Appeal against a decision of the Industrial Magistrate in matter no. M 172 of 2014 given on 1 March 2017

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

FULL BENCH

CITATION : 2017 WAIRC 00828

DELIVERED : TUESDAY, 19 SEPTEMBER 2017

FILE NO. : FBA 6 OF 2017

Appellant

AND

The Minister for Corrective Services

Respondent

ON APPEAL FROM:

Jurisdiction : Western Australian Industrial Magistrate's Court

Coram : Industrial Magistrate M Flynn

Citation : [2017] WAIRC 00109; (2017) 97 WAIG 273

File No. : M 172 of 2014

Catchwords : Industrial Law (WA) - Appeal against decision of Industrial Magistrate's Court - Construction of industrial agreement - Principles considered - Industrial Magistrate dismissed claim for payment of pro-rata long service leave - Employee had resigned in acceptance of the terms of settlement of a claim for workers' compensation - Meaning of words employment 'ended by employer' considered

Legislation : Industrial Relations Act 1979 (WA) s 84(2)

Industrial Relations Act 1988 (Cth) s 170CB, sch 10, sch 11

Prisons Act 1981 (WA) s 6(5)

Public Sector Management Act 1994 (WA) s 3, pt 3, s 39

Workers' Compensation and Injury Management Act 1981 (WA) s 182O

Result : Appeal dismissed

Representation:

Counsel:

Appellant : Mr A J Stewart (of counsel)

Respondent : Mr J M Carroll (of counsel)

Solicitors:

Appellant : Chapmans Barristers & Solicitors

Respondent : State Solicitor for Western Australia

Case(s) referred to in reasons:

ABB Engineering Construction Pty Ltd v Doumit (Print N6999, 9 December 1999)

Auckland Shop Employees Union v Woolworths (NZ) Ltd [1985] 2 NZLR 372

City of Wanneroo v Holmes [1989] FCA 369; (1989) 30 IR 362

Comcare v Martin [2016] HCA 43

Director General, Department of Education v United Voice WA [2013] WASCA 287; (2013) 94 WAIG 1

Durham v Western Australian Government Railways Commission (1995) 75 WAIG 3163

George A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498

Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200

O'Meara v Stanley Works Pty Ltd [2006] AIRC 496

Re Harrison; Ex parte Hames [2015] WASC 247

Rheinberger v Huxley Marketing Pty Ltd (1996) 67 IR 154

Swan Yacht Club (Inc) v Bramwell (1997) 78 WAIG 579

The Attorney General v Western Australian Prison Officers' Union of Workers (1995) 75 WAIG 3166

Tranchita v Wavemaster International Pty Ltd (1999) 79 WAIG 1886

Reasons for Decision

SMITH AP AND SCOTT CC:

Introduction

1         This appeal is instituted under s 84(2) of the Industrial Relations Act 1979 (WA) (the IR Act).  Martin Fedec (the appellant) appeals against a decision of the Industrial Magistrate's Court in M 172 of 2014 dismissing his claim for pro-rata long service leave.

2         The appellant was employed by The Minister for Corrective Services (the respondent) as a nurse at Bandyup Women's Prison from on or about 1 February 2012 until 24 March 2014.  The Department of Corrective Services - Registered Nurses (ANF) Industrial Agreement 2010, AG 28 of 2011 (the Industrial Agreement) applied to his employment as terms and conditions.

3         The appellant claimed that he was entitled on the termination of his employment to pro-rata long service leave pursuant to cl 29(11)(a)(iii) of the Industrial Agreement.  Clause 29(11)(a)(iii) provides that if the employment of an employee ends, the employee is entitled to pro-rata long service leave if the employee has completed a total of not less than 12 months' continuous service and his/her employment has been ended by his/her employer on account of incapacity due to old age, ill health or the result of an accident.  The circumstances upon which the appellant claims that he is entitled to payment of pro-rata long service leave pursuant to this clause are pleaded in the originating claim as follows:

(a) The appellant sustained a work-related injury on 11 July 2011.  As a result of the injury, he lodged a workers' compensation claim.  As part of the settlement of the workers' compensation claim, the appellant resigned from his position at the Department of Corrective Services effective 24 March 2014.

(b) It was agreed between the appellant and his employer, as per his written resignation, that the appellant would be paid all monies outstanding for his accrued time in lieu and annual leave in the next pay cycle following his resignation.

4         Whilst the appellant also made a claim in the Industrial Magistrate's Court for payment of time off in lieu, which claim was also dismissed, this appeal does not seek to challenge the dismissal of that claim.

5         At the hearing at first instance, the appellant gave his evidence-in-chief by way of a witness statement (exhibit 1).  In his witness statement, he stated the relevant circumstances which led to his resignation from his employment with the respondent were:

10. On 24 March 2014, during discussions to resolve a dispute related to my Workers' Compensation Claim, it was agreed amongst the parties to discuss settlement of my Workers' Compensation Claim.

11. In these discussions, the Department made it clear that for any settlement, they would require me to resign from my employment.

12. Despite the Department's insistence I resign, I was not advised of the reason they wanted my resignation. However, it was clear that the Department would refuse to settle the Workers' Compensation Claim unless my resignation was forthcoming.

13. I wanted to remain in my employment with the Department. I only agreed to discuss settling the Workers' Compensation Claim with the intention of returning to work, not resigning.

14. On 24 March, the Department required me to write and sign a note confirming that I resign given the settlement of my Workers' Compensation Claim …

15. On 30 March 2014, I wrote a letter to the Department resigning from my employment …

6         The note referred to in his witness statement was attached to his statement.  In the note the appellant stated:

I, Martin Fedec, agree that as a part of my Worker's Compensation settlement I will resign from my employment with Department of Corrective Services.

I will tender my letter of resignation in exchange for the settlement monies.

7         In accordance with the terms of the settlement agreement, the appellant gave notice of his resignation in a typewritten document signed and dated by him on 30 March 2014.  In that document, he stated:

I hereby give notice of resignation from my employment with the Department of Corrective Services effective 24 March 2014, but subject to receiving the settlement monies. Please forward my outstanding entitlements to the above address. As well as monies outstanding for time of [sic] in lieu and my annual leave entitlements to be paid on the next pay cycle.

8         Whilst the appellant was cross-examined about other matters arising in his witness statement, the appellant was not cross-examined about the circumstances that led to his resignation.  Nor was he asked any questions about the written note which records his agreement to resign from his employment or the notice of resignation he gave in accordance with the terms of the settlement agreement.

Relevant provisions of the Industrial Agreement

9         Clause 10(6) of the Industrial Agreement provides for the giving of notice to terminate employment by an employee.  Clause 10(6) provides:

Notice of termination by an employee

(a) The contract of employment for employees classified at Registered Nurse Level 1, unless otherwise mutually agreed by the employee and the Employer, will be terminable by the employee giving the Employer two weeks notice of termination.

(b) The contract of employment for Registered Nurses classified in Levels 2 and above, unless mutually agreed by the employee and the Employer, will be terminable by the employee giving the Employer four weeks notice of the termination.

(c) In lieu of giving the required notice, the employee may forfeit to the Employer the equivalent number of weeks wages as to the number of weeks notice required by subclause (6)(a) or (6)(b) of this clause.

10      The relevant subclauses of cl 29 of the Industrial Agreement which provide for an entitlement to long service leave or payment of pro-rata long service leave are as follows:

(1) Long Service Leave Entitlement

Subject to the conditions of this clause all employees will become entitled to 13 weeks long service leave:

(a) after a period of ten (10) years continuous service.

(b) after each further period of seven (7) years continuous service.

…

(11) Pro Rata Long Service Leave

(a) If the employment of an employee ends before he/she has completed the first further qualifying periods in accordance with subclause (1) of this clause, payment in lieu of long service proportionate to his/her length of service will not be made unless the employee:

(i) has completed a total of at least three (3) years continuous service and his/her employment has been ended by his/her Employer for reasons other than serious misconduct; or

(ii) is not less than 55 years of age and resigns but only if the employee has completed a total of not less than twelve (12) months continuous service prior to the day from which the resignation has effect; or

(iii) has completed a total of not less than twelve (12) months continuous service and his/her employment has been ended by his/her Employer on account of incapacity due to old age, ill health or the result of an accident; or

(iv) has completed a total of not less than three (3) years' continuous service and resigns because of her pregnancy and who produces at the time of resignation or termination certificate of such pregnancy and the expected date of birth from a legally qualified medical practitioner; or

(v) dies after having served continuously for not less than twelve (12) months before his/her death and leaves his/her spouse, children, parent or invalid brother or sister dependent on him/her in which case the payment shall be made to such spouse or other dependent; or

(vi) has completed a total of not less than three (3) years continuous service and resigns in order to enter an lnvitro Fertilisation Programme provided she produces written confirmation from an appropriate medical authority of the dates of involvement in the programme.

(12) Notwithstanding the provisions of subclauses (11)(a)(i) and (11)(a)(iii) of this clause, an employee whose position has become redundant and when refuses an offer by the Employer of reasonable alternative employment or who refuses to accept transfer in accordance with the terms of his/her employment will not be entitled to payment in lieu of long service leave proportionate to his/her length of service.

(13) For the purpose of subclause (11)(a)(iii) of this clause, a medical referee will, if there is disagreement between the employee's doctor and the Employer's doctor as to the employee's incapacity, be selected from an appropriate panel of doctors by agreement between the Employer and employee.

11      At the hearing before the Industrial Magistrate and in this appeal, the appellant submits that his entitlement to payment of pro-rata long service leave arises under cl 29(11)(a)(iii) for payment of long service leave as he was employed continuously for a period of over 12 months and the fact that the respondent required him to resign as a condition of settlement of his workers' compensation was as a matter of law an act by the employer ending his employment on account of ill health or accident.  The respondent does not dispute that the appellant has completed at least 12 months' continuous service, but says that it was not the respondent who ended his employment, it was the appellant by the tender of his resignation.  Alternatively, the respondent argues the appellant's employment terminated by mutual agreement.

Industrial Magistrate's reasons for decision

12      After considering the arguments put by the parties, the Industrial Magistrate found that the circumstances of the effect of the settlement of the workers' compensation claim as put by the respondent was correct.  His reasons for reaching that conclusion were as follows [18]:

(a) Subject to the terms of the Industrial Agreement and any agreement made by the parties, an employee and an employer are free to mutually agree to terminate the employment relationship. Clause 10 of the Industrial Agreement reflects this freedom. It provides for termination of the contract of employment in circumstances proscribed and upon notice for the periods proscribed. However, it also provides for termination at any time by an employee where 'mutually agreed by the employee and the employer': cl 10(6). The note signed by Mr Fedec on 24 March 2014 stated, 'I will resign from my employment.' It reflected an agreement between him and his employer for the termination of the employment relationship with effect from day. The existence of this (mutual) agreement is inconsistent with a characterisation of what happened on 24 March 2014 as employment ended by the respondent.

(b) Mr Fedec relies upon a decision of the Industrial Relations Court of Australia … The evidence adduced by Mr Fedec on the circumstances of his resignation on 24 March 2014 do not reveal any conduct of the respondent that would suggest to me that Mr Fedec's will was overborne in any sense that was comparable to the position of the employee in Mohazab. On 24 March 2014, Mr Fedec had a choice. He could accept or refuse the offer made to him in settlement of his Workers' Compensation Claim. He had the opportunity to take advice from his solicitor. If he refused the offer, he would remain an employee. He accepted the offer and, pursuant to the terms of settlement, he resigned.

(c) At issue is the meaning of the words 'by his/her Employer' in the phrase 'his employment has been ended by his/her Employer on account of incapacity due to old age, ill health or the result of an accident' in cl 29(11)(a)(iii). The words require an assessment of the causal connection between, on the one hand, the end of the Mr Fedec's employment relationship, and on the other hand, the conduct of the respondent. In one sense it is true to say that 'but for' the injury to Mr Fedec on 11 July 2011, there would not have been the Workers' Compensation Claim and 'but for' the position taken by the respondent during negotiations of the claim on 24 March 2014, Mr Fedec would not have resigned. However, it has been recognised that a 'but for' test of causation is inadequate as a comprehensive test of causation (e.g. Travel Compensation Fund v Tambree T/As R Tambree and Associates [2005] HCA 69 [25]). The better view is to examine the text and context of cl 29(11)(a)(iii) to determine the appropriate causal connection: Comcare v Martin [2016] HCA 43 [42] - [49] (French CJ, Bell, Gageler, Keane and Nettle JJ).  My view is that there are a number of indications in the text and context of cl 29 that suggest the ending of employment following an employee's resignation is not encompassed by cl 29(11)(a)(iii). The ordinary meaning of the text 'by his/her Employer' suggests that the employer must have initiated a factual step necessary to end the employment relationship. A resignation is initiated by an employee. This ordinary meaning is reinforced by the content of the other subclauses of cl 29(11)(a) revealing a distinction between employee initiated terminations (pro-rata long service leave available to an employee who is aged 55 who 'resigns': cl 29(a)(ii) [sic]) and employer initiated terminations (pro-rata long service leave available to an employee of 3+ years whose employment ended 'by his/her Employer': cl 29(a)(i) [sic]). The context of cl 29(11)(a)(iii) includes the statutory power of the respondent to terminate employment on the grounds of ill health: s 39 of the Public Sector Management Act 1994 (WA) ('a public service officer called on to retire by an employing authority on the grounds of ill health shall forthwith retire').

(d) The conclusion is consistent with the reasoning and result in The State School Teachers' Union of W.A. (Incorporated) v The Governing Council, South Metropolitan TAFE [2016] WAIRComm 291 [18] - [39] (Cicchini IM) to the effect that an entitlement to pro-rata long service leave 'upon being retired by the employer' (my emphasis) is not enlivened upon the expiration of a fixed term contract of employment.

13      The learned Industrial Magistrate also found that if contrary to his conclusion the appellant's employment was ended by the respondent, it was his view that the appellant's employment was ended on account of his ill health.  His Honour rejected the argument put by the respondent that there was a relevant distinction between ending employment 'on account of the settlement of the Workers Compensation Claim' and ending employment 'on account of ill health'.  In particular, his Honour found there was evidence of the appellant suffering ill health in the form of 'left-sided low-back pain' as set out in a letter from Dr Brian Galton-Fenzi to RiskCover on 28 November 2013 and evidence given by the appellant that his injury has never abated.

Grounds of appeal

14      The appellant filed a notice of appeal to the Full Bench on the last day prescribed for the filing of an appeal against a decision of the Industrial Magistrate's Court.  The notice of appeal was filed on 22 March 2017.  It contained one ground of appeal.  On 29 March 2017, the appellant made an application to amend the ground of appeal to particularise the ground and outline the relief sought.

15      The ground of appeal as particularised states that the learned Magistrate erred in law, fact, or both, in concluding that the appellant's employment was not ended by the respondent for the purposes of cl 29(11)(a)(iii) of the Industrial Agreement given:

(a) that at [12] of his reasons, the Learned Magistrate found:

i. that the Appellant's position in the negotiations to settle his workers' compensation claim was that he was not willing to resign; and

ii. that the Respondent's position in the negotiations to settle the Appellant's workers' compensation claim was that it required his resignation.

(b) at [18](c) of his reasons, the Learned Magistrate found that '[i]n one sense it is true to say that "but for" the injury to the [Appellant] on 11 July 2011, there would not have been the Workers' Compensation Claim and "but for" the position taken by the [R]espondent during negotiations of the claim on 24 March 2014, [the Appellant] would not have resigned'.

The submissions on appeal

16      The appellant points out that the evidence considered by the Industrial Magistrate's Court demonstrates that on 24 March 2014, an agreement was reached to resolve the appellant's workers' compensation claim by way of a lump sum settlement.  However, in order to agree to the settlement, the respondent placed a requirement or demand upon the appellant that he resign from his employment.  It is argued that the weight of evidence before the Court ought to have led the Industrial Magistrate to conclude that the respondent ended the appellant's employment by forcing the appellant to choose between resigning from his employment, or being denied a choice to accept a lump sum settlement of his workers' compensation claim.  That demand upon the appellant, it is said, should be characterised as a demand initiated by the respondent to bring the appellant's employment to an end, or face hardship and uncertainty in finalising the claim.  Consequently, it is argued that notwithstanding the appellant agreed to the terms of settlement, his employment was ended by the employer as his resignation was initiated by the employer, as the appellant would not have resigned his employment and only did so upon the request of the respondent to enter into an agreement to settle his workers' compensation claim.

17      Thus, the appellant says he is entitled to the benefit of cl 29(11)(a)(iii) of the Industrial Agreement for the reasons that:

(a) the resignation from employment was initiated at the respondent's request and was a mandatory requirement; and

(b) the ending of the employment contract was directly related to his injury and on account of incapacity due to the result of an accident and/or ill health.

18      At first instance and on appeal, the appellant relies upon the observations made by the Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200 about what was meant by the phase 'termination at the initiative of the employer' in s 170CB of the Industrial Relations Act 1988 (Cth), the Convention concerning Termination of Employment at the Initiative of the Employer and the Recommendation concerning Termination of Employment at the Initiative of the Employer set out in sch 10 and sch 11 of the Industrial Relations Act 1988.  An argument is put on behalf of the appellant that the words 'ended by his/her Employer' in cl 29(11)(a)(iii) of the Industrial Agreement have effect or should be construed to have effect the same as the words 'termination at the initiative of the employer' were construed in Mohazab and applied by the Full Bench of the Australian Industrial Relations Commission in O'Meara v Stanley Works Pty Ltd [2006] AIRC 496.

19      In Mohazab, the Court said (205 - 206):

Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship. We proceed on the basis that the termination of the employment relationship is what is comprehended by the expression 'termination of employment': Siagian v Sanel (1994) 1 IRCR 1 at 19; 54 IR 185 at 201. In many, if not most, situations the act of the employer that terminates the employment relationship is not only the act that puts in train the process leading to its termination but is, in substance, the entire process.

…

[I]t is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship.

20      The appellant relies upon the following points that were made in O'Meara [23]:

(a) There must be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end.

(b) It is not simply a question of whether the act of the employer resulted directly or indirectly in bringing the employment relationship to an end.

(c) In determining whether a termination was at the initiative of the employer an objective analysis of the employer's conduct is required to determine whether it was of such a nature that resignation was the probable result or that the employee had no effective or real choice but to resign.

Interpreting an industrial agreement - general principles of interpretation

21      The approach that is to be applied when interpreting an industrial agreement is well established.  This is:

(a) Industrial agreements are usually not drafted with careful attention to form by persons who are experienced in drafting documents that have legal effect.

(b) The task of construction of an industrial agreement is to be approached in a way that allows for a generous construction:  City of Wanneroo v Holmes [1989] FCA 369; (1989) 30 IR 362.

(c) Industrial agreements are made for industries in light of the customs and working conditions of each industry and must not be interpreted in a vacuum divorced from industrial realities:  George A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498; City of Wanneroo v Holmes (378 - 379) (French J).

22      The general principles that apply to the construction of contracts and other instruments also apply to the construction of an industrial agreement.  In Re Harrison; Ex parte Hames [2015] WASC 247, Beech J said [50] - [51]:

The general principles relevant to the proper construction of instruments are well‑known. In summary:

(1) the primary duty of the court in construing an instrument is to endeavour to discover the intention of the parties as embodied in the words they have used in the instrument;

(2) it is the objectively ascertained intention of the parties, as it is expressed in the instrument, that matters; not the parties' subjective intentions. The meaning of the terms of an instrument is to be determined by what a reasonable person would have understood the terms to mean;

(3) the objectively ascertained purpose and objective of the transaction that is the subject of a commercial instrument may be taken into account in construing that instrument. This may invite attention to the genesis of the transaction, its background and context;

(4) the apparent purpose or object of the relevant transaction can be inferred from the express and implied terms of the instrument, and from any admissible evidence of surrounding circumstances;

(5) an instrument should be construed so as to avoid it making commercial nonsense or giving rise to commercial inconvenience. However, it must be borne in mind that business common sense may be a topic on which minds may differ; and

(6) an instrument should be construed as a whole. A construction that makes the various parts of an instrument harmonious is preferable. If possible, each part of an instrument should be construed so as to have some operation (Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35] (French CJ, Hayne, Crennan & Kiefel JJ); Kidd v The State of Western Australia [2014] WASC 99 [122]; Red Hill Iron Ltd v API Management Pty Ltd [2012] WASC 323 [106] - [112]; Primewest (Mandurah) Pty Ltd v Ryom Pty Ltd [2014] WASCA 28 [55] (Martin CJ, Pullin & Murphy JJA agreeing)).

These general principles apply in the construction of an industrial agreement (Director General, Department of Education v United Voice WA [2013] WASCA 287 [18] - [20] (Pullin J, Le Miere J agreeing), [83] (Buss J)). The industrial character and purpose of an industrial agreement is part of the context in which it is to be construed (Amcor Ltd v Construction, Forestry, Mining & Energy Union [2005] HCA 10; (2005) 222 CLR 241 [2] (Gleeson CJ and McHugh J); Director General v United Voice [81]; see also Amcor v CFMEU 66 (Kirby J), 129 - 130 (Callinan J)).

23      To these principles, the following observations made by Pullin J in Director General, Department of Education v United Voice WA [2013] WASCA 287; (2013) 94 WAIG 1 [18] - [19] should be added:

The Agreement has to be construed to determine what the intention of the parties was at the time the Agreement was entered into. This has to be determined by ascertaining what a reasonable person would have understood the words of the Agreement to mean taking into account the text, the surrounding circumstances known to the parties and the purpose and object of the transaction: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 [40]; Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 [22].

Surrounding circumstances may only be taken into account if the ordinary meaning of the words used by the parties is ambiguous or susceptible of more than one meaning: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337, 352; McCourt v Cranston [2012] WASCA 60 [23].

Proper construction of cl 29(11)(a)(iii) of the Industrial Agreement

24      It is not contended that the operative words in cl 29(11)(a)(iii) are ambiguous or uncertain.

25      Clause 29(1) provides for an entitlement to long service leave which is an entitlement to take long service leave which only accrues after a period of 10 years' continuous service.

26      Clause 29(11)(a) expressly sets out circumstances which, if met, create an entitlement to pro-rata long service leave, not as an entitlement to take leave, but as an entitlement to payment in lieu.  The opening operative words in cl 29(11)(a) by the use of the words 'will not be made unless the employee' only create an entitlement to payment where the preconditions set out in cl 29(11)(a)(i), (ii), (iii), (iv), (v) or (vi) are met.  Of importance, each of the circumstances set out in those subparagraphs create an entitlement in certain specified circumstances upon the termination of an employee/employer relationship, that is upon cessation of the contract of employment.

27      Also of importance is that:

(a) Clause 29(11)(a)(ii), (iv) and (vi) apply when an employee terminates the employment relationship by resigning.  These provisions did not apply to the appellant as the circumstances of the termination of his employment are not capable of fulfilling the preconditions prescribed in those subclauses.

(b) Clause 29(11)(a)(v) has no application to the facts of this matter as that provision only applies where the employee has died, after serving 12 months' continuous service and leaves dependants.

(c) Clause 29(11)(a)(i) and (iii) apply where the employee's employment has been 'ended' by his or her employer.  Clause 29(11)(a)(i) has no application to the appellant's circumstances as one of the preconditions to be met by an employee is at least three years' continuous service of employment with the employer.

28      Clause 10(6) requires that notice is to be given by an employee to terminate the contract of employment.  Whilst the word 'resign' is not used in cl 10(6), plainly for an employee to 'resign' within the meaning of cl 29(11)(a) requires an employee to give notice as provided for in cl 10(6).  Pursuant to cl 10(6)(a), a registered nurse level 1 is required to give two weeks' notice of termination and cl 10(6)(b) requires a registered nurse level 2 and above to give four weeks' notice of termination.  However, the express terms of cl 10(6)(a) and (b), by the use of the words 'unless otherwise mutually agreed', authorise the entering into an agreement between the employer and employee to shorten or waive the specified period of notice.

29      We agree that the words 'ended by his/her Employer' in cl 29(11)(a)(iii) require as one of the preconditions to a benefit accruing under the clause the termination of employment of the employee by, or at the initiative of, the employer.  However, in circumstances where there has been a 'resignation' of the employee there must arise in substance on the facts a dismissal.  This construction emerges from a construction of the whole of cl 29(11)(a) which provides for an entitlement to pro-rata long service leave in certain circumstances.  Except in cl 29(11)(a)(v) where an employee dies leaving dependants, the termination must arise by a unilateral act of an employer in cl 29(11)(a)(i) or cl 29(11)(a)(iii) or by an employee (by resignation) in cl 29(11)(a)(ii), cl 29(11)(a)(iv) and cl 29(11)(a)(vi).

30      A court or a tribunal is able to look beyond a resignation to ascertain whether, on grounds of improper conduct, a resignation should be voided and regarded as a constructive dismissal:  The Attorney General v Western Australian Prison Officers' Union of Workers (1995) 75 WAIG 3166, 3169 (Rowland J) (Anderson J agreeing) (Prison Officers').  Such a case would include where an employer gives an employee an option of resigning or being dismissed or where an employer has followed a course of conduct with the deliberate and dominant purpose of coercing an employee to resign:  Auckland Shop Employees Union v Woolworths (NZ) Ltd [1985] 2 NZLR 372, 374 (Cooke J); applied in Prison Officers' (3169).

31      A termination by an employer will also arise where the employee does not fairly consent to the termination of employment:  Swan Yacht Club (Inc) v Bramwell (1997) 78 WAIG 579, 584 (Sharkey P and Scott C); Tranchita v Wavemaster International Pty Ltd (1999) 79 WAIG 1886, 1893 (Sharkey P).

32      This approach is consistent with the observations made in O'Meara at [23] which is relied upon by the appellant.  In O'Meara at [23], the Full Bench of the Australian Industrial Relations Commission also made it plain that it approved the explanation of the principles enunciated in Mohazab in Rheinberger v Huxley Marketing Pty Ltd (1996) 67 IR 154 and ABB Engineering Construction Pty Ltd v Doumit (Print N6999, 9 December 1999).  In Rheinberger, Moore J at (160) said, after referring to Mohazab:

[I]t is not sufficient to demonstrate that the employee did not voluntarily leave his or her employment to establish that there had been a termination of the employment at the initiative of the employer. Such a termination must result from some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect.

33      In Mohazab, the court noted that in deciding whether a termination of employment was 'at the initiative of the employer', 'it is not only the act that puts in train the process leading to [the] termination but is, in substance, the entire process' (205).  It also noted that it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer (205).

34      There are many circumstances where a resignation is, in reality, a dismissal.  However, it is not as simple as determining who initiated the end of the employment.  It is also necessary to look at the process that followed to see if, in truth, a resignation was voluntary or the end of the employment was genuinely a mutual decision.  There may be circumstances where the employer initiates a termination, but it eventuates that it ultimately occurs by genuine agreement.  There may be circumstances where the employee initiates the termination, such as seeking to be made redundant and receives a redundancy payment but in truth it was the employer who brought the employment to an end because circumstances changed after the initiation of the negotiations by the employee.

35      In O’Meara at [23], the third of the points made by the Full Bench of the Australian Industrial Relations Commission was that 'in determining whether a termination was at the initiative of the employer an objective analysis of the employer's conduct is required to determine whether it was of such a nature that resignation was the probable result or that the [employee] had no effective or real choice but to resign'.  It is not simply an analysis of the employer's conduct that is required, but of the process and the events leading to the termination.

36      In ABB Engineering, the Full Bench of the Australian Industrial Relations Commission said (8):

Often it will only be a narrow line that distinguishes conduct that leaves an employee no real choice but to resign employment, from conduct that cannot be held to cause a resultant resignation to be a termination at the initiative of the employer.

37      In any event, the test the appellant needed to meet in this matter was not who initiated the termination but whether the employment was 'ended by [the] employer'.  We do not see them as analogous because in the latter case, it does not matter who initiated the termination.  However, we recognise that in each case, it is necessary to undertake an objective assessment of the circumstances.

38      Whilst cl 29(11)(a)(iii) may be capable of applying to circumstances other than where an employer has dismissed an employee, from the observations made in Auckland Shop Employees Union and ABB Engineering, it is clear that for a resignation to constitute a termination of employment, or put another way to constitute the ending of employment by the employer, the finding must be made that an employee has not fairly or genuinely consented to resign.

39      In his reasons for decision at [12], the learned Industrial Magistrate noted that '[o]n the 24 March 2014 Mr Fedec and his solicitor attended a conference in connection with the Workers' Compensation Claim.  Negotiations commenced with a view to settlement of that claim …  The negotiations ended upon the parties reaching an agreement to settle of the Workers' Compensation Claim.  The agreement provided, inter alia, for payment of a lump sum to Mr Fedec and for Mr Fedec to resign with effect from 24 March 2014'.

40      We also note that the documents filed in the Industrial Magistrate's Court demonstrate that the agreement to settle the Workers' Compensation claim and for the appellant to resign was reached in a conciliation conference conducted by WorkCover.  The Certificate of Outcome issued under s 182O of the Workers' Compensation and Injury Management Act 1981 (WA) records that '[t]he parties reached an agreement to redeem this claim', and that '[t]he agreement included a resignation effective from 24 March 2014 subject to the payment of the settlement monies'.

41      During the negotiations for the settlement, the appellant was represented by a lawyer.

42      The circumstances of the resignation of the appellant, in our opinion, are similar to the circumstances considered by the Industrial Appeal Court in Durham v Western Australian Government Railways Commission (1995) 75 WAIG 3163.  The decision in Durham was delivered on the same day as Prison Officers', albeit, the Court was, in part, differently constituted.  Durham was a matter that was referred to the Commission as a claim of unfair dismissal.  Mr Durham had suffered an injury at work which rendered him medically unfit to work as a train driver.  Following negotiations between his solicitor and the State Government Insurance Commission (SGIC), who acted for his employer, and a driver of a car who caused the accident in which Mr Durham was injured, Mr Durham through his solicitors reached agreement to settle a common law claim in damages, including past payments for loss of workers' compensation.  Mr Durham had been informed by Westrail prior to entering into the agreement that his employment would be terminated.  Consequently, his solicitors sought to negotiate an increase to the settlement sum to take account of future loss of earnings, which increased offer was rejected, but settlement was reached on the original offer put by the SGIC.  A resignation was not, however, a condition of settlement, but termination of the employment was found by the Full Bench to be a condition.  After the agreement was reached, Mr Durham was told by Westrail that his employment had been terminated when he accepted the settlement.  At first instance and on appeal to the Full Bench of the Commission, it was found the termination of Mr Durham's contract was not consensual and the contract was unilaterally terminated because Mr Durham accepted the offer of settlement of his claim.  However, Mr Durham's claim failed as the dismissal was found not to be unfair.  Mr Durham was unsuccessful in his appeal to the Industrial Appeal Court.  Justice Rowland, with whom Parker J agreed, found that the facts as found and not challenged could not lead to a finding of unilateral termination by the employer in circumstances where there were no threats or duress.

43      In this matter, the contents of the note handwritten by the appellant on 24 March 2014, together with the facts of the discussions he had to resolve his workers' compensation claim as set out by him in his witness statement, is evidence of an agreement between him and his employer to mutually terminate his contract of employment by the appellant giving notice to resign effective from 24 March 2014.  Such mutual agreement is authorised by cl 10(6) of the Industrial Agreement.

44      While the learned Industrial Magistrate noted at [12] of his reasons that the appellant's position in the negotiations was that he was not willing to resign, and the respondent's position in the negotiations was that it required his resignation, his Honour also recorded that ultimately the parties reached agreement.  That agreement resulted in the respondent paying the appellant the settlement sum and he resigned.  The appellant had a choice, and it was a real choice.  He could retain his employment but not settle his workers' compensation claim.  He made an informed choice on advice.

45      In that sense, he negotiated a resolution that required a compromise on his part.  This is not unusual in negotiations.  In fact, it is the norm in attempting to resolve a dispute, that parties compromise.  It does not mean that they are entirely happy with the outcome, but they weigh up the alternatives and make a choice.  The appellant was not without options.

46      In these circumstances, it is difficult to conclude that the appellant's resignation was other than part of a settlement he entered into for his own benefit.  He may not have wished to resign, but he had a choice, one he exercised, apparently on advice.  In that sense, the employment was not ended by the employer but was by mutual agreement.

47      Whilst the appellant may not have been content to resign, it appears clear, as the learned Industrial Magistrate found, that he:

(a) did so freely; and

(b) accepted the offer and, pursuant to the terms of settlement, he resigned.

48      A mutual agreement reached between the appellant and the respondent, pursuant to the terms of a settlement agreement of a workers' compensation claim, whereby a term of that agreement was that the employment of the appellant was to be terminated, cannot be construed as 'employment ended by his or her employer' within the meaning of cl 29(11)(a)(iii) of the Industrial Agreement.  In these circumstances, the facts before the learned Industrial Magistrate established that the employment of the appellant was ended by mutual agreement which was effected by a resignation by him.

49      In this matter, the acceptance of the terms of the settlement by the appellant, including the condition that he resign effective from the date of the settlement, was clearly consensual and cannot be characterised as an agreement that was involuntary.  The appellant achieved part of his purpose and the respondent achieved part of its purpose.  Merely because the employer's purpose included a settlement sum in exchange for the resignation does not mean that the employment was ended by the employer.

50      In these circumstances, it could not be found that the appellant's employment was ended by his employer within the meaning of cl 29(11)(a)(iii) of the Industrial Agreement.

51      Whilst the ending of the appellant's employment can be said to be directly related to his injury and on account of incapacity due to an accident or ill health, it does not follow that the appellant has established that his employment ended by his employer on account of incapacity due to old age, ill health or accident within the meaning of cl 29(11)(a)(iii).  The particular of ground (b) of the appeal claims that 'at [18](c) of his reasons, the Learned Magistrate found that "[i]n one sense it is true to say that 'but for' the injury to the [Appellant] on 11 July 2011, there would not have been the Workers' Compensation Claim and 'but for' the position taken by the [R]espondent during negotiations of the claim on 24 March 2014, [the Appellant] would not have resigned".'  However, in setting out this quote, the appellant has not proceeded to complete the learned Magistrate's comment.  His Honour went on to note that '[h]owever, it has been recognised that a "but for" test of causation is inadequate as a comprehensive test of causation', and his Honour refers to a High Court authority.  He went on to conclude that '[t]he better view is to examine the text and context of cl 29(11)(a)(iii) to determine the appropriate causal connection:  Comcare v Martin [2016] HCA 43 [42] – [49] (French CJ, Bell, Gageler, Keane and Nettle JJ).'  Therefore, this particular of the ground of appeal is misconceived.

52      Whilst we agree with the observation made by the learned Industrial Magistrate in [18](d) of his reasons for decision that the text and context of cl 29(11)(a)(iii) of the Industrial Agreement by the use of the words 'by his/her employer' suggests that the termination of employment must be initiated by the employer, whereas a resignation is initiated by the employee, we do not agree the context of cl 29(11)(a)(iii) includes the statutory power to terminate pursuant to s 39 of the Public Sector Management Act 1994 (WA) (the PSM Act).  Section 39 of the PSM Act provides:

(1) A public service officer may retire, or an employing authority may call on a public service officer to retire, from the Public Service on the grounds of ill health.

(2) A public service officer who is called on to retire from the Public Service under subsection (1) shall forthwith so retire.

53      A public service officer as defined in s 3 of the PSM Act is an executive officer, permanent officer or term officer employed in the Public Service under pt 3 of the PSM Act.  The appellant was not employed under pt 3 of the PSM Act.  He was engaged as an employee by the respondent as the Minister responsible for the administration of the Prisons Act 1981 (WA), under s 6(5) of the Prisons Act and pursuant to cl 4 of the Industrial Agreement.  Consequently, s 39 of the PSM Act has no application to cl 29(11)(a)(iii) of the Industrial Agreement.  However, this error of law is not, in our opinion, material.

54      For these reasons, we are of the opinion that the appeal should be dismissed.

55      We do not, however, agree that an order should be made to award costs to the respondent, as we do not agree that the appeal has been frivolously or vexatiously instituted.  Whilst the appellant's argument has not succeeded, given that the event that triggered the appellant's resignation was related to his injury, the appellant's argument cannot be said to be so obviously untenable or so fundamentally flawed so as to be frivolous.

EMMANUEL C:

56      I have had the benefit of reading the draft joint reasons of Her Honour, the Acting President and the Chief Commissioner.  I agree with those reasons and have nothing to add.