he did not have the money to vacate the house. Mrs Nicoletti yelled and screamed at him whilst on the phone which he then handed to his partner. Mr Richards' evidence was that they both felt threatened by this conduct.
(c) On the Wednesday night Mr Richards heard Mr Nicoletti's ute driving by. The following night at about 8.30pm he heard the engine of Mr Nicoletti's ute again and saw the ute taking off very fast. Five or ten seconds later he heard a crash and saw the lights of the ute going all over the place. He then saw the lights coming straight towards him and Ms Evans. Mr Nicoletti stopped the ute and threatened him, telling him to get off his land or he had ways to get him off or get out of the house and that they had ways to get him out. Mr Richards told Mr Nicoletti he did not have the money but would leave when he could and went to walk around the side of the ute. Mr Nicoletti then took off in the ute, did a circle, came back aimed his ute straight at Mr Richards and stopped at the last minute, four or five inches short of him. Mr Nicoletti was yelling and screaming, 'Get off my land, get out, this is your last warning. Get out'. Mr Richards rang the police. They turned up about 50 minutes to an hour later. Mr Richards made a statement to the police and later sought and obtained a restraining order against Mr Nicoletti.
31 Mr Richards subsequently borrowed $7,500 from his mother so he and Ms Evans could move back to Perth.
(g) Injury caused by the dismissal
32 After having regard to the observations about the concept of 'injury' in s 23A(6) of the IR Act considered by the Full Bench in Capewell v Cadbury Schweppes Australia Ltd (1997) 78 WAIG 299, 303 and AWI Administration Services Pty Ltd v Birnie [2001] WAIRC 04015; (2001) 81 WAIG 2849, 2862, Beech CC found Mr Richards suffered an injury caused by the dismissal. In making this finding, he found:
(a) Mr Richards did not give direct evidence of how the dismissal itself affected him. His diary evidence was that his head was 'just whirling with what had happened' did not show that the manner of dismissal caused him injury beyond what he might be expected to have experienced.
(b) The later conduct of Mr Nicoletti where Mr Richards says he was threatened occurred on the Tuesday or Wednesday night of the following week. This conduct was in relation to the need to vacate the accommodation as a direct result of the dismissal and is part of the dismissal.
(c) Mr Richards' evidence is that both he and Ms Evans were stressed, not very well, not sleeping and not coping. The diary entry for 11 November 2015 shows Mr Richards needed to take Ms Evans to the doctor and there is a later reference to strong medication to help her sleep. He was fearful for their safety.
(d) The evidence shows Mr Richards suffered stress not just about himself, but also about Ms Evans, as an indirect consequence of the dismissal which had occurred, that is, the effect upon him and his family at having to vacate the accommodation provided but having lost the income to enable them to afford to do so.
33 Chief Commissioner Beech then had regard to the well-established principle that the assessment of compensation for injury is not capable of precise calculation but is a matter for individual assessment and found there is no case where compensation has been ordered for injury caused by a dismissal in similar circumstances. He then, however, noted an award had been made by Harrison C in Golding (3643) of $500 for injury in circumstances where the employer's handling of the dismissal caused the employee shock and humiliation when she was terminated in circumstances where the termination was summary and unexpected and she was supervised when she was required to pack up and leave the employer's premises straight after her termination. In light of this decision, Beech CC concluded when the stress suffered by Mr Richards about himself and his partner from the later conduct (subsequent to the dismissal) is considered, an order should be made that $1,000 be paid for the injury caused by the dismissal.
(h) Claim for denied contractual benefit
34 Chief Commissioner Beech found the claim for payment in lieu of reasonable notice of termination could not succeed. He also found that once it is recognised that the Award applies to Mr Richards' employment, the Award provision that engagement in terms of weekly hiring may be terminated only by one week's notice or by payment or forfeiture of one week's pay, means that the provision of notice, or for payment in lieu of notice, applies by virtue of the Award.
35 Chief Commissioner Beech then found that the existence of the Award provision makes the conditions of employment effective without any need to imply an obligation to give reasonable notice: Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410. For that reason, he found that there is no scope for the implication of a term of reasonable notice into Mr Richards' contract of employment.
Consideration - injury - FBA 3 of 2016
36 Pursuant to s 23A(6) of the IR Act, the Commission is conferred with a discretion to make an award of compensation to an employee who has been harshly, oppressively or unfairly dismissed for loss or injury caused by the dismissal.
37 The leading statement of principles to be applied by the Commission when considering whether to make an award of compensation for injury is set out in the following passage of the joint judgment of Coleman CC and Smith C in Birnie wherein it was said [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)).
38 From these principles emerges a requirement to assess the gravity or scale of the injury. In particular, when considering whether to make an award of compensation for injury, the following matters should be considered:
(a) Whether the behaviour by or on behalf of an employer by the termination of employment has caused injury to the employee.
(b) If the behaviour in question has caused an injury, the gravity of the behaviour of the employer.
(c) The level of effect or impact of the behaviour on the employee and whether the effect or impact goes beyond a level of distress that is caused by almost all employer initiated terminations of employment.
39 This approach was implicitly approved of by the Full Bench in Anthony & Sons Pty Ltd v Fowler [2005] WAIRC 01744; (2005) 85 WAIG 1899. In Fowler v Anthony & Sons Pty Ltd [2004] WAIRC 13416; (2004) 84 WAIG 3855, at first instance, Mr Fowler was awarded $3,000 as compensation for injury caused by his dismissal. He had been employed as a skipper of Swan River cruise boats and had ascertained his employment had been terminated by his employer when he was told his name was removed from the roster. He later received a letter informing him that there was no requirement for his services as there had been a downturn in trade. Mr Fowler was horrified, mortified and depressed which caused him to visit a doctor. The manner of the termination by the employer was found to be callous, caused Mr Fowler injury and he had suffered feelings of shock within the legal meaning of that word [40].
40 On appeal the award was reduced to $2,000. President Sharkey, with whom Mayman C agreed, assessed the nature of the injury to Mr Fowler to be towards the lower end of the scale [68]. His Honour then observed [69] - [70]:
Speaking for myself, I would add this. There is something to be said for an opinion that awards in this Commission of compensation for injury are too low, and particularly in cases where there is medical and legal evidence of injury, but not solely. It might be said that Full Benches of this Commission should consider, if the parties submit it, whether the awards should be increased. However, that is a matter which it is not necessary to consider on this occasion and can await any submissions which are made another day before there is any consideration of it.
This award was not sufficiently judged as being at the lower end of the scale, which the injury was. I would reduce it therefore by one-third to reflect that it was at the lower end of the scale and award $2,000.00 not $3,000.00. The discretion, for those reasons, and in that respect alone, I am satisfied, is established to have been miscarried within the grounds laid down in House v The King [1936] 55 CLR 499 because the amount is manifestly outside what a fair exercise of discretion would be. The Full Bench is therefore entitled to substitute its decision for that of the Commissioner at first instance, on that point.
41 Commissioner Kenner also agreed the award of compensation to Mr Fowler should be reduced to $2,000 on grounds that the effect of the dismissal was at the lower end of the scale. At [80] Kenner C found:
In this case, the evidence as to the effect on the respondent of the dismissal was brief. However, simply because the evidence was brief, does not mean that it may not support a finding of injury for the purposes of s 23A(6) of the Act. Where there is an allegation or claim of injury, then some caution should be exercised. Whilst not always necessary, it will be of assistance in assessing any such claim if there is independent oral or documentary evidence of the effect of a dismissal on an employee, by way of medical or other evidence to that effect. On the evidence at first instance, the injury found by the learned Commissioner was certainly at the lower end of the spectrum and would warrant a limited award of compensation. I agree that to this extent, the discretion of the Commission at first instance miscarried and it would be appropriate to reduce the award by 30% in this case, given the evidence and the findings made.
42 The approach of the Full Bench in Anthony & Sons Pty Ltd v Fowler was applied by the Full Bench in Bone Densitometry Australia Pty Ltd v Lenny [2005] WAIRC 02081; (2005) 85 WAIG 2981. In that matter, Sharkey P, with whom Scott and Mayman CC agreed, after applying the principles approved of in Birnie, said [124] - [126]:
'Injury', as the Commissioner found, embraces the actual harm done to an employee by an unfair dismissal and 'comprehends all manner of wrongs' including being treated with callousness. The Commissioner correctly observed, too, that whilst injury may be manifested by the detrimental impact on the physical or emotional wellbeing (or, for that matter, the reputation) of an employee unfairly dismissed, dismissals will affect individuals to varying degrees and, I might add, not at all.
The Commissioner observed, too, that, while the need for professional care may be evidence of this impact, this will not always be necessary to establish the causal link between the termination of employment and the injury. Not every claim for injury, as the Commissioner correctly observed, necessarily involves or should involve expert evidence of emotional trauma. (The Commissioner referred, too, to Timms v Phillips Engineering Pty Ltd (1998) 78 WAIG 4460 and Burazin v Blacktown City Guardian Pty Ltd (FC) (op cit).)
The Commissioner went on to observe, too, and correctly, that the circumstances in which the dismissal from employment had been effected may be sufficient to cause the injury experienced. Examples were given of locking an employee out of the workplace or escorting an employee from premises in full view of staff, particularly, I might add, if this were unjustifiably done by a police officer or uniformed security officer (see the discussion of these matters in Lynham v Lataga Pty Ltd (FB) (op cit).)
43 His Honour in Bone Densitometry Australia Pty Ltd also applied the principle that an employer is bound to take an employee's reaction to a dismissal as it found him or her. He said [133]:
Ms Lenny clearly did not suffer shock and humiliation because of her personality. She, first of all, suffered it as a result of, and caused by, the unfair dismissal and the surrounding treatment of her, effected by Professor Will. That was entirely clear. That she might have suffered greater injury than someone else would, or any injury, was not established at all. Even if it were, it is trite to observe that BDA, as the respondent, was bound to take Ms Lenny as it found her. There was also unshaken evidence and uncontradicted evidence of her being bullied and exploited by Professor Will in the past, which might reasonably be found, if it were necessary, which it was not, to have caused a greater susceptibility to hurt and humiliation when the dismissal did come.
44 Finally, his Honour found [136]:
In this case, and the authorities which I have cited above are clear, one must look at the nature of the unfair dismissal and other evidence to determine whether the unfair dismissal caused any injury alleged to have been caused by it. One has to look at the alleged injurious act and assess the conduct in that light when it has been alleged to be injurious.
45 In this matter, Beech CC did not make any assessment of the gravity of the behaviour of the respondents in effecting the dismissal which in this matter Beech CC found to include the vacating of the accommodation and the level and effect of the conduct that formed part of the dismissal on Mr Richards. In particular, Beech CC made no assessment of the relevant circumstances that are raised on the facts found by him. Whilst Beech CC correctly found that an assessment for injury is not capable of precise calculation but is a matter for individual assessment, he erred in having regard to the circumstances raised in and the award made in Golding.
46 In my respectful opinion, such an assessment by regard to and the award made in Golding was in error for two reasons.
47 Firstly, the factual circumstances of Golding were entirely different. Ms Golding was a sales consultant who was made redundant. Although after being employed for less than a year, she was paid on termination four weeks' pay in lieu of notice and four weeks' pay as a redundancy entitlement. Prior to the termination of her employment she had some time off work for medical appointments for a hand injury. On the day her employment was terminated Ms Golding was asked to attend a meeting at which she was advised that her job had been made redundant as her sales had not been progressing due to the time she had off with the hand injury. Ms Golding was shocked, upset and angry as excessive time off had not previously been raised with her. She was required to immediately pack up her personal effects and was watched whilst doing so.
48 Secondly, an assessment of an award of compensation for injury should only be made by regard to the matters raised in s 26(1)(a), s 26(1)(c) and, if relevant, s 26(1)(d) and, in particular, the relevant facts and circumstances pursuant to s 23A(7)(c) of the IR Act and any matters raised in s 23A(7)(b) of the IR Act.
49 By acting upon a wrong principle, Beech CC erred in the exercise of the discretion conferred by s 23A of the IR Act to make an award of compensation. In these circumstances, it is open to the Full Bench to exercise its own discretion in substitution of the discretion at first instance by applying the findings of fact and considering the circumstances found by Beech CC.
50 In this matter:
(a) Mr Richards had to incur considerable expense to move his family from the farm and whilst Beech CC found these expenses were not losses caused by the dismissal, the loss of accommodation and the fact that the respondents engaged in threatening, abusive and harassing behaviour on more than one occasion in an attempt to get Mr Richards and his family to leave the farm when Mr Richards had lost the income to enable them to afford to do so are relevant circumstances.
(b) The threatening and abusive behaviour of Mr Nicoletti towards Mr Richards at the time of the dismissal on Friday, 23 October 2015 is also a relevant circumstance.
(c) The effect of the behaviour of the respondents on Mr Richards was that Mr Richards was fearful of his safety and suffered stress about himself and also about his partner.
51 The gravity of the behaviour of the respondents towards Mr Richards was, in my opinion, very serious and could be characterised at a very high end of the scale of callous and abusive behaviour of an employer. The behaviour was not only threatening and callous but was sustained for more than one week. The level of the effect and impact of this behaviour on Mr Richards was to cause fear and stress which must on the facts have continued during at least the period of behaviour. In the absence of medical evidence of the effect of the stress on Mr Richards or whether such effect was long lasting post dismissal, it could not be said that the effect of the behaviour on Mr Richards is at the very highest end of the scale, but can be assessed at the very least to be serious.
52 For these reasons, I am of the opinion that the ground of appeal in FBA 3 of 2016 is made out. In particular, I am satisfied that Beech CC did not give proper regard to the gravity of the threats made to Mr Richards and his partner and the stress caused by this behaviour. I am satisfied that an award of $1,000 for injury is in these circumstances unjust. When such a failure to properly exercise a discretion is made out, it is open for an appellate body to substitute its own discretion: House v The King [1936] HCA 40; (1936) 55 CLR 499; Gronow v Gronow [1979] HCA 63; (1979) 144 CLR 513, 534 - 535 (Aicken J). When all of the circumstances are considered, I am of the opinion that the injury to Mr Richards caused by behaviour, which was found by Beech CC to form part of the dismissal, should be assessed towards the higher end of the scale (but not at the highest) and that a sum of $6,000 as compensation for injury should be awarded to Mr Richards.
FBA 4 of 2016 - does s 117 of the Fair Work Act operate to exclude the implication of a term requiring reasonable notice to terminate the contract of employment?
53 Section 117 of the Fair Work Act provides:
Notice specifying day of termination
(1) An employer must not terminate an employee's employment unless the employer has given the employee written notice of the day of the termination (which cannot be before the day the notice is given).
Note 1: Section 123 describes situations in which this section does not apply.
Note 2: Sections 28A and 29 of the Acts Interpretation Act 1901 provide how a notice may be given. In particular, the notice may be given to an employee by:
(a) delivering it personally; or
(b) leaving it at the employee's last known address; or
(c) sending it by prepaid post to the employee's last known address.
Amount of notice or payment in lieu of notice
(2) The employer must not terminate the employee's employment unless:
(a) the time between giving the notice and the day of the termination is at least the period (the minimum period of notice) worked out under subsection (3); or
(b) the employer has paid to the employee (or to another person on the employee's behalf) payment in lieu of notice of at least the amount the employer would have been liable to pay to the employee (or to another person on the employee's behalf) at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice.
(3) Work out the minimum period of notice as follows:
(a) first, work out the period using the following table:
Period

Employee's period of continuous service with the employer at the end of the day the notice is given
Period
1
Not more than 1 year
1 week
2
More than 1 year but not more than 3 years
2 weeks
3
More than 3 years but not more than 5 years
3 weeks
4
More than 5 years
4 weeks
(b) then increase the period by 1 week if the employee is over 45 years old and has completed at least 2 years of continuous service with the employer at the end of the day the notice is given.
54 The operation of s 117 of the Fair Work Act is extended to employees of non-national system employers by operation of s 758, s 759, s 760, s 761 and s 762 of the Fair Work Act. Section 758 provides:
The object of this Division is to give effect, or further effect, to:
(a) the ILO Convention (No. 158) concerning Termination of Employment at the Initiative of the Employer, done at Geneva on 22 June 1982 ([1994] ATS 4); and
(b) the Termination of Employment Recommendation, 1982 (Recommendation No. R166) which the General Conference of the ILO adopted on 22 June 1982.
Note 1: In 2009, the text of a Convention in the Australian Treaty Series was accessible through the Australian Treaties Library on the AustLII website (www.austlii.edu.au).
Note 2: In 2009, the text of a Recommendation adopted by the General Conference of the ILO was accessible through the ILO website (www.ilo.org).
55 Section 759 provides:
Extension of Subdivision A of Division 11 of Part 22 and related provisions
(1) The provisions of Subdivision A of Division 11 of Part 22, and the related provisions identified in subsection (2), apply in relation to a nonnational system employee as if:
(a) any reference in the provisions to a national system employee also included a reference to a nonnational system employee; and
(b) any reference in the provisions to a national system employer also included a reference to a nonnational system employer.
Note 1: Subdivision A of Division 11 of Part 22 provides for notice of termination or payment in lieu of notice.
Note 2: This subsection applies to express references to national system employees and national system employers, and to references that are to national system employees and national system employers because of section 60 or another similar section.
(2) The related provisions are the following, so far as they apply in relation to Subdivision A of Division 11 of Part 22 as it applies because of subsection (1):
(a) the provisions of Division 2, Subdivision C of Division 11, and Division 13, of Part 22;
(b) any other provisions of this Act prescribed by the regulations;
(c) any provisions of this Act that define expressions that are used (directly or indirectly) in provisions of Subdivision A of Division 11 of Part 22, or in provisions referred to in paragraph (a) or (b) of this subsection.
Modifications are set out in Subdivision B
(3) The extended notice of termination provisions have effect subject to the modifications provided for in Subdivision B. The extended notice of termination provisions are the provisions of Subdivision A of Division 11 of Part 22, and the related provisions identified in subsection (2) of this section, as they apply because of this section.
Regulations made for the purpose of provisions
(4) Subsection (1) also applies to any regulations made for the purpose of a provision to which that subsection applies, other than a provision that is modified by Subdivision B.
56 Section 760 provides:
A nonnational system employer must not contravene the extended notice of termination provisions.
Note: This section is a civil remedy provision (see Part 41).
57 Section 761 provides:
A reference in this Act, or another law of the Commonwealth, to the National Employment Standards includes a reference to the extended notice of termination provisions.
58 Section 762 provides:
This Act is not intended to apply to the exclusion of laws of a State or Territory that provide employee entitlements relating to notice of termination of employment (or payment in lieu of notice), to the extent that those laws:
(a) apply to non-national system employees; and
(b) provide entitlements for those employees that are more beneficial than the entitlements under the extended notice of termination provisions.
(a) The parties' submissions
59 In B 188 of 2015, Mr Richards sought pay in lieu of an implied term in his contract of employment that he would be given reasonable notice of termination of employment.
60 Chief Commissioner Beech found that because the Award applied to Mr Richards' employment, the award for one week's notice or payment in lieu for weekly hire employees applied without any need to imply an obligation to give reasonable notice and there was no scope for the implication of a term for the giving of reasonable notice into the contract.
61 Mr Richards argues firstly the finding that the Award provision applied to his employment was in error because of the operation of s 109 of the Australian Constitution (the Constitution) and s 762 of the Fair Work Act rendered the Award provision inoperative. This is because the effect of s 762 is to provide that employee entitlements relating to notice of termination of employment or payment in lieu of notice apply to non-national system employees unless those entitlements for those employees are more beneficial than the entitlements under the extended notice of termination provisions in the Fair Work Act.
62 At the hearing of the appeals on 17 August 2016, it was disputed by Mr J Graham on behalf of the respondents that s 117 of the Fair Work Act applied to the employment of Mr Richards. At the conclusion of the hearing on that day the Full Bench invited the respondents to file supplementary submissions which dealt with the effect of s 762 and s 117 of the Fair Work Act and whether those provisions operate pursuant to s 109 of the Constitution to override the provisions of the Award. It was contemplated that once those submissions were filed that Mr McCorry, who appeared on behalf of Mr Richards, would then draft and serve notices of a matter arising under the Constitution or involving its interpretation to the Attorneys-General of the Commonwealth and of the States pursuant to s 78B of the Judiciary Act 1903 (Cth).
63 However, on 26 August 2016 submissions were filed on behalf of the respondents by their solicitors in which it was stated that the respondents concede that the effect of s 26, s 762 and s 117 of the Fair Work Act exclude the application of the notice provisions in the Award. In particular, it is conceded in the submissions that the Award provision is not more beneficial than the entitlements under s 117 of the Fair Work Act. The submissions also state in effect that it is accepted that the operation of s 762 and s 117 are intended to cover the field and to exclude any state based industrial laws, except to the extent that they are expressly preserved by s 762.
64 However, at the hearing of the appeals on 19 September 2016, Mr Sirett on behalf of the respondents, informed the Commission that the constitutional effect of the provisions of the Fair Work Act was not something that they could rightly concede as it was a matter going to the jurisdiction of the Commission. However, having said that, Mr Sirett put no submission to the Full Bench which departed from the matters set out in the submissions that had been filed on behalf of the respondents on 26 August 2016.
65 It is argued on behalf of Mr Richards that:
(a) neither s 117(2) of the Fair Work Act, nor the extended application provided for by s 759, or any other provision in the Fair Work Act has the effect of ousting an implied term requiring the giving of reasonable notice. Section 117(2) refers to the requirement to give 'at least' the prescribed notice periods therein, while s 762 expressly preserves any state law that provides for more beneficial periods of notice of termination. Section 117(2) and s 762 give effect to the ILO Convention (No. 158) concerning Termination of Employment at the Initiative of the Employer ([1994] ATS 4) (the Termination of Employment Convention), in particular Article 11 which requires reasonable notice to be given and s 117(2) of the Fair Work Act merely expresses minimum terms of notice;
(b) the Industrial Relations Court has said that such clauses in awards do not necessarily imply that the contractual right to reasonable notice is to be abolished or made inoperative: Westen v Union des Assurances de Paris (No 2) (1996) 88 IR 268, 279 - 280. In particular, Madgwick J made the point that the clause in the award providing for notice did not exclude the implied term of an employer's obligation to give reasonable notice as the award applied to all categories of employees from outside workers right up to administrative staff and that clause because it applied so widely to all levels of potential employment needed to be read consistent with the Termination of Employment Convention (279);
(c) where an award or a statute provides for a fixed period of notice in the sense of imposing a positive obligation for a minimum period of notice, the obligation is to give not less than that period of notice; it does not mean that you must give only that notice and no more. Section 758 of the Fair Work Act requires effect to be given to the Termination of Employment Convention;
(d) section 117(2) of the Fair Work Act does not preclude the implication of an implied term of reasonable notice because there is a 'gap' in the requirement to give reasonable notice as required by the Termination of Employment Convention that has not been filled comprehensively by the enactment of s 117 as s 117(2) only specifies minimum periods of notice;
(e) the contract of employment of Mr Richards provided for an annual salary and for annual leave to be taken annually (AB 46). That of itself indicates a lengthy period of employment was anticipated and the fact that the annual salary was payable fortnightly under the contract of employment does not imply reasonable notice of a fortnight. The test of what period, in all of the circumstances, would constitute reasonable notice is a period that would give both parties time to adjust to the new circumstances that occur when the contract ends and is to cushion the employee against the sudden loss of employment by providing an opportunity to obtain new employment of a similar nature: Rogan-Gardiner v Woolworths Ltd [2012] WASCA 31 [46] - [50]; Rankin v Marine Power International Pty Ltd [2001] VSC 150; (2001) 107 IR 117 [220]. Factors relevant in any particular case are accepted to depend upon the particular facts of a case: Rogan-Gardiner;
(f) a period of time that would constitute reasonable notice for the termination of Mr Richards' employment would be a period of 60 days. The basis of this submission is that pursuant to the provisions of the Residential Tenancies Act 1987 (WA) the notice that was given to Mr Richards by the respondents to quit the tenancy was a period required by that Act to be not less than 60 days;
(g) the relevant circumstances for determining the period of reasonable notice for Mr Richards are that he was employed as a farm hand, which by its nature is seasonal work, in a location and under financial constraints that prevented him from quickly moving to another place to seek alternative employment if it was available. Chief Commissioner Beech found that Mr Richards did seek alternative employment as both a farm hand and in his previous oilfield role but had been unsuccessful for a lengthy period (AB 26 - 27, [141]). It is also relevant to consider Mr Richards' evidence that there was only a prospect of farming work becoming available at the start of the next season, which was after the hearing at first instance was concluded;
(h) the cost of moving from the respondents' farm and Mr Richards' evidence of having to borrow $5,000 from his mother in order to do so and obtain alternative accommodation, while found by Beech CC to not be a loss for which compensation could be ordered, is also a material factor in determining a period that would cushion the employee against the sudden loss of employment; and
(i) the factors in (f) to (h) outweigh the fact that Mr Richards was only employed for a short period.
66 It is submitted on behalf of the respondents that:
(a) the fact that the state award is overridden by the provisions of the Fair Work Act does not mean a term of reasonable notice is to be implied in every employment contract;
(b) it is only proper to imply a term of reasonable notice in a particular case where it is both reasonable and necessary to give the employment contract efficacy. This proposition is supported by the decision in Byrne v Australian Airlines Ltd;
(c) where the Fair Work Act provides for a statutory minimum notice period, there is no necessity to imply a term of reasonable notice to give the employment contract efficacy, as the employee will be entitled to a guaranteed period of notice;
(d) the weight of authority overwhelmingly supports the proposition that an effective award or statutory provision will, except in the most exceptional circumstances, preclude the implication of a term of reasonable notice. The reason for that is it is not necessary to imply a term of reasonable notice where a statutory provision or an award applies to an employment contract. Consequently, there is no gap to be filled; that is there is no need to imply a term of reasonable notice;
(e) inherent in the respondents' argument is that there is scope in some matters that come before the Commission to imply a term of reasonable notice and find the term is not excluded by s 117 of the Fair Work Act. There may be particular circumstances that surround the employment relationship which would give rise to the implication of a term of reasonable notice, but the starting point is whether there is necessity to do so. In this matter, there is no such necessity to imply a term of reasonable notice;
(f) in this matter, Mr Richards, pursuant to s 117 of the Fair Work Act, was entitled to a guaranteed period of notice. The existence of the Award and its application over a long period of time in this particular industry, coupled with the minimum provisions in s 117, support a finding that the farming industry practice is consistent with the statutory minimum and would be disturbed only where such a term was clearly incompatible with all the relevant surrounding circumstances;
(g) the particular circumstances of the employment relied upon by Mr Richards to support an implication of a reasonable term include significant subjective matters, for example, the borrowing of money from his mother to take up the employment. These circumstances, which are probably unknown to the respondents, do not assist in the implication of a term of reasonable notice. A unilateral and subjective intention is not the mutual intention of the contracting parties, nor one that an officious bystander would consider reasonable and necessary in the sense of being required to make the contract effective (ie efficacious). (However, it is conceded by counsel that if a period of reasonable notice did apply then it would be relevant to take into account the fact that Mr Richards moved his entire family to the farm and was induced to do so by Mr Nicoletti); and
(h) in these circumstances, in the absence of an express agreement between the parties, the minimum term in s 117 of the Fair Work Act should apply and the period of notice would be one week. That was the outcome of the original hearing. Consequently, this appeal should be dismissed on grounds that it does not result in any different outcome.
(b) Consideration - FBA 4 of 2016 - does the notice provision in the Award provide entitlements that are more beneficial than the extended notice provision in s 117 of the Fair Work Act?
67 Clause 5 of the Award provides:
(a) An employer shall have the option of engaging an employee other than an apprentice either under terms of weekly hiring or as a casual employee. An employee not specifically engaged as a casual employee, shall be deemed to be employed on terms of weekly hiring. A casual employee shall mean an employee engaged and paid as such.
(b) If the engagement is on terms of weekly hiring, it shall be terminated only by a week's notice or by payment or forfeiture of one week's pay in lieu of notice by either side. Provided that this clause shall not affect the right of the employer to dismiss an employee without notice for incompetence or misconduct and in such cases wages shall be paid up to the time of dismissal.
68 As cl 5(b) prescribes a period of one week's notice to all employees whose employment is covered by the Award, irrespective of length of service (or whether an employee is over the age of 45 years where an employee has completed at least two years' of continuous service), cl 5 cannot be characterised as a more beneficial provision than the periods prescribed in s 117 of the Fair Work Act. Consequently, s 117 (when read with s 759, s 760, s 761 and s 762 of the Fair Work Act) applies to exclude the operation of cl 5(b) of the Award.
(c) The implied term of reasonable notice - principles to be applied
(i) A term implied in law
69 The common law will imply a term that a contract of employment may be terminated on reasonable notice into a contract with no provision for termination, except in circumstances justifying summary dismissal to overcome a presumption of yearly hiring: Byrne v Australian Airlines Ltd (429) (Brennan CJ, Dawson and Toohey JJ); Richardson v Koefod [1969] 3 All ER 1264; Thorpe v South Australian National Football League (1974) 10 SASR 17, 29; Westpac Banking Corporation v Wittenberg [2016] FCAFC 33; (2016) 256 IR 181 [219] - [222] (Buchanan J). In Rankin, Gillard J explained [202] - [206]:
The general rule is that such a contract is irrevocable, unless there is something in the contract from which it could be implied that it was not irrevocable and could be determined by either party giving notice: see Llanelly Railway and Dock Co v London and North Western Railway Co (1873) LR 8 Ch App 942 at 949-50 and (1875) LR 7 HL 550 at 567; Crawford Fittings Co v Sydney Valve and Fittings Pty Ltd (1988) 14 NSWLR 438.
The law has developed exceptions to the general rule, and one of them is the contract of service. In the nineteenth century, the courts held that it was to be implied into a contract of service, in the absence of any evidence to the contrary, that either party could bring the contract of employment to an end by giving a reasonable period of notice to terminate.
In Creen v Wright (1876) 1 CPD 591, Lord Coleridge CJ, delivering the judgment of the Court, said (at 594):
'As to the notice, we think the sound construction of the contract before us is, that, except in the single case provided for by its terms, there must be a reasonable notice before it can be put an end to by either party. The rule of construction must be the same for both parties to the contract.'
See also Payzu v Hannaford (1918) 2 KB 348.
The term is implied by law.
70 Employment contracts are generally subject to a number of terms implied by the law. All such terms are subject to the express provisions of the particular contracts and any applicable statutes which includes a term to give reasonable notice of the termination of the contract other than for breach: Commonwealth Bank of Australia v Barker [2014] HCA 32; (2014) 253 CLR 169 [30] (French CJ, Bell and Keane JJ).
71 The criterion for implying a term in law is necessity. In Barker, French CJ, Bell and Keane JJ observed [28] - [29]:
An implication in law may have evolved from repeated implications in fact. As Gaudron and McHugh JJ observed in Breen v Williams ((1996) 186 CLR 71), some implications in law derive from the implication of terms in specific contracts of particular descriptions, which become 'so much a part of the common understanding as to be imported into all transactions of the particular description' ((1996) 186 CLR 71 at 103, quoting Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 449 per McHugh and Gummow JJ). The two kinds of implied terms tend in practice to 'merge imperceptibly into each other' ((1996) 186 CLR 71 at 103, quoting Glanville Williams, 'Language and the Law – IV', Law Quarterly Review, vol 61 (1945) 384, at p 401). That connection suggests, as is the case, that the 'more general considerations' informing implications in law are not so remote from those considerations which support implications in fact as to be at large. They fall within the limiting criterion of 'necessity', which was acknowledged by both parties to this appeal. The requirement that a term implied in fact be necessary 'to give business efficacy' to the contract in which it is implied can be regarded as a specific application of the criterion of necessity. The present case concerns an implied term in law where broad considerations are in play, which are not at large but are not constrained by a search for what 'the contract actually means'.
In Byrne v Australian Airlines Ltd, McHugh and Gummow JJ emphasised that the 'necessity' which will support an implied term in law is demonstrated where, absent the implication, 'the enjoyment of the rights conferred by the contract would or could be rendered nugatory, worthless, or, perhaps, be seriously undermined' ((1995) 185 CLR 410 at 450) or the contract would be 'deprived of its substance, seriously undermined or drastically devalued' ((1995) 185 CLR 410 at 453. See also Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44 at 68 [78] per McHugh, Gummow and Hayne JJ). The criterion of 'necessity' in this context has been described as 'elusive' (Crossley v Faithful and Gould Holdings Ltd [2004] ICR 1615 at 1627 [36]) and the suggestion made that 'there is much to be said for abandoning' (Peel, Treitel: The Law of Contract, 13th ed (2011), p 231 [6-043]) the concept. Necessity does, however, remind courts that implications in law must be kept within the limits of the judicial function. They are a species of judicial law-making and are not to be made lightly. It is a necessary condition that they are justified functionally by reference to the effective performance of the class of contract to which they apply, or of contracts generally in cases of universal implications, such as the duty to co-operate. Implications which might be thought reasonable are not, on that account only, necessary (University of Western Australia v Gray (2009) 179 FCR 346 at 376-377 [139]-[142]). The same constraints apply whether or not such implications are characterised as rules of construction.
72 Thus, necessity is judged by reference to contracts generally or to the class of contract to which the implied term is to apply. In this matter, the relevant class of contract is employment contracts.
73 The Full Court of the Federal Court in University of Western Australia v Gray [2009] FCAFC 116; (2009) 179 FCR 346 explained the general principles governing the implication of a term by law into a contract and, in particular, the implication of terms in employment contracts. At [135] the Full Court set out the following observations in Society of Lloyds v Clementson [1995] CLC 117, 131:
Terms implied in fact are individualised gap fillers, depending on the terms and circumstances of a particular contract. Terms implied in law are in reality incidents attached to standardised contractual relationships, or perhaps more illuminatingly, such terms can in modern US terminology be described as standardised default rules.
74 After referring to this principle, the Full Court said in University of Western Australia v Gray that the test for implying a term in law is different to the criteria to be considered when determining whether a term should be implied in fact. Their Honours observed [136]:
We begin with what is well accepted. (i) Terms implied in law are 'legal incidents of the particular class of contract' to which they respectively relate: Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 345. They are to be found in many commonly occurring types of contract — sales, employment, landlord and tenant, doctor-patient, etc. (ii) They are not based upon the intention of the parties, actual or presumed, in a given instance, although the provenance of a particular term may well have been the commonplace use of such a term in earlier times in contracts of that type, so establishing what later would become the default rule: see Byrne 185 CLR at 449. (iii) Neither are they founded on the need to give efficacy to a contract: Codelfa Construction 149 CLR at 345; although, as has often been recognised, there can be a deal of overlap between terms implied in law and terms implied in fact in particular contractual settings: see eg Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 (Hughes Aircraft Systems International) at 193. While implication in law is also said to be based on 'necessity', that necessity, as will be seen, is informed by 'more general considerations than mere business efficacy': Lister v Romford Ice and Cold Storage Company Pty Ltd [1957] AC 555 (Lister) at 576. (iv) Implication of a term in law yields to the contrary intention of the parties as expressed in their contract or because of inconsistency with the terms that have been agreed: Castlemaine Tooheys Ltd v Carlton & United Breweries Ltd (1987) 10 NSWLR 468 (Castlemaine Tooheys) at 492B-C; Shell UK Ltd v Lostock Garage Ltd [1976] 1 WLR 1187 (Shell UK) at 1196.
(ii) Section 117 of the Fair Work Act
75 It is well established that an implied term of reasonable notice in employment contracts may be excluded by an express term that evinces a clear intention to the contrary or by a statutory provision or an award provision that precludes the implication of a term requiring reasonable notice. In this appeal, the former is not raised as Mr Richards' contract of employment contained no agreed term that dealt with the termination or duration of the contract.
76 There is controversy about whether s 117(2) of the Fair Work Act operates to exclude an implied term of reasonable notice.
(iii) Legislative history of similar commonwealth termination of notice provisions and the beginning of divergent judicial opinions
77 A similar provision to s 117 was first enacted in commonwealth legislation in 1993 by the enactment of s 170DB of the Industrial Relations Act 1988 by s 21 of the Industrial Relations Reform Act 1993 (Cth). Section 170CA(1) provided that s 170DB was enacted to give effect, or further effect to the Termination of Employment Convention (which was set out in full in sch 10 of the Industrial Relations Act 1988). Section 170DB(1) specified that an employer must not terminate an employee's employment unless the employee has been given the period of notice required by s 170DB(2) or compensation in lieu of notice. The periods specified in s 170DB(2) were not, however, specified as minimum periods of notice.
78 An argument that the notice periods prescribed in s 170DB(2) of the Industrial Relations Act 1988 could be treated as a period of reasonable notice, or be construed to operate to limit a period of reasonable notice a court could imply, was rejected by Moore J in Grout v Gunnedah Shire Council (No 2) (1995) 58 IR 67. At (80), his Honour found:
The respondent then submitted that what might be treated as reasonable notice is the standard of notice found in s 170DB of the Act which would require the giving of five weeks notice. In this context, the respondent referred to the judgment of Northrop J in Holt v Musketts Timber Sales Pty Ltd (1994) 54 IR 323 in which his Honour concluded that a manager of a timber mill located in Tasmania was entitled to one week's notice only. It is clear that this conclusion depended upon the terms of s 47 of the Industrial Relations Act 1984 (Tas) which relevantly provided that the employment was 'terminable by either party by … a week's notice'. However, s 170DB is framed in terms materially different to s 47. Section 170DB is in Pt VIA of the Act which concerns the minimum entitlements of employees. Section 170DB is expressed to be a prohibition on termination unless the specified notice is given. Unlike s 47, it does not invest the employer with a statutory right to terminate irrespective of what are the common law contractual rights of the parties whether express or implied. It thus preserves the operation of those contractual rights as long as they do not fall short of the minimum set by s 170DB. In my opinion, if no notice is expressly agreed between an employer and an employee, s 170DB does not operate to limit the period of notice that a Court would imply as reasonable notice by reference to the criteria the common law has developed when determining damages for wrongful dismissal.
79 As Mr Grout held a senior position and other employment was difficult to find, Moore J found Mr Grout was entitled to nine months' notice (80). Grout v Gunnedah Shire Council (No 2) was overturned by the Full Court of the Industrial Relations Court of Australia on grounds that did not involve a consideration of the effect of the notice periods prescribed in s 170DB: Gunnedah Shire Council v Grout (1995) 62 IR 150.
80 The same argument that the notice periods prescribed in s 170DB(2) could be treated as a period of reasonable notice was also rejected by Wilcox J in Vermeesch v Harvey World Travel Franchises Pty Ltd (1997) 74 IR 364. At (365) his Honour found:
I do not agree with the submission of Mr Gallagher that the five weeks provided by s 170DB of the Industrial Relations Act 1988 (Cth) as a statutory period of notice should be treated as reasonable notice in this case. The statutory formula takes no account of the circumstances of individual employees, other than the duration of the employment and that the employee is over the age of 45 years. It does not differentiate between a person working in a highly specialised and responsible position, to which that person may have moved at considerable expense and inconvenience to himself or herself and family members, and a person who is in a position where it is relatively easy to obtain alternative employment. One has to look at the circumstances of the case.
81 A similar issue was raised in Westen v Union des Assurances de Paris (No 2). In that matter the question was whether the implied term of reasonable notice could be implied, or was to be regarded as inoperative, if a relevant award makes provision for termination of employment upon a specified period of notice. At the time the matter in Westen v Union des Assurances de Paris (No 2) arose, s 170HA of the Industrial Relations Act 1988 provided:
On and after 26 February 1994, when the Termination of Employment Convention takes effect, any award or order of the Commission that is inconsistent with the requirements of that Convention does not have effect to the extent of the inconsistency.
82 After setting out s 170HA in his reasons for decision, Madgwick J had regard to Article 11 of the Termination of Employment Convention which expressly provides for an entitlement to employees on termination of their employment to be given reasonable notice or compensation in lieu thereof, unless guilty of serious misconduct and found that the award simply could not have the effect attributed to it by the employer (278). His Honour then found (279):
So cl 19 applies to every employee from the junior messenger, through occupations such as keyboard operators, and on and up through assessors, underwriters and actuaries and so on to, finally, the general managers.
Without the award provision, for many classes of employees, their implied right to reasonable notice would considerably exceed the minimal periods specified in the award. However, there would be some employees for whom reasonable notice would be less than four weeks and even less than two weeks. The language of the clause, except where an express obligation is cast upon employees to give at least two weeks' notice or to forfeit wages therefor, is that of limitations being placed upon respondent employers: the clause is not one which is aimed at adding, except, possibly, in the respects mentioned, to their rights. Nevertheless, the award establishes, overall, fairly low minima for periods of notice which must be given. The purpose, one deduces, of the award provisions is to relieve the less-skilled employees against a low common law measure of reasonable notice, to be judged simply against the market — often and increasingly a rather cold place for such people. In other words, the clause is mainly intended to augment the common law rights of the more needful employees; not to cut such rights away from the others.
The clause does not say, nor does it necessarily imply, that the right of reasonable notice, for employees for whom such notice might be months longer than four weeks, is to be abolished or made inoperative. The award can have a sensible and reasonable operation if it is read as meaning that an employer's obligation to give reasonable notice is assumed and endures, but, reasonable or no, the employer must give the minimum periods of notice prescribed in the award.
83 His Honour also observed (280):
I would add that s 170DB can hardly be said to take up where the award thus, as it were, left off. As I said in Hawkins v Smorgon Meat Group (unreported, Industrial Relations Court of Australia, Madgwick J, 31 July 1996), now approved in Smorgon Meat Group v Hawkins (unreported, Industrial Relations Court of Australia, Full Court, 6 December 1996) 'the section imposes minimal obligations upon employers; it does not give them rights'. When the object of the Termination of Employment Division of the Act is to give effect to the Convention (s 170CA(1)), and the Convention contains Art 11, how could it be otherwise?
84 In Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 67 IR 162, Beazley J took a different view. Her Honour had before her a claim for payment for breach of an implied term to give reasonable notice of termination in the Court's associated jurisdiction conferred by the Industrial Relations Act 1988. The applicant's employment was found by her Honour to have been terminated on 2 February 1995 by a demotion. In Brackenridge, the applicant's employment was governed by the Toyota Australia Vehicle Industry Award 1988 which provided for the periods of notice which the employer was to give upon termination. Her Honour found there was no room for the implication of a term relating to the same subject matter as an award provision. In making this finding, her Honour relied upon observations made in Byrne v Australian Airlines Ltd. At (189) she said:
As has already been observed, terms of an award are not implied into the contract of employment. However, the award still governs the employment to the extent that the express terms of the employment do not make some greater or more beneficial provision. As Brennan CJ, Dawson and Toohey JJ said in Byrne v Australian Airlines Ltd (1995) 69 ALJR 797 at 800; 61 IR 32 at 35-36:
'The award regulates what would otherwise be governed by the contract. But [the award provision is] imported as a statutory right . . . The importation of the statutory right into the employment relationship does not change the character of the right. As Latham CJ points out in his judgment in Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 at 423, the legal relations between the parties are in that situation determined in part by the contract and in part by the award.
. . .
In a system of industrial regulation where some, but not all, of the incidents of an employment relationship are determined by award, it is plainly unnecessary that the contract of employment should provide for those matters already covered by the award. The contract may provide additional benefits, but cannot derogate from the terms and conditions imposed by the award (See Kilminster v Sun Newspapers Ltd (1931) 46 CLR 284) and, as we have said, the award operates with statutory force to secure those terms and conditions. Neither from the point of view of the employer nor the employee is there any need to convert those statutory rights and obligations to contractual rights and obligations.'
Their Honours further stated (at 801; 37):
'. . . a term of an award derives its force, not from agreement between the parties, but from statute. That being so, if a contract of employment is made in reliance upon a provision of an award, it is not a reliance which requires the provision to be made a term of the contract because it already has statutory force.'
It follows that where an Award governs a particular aspect of employment, there is no room for the implication of a term relating to precisely the same subject matter. Accordingly, I reject the submission that there was an implied term as alleged.
85 Her Honour, however, did not have regard to the decisions of Moore J in Grout v Gunnedah Shire Council (No 2), Wilcox J in Vermeesch or Madgwick J in Westen v Union des Assurances de Paris (No 2). Nor did she have regard to s 170HA of the Industrial Relations Act 1988 which rendered an award provision inoperative if it was inconsistent with the requirements of the Termination of Employment Convention, in particular the requirement in Article 11 to give reasonable notice. Further, her observations were obiter as her Honour found Ms Brackenridge was guilty of wilful misconduct which justified termination of her contract without notice. On appeal, the court did not decide this point: Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 142 ALR 99, 105 - 109.
86 Section 170HA was subsequently repealed by Item 10 of sch 6 of the Workplace Relations and Other Legislation Amendment Act 1996 (Cth) which became operative on 31 December 1996.
87 Section 170DB was repealed and replaced by s 170CM of the Workplace Relations Act 1996 (Cth). Section 170CM(1) also required the giving of a period of notice specified in s 170CM(2). The Termination of Employment Convention was retained in sch 10 of the Workplace Relations Act 1996. However, no equivalent of s 170CA(1) of the Industrial Relations Act 1988 was re-enacted. Section 170CA(1) was, prior to its repeal, in substantially the same terms as s 758 of the Fair Work Act.
88 Section 170CM was later renumbered s 661 by sch 5 Item 1 of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth).
(iv) Legislative provision and award provisions that provide for specified notice - can a provision of this kind be distinguished from the operative effect of s 117 of the Fair Work Act?
89 Observations made by their Honours in Byrne v Australian Airlines Ltd about the implication of a term to be implied in fact were applied by the Full Court of the Supreme Court of Tasmania in Australian National Hotels Pty Ltd v Jager [2000] TASSC 43; (2000) 9 TASR 153. The issue raised in Jager was whether s 47(2) of the Industrial Relations Act 1984 (TAS) precluded an implied term of reasonable notice in an employment contract. Section 46 and s 47(2) of the Tasmanian Industrial Relations Act 1984 provided:

46 This Division applies to the employment of a person whose terms and conditions of employment are not –
(a) prescribed by or under any Act or Act of the Commonwealth; or
(b) regulated by an order, award, determination or agreement having effect under any Act or Act of the Commonwealth.
47 (2) Subject to subsection (3), a term or period of service of employment to which this Division applies that is of indefinite duration is terminable by either party by –
(a) a week's notice, if the wages are payable weekly;
(b) a fortnight's notice, if the wages are payable fortnightly; or
(c) a month's notice in any other case.
90 In Jager, Evans J, with whom Underwood and Crawford JJ agreed, found [26]:
It follows from the approach taken by the members of the High Court in Byrne v Australian Airlines Ltd that as s47(2) applies to the parties' contract of employment with the effect that the contract is terminable on one month's notice by either party, there is no opening for the implication of a term as to the giving of reasonable notice of the termination of the respondent's employment into the contract, it not being necessary.
91 His Honour at [27] then found that this view was consistent with the decision in Brackenridge. Justice Evans also found his conclusion was consistent with three decisions which had previously considered the effect of s 46 and s 47(2) of the Tasmanian Industrial Relations Act 1984 [28] - [31]: Hutt v The Cascade Brewery Co Ltd A99/1991; Neville Jeffress Advertising Pty Ltd v Barlow (No 2) A81/1993 and Holt v Musketts Timber Sales Pty Ltd (1994) 54 IR 323.
92 The decision in Jager has been criticised as being vitiated by the erroneous premise that the implication in question was one of fact and not law by the learned authors Neil SC and Chin, The Modern Contract of Employment (Lawbook, 2012) [11.40]. The authors also point out that special leave from the decision of the Full Court was refused, but not on a ground that touched this point ([11.40], Note 16). Justice Buchanan in Wittenberg, however, did not accept this criticism of the reasoning in Jager [234].
93 In any event, for reasons that follow, in my respectful opinion, the reasoning or at least the facts in Jager can be said to be distinguishable as it is clear the task in Jager was to construe a statutory provision that provided for actual notice, rather than minimum notice.
94 The reasoning of Beazley J in Brackenridge was also applied by a single judge of the Federal Court in Elliott v Kodak Australasia Pty Ltd [2001] FCA 807; (2001) 108 IR 23. In Elliott, Marshall J referred to the award provision as prescribing a period of one month's termination pay. His Honour did not, however, find whether the notice provision specified a period of actual notice or a minimum period of notice. His Honour's observations on this issue were brief. He found [91] - [96]:
The Court received written submissions on the issue of reasonable notice after it reserved its judgment. The central issue concerned whether the award provision relating to notice usurped the implication of a term relating to reasonable notice in Mr Elliott's contract of employment. This called for a consideration of the High Court decision in Byrne v Australian Airlines Ltd (1995) 185 CLR 410; (Byrne) and the later decision of Beazley J in Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 67 IR 162 (Brackenridge).
In Byrne at 422 to 423; their Honours, Brennan CJ, Dawson and Toohey JJ held:
'In the absence of any provision in the award and of any express provision in the contract of employment the law would regard it as a legal incident of the contract that it should be terminable upon reasonable notice or summarily for serious breach.' (Emphasis added.)
Mr Irving submitted that their Honours in the above passage did not intend to remove the possibility of implying a term regarding notice when an award prescribed a minimum period of notice. Mr Irving contended:
'In my submission, their Honours were referring in that passage to a situation in which the "provision in the award" or "the express provision in the contract" dealt with the same subject matter as the implied term in a manner that was inconsistent with the implication of the term. In my submission the majority were alluding to circumstances in which the award granted a positive right to an employer to dismiss on the provision of 4 weeks notice . . . They was [sic] not referring to award clauses that granted additional minimum rights to employees similar to the rights granted by section 170CM of the WR Act.'
In reply Mr McDonald relied on Beazley J's judgment in Brackenridge. In Brackenridge, after considering Byrne, Beazley J held (at 189): '... where an Award governs a particular aspect of employment there is no room for the implication of a term relating to precisely the same subject matter.'
Mr McDonald further noted that Beazley J's judgment in Brackenbridge was cited with approval by the Full Court of the Supreme Court of Tasmania in Australian National Hotels Pty Ltd v Jager [2000] TASSC 43 (Jager). Nor was this aspect of Beazley J's decision disturbed on appeal to the Full Court of the Industrial Relations Court of Australia: Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 142 ALR 99.
I do not consider Beazley J was clearly wrong in Brackenridge in coming to the view referred to above and am content to follow her Honour's judgment. I therefore reject Mr Irving's submissions on the topic of implied terms. I am fortified in that view by the High Court's refusal to grant special leave in Jager: see Application for Special Leave to Appeal in Jager v Australian National Hotels Pty Ltd (unreported, H3/2000, 5 April 2001).
95 In Elliott, his Honour did not consider the reasoning in Westen v Union des Assurances de Paris (No 2), Grout v Gunnedah Shire Council (No 2) or Vermeesch. On appeal, this point was not raised and the decision of Marshall J was reversed on other grounds of appeal: Elliott v Kodak Australasia Pty Ltd [2001] FCA 1804; (2001) 129 IR 251.
96 In Windross v Transact Communications Pty Ltd [2002] FMCA 145, the reasoning in Jager was distinguished and the reasoning in Westen v Union des Assurances de Paris (No 2) was applied. Part of a claim in Windross was a claim for payment in lieu of reasonable notice on grounds that a notice provision that specified actual periods of notice should be construed to have a different effect than a notice period that provides for minimum periods of notice. Clause 17(2) of the claimant's contract in Windross provided that the employment could be terminated on 'not less than one month's written notice'. Federal Magistrate Driver in Windross considered a submission made by the parties about the effect of the decision in Jager including a submission that [56]:
... The statutory provision being considered by the Court in Australian National Hotels Pty Ltd v Jager was expressed in absolute terms, ie 'a term or period of service of employment ... is terminable by either party by (a) a week's notice, if the wages are payable weekly; ... or (c) a month's notice in any other case.' The language of the statute is expressed in such a way as to leave no room for the implication of further terms. The applicant submits that had the term been expressed as a minimum stipulation, such as for example, 'at least a week's notice' or 'at least a month's notice' the Court would have had greater flexibility and arguably would not have been constrained from implying a term giving reasonable notice. On the facts in Jager, the Court found that no injustice had been done to the applicant because he had received a payment equivalent to six months salary in lieu of notice of termination of employment which was in excess of the employer's obligations under the statute.
97 At [57] - [58] Driver FM found:
In my view, the law concerning the period of notice required to put an end to an employment contract is correctly set out in Macken, McCarry and Sappideen's Law of Employment (1997) at pp164-168. The period of notice required may be specified in the contract. Alternatively, the requisite period of notice may be implied from the employer's custom and practice. A minimum period of notice may be prescribed by legislation or an industrial award or agreement. In other circumstances the general law requires that the period of notice must be reasonable.
Where no length of notice is specified, it can be implied. There is authority that the specification of a minimum period of notice leaves room for the implication of reasonable notice of a longer period in an employment contract: Westen v Union des Assurances de Paris (unreported, Industrial Relations Court of Australia, per Madgwick J, 17 December 1996) at 19-20. It is a question of construction whether the parties intended the express provisions relating to termination to be comprehensive: New South Wales Cancer Council v Sarfaty. If the parties intended the contractual term to be comprehensive, there will be no implication of a reasonable notice term. If not, then in the absence of an implication of a specific period by reference to custom, a reasonable notice term will be implied.
98 His Honour then found that cl 17(2) of the contract stipulated a minimum period of notice and that the implied term of reasonable notice was not excluded by the express terms of the contract [59].
99 Provisions that specified actual periods of notice continued to be distinguished. In Bognar v Merck Sharp & Dohme (Australia) Pty Ltd [2008] FMCA 571, the applicant's employment fell within a classification covered by a federal award, the Commercial Sales (Victoria) Award 1999, which contained a notice provision. The applicant's contract of employment also expressly provided a period of four weeks' notice to be given by the employer except in the case of serious misconduct. In Bognar, the applicant relied upon the decision of Driver FM in Windross in support of an argument that the contract and the policy, which provided for a minimum scale of notice periods, enabled a term at law of reasonable notice to be implied. This argument was rejected. Federal Magistrate O'Sullivan, after having regard to the observations made in Byrne v Australian Airlines Ltd, Brackenridge, Jager and Elliott, found that as the award provision specified an 'actual' period of notice there was no room for the implication of a term as to reasonable notice.
100 The distinction between a provision that specifies minimum periods of notice (which by implication does not exclude an implied term of reasonable notice) and a provision that specifies actual periods of notice (which by implication does exclude an implied term of reasonable notice) was applied to the construction of s 117 of the Fair Work Act by Kaye J in Guthrie v News Ltd [2010] VSC 196; (2010) 27 VR 196. In Guthrie, a clause in Mr Guthrie's employment contract contemplated an appropriate payment of pay in lieu of notice as part of a termination payment. It was argued an appropriate period of notice would be five weeks if s 117(3) of the Fair Work Act was to be applied. Justice Kaye rejected this contention and found s 117 of the Fair Work Act, if it had applied to Mr Guthrie's contract of employment, would not have excluded a term of reasonable notice. His Honour found [197]:
In determining the applicable period of notice, I do not consider that much guidance is obtained from the Fair Work Act, upon which Mr Attiwill relied. Section 123(1) provides that Div 11, in which s 117 is located, does not apply to an employee who is employed for a specified period of time. Thus, s 117 would not have applied to Mr Guthrie's contract, in February 2010. Further, and in any event, s 117(3) only provides for the 'minimum period of notice' to be provided to an employee. The Fair Work Act applies to a wide variety of employees. By prescribing the minimum period of notice, the Act does not, it seems to me, cast light on the appropriate period of notice, which should be given to an employee in Mr Guthrie's position. In such a case, the minimum period provided by the Act, namely five weeks, would have been wholly inadequate, in light of the factors which are involved in the assessment at common law.
101 This distinction between provisions that provide for minimum periods of notice and actual periods of notice was rejected by the Full Court of the Supreme Court of South Australia in Brennan v Kangaroo Island Council [2013] SASCFC 151; (2013) 120 SASR 11; (2013) 239 IR 355. In Brennan, the appellant was employed as a senior manager of the Council. It was common ground that the appellant's employment was subject to the South Australian Municipal Salaried Officers Award made under the Fair Work Act 1994 (SA). Clause 3.2.1.1 of the Award provided that in order to terminate the employment of an employee the employer must give a specified period of notice. It was argued that the Fair Work Act 1994 (SA) and awards made under that Act merely set minimum standards for employment so that these standards should not preclude the implication of more generous terms into a contract [23]. In that context, counsel had referred to Westen v Union des Assurances de Paris (No 2). Justice Parker (with whom Vanstone and Anderson JJ agreed) held that the decision in Westen v Union des Assurances de Paris (No 2) was inconsistent with the decision in Byrne v Australian Airlines Ltd, Brackenridge, Elliott and Jager [32] - [33]. Justice Parker applied a test of necessity founded on business efficacy. He said [34]:
I find that the implication of an obligation to give reasonable notice was not necessary to give business efficacy to the appellant's employment contract. The existence of the award provision, albeit that it operated outside the contract, had the result that the employment arrangement was effective without any need to imply an obligation to give reasonable notice, ie there was no gap that needed to be filled. Furthermore, because of the existence of the award provision it could not be said that implication of such a term would have been accepted by the contracting parties as a matter so obvious as to 'go without saying'.
102 Justice Parker's reasoning assumes that a term governing reasonable notice could only be implied in fact. Thus, it appears his Honour applied the wrong test. Consequently, his reasoning has been criticised by a number of commentators: Irving M, 'Australian and Canadian approaches to the assessment of the length of reasonable notice' (2015) 28 AJLR 159, 160 - 163, Stewart A et al, Creighton and Stewart's Labour Law (Federation Press, 6th ed, 2016) [22.08].
103 Further, it appears that Parker J's reasoning, in my respectful opinion, is contrary to the observations made in Barker [28] and University of Western Australia v Gray [136] where their Honours said that 'business efficacy' does not have a part to play in implying a term in law as such implications do not rely upon an analysis of the specific terms of a contract, but have regard to a class of contracts.
104 In Wittenberg, Buchanan J rejected the criticism of Brennan on this point, despite considering at some length leading authorities which establish the proposition that a term of reasonable notice is implied in law [218] - [225]. At [234] - [237] his Honour without providing any analysis simply said the issue should be considered in a different way:
Jager and Brennan were criticised in written submissions for the employees on the basis that the two Full Courts misunderstood the difference between implications of law and implications of fact. In my view, the criticism is misplaced. The essential point, applicable to both forms of implication in the current circumstances, is that there was no gap to be filled by the implication.
Those various approaches (bearing in mind the statutory source of awards) are consistent with a general statement of principle by the majority in Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 422-423; 61 IR 32 at 37 (Byrne):
… In the absence of any provision in the award and of any express provision in the contract of employment the law would regard it as a legal incident of the contract that it should be terminable upon reasonable notice or summarily for serious breach. …
(Emphasis added)
The minority judgment in Byrne said (at 449-450; 59):
… terms of this kind, although treated as implied by law, may be excluded by express provision made by the parties and also as a result of inconsistency with terms of the contract. The result is that, even if treated as rules of law, they only apply in the absence of an expression of contrary intent.
(Emphasis added; footnote omitted)
In most cases there will be no practical difference arising from the two formulations as to their particular effect concerning contracts of employment. In each case the possible implication is, in my respectful view, secondary, subordinate and tied to questions of necessity in order to make the contract effectively operative. The implied term of reasonable notice does not represent the imposition of a judicial rule or standard. The courts have not set out to rewrite individual contracts of employment.
105 In this matter before the Full Bench, counsel for the respondents rely not only on the observations made by Buchanan J in Wittenberg about Brennan, but also point out that an application for special leave to appeal the decision in Brennan to the High Court was refused. However, I am not sure whether the fact that the High Court refused special leave to appeal assists their argument. The grounds of appeal filed in the High Court were that the Full Court of the Supreme Court of South Australia did not have appropriate regard to the fact that the implied term related to a term of a contract of employment as opposed to a commercial contract: Brennan v Kangaroo Island Council [2014] HCASL 153.
106 In any event, if the reasoning by Buchanan J in Wittenberg is applied in this appeal, the question to be answered may perhaps be whether there is a 'gap' to be filled in a contract of employment when regard is had not only to the express terms of the contract, but also is there a 'gap' in, or put another way, does s 117 leave a gap to be filled by an implied term of reasonable notice? This approach appears to have been applied in the recent case of Kuczmarski v Ascot Administration Pty Ltd [2016] SADC 65.
107 In Kuczmarski, the question whether in light of the minimum period of notice prescribed by s 117 of the Fair Work Act should a term entitling the plaintiff to reasonable notice be implied into the contract of employment. In that matter, Clayton J of the District Court of South Australia found [56]:
(a) it was irrelevant that s 117 of the Fair Work Act only provides for a minimum period of notice; and
(b) whilst s 117 imposes a minimum obligation it is not 'necessary' to imply the term requiring reasonable notice because Parliament has already imposed an obligation on employers to give a period of notice. Thus, he found there was no relevant 'gap to fill' in light of the operation of s 117.
108 Judge Clayton referred to the decision in Westen v Union des Assurances de Paris (No 2) and observed that the relevant award in that case provided for specified minimum periods of notice similar to s 117 of the Fair Work Act [40]. His Honour also found that if Westen v Union des Assurances de Paris (No 2) was a current statement of the law he would have been inclined to find that s 117 did not affect the implied contractual right to reasonable notice [43]. He observed that Westen v Union des Assurances de Paris (No 2) had been disapproved of in Brennan and, without revealing his reasoning for reaching this conclusion, found that Westen v Union des Assurances de Paris (No 2) was inconsistent with Wittenberg [44]. His Honour then declined to follow Westen v Union des Assurances de Paris (No 2) [44] and said he was bound by Brennan [71]. Judge Clayton rejected the observations of Kaye J in Guthrie on grounds the facts in Guthrie were different. Presumably, Clayton J was referring to the fact that in Guthrie, Mr Guthrie's contract of employment was for a fixed term. However, this distinction does not explain why the observations made by Kaye J in Guthrie did not require consideration.
109 It is notable, however, that in Wittenberg Buchanan J did not consider the reasoning in Westen v Union des Assurances de Paris (No 2). Of importance, Buchanan J was not called upon to consider whether a statutory provision enacted to give effect to the Termination of Employment Convention excluded a term of reasonable notice or whether a statutory provision that provided for minimum periods of notice to terminate a contract of employment as opposed to actual periods of notice when regard was had to the construction of contracts generally or the construction of a particular contract left a 'gap' to be filled by a term of reasonable notice. The issue in Wittenberg was whether a term requiring reasonable notice could be implied in a contract and co-exist with an express provision in a contract giving rights of termination on specified actual periods of notice [238]. In Mr Wittenberg's case, it was found that cl 8 of his service agreement (the terms of which had not been abandoned by the parties) provided his employer could terminate his employment by giving six months' notice [281] - [284]. Incorporated into the contracts of three other appellants in Wittenberg, Mr Lawson, Mr Poulos and Ms Murphy, were the terms of a redundancy policy of the employer which contractually entitled each of them to six weeks' pay in lieu of notice [264] - [267].
110 The most recent statement of the effect of s 117 of the Fair Work Act is to be found in the judgment of McNab J of the Federal Circuit Court of Australia in McGowan v Direct Mail and Marketing Pty Ltd [2016] FCCA 2227. In McGowan, McNab J rejected Clayton J's analysis in Kuczmarski.
111 In this appeal, it is argued on behalf of the respondents that the Full Bench should not apply the reasoning in McGowan as the observations made by McNab J were strictly obiter and not consistent with the views expressed in Brennan.
112 In McGowan, the applicant brought a claim for reasonable notice on termination of his employment with the respondent. The applicant was initially employed as an account manager and entered into a written contract in 1999 which entitled him to specified periods of notice up to four weeks determinable by length of service on termination of employment [19]. His contract also provided that the terms of the contract continued to operate until terminated in accordance with the provisions of this agreement or until superseded by a further agreement which explicitly replaced the agreement [6]. The applicant was subsequently promoted to a position of sales manager in 2009 and then in 2012 to the role of group general manager. On 17 November 2014, his employment was terminated and he was paid five weeks' notice, which is the statutory minimum pursuant to s 117(2) of the Fair Work Act [11] and [20]. Judge McNab found the contract entered into in 1999 continued to govern the terms of employment at the date of termination. Consequently, his Honour found there was no basis for implying a term of reasonable notice [67] and [74].
113 Judge McNab, however, then went on to consider the respondent's alternative argument that because of the operation of s 117, this provision prevented the implication of the term of reasonable notice. His Honour rejected this argument. Firstly, he found that Brennan was distinguishable on the facts as the period of notice was not expressed as 'at least' as it is specified in s 117(2) of the Fair Work Act. His Honour then went on to observe that there remains a genuine controversy as to whether s 117 operates so as not to require the implication of a term of reasonable notice where an employee is not employed subject to an award [79]. His Honour had regard to the observations of Clayton J in Kuczmarski and the application of Buchanan J's reasoning in Wittenberg about whether a provision left a gap to be filled [80] - [81]. Judge McNab then observed that it was significant that the detailed and comprehensive analysis of the authorities by Buchanan J in Wittenberg did not state that s 117 operates so as to remove the need to imply a term of reasonable notice in the absence of a contractual term that prescribes notice. Judge McNab then applied a beneficial approach to the construction of s 117 and found [85]:
I think the better view is that s.117 is in that part of the Act dealing with National Employment Standards and is intended to provide a minimum period only. It does not displace a right to reasonable notice when the contract of employment is silent on the question of notice. By paying or giving the minimum period of notice under s.117(2), the employer will have satisfied the National Employment Standard and not be liable for a claim of breach of those standards. However, it is strongly arguable that payment or provision of that notice will not necessarily satisfy a claim for reasonable notice. The proposition may be tested where the employment of two employees is terminated. Both are over 45 years of age. One has worked for 5 years in a mid-range role, the other has worked for 25 years and worked her or his way up on a high level role. Both are employed under contracts that make no provision for notice of termination. I doubt that parliament intended that both would receive the same period of notice of termination by the enactment of s.117(2) of the Act.
(v) The effect of construing s 117 when read with s 758, s 759, s 760, s 761 and s 762 of the Fair Work Act
114 Section 759, when read with s 758, extends s 117 to non-national system employers. Pursuant to s 758, part of the object of doing so is to give effect to, or further effect to the Termination of Employment Convention.
115 Article 11 of the Termination of Employment Convention provides that:
A worker whose employment is to be terminated shall be entitled to a reasonable period of notice or compensation in lieu thereof, unless he is guilty of serious misconduct, that is, misconduct of such a nature that it would be unreasonable to require the employer to continue his employment during the notice period.
116 The Termination of Employment Convention does not form part of the Fair Work Act as a treaty which has not been incorporated into legislation cannot operate as a direct source of individual rights and obligations under that legislation: Minister of State for Immigration and Ethnic Affairs v Teoh [1995] HCA 20; (1995) 183 CLR 273, 286 - 287 (Mason CJ and Deane J). However, regard can be had to the Termination of Employment Convention as an aid to statutory interpretation.
117 It is presumed that Parliament normally intends to legislate consistently with Australia's international obligations: Polites v Commonwealth [1945] HCA 3; (1945) 70 CLR 60, 68 - 69 (Latham CJ), (77) (Dixon J), (80 - 81) (Williams J).
118 Pursuant to s 15AB(1) and s 15AB(2)(d) of Acts Interpretation Act 1901 (Cth), in the interpretation of a provision of an Act, consideration may be given to any treaty or other international agreement that is referred to in the Act:
(a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; or
(b) to determine the meaning of the provision, where the provision is ambiguous or obscure.
119 In Minister for Immigration and Multicultural and Indigenous Affairs v QAAH of 2004 [2006] HCA 53; (2006) 231 CLR 1, Gummow A-CJ, Callinan, Heydon and Crennan JJ observed [34]:
The relevant law of Australia is found in the Act and in the Regulations under it. It is Australian principles of statutory interpretation which must be applied to the Act and the Regulations. One of those principles is s 15AA(1) of the Acts Interpretation Act 1901 (Cth) (Section 15AA(1) provides: 'In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.'). Another is s 15AB(2)(d) of that Act. The Convention has not been enacted as part of the law of Australia, unlike, for example, the Hague Rules (See Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad (1998) 196 CLR 161 at 166 [3], 186 [70], 210 [132], 224 [163]) and the Warsaw Convention (See Povey v Qantas Airways Ltd (2005) 223 CLR 189 at 197 [3], 224-225 [107]). Section 36 of the Act is the only section (apart from the interpretation section, s 5) which refers in terms to the Convention. That does not mean that thereby the whole of it is enacted into Australian law. As McHugh and Gummow JJ said in Minister for Immigration and Multicultural Affairs v Khawar ((2002) 210 CLR 1 at 16 [45]):
'[T]he Act is not concerned to enact in Australian municipal law the various protection obligations of Contracting States found in Chs II, III and IV of the Convention. The scope of the Act is much narrower. In providing for protection visas whereby persons may either or both travel to and enter Australia, or remain in this country, the Act focuses upon the definition in Art 1 of the Convention as the criterion of operation of the protection visa system.'
Hence, by reason of s 15AB(2)(d) of the Acts Interpretation Act, the Convention may be considered for the purposes described in s 15AB(1). Further, Australian courts will endeavour to adopt a construction of the Act and the Regulations, if that construction is available, which conforms to the Convention. And this Court would seek to adopt, if it were available, a construction of the definition in Art 1A of the Convention that conformed with any generally accepted construction in other countries subscribing to the Convention, as it would with any provision of an international instrument to which Australia is a party and which has been received into its domestic law (Great China Metal Industries Co Ltd v Malaysian International Shipping Corporation Berhad (1998) 196 CLR 161 at 176 [38], 186-187 [71], 213 [137], 227-228 [179]-[180]; Povey v Qantas Airways Ltd (2005) 223 CLR 189 at 202 [25], 230 [128]). The Convention will also be construed by reference to the principles stated in the Vienna Convention on the Law of Treaties (the Vienna Convention) (The Vienna Convention was ratified by Australia on 13 June 1974 and came into force on 27 January 1980 (see Vienna Convention on the Law of Treaties [1974] ATS 2)), even though the Vienna Convention has not been enacted as part of the law of Australia. One of the principles stated in Art 31 of the Vienna Convention (footnote omitted) requires that regard be had to the context, object and purpose of the Convention.
120 In Teoh, Mason CJ and Deane J referred to the principle of statutory construction that if a statute or legislative instrument is ambiguous courts should interpret the provision in a manner that is consistent with Australia's international obligations (287). Their Honours then went on to explain that this principle must lead to a broad view of the concept of ambiguity (287 - 288):
It is accepted that a statute is to be interpreted and applied, as far as its language permits, so that it is in conformity and not in conflict with the established rules of international law (Polites v The Commonwealth (1945) 70 CLR 60 at 68-69, 77, 80-81). The form in which this principle has been expressed might be thought to lend support to the view that the proposition enunciated in the preceding paragraph should be stated so as to require the courts to favour a construction, as far as the language of the legislation permits, that is in conformity and not in conflict with Australia's international obligations. That indeed is how we would regard the proposition as stated in the preceding paragraph. In this context, there are strong reasons for rejecting a narrow conception of ambiguity. If the language of the legislation is susceptible of a construction which is consistent with the terms of the international instrument and the obligations which it imposes on Australia, then that construction should prevail. So expressed, the principle is no more than a canon of construction and does not import the terms of the treaty or convention into our municipal law as a source of individual rights and obligations (R v Secretary of State for Home Department; Ex parte Brind [1991] 1 AC 696 at 748).
121 In Kartinyeri v Commonwealth [1998] HCA 22; (1998) 195 CLR 337, Gummow and Hayne JJ applied the broad view of Mason CJ and Deane J in Teoh and stated that [97]:
[A] statute of the Commonwealth or of a State is to be interpreted and applied, as far as its language permits, so that it is in conformity and not in conflict with the established rules of international law (Polites v The Commonwealth (1945) 70 CLR 60 at 68-69, 77, 80-81; Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 287).
122 Whilst Madgwick J in Westen v Union des Assurances de Paris (No 2) did not refer to s 15AB(1) and s 15AB(2)(d) of the Acts Interpretation Act 1901 (as perhaps in light of s 170HA of the Industrial Relations Act 1988 recourse to s 15AB of the Acts Interpretation Act 1901 was not necessary), his Honour's approach was consistent with an interpretation of the notice provisions in s 170DB of the Industrial Relations Act 1988 as requiring minimum notice and this is consistent with the requirement in Article 11 of the Termination of Employment Convention to give reasonable notice of termination.
123 In this matter, insofar as s 117 of the Fair Work Act extends to non-national system employers, pursuant to s 15AB(1)(a), the text of the Termination of Employment Convention is admissible to confirm the ordinary meaning conveyed by the words in s 117(2), the employer must not terminate the employee's employment unless:
(a) the time between giving the notice and the day of the termination is at least the prescribed period (the minimum period of notice); or
(b) the employer has paid to the employee payment in lieu of the prescribed period of notice.
124 Article 11 of the Termination of Employment Convention in accordance with the rules of the Vienna Convention on the Law of Treaties ([1974] ATS 2) must be read in context. Article 4 of the Termination of Employment Convention prohibits the termination of the employment of a worker (an employee) unless there is a valid reason connected with the capacity or conduct of the worker or based upon operational requirements. This provision, however, does not create an international obligation which can be characterised as a right of an employer to terminate the employment of an employee.
125 Thus, it is apparent that Madgwick J in Westen v Union des Assurances de Paris (No 2) was correct to observe that the ordinary meaning of s 117 is that it imposes minimal obligations upon employers; it does not give them rights. Article 11 refers to an obligation that is to arise in the event an employee is terminated. Section 117 does not give an employer a right to terminate an employee; the right to do is a right conferred by the common law or by the express terms of the contract of employment. At common law an employer only has the right to terminate a contract of employment:
(a) by the giving of proper notice in accordance with the express or implied terms of the contract; or
(b) the employer may terminate the contract immediately without notice where grounds for summary dismissal exist.
126 Thus construed, it is apparent that s 117 is not intended to reduce or affect common law rights and obligations other than to augment the common law right to reasonable notice by establishing a floor that if breached constitutes by the employer a breach of the National Employment Standards.
127 Alternatively, if and when s 117 read as a whole with regard to its object, underlying context, purpose and, in particular, in respect of the latter, its legislative history, it could be said an ambiguity arises as to whether s 117(2) excludes the operation of a common law implied term to give reasonable notice in the absence of an express term. By the use of the words 'minimum notice' in s 117 could be said to leave open the question whether the prescribed periods of notice simply provide for a floor or exclude a more beneficial entitlement to a period of notice (except where the parties to a particular contract expressly agree to greater period than specified in s 117).
128 As Mason CJ and Deane J said in Teoh, if the language of a provision is susceptible of a construction which is consistent with the terms of the international instrument and the obligations imposed on Australia, that construction should prevail. Article 11 imposes an obligation on employers to give reasonable notice. As set out in [….] - [….] of these reasons, what may constitute reasonable notice to terminate the employment of a chief executive officer where relevant factors may result in a long period to obtain alternative employment would not and could not be regarded as the same as reasonable notice to terminate the employment of a low skilled employee whose prospects of obtaining alternative employment are likely to result in a much shorter period of unemployment. Thus, what constitutes reasonable notice to terminate the employment of one employee must be considered in light of all relevant factors. When s 117 is construed in light of Article 11, it is clear that s 117 simply provides a floor that must not be breached by an employer. Put another way, s 117 should not be construed as a provision that specifies actual periods of notice.
129 Even if the provisions of the Fair Work Act that extend the application of s 117 to non-national system employers and the Termination of Employment Convention are disregarded, I respectfully do not agree with Clayton J's analysis of s 117 in Kuczmarski and prefer the reasoning of Kaye J in Guthrie and McNab J in McGowan. Both Kaye J in Guthrie and McNab J in McGowan point out that the minimum periods prescribed in s 117 simply prescribe minimum periods and do not prescribe periods of notice that could be characterised as satisfying a claim for reasonable notice for all classes of employees when the contract of employment is silent on notice. Further, as McNab J points out in McGowan, s 117 simply provides for a minimum standard if complied with by an employer that will satisfy the National Employment Standard and will result in compliance with the Standards.
130 Alternatively, if the reasoning of Buchanan J in Wittenberg is applied, it is apparent that by prescribing minimum notice periods in s 117 a 'gap' is left to be filled by the implied term of reasonable notice as s 117 does not create a right for an employer to terminate the contract of employment of an employee. In the absence of an express term, an employer must rely upon the common law to do so. Part of that right at common law is the requirement to give reasonable notice. In contrast, one could say that there was no 'gap' to be filled by the legislative provisions in Jager and the award provision in Brennan as actual periods of notice were specified.
131 For these reasons, I am of the opinion that s 117 of the Fair Work Act does not exclude the common law implied term of reasonable notice in employment contracts in the absence of an express term to the contrary.
(d) Could a period of one week's notice constitute a period of reasonable notice or payment of one week's pay constitute payment in lieu of reasonable notice to Mr Richards?
132 In Rogan-Gardiner, Newnes JA (Allanson J agreed) set out the principles for assessing a period of reasonable notice of termination of an employment contract absent an express provision relating to termination. His Honour observed [43] - [52]:
It is well-established that where an employer terminates a contract of employment in breach of an obligation to give reasonable notice of termination, the general rule is that the employee is entitled by way of damages to the amount that he or she would have been earned during the period of reasonable notice (less any amounts actually received during that period): Bagnall v National Tobacco Corporation of Australia Ltd (1934) 34 SR (NSW) 421, 429; Gunton v Richmond-upon-Thames London Borough Council [1981] 1 Ch 448, 469; Dellys v Elderslie Finance Corp Ltd [2002] WASCA 161; (2002) 132 IR 385 [39]; McGregor on Damages (18th ed, 2009) pars 28-002, 28-006, 28-010.
In accordance with ordinary principles, the employee must take reasonable steps to mitigate his or her loss, the onus of establishing a failure to mitigate being on the employer: Harding v Harding (1928) 29 SR (NSW) 96, 106; Gunton (468); Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410, 428; Dellys [39]. In the present appeal, no question of mitigation was raised.
It was not in issue on the appeal that the appellant's contract of employment contained an implied term that the respondent would give reasonable notice of termination, except in circumstances of misconduct justifying summary dismissal: see Byrne (429). Nor was it in issue that the respondent was in breach of the implied term by failing to give the appellant notice of the termination. The fundamental question on the appeal was whether the primary judge erred in finding that the appropriate period of notice was four months.
The object of a term requiring the giving of reasonable notice to terminate a contract at will was described by the Privy Council in Australian Blue Metal Ltd v Hughes [1963] AC 74, in the context of a commercial agreement, as follows:
The implication of reasonable notice is intended to serve only the common purpose of the parties. Whether there need be any notice at all, and, if so, the common purpose for which it is required, are matters to be determined as at the date of the contract; the reasonable time for the fulfilment of the purpose is a matter to be determined as at the date of the notice. The common purpose is frequently derived from the desire that both parties may be expected to have to cushion themselves against sudden change, giving themselves time to make alternative arrangements of a sort similar to those which are being terminated (99).
That has since been applied in respect of a term requiring reasonable notice of termination of an employment contract: see Saad v TWT Ltd [1998] NSWCA 199; Rankin v Marine Power International Pty Ltd [2001] VSC 150; (2001) 107 IR 117; Guthrie v News Ltd [2010] VSC 196; (2010) 27 VR 196 [196]. In Rankin, Gillard J reiterated that the primary purpose of giving a period of notice was to enable the employee to obtain new employment of a similar nature [220]. A like view was expressed by the Queensland Court of Appeal in Macauslane v Fisher & Paykel Finance Pty Ltd [2002] QCA 282; [2003] 1 Qd R 503 [24], [26]. See also Irons v Merchant Capital Ltd (1994) 116 FLR 204, 209; Harding (103).
It is evident that in the present case the parties proceeded on that basis.
The length of the required notice in any case is a question of fact to be decided in the light of the objective circumstances as they exist at the time the notice is, or should have been, given: Saad and Macauslane.
In the fourth edition of Macken, McCarry and Sappideen, The Law of Employment (1997) 166 - 168, the authors state that the considerations which may be relevant to the determination of the period of reasonable notice include the 'high grade' and importance of the position; the size of the salary; the nature of the employment; the employee's length of service; the professional standing, age, qualifications, experience and job mobility of the employee; the expected period of time it would take the employee to find alternative employment; and the period that, apart from the dismissal, the employee would have continued in the employment. The authors note that the factors which are relevant in any particular case must, of course, depend upon the particular facts of the case.
The relevant passages of that text have been cited with approval in a number of cases; see, for instance, Saad [18]; Macauslane [27]; Rankin [223]; Guthrie [196]; Quinn v Jack Chia (Australia) Ltd (1992) 1 VR 567, 580; Irons (208); Lau v Bob Jane T-Marts Pty Ltd [2004] VSC 69 [65]; Sorrell v Kara Kar Holdings Pty Ltd [2010] NSWSC 1315 [91] (referring to the 6th ed, 2009, 269 - 272). The factors listed in the current (7th) edition of The Law of Employment (289 - 291) do not differ in any material respect from those contained in the 4th ed. The case both at trial and on appeal was fought on the basis of such factors and the appeal should be so determined.
The approach to be taken by an appellate court to a finding by a trial judge as to a reasonable period of notice is not settled. In Macauslane the Queensland Court of Appeal appears to have taken the view ([2] - [3], [14]) that such a finding involved the exercise of a judicial discretion, which could only be disturbed on appeal by application of the principles in House v The Queen [1936] HCA 40; (1936) 55 CLR 499, 505. In IOOF Building Society Pty Ltd v Foxeden Pty Ltd [2009] VSCA 138; (2009) 23 VR 536, the Court of Appeal of Victoria found it was unnecessary to consider whether that was the correct approach [87], although the court was inclined to the view that the preferable approach may be to equate a determination of a period of reasonable notice with an assessment of damages in a personal injuries case; that is, the court must be satisfied that the judge has acted on a wrong principle of law, or has misapprehended the facts, or has for these or other reasons made a wholly erroneous assessment [88]. The court concluded, however, that ordinarily (and in that case) appellate review of a determination as to the reasonable period of notice would be unlikely to lead to a different result depending upon which approach was taken [89].
133 In this matter, an error in law in the reasoning of Beech CC is made out as he found there was no scope for the implication of a term of reasonable notice into Mr Richards' contract of employment. Consequently, Beech CC made no assessment of what period of notice would have been reasonable to terminate Mr Richards' employment.
134 The relevant factors raised in this matter which go to a finding of a relatively short period of notice that could, in the circumstances, be characterised as a reasonable period which may not exceed a minimum period prescribed in s 117 of the Fair Work Act are:
(a) Mr Richards did not hold a 'high grade or important position';
(b) but for the dismissal, he would have only been employed for a further two weeks; and
(c) Mr Richards had only been employed for a very short period of three weeks.
135 Balanced against those factors is the uncontested fact that Mr Richards had been induced by Mr Nicoletti when interviewed for the position to move his family together with all their possessions to reside at the farm, in circumstances where Mr Nicoletti had refused an offer by Mr Richards to commence work on trial prior to moving his family to the farm. This circumstance should be considered with the evidence that the provision of accommodation was part of the remuneration of Mr Richards' contract of employment and the cost to Mr Richards of moving his family and possessions from the farm and obtaining alternative accommodation was substantial. In my opinion, consideration of these circumstances results in a longer period of notice then one week to give Mr Richards time to make these arrangements as termination of his employment had the effect of terminating his right to accommodation for himself and his family. When regard is had to these circumstances, I am of the opinion that a reasonable period of notice would have been three weeks.
SCOTT CC
136 I have had the benefit of reading the draft reasons for decision of the Acting President.
137 In respect of FBA 3 of 2016, in the issue of the assessment of compensation for injury arising from the dismissal, I respectfully agree with her Honour's reasons and the order she proposes.
138 In respect of FBA 4 of 2016, I am of the view that there is no room for the implication of a term requiring reasonable notice to terminate the contract of employment.
FBA 4 of 2016 – Implication of a term
139 The important consideration here is that, in the absence of a term within the contract for notice to terminate, there may be a provision within a statute or an award which fills the gap, making the implication of a term unnecessary.
140 It is not in contention that s 117(2) of the Fair Work Act 2009 (Cth) applies to nonnational system employers by the operation of the provisions of various sections of that Act. Her Honour's reasons in [53] – [58] set out those provisions.
141 The question is what is required for the implication of a term of reasonable notice.
142 For a term to be implied in a contract, whether in law or fact, it is required that it be necessary, known as the criterion of necessity (BP Refinery (Westernport) Pty Ltd v. Shire of Hastings (1997) 180 CLR 266 at 283; Commonwealth Bank of Australia v. Barker (2014) 253 CLR 169, per French CJ, Bell and Keane JJ at pars 28-29).
143 A number of authorities have considered the issue of the effect of a term for notice in a statute or an award.
144 In Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 67 IR 162 at 188, Beazley J stated:
In the absence of an express term as to the notice which is to be given upon termination, there is usually an implied term that reasonable notice will be given: NSW Cancer Council v Sarfaty (1992) 28 NSWLR 68; 44 IR 1 per Gleeson CJ and Handley JA at 74; 5. In the present case, there was no express term relating to notice. However, the applicant's employment was governed by the Toyota Australia Vehicle Industry Award 1988. Clause 5(c) of the Award provided for the periods of notice which the employer was to give upon termination. As has already been observed, terms of an award are not implied into the contract of employment. However, the award still governs the employment to the extent that the express terms of the employment do not make some greater or more beneficial provision. As Brennan CJ, Dawson and Toohey JJ said in Byrne v Australian Airlines Ltd (1995) 69 ALJR 797 at 800; 61 IR 32 at 35-36 (188 – 9):
"The award regulates what would otherwise be governed by the contract. But [the award provision is] imported as a statutory right . . . The importation of the statutory right into the employment relationship does not change the character of the right. As Latham CJ points out in his judgment in Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 at 423, the legal relations between the parties are in that situation determined in part by the contract and in part by the award.
...
In a system of industrial regulation where some, but not all, of the incidents of an employment relationship are determined by award, it is plainly unnecessary that the contract of employment should provide for those matters already covered by the award. The contract may provide additional benefits, but cannot derogate from the terms and conditions imposed by the award (See Kilminster v Sun Newspapers Ltd (1931) 46 CLR 284) and, as we have said, the award operates with statutory force to secure those terms and conditions. Neither from the point of view of the employer nor the employee is there any need to convert those statutory rights and obligations to contractual rights and obligations."
Their Honours further stated (at 801; 37):
''… a term of an award derives its force, not from agreement between the parties, but from statute. That being so, if a contract of employment is made in reliance upon a provision of an award, it is not a reliance which requires the provision to be made a term of the contract because it already has statutory force.''
It follows that where an Award governs a particular aspect of employment, there is no room for the implication of a term relating to precisely the same subject matter. Accordingly, I reject the submission that there was an implied term as alleged.
145 The Full Court of the South Australian Supreme Court in Brennan v Kangaroo Island Council [2013] SASCFC 151, per Parker J, with whom Vanstone and Anderson JJ agreed, referred to Byrne v Australian Airlines Ltd (1995) 185 CLR 410, noting that '[t]he issue was whether an award provision requiring that a termination of employment not be harsh, unjust or unreasonable could be implied into a contract' (Brennan [29]). Parker J noted that Brennan CJ, Dawson and Toohey JJ held that such terms could not be implied into a contract, stating:
[T]he answer must be that it is not necessary to imply a term in the form of cl 11(a) for the reasonable or effective operation of the contract of employment in all the circumstances. In the absence of any provision in the award and of any express provision in the contract of employment the law would regard it as a legal incident of the contract that it should be terminable upon reasonable notice or summarily for serious breach. Clause 11(a) may alter that position, but there is no reason to presume that any alteration was intended by the parties to form a term of their contract, nor any reason to impute such an intention to them ... The argument that clause 11(a) constituted an implied term of the contract of employment should be rejected (emphasis added).
(Brennan [30])
146 Parker J cited the separate reasons of McHugh and Gummow JJ in Byrne, including that '[f]urthermore, despite the lack of "… formality and detailed specificity in the contract" it could not be said that the implication of the award provision into the contract would be necessary for its reasonable or effective operation as there was "no gap which was necessary to fill".' Parker J went on to note that the judgment in Westen v Union Des Assurances De Paris (No 2) (1996) 88 IR 268 is inconsistent with Byrne v Australian Airlines Ltd, saying that he took the same view of the decision of the Full Court of the Industrial Relations Court of Australia in Logan v Otis Elevator Co Pty Ltd [1999] IRCA 4; (1999) 94 IR 218. He said:
There the Full Court held that the fact that the relevant industrial award specified a period of notice did not preclude an obligation to give reasonable notice being implied into the contract of employment. However, counsel for the defendant in that case had submitted that the award provision was merely a matter that ought to be taken into account in determining what constituted reasonable notice. That submission appears to have been based on a misunderstanding of an obiter comment by Brennan CJ, Dawson and Toohey JJ in Byrne v Australian Airlines Ltd where their Honours referred to what might have been the situation if the relevant award had not provided for termination upon notice.
(Brennan [32])
147 His Honour went on to note:
Counsel for the respondent referred to other cases where, consistently with Byrne v Australian Airlines Ltd, a court has refused to imply an obligation to give reasonable notice in circumstances where an award specifies a period of notice, ie Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 67 IR 162 and Elliott v Kodak Australasia Pty Ltd [2001] FCA 807; (2001) 108 IR 23. Counsel also referred to the decision of the Full Court of the Supreme Court of Tasmania in Australian National Hotels Pty Ltd v Jager [2000] TASSC 43; (2000) 9 Tas R 153. The Full Court refused to imply an obligation to give reasonable notice as the Industrial Relations Act 1984 (Tas) specified a period of notice. The High Court refused special leave to appeal.
(Brennan [33])
148 His Honour found that there was no need to imply a term of reasonable notice to give business efficacy to the contract of employment in that case. The award provision had the result that the employment arrangement was effective without any need to imply any obligation to give reasonable notice, i.e. there was no gap to be filled.
149 I note that the Fair Work Act, in s 117, provides for 'the minimum period of notice' and sets out the minimum periods of notice according to the employee's period of continuous service, and for an additional week for an employee who is over 45 years of age and who has completed at least two years' continuous service. In McGowan v Direct Mail and Marketing Ltd [2016] FCCA 2227, McNab J dealt with this question as to whether the statute means that there is no requirement to imply a term of reasonable notice where an employee is not employed subject to an award. He referred to the judgement of Buchanan J in Westpac Banking Corporation v Wittenberg (No 1) [2016] FCAFC 33; (2016) 256 IR 181 where his Honour found:
217 Thus, even in the case of an implication by law into a class of contracts it remains essential, in my respectful view, to bear in mind the "necessity" which compels the implication. And, in both cases, it is accepted that no implication may be made which contradicts the express terms of the particular contract.
218 It is generally accepted that the common law will imply a term that a contract of employment may be terminated on reasonable notice into such a contract which makes no provision for termination. In the present appeals it was argued that such a term is implied into every contract of employment unless excluded. The two propositions are different. The first is concerned with filling a gap; the second with establishing a position of primary operation.
(McGowan [80])
150 In Wittenberg (No 1), a 2016 case, the Full Court of the Federal Court dealt with the issue of the implication of a term of reasonable notice into a contract. Buchanan J, with whom McKerracher and White JJ agreed in this respect, set out and analysed in great detail the history and development of the law. His Honour concluded:
233 In Brennan v Kangaroo Island Council (2013) 120 SASR 11 ("Brennan"), the Supreme Court of South Australia (Full Court) also declined to imply a term of reasonable notice where an award applied, independently of the contract of employment, and prescribed a period of notice.
234 Jager and Brennan were criticised in written submissions for the employees on the basis that the two Full Courts misunderstood the difference between implications of law and implications of fact. In my view, the criticism is misplaced. The essential point, applicable to both forms of implication in the current circumstances, is that there was no gap to be filled by the implication.
235 Those various approaches (bearing in mind the statutory source of awards) are consistent with a general statement of principle by the majority in Byrne v Australian Airlines Limited (1995) 185 CLR 410 ("Byrne") at 422-423:
... In the absence of any provision in the award and of any express provision in the contract of employment the law would regard it as a legal incident of the contract that it should be terminable upon reasonable notice or summarily for serious breach. ... 
(Emphasis added.)
236 The minority judgment in Byrne said (at 449-450):
... terms of this kind, although treated as implied by law, may be excluded by express provision made by the parties and also as a result of inconsistency with terms of the contract. The result is that, even if treated as rules of law, they only apply in the absence of an expression of contrary intent. 
(Emphasis added.) (Footnote omitted.)
237 In most cases there will be no practical difference arising from the two formulations as to their particular effect concerning contracts of employment. In each case the possible implication is, in my respectful view, secondary, subordinate and tied to questions of necessity in order to make the contract effectively operative. The implied term of reasonable notice does not represent the imposition of a judicial rule or standard. The courts have not set out to rewrite individual contracts of employment.
238 In the present appeals, the question is whether (as the employees submit) a term requiring reasonable notice may be implied into a contract and co-exist with a provision giving rights of termination on specified periods of notice. In my view, such a term of reasonable notice cannot be implied in such a circumstance. It would derogate from existing contractual rights. It would be inconsistent with express terms of the contract. It must be regarded as excluded.
151 Therefore, the question for the implication of a term of reasonable notice comes back to whether there is a gap in the contract which requires to be filled. A statute, or an award having statutory effect, may fill the gap.
152 Wittenberg (No 1) did not deal with the issue of whether s 117 of the Fair Work Act operates so as to remove the need to imply a term of reasonable notice in the absence of a contractual term that prescribes notice. Section 117 provides a minimum period of notice. In Kuczmarski v. Ascot Administration P/L [2016] SADC 65, Clayton AUJ found that even though s 117(2) prescribes a minimum period of notice, nonetheless it prescribed a period of notice. Therefore there was no need to imply a term of reasonable notice as there was no gap to be filled. I respectfully agree.
153 The history of awards throughout Australia is that, with the exception of paid rates awards, the conditions within awards are minimum conditions. That is, the parties to the contract of employment may negotiate conditions which are more beneficial to the employee, but none can be less beneficial (see Creighton B and Stewart A, Labour Law (5th ed, 2005) [9.20]).
154 The same applies in this case in respect of the minimum period of notice set out in s 117 of the Fair Work Act. It is no different from the minimum conditions set out in an award, which has statutory effect, except that it expressly refers to the period of notice being a minimum.
155 In the circumstances, there is no gap to be filled – there is a period of notice, and accordingly there is no requirement to imply a term of reasonable notice.
Conclusion regarding FBA 4 of 2016
156 The order at first instance in respect of appeal FBA 4 of 2016 was that the application be dismissed. This was because one week's notice was found to be payable under the Award, meaning there was no need to imply a term of reasonable notice. I find, with respect, that although the Award provision was overtaken by the Fair Work Act provision and in that regard was in error, the ultimate finding of there being no need to imply a term of reasonable notice was correct. I would dismiss the appeal.
KENNER ASC:
Introduction
157 The appellant Mr Richards commenced two applications before the Commission. The first maintained that he was harshly, oppressively and unfairly dismissed on 23 October 2015 from his position as a stockman employed by the respondent Mr Nicoletti on farming properties. A second claim was made by Mr Richards that he had been denied a contractual benefit of reasonable notice under his contract of employment.
158 The Commission's finding at first instance that Mr Richards was unfairly dismissed is not challenged on these appeals. What is challenged is the award of compensation for injury in the sum of $1,000. This is the subject of the amended ground of appeal in FBA 3 of 2016. Mr Richards contended that the award should be much higher. Insofar as the second appeal in FBA 4 of 2016 is concerned, by the amended ground of appeal, Mr Richards maintained that the Commission's finding at first instance that the contract of service provision in the Farm Employees' Award 1985 precluded the implication of a term of reasonable notice, was in error. The error alleged, which was a point not taken at first instance, was that the terms of s 117(2), read with Part 6 – 3 Division 3 of the Fair Work Act 2009 (Cth) overrode the provisions of the Award. The effect of this, as the argument went, was that s 117(2) only provides for a minimum period of notice for all employees covered by its terms, and does not preclude the implication of a greater period of notice at common law.
159 For the following reasons, I would allow the appeal in FBA 4 of 2016 in part. I would allow the appeal in FBA 3 of 2016.
FBA 4 of 2016
160 Whilst the issue of the application of s 117(2) of the FW Act appeared to be initially controversial in proceedings before the Full Bench, the respondent, in further written submissions, now accepts that the notice provision of the Award was overridden. Therefore, at the material time, that is at the time of the dismissal of the appellant, the terms of s 117(2) of the FW Act applied to the contract of employment between the appellant and the respondent. To that extent, the respondent accepted that the learned Chief Commissioner at first instance was in error in holding that the Award provision applied to oust the common law.
161 As this issue was not taken at first instance, can it be raised now? The issue of jurisdiction of the Commission is always at large and may be raised for the first time on appeal: SGS Australia Pty Ltd v Trevor Taylor (1993) 73 WAIG 1760. As it is arguable that this is the basis of the point now taken on appeal, the Full Bench should enable the point to be taken and for it to be determined, despite it not having been raised at first instance.
162 The appellant submitted that the effect of Division 3 of Part 6-3 of the FW Act when read with s 109 of the Commonwealth Constitution, is that the relevant provisions of the Award enabling the respondent to give the appellant one weeks' notice of termination did not apply. The submission was that the terms of the Award provision as to notice were rendered inoperative. The further submission was however, that the terms of s 117(2) of the FW Act, as extended by s 759 of the FW Act to non-national system employers and employees, did not oust the common law implication of a term of reasonable notice. In particular, the appellant focused on the words "at least" in s 117(2) in support of its submissions. That is, s 117(2) provides a minimum period of notice and not an actual period of notice. Reliance was also placed on a decision of the Industrial Relations Court of Australia in Westen v Union des Assurances de Paris (1996) 88 IR 259 at 263. In that case, Madgwick J considered whether the relevant provisions of a federal award as to notice of termination of employment, precluded the implication of a period of reasonable notice at common law. Whilst not needing to finally decide the matter in that case, Madgwick J inclined to the view that the award provision would not prevail over an implied contractual right for reasonable notice. The argument on this appeal was that the same approach should apply in relation to s 117(2) of the FW Act.
163 In terms of what reasonable notice should be, the appellant made a number of submissions. He referred to the contract of employment of the appellant providing for an annual salary and for annual leave to be taken annually. Furthermore, reference was made to the seasonal nature of the appellant's work as a farm hand, which would preclude him quickly moving from one location to another to seek other employment. The costs associated with the appellant moving from the respondent's farm, having to borrow money to do this, and also of obtaining alternative accommodation in the meant time, were said to be further relevant considerations in what might be a period of reasonable notice. The overall submission was that these factors weighed against the relatively short period of employment of the appellant, from 5 October to 23 October 2015.
164 As noted, the respondent conceded in its later written submissions to the Full Bench, that the effect of the relevant provisions of the FW Act in this case, excluded the notice period of the contract of service clause of the Award. It was accepted that the Award provision, in relation to notice of termination of employment, was no more beneficial to the appellant and therefore, the savings provision in s 762 of the FW Act, to the effect that State and Territory laws are not excluded where entitlements in relation to notice of termination of employment are more beneficial to employees, did not have application.
165 However, despite this concession, the respondent submitted that there was no warrant to imply a term at common law of reasonable notice in this case. Reference was made to the decision of the High Court in Byrne and Frew v Australian Airlines Limited (1995) 185 CLR 410, as authority for the proposition that a term as to reasonable notice will only be implied into a contract of employment where it is both reasonable and necessary to give the employment contract efficacy. In circumstances where there is a notice of termination provision governing the relationship between the parties, as in the case of s 117(2) of the FW Act, there is no necessity to imply such a term at common law, as the employee is entitled to a guaranteed period of notice in accordance with the terms of the statute.
166 In any event, the submission of the respondent was that the terms of the Award in relation to a contract of service, and the provision of notice set out in the Award, reflect a long standing practice in the farming industry. The period of notice of one week, prescribed by the Award, was consistent with the appellant's entitlement under s 117(2) of the FW Act in any event. The submission drawn from this was that if any industry practice or custom can be derived from the Award, as to notice of termination of employment, then it is consistent with the appellant's statutory rights, and inconsistent with any surrounding circumstances. As to that matter, the respondent submitted that contrary to the appellant's contentions, the particular circumstances relied on by the appellant to support the implication of a term of greater notice were insufficient. Furthermore, it was also maintained that the factors relied on by the appellant, such as the need to borrow money to relocate are purely subjective matters, and could not be relied on to support the implication of a term of greater notice in this case.
167 Accordingly, the respondent contended that the terms of s 117(2) of the FW Act provided for one weeks' notice of termination of employment. Given that this was the end result of the case at first instance, by the operation of the Award provision, the outcome would be no different whether the Award or FW Act provision applied. To that extent, there was no warrant in disturbing the order at first instance, as the submission went.
168 It is trite to observe that an award or statutory provision applicable to an employment relationship operates on a contract of employment once formed. As such, an award or statutory provision, unless expressly provided, are not incorporated into and do not form part of a contract. In cases of breach, the remedy is to enforce the terms of the award or statutory provision, not the contract of employment itself: Byrne.
169 The approach in Westen, upon which the appellant relied, was not followed in a later decision of the Court in Brackenridge v Toyota Motor Corporation Australia Limited (1996) 67 IR 162. In that case, Beazley J considered a claim for reasonable notice in the Court's associated jurisdiction, arising from the termination of an employee's employment. The employment was governed by the terms of a federal award. As to notice of termination of employment, Beazley J held, in applying Byrne, that as the award governed the relationship between the parties in respect of notice of termination, there was no room for the implication of a term of reasonable notice.
170 However, in an earlier decision of the Court, in Grout v Gunnedah Shire Council (No 2) (1995) 58 IR 67, Moore J considered that the terms of s 170DB of the former Industrial Relations Act 1988 (Cth) did not preclude the implication of a period of notice at common law. His Honour in that case attached significance to the fact that the then s 170DB did not invest the employer with a statutory right to terminate the contract of employment. It specified only a minimum entitlement to notice, leaving room for the common law to operate.
171 In more recent cases, for example a decision of the Full Court of the Tasmanian Supreme Court in Australian National Hotels Pty Ltd v Jager (2000) 9 Tas R 153, it was held that the terms of the Tasmanian industrial statute providing notice of termination of employment did not permit the implication of a term of reasonable notice. A similar conclusion, albeit in applying an award provision as to notice of termination, was reached by the Full Court of the Supreme Court of South Australia in Brennan v Kangaroo Island Council (2013) 120 SASR 11. In Brennan, the Full Court concluded that the approach taken in Westen was inconsistent with the decision of the High Court in Byrne and it should not be followed. Also, the Full Court referred to with approval, both decisions in Brackenridge and Jager, along with the decision of the Industrial Relations Court of Australia in Elliot v Kodak Australasia Pty Ltd (2001) 108 IR 23. In the latter case, the Court had refused to imply a term as to reasonable notice in the face of an award term dealing with the same subject matter.
172 Regardless of whether the implication of a term into a contract is based on factual implication, as in BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of The Shire of Hastings (1977) 180 CLR 266 at 283, or as a matter of law, based on the nature of the contract itself, it has been repeatedly held that the implication must be "necessary" in both cases: Westpac Banking Corporation v Wittenberg (2016) 330 ALR 476 per Buchanan J at pars 216-217. In this respect, most recently, French CJ, Bell and Keane JJ in Commonwealth Bank of Australia v Barker (2014) 253 CLR 169, observed at pars 28-29 as follows:
28 An implication in law may have evolved from repeated implications in fact. As Gaudron and McHugh JJ observed in Breen v Williams [109] , some implications in law derive from the implication of terms in specific contracts of particular descriptions, which become "so much a part of the common understanding as to be imported into all transactions of the particular description"[110] . The two kinds of implied terms tend in practice to "merge imperceptibly into each other"[111] . That connection suggests, as is the case, that the "more general considerations" informing implications in law are not so remote from those considerations which support implications in fact as to be at large. They fall within the limiting criterion of "necessity", which was acknowledged by both parties to this appeal. The requirement that a term implied in fact be necessary "to give business efficacy" to the contract in which it is implied can be regarded as a specific application of the criterion of necessity. The present case concerns an implied term in law where broad considerations are in play, which are not at large but are not constrained by a search for what "the contract actually means".
29 In Byrne v Australian Airlines Ltd, McHugh and Gummow JJ emphasised that the "necessity" which will support an implied term in law is demonstrated where, absent the implication, "the enjoyment of the rights conferred by the contract would or could be rendered nugatory, worthless, or, perhaps, be seriously undermined"[112] or the contract would be "deprived of its substance, seriously undermined or drastically devalued"[113] . The criterion of "necessity" in this context has been described as "elusive"[114] and the suggestion made that "there is much to be said for abandoning"[115] the concept. Necessity does, however, remind courts that implications in law must be kept within the limits of the judicial function. They are a species of judicial law-making and are not to be made lightly. It is a necessary condition that they are justified functionally by reference to the effective performance of the class of contract to which they apply, or of contracts generally in cases of universal implications, such as the duty to co-operate. Implications which might be thought reasonable are not, on that account only, necessary [116] . The same constraints apply whether or not such implications are characterised as rules of construction.
173 Thus "necessity" in this context, has been held to mean, in the situation of implication by the operation of law, the circumstance where the absence of such a term would render the particular contract "nugatory or worthless, or be seriously undermined if no implication is made". Furthermore, the relevant "necessity" is broader than that applicable to the necessity for "business efficacy" in relation to the implication of terms in fact: University of WA v Gray (2009) 179 FCR 346 at pars 135-142.
174 In Wittenberg, Buchanan J, after a detailed consideration of authorities in both the United Kingdom and Australia in relation to the implication of a term of reasonable notice in employment contracts, and some of those mentioned in submissions on this appeal, concluded the issue is to be approached from the point of view of whether there were gaps to be filled in the contract by the implication of a term. In particular, at pars 234-237, his Honour said:
[234] Jager and Brennan were criticised in written submissions for the employees on the basis that the two Full Courts misunderstood the difference between implications of law and implications of fact. In my view, the criticism is misplaced. The essential point, applicable to both forms of implication in the current circumstances, is that there was no gap to be filled by the implication.
[235] Those various approaches (bearing in mind the statutory source of awards) are consistent with a general statement of principle by the majority in Byrne v Australian Airlines Ltd (1995) 185 CLR 410; 131 ALR 422 (Byrne) at CLR 422–3; ALR 428:
… In the absence of any provision in the award and of any express provision in the contract of employment the law would regard it as a legal incident of the contract that it should be terminable upon reasonable notice or summarily for serious breach. … (Emphasis added.)
[236] The minority judgment in Byrne said (at CLR 449–50; ALR 449): … terms of this kind, although treated as implied by law, may be excluded by express provision made by the parties and also as a result of inconsistency with terms of the contract. The result is that, even if treated as rules of law, they only apply in the absence of an expression of contrary intent. (Emphasis added.) (Footnote omitted.)
[237] In most cases there will be no practical difference arising from the two formulations as to their particular effect concerning contracts of employment. In each case the possible implication is, in my respectful view, secondary, subordinate and tied to questions of necessity in order to make the contract effectively operative. The implied term of reasonable notice does not represent the imposition of a judicial rule or standard. The courts have not set out to rewrite individual contracts of employment.
175 Whilst the terms of s 117(2) of the FW Act was not the subject of specific consideration in Wittenberg, in my view, this case, and those referred to in it, represent the general applicable principles. That is, it is only in cases where no provision is made for notice in a contract of employment, or applies to the employment relationship, is there scope for the implication of a term as to reasonable notice. Thus, it is only where there is a gap in the employment relationship in relation to notice of termination of employment, that the common law will operate to fill it. I do not think it can be said that by not implying a term as to reasonable notice as contended by the appellant, the operation of the contract of employment between the appellant and the respondent would have been "seriously undermined"; "rendered nugatory" or "worthless", in the sense that those concepts are to be understood: Byrne at 450.
176 Some reference was made in argument to the fact that s 117(2) of the FW Act merely provides for a minimum period of notice and the use of the words "at least" are significant. It means that there is still room for the implication of a term providing a greater period of notice than that provided by the statute. As to the use of the words "at least" in s 117(2)(a) of the FW Act, and the fact that the statutory provision provides for a minimum period of notice of termination of employment, I agree, with respect, with the conclusions and observations of Clayton J of the District Court of South Australia in Kuczmarski v Ascot Administration P/L [2016] SADC 65, at pars 55-62, a case referred to by the parties in this appeal. In that case, the terms of s 117(2) of the FW Act were in issue. The plaintiff claimed the defendant failed to provide reasonable notice on termination of employment on the grounds of redundancy. The claim was mounted on the basis that while s117(2) of the FW Act applied, it did not preclude the implication of a greater period of notice at common law, based on the contention that s 117(2) only prescribed a minimum period of notice, by the use of the words "at least" in the subsection.
177 The defendant resisted the claim on the basis that, in applying the principles discussed in Barker, such implication was not necessary. In considering the competing contentions of the parties, Clayton J, in applying many of the authorities referred to above, preferred the approach of the defendant. In particular, his Honour concluded at pars 54-58, that he accepted the submission of the defendant that reliance on the fact that s 117(2) only prescribes a minimum period of notice, was not to the point. Irrespective of this, it was not necessary to imply the further term of reasonable notice because there was no gap to be filled, as s 117(2) operated according to its terms and provided a period of notice to apply. Thus, the Parliament has legislated to fill any gap and requires employers to provide the specified period of notice of termination of employment. Furthermore, the contention put by the defendant in Kuczmarski that the existence of s 117(2) of the FW Act excludes and displaces the implied term and enables the parties to agree on a greater period of notice, was accepted.
178 A further recent decision referred to by the parties was of the Federal Circuit Court in McGowan v Direct Mail and Marketing Pty Ltd [2016] FCCA 2227. In this case, a claim was made by the applicant in an adverse action claim, for damages under s 340(1)(a)(ii) of the FW Act and also for reasonable notice of termination of employment under his contract of employment. As to the claim for reasonable notice, McNab J held that whilst the applicant had had a number of promotions and job changes with the same employer since his initial employment in 1999, the original contract notice provision continued to apply. There was thus no room for the implication of a period of reasonable notice. In the alternative, McNab J considered a further submission of the respondent that in any event, despite the terms of the 1999 contract, s 117(2) of the FW Act applied and in reliance on many of the cases mentioned above, there was no scope for the implication. At pars 79-85, McNab J referred to the controversy in the cases as to whether a term of reasonable notice should be implied into an employment contract, in the face of an award or statutory term as to notice. In obiter observations at par 85, his Honour expressed his preference for the view that s 117(2) of the FW Act does not oust the common law term of reasonable notice. In particular, reference was made to the situation of a more senior long standing employee compared to an employee with considerably shorter service and it could not have been the intention of Parliament that both employees would receive the same notice period. Given my agreement the conclusions reached by the court in Kuczmarski, with respect, I consider that approach is preferable to the obiter observations of McNab J in McGowan.
179 In the case of the operation of s 117(2) of the FW Act, the Commonwealth Parliament has, by the terms of Division 3 of Part 6-3 of the FW Act, extended it to non-national system employers, as in the present case. Having done so, to the extent that the laws of a State or Territory do not provide more favourable terms, as referred to in s 762, the Commonwealth Parliament has filled any "gap" in the employment relationship concerned. Further, in providing for a minimum period of notice, there is nothing precluding the parties to a contract of employment from agreeing to a period of notice more generous than that provided for in s 117(2). This the same as is the case of an award provision dealing with notice. Both are minimum periods. Whether the language is expressed as an actual period or a minimum period, the practical effect is the same. An employer providing a lesser period of notice is in breach of the statute or the award as the case may be, but is not in breach of the contract of employment, unless under the terms of the contract in question, there is express incorporation. In either case of an actual or minimum period of notice being specified, an employer is at liberty to provide a greater period of notice if it chooses to do so.
180 Therefore, in conclusion, whilst I accept that having regard to the provisions of the FW Act, cl 5 of the Award did not apply, there is no basis to conclude that the employment relationship between the appellant and the respondent was such that a term as to reasonable notice should have been implied, in addition to the express requirements of s 117(2). To the extent only that the learned Chief Commissioner erred as to the applicable law, I would allow this ground in part.
FBA 3 of 2016
181 The Commission at first instance awarded the appellant compensation for injury in the sum of $1,000. The learned Chief Commissioner concluded that he was not aware of a similar case to that before him. He referred to a decision of Harrison C in Golding v PIHA Pty Ltd (2004) WAIRC 12971; (2004) 84 WAIG 3639 where the sum of $500 was awarded for injury for shock and humiliation as a result of the abrupt manner of a dismissal in that case.
182 The appellant contended that the Commission erred in the assessment of compensation for injury. The Commission found that the conduct of Mr Nicoletti, for the respondent, involved threats and intimidation of the appellant, leading to both he and his partner Ms Evans fearing for their safety. Ms Evans called the police. Also, an Apprehended Violence Order was taken out by the appellant. The Commission also found at par 144 of its reasons that the post-dismissal conduct of Mr Nicoletti towards the appellant, primarily in connection with the appellant and Ms Evans vacating the house they occupied on the respondent's farm, was as a direct result of and part of the dismissal. Thus there was a positive finding in relation to causation.
183 The learned Chief Commissioner found at par 145 that the conduct of Mr Nicoletti caused the appellant to fear for his safety and for that of Ms Evans. The Commission also found that the appellant did not sleep properly, was stressed and was not coping. A finding was also made that the cause of the appellant's stress was not just in relation to himself, but also in relation to the impact of the events on Ms Evans, in particular the requirement to vacate the farm accommodation.
184 The learned Chief Commissioner referred to authorities of the Commission in relation to compensation for injury and the breadth of the concept: Capewell v Cadbury Schweppes Aust Ltd (1997) 78 WAIG 299. He also referred to the need for evidence of injury beyond what might be expected to flow from an unfair dismissal in the ordinary course: AWI Administration Services Pty Ltd v Andrew Birnie (2001) 81 WAIG 2849.
185 In the case of an appeal from a discretionary decision, it is necessary for the appellant to demonstrate error. The error may be as to the facts, acting on a wrong principle or failing to have proper regard to relevant factors or taking into account matters not relevant: House v R (1936) 55 CLR 499. It may also be the case that whilst specific error is not able to be identified, error may be inferred in circumstances where the result of a decision is plainly unjust: Australian Coal and Shale Employees' Federation v Commonwealth (1953) 94 CLR 621. It is not enough for the decision under appeal to be set aside simply because an appeal court may take an alternative view on the facts and come to a different decision: Fire and All Risks Insurance Co Ltd v Rousianos (1989) 19 NSWLR 57.
186 In assessing compensation for loss and/or injury, each case will turn on its own facts. The relevant principles for the assessment of compensation for loss and injury are well settled (see Ramsay Bogunovich v Bayside Western Australia Pty Ltd (1998) 79 WAIG 8; Capewell; AWI; Lynam v Lataga Pty Ltd (2001) 81 WAIG 986; AWI Administration Services Pty Ltd v Birnie (2001) 81 WAIG 2849; 2862). The Full Bench recently summarised these principles in Scicluna v William Paul Brookes t/as Bayview Motel Esperance WA [2016] WAIRC 00862. Whilst there is no "tariff" or specified range from the cases, as to what may be seen as adequate compensation in any given case, it is at least possible to discern from them a continuum of conduct or behaviour and resultant injury in the case of a claim for loss on that basis. Importantly, the focus needs to be kept on the impact of the conduct on the employee, when considering any injury suffered as a causal effect of the unfair dismissal. For example, in Lynam at pars 49-64 the Full Bench found that the employee was locked out of the retail store of which he was a manager; was precluded from speaking to other staff; and the employer threatened to call the police if he returned; and there was evidence of the employee being placed under great stress and was grinding his teeth at night. In that case the Full Bench found that the employer engaged in a callous, oppressive and humiliating course of conduct. An award for injury was made in the sum of $4,500 however the appellant was prepared to accept, and the Full Bench awarded, the lesser sum of $3,500.
187 In Bogunovich, Sharkey P found at pp 11-12 (Kenner C agreeing) that the appellant suffered mental distress, anxiety and loss of dignity and self-esteem. Compensation for injury in this case was assessed at $5,000. In AWI, the Full Bench upheld an award of compensation for injury of $5,000 by the Commission at first instance in circumstances where the employee was made redundant without prior notice, having been told the day prior that he had good career prospects and was shocked and distressed by the employer's conduct. Also in that case, the employee's shock and distress was made worse by the employer's refusal to subsequently discuss relevant matters in relation to the redundancy with the employee.
188 In the cases just cited, it is open to conclude that there have been substantial awards of compensation for injury evidenced by particularly poor conduct of the employer, resulting in an identifiable impact on the employee, established on the evidence.
189 In the present case, based on the findings of the learned Chief Commissioner, in comparison to a number of Full Bench decisions such as those cited above, the conduct of Mr Nicoletti of the respondent, must be regarded on any measure, as very poor conduct, and towards the upper end of the scale. The impact on the appellant, including his concern for Ms Evans, was, on the evidence and the findings made by the Commission, substantial and warranted a significant award of compensation for injury. I consider that the assessment of $1,000 compensation was, in all the circumstances of this case, erroneous. Whilst the learned Chief Commissioner referred to the relevant principles, it is open to conclude that in view of the findings made by the Commission, that the exercise of discretion miscarried, leading to a result that was in all the circumstances unjust. I consider that an award of $6,000 compensation for injury would be appropriate.
Determination of the appeals
190 For the reasons given by each of the members of the Full Bench, orders should be made in FBA 3 of 2016 that:
(a) The appeal be upheld.
(b) The decision in Order [2016] WAIRC 00248; (2016) 96 WAIG 504 be varied by deleting the sum of '$3,991.72' and substituting the sum of '$8,991.72'.
191 For the reasons given by Scott CC and Kenner ASC, an order should be made to dismiss FBA 4 of 2016.