He, in the matter of an application for Writs of Mandamus and Certiorari or Constitutional Relief against Lewin [2004] FCAFC 161 (21 June 2004)

Last Updated: 21 June 2004

FEDERAL COURT OF AUSTRALIA

He, in the matter of an application for Writs of Mandamus and Certiorari or Constitutional Relief against Lewin [2004] FCAFC 161

INDUSTRIAL RELATIONS – termination of employment – whether Australian Industrial Relations Commission obliged to consider legality of termination – whether Commission had jurisdiction to deal with allegation that termination was for the reason of the filing of a complaint against employer involving alleged violation of laws or regulations or recourse to competent administrative authorities – whether alleged inaccuracies in transcript of Commission proceedings a ground for relief in Court – whether Commission erred in calculation of compensation – whether rule relating to calculation of damages for wrongful dismissal applicable – whether jurisdictional error – whether failure to take into account a relevant consideration – whether jurisdictional error – exercise of discretion – employer willing to pay balance of maximum amount dismissed employee could have received, in order to avoid further proceedings – whether, if such amount were paid, relief sought by applicant should be refused – proper form of order


Workplace Relations Act 1996 (Cth) ss 97, 170CE, 170CF, 170CFA, 170CG, 170CH, 170CK, 170CL, 170CM, 170CN, 170FA, 347
Commonwealth Constitution s 75(v)
Occupational Health and Safety Act 1985 (Vic) s 54(d)

Miller v University of New South Wales [2003] FCAFC 180 (2003) 200 ALR 565 applied
Quinn v Jack Chia (Australia) Ltd [2000] VSCA 75; [1992] 1 VR 567 distinguished
Addis v Gramophone Co [1909] AC 488 distinguished
Craig v State of South Australia [1995] HCA 58; (1995) 184 CLR 163 followed
Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 (2001) 206 CLR 323 followed
Re: McJannet; Ex parte Australian Workers’ Union of Employees, Queensland [No. 2] [1997] HCA 40; (1997) 189 CLR 654 followed


IN THE MATTER OF AN APPLICATION FOR WRITS OF MANDAMUS AND CERTIORARI OR CONSTITUTIONAL RELIEF AGAINST THE HONOURABLE COMMISSIONER LEWIN, THE HONOURABLE SENIOR DEPUTY PRESIDENT POLITES, THE HONOURABLE DEPUTY PRESIDENT HAMILTON AND THE HONOURABLE COMMISSIONER LARKIN AS MEMBERS OF A FULL BENCH OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION AND THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION AND ENVELOPMENTS PTY LTD; EX PARTE: DAMING HE
V 457 of 2003

GRAY, WHITLAM AND MANSFIELD JJ
21 JUNE 2004
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 457 of 2003

ON REMITTAL FROM THE HIGH COURT OF AUSTRALIA

BETWEEN: AND:	DAMING HE APPLICANT THE HONOURABLE COMMISSIONER LEWIN, THE HONOURABLE SENIOR DEPUTY PRESIDENT POLITES, THE HONOURABLE DEPUTY PRESIDENT HAMILTON AND THE HONOURABLE COMMISSIONER LARKIN AS MEMBERS OF A FULL BENCH OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION AND THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION FIRST RESPONDENTS
	ENVELOPMENTS PTY LTD SECOND RESPONDENT
JUDGES:	GRAY, WHITLAM AND MANSFIELD JJ
DATE OF ORDER:	21 JUNE 2004
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.	The application for an order nisi be granted.

2.

If, within 21 days of the date of the reasons for judgment, the second respondent pays or tenders to the applicant the sum of $13 000 (or such sum less any amount from such sum which the second respondent is required to remit to the Australian Taxation Office), and the second respondent produces evidence to the satisfaction of the District Registrar, Victoria District Registry of the Federal Court of Australia, that it has paid or tendered to the applicant the said sum, the orders sought in the application be refused.

3.

If, within 21 days, the second respondent has not complied with Order 2 hereof, the orders of Commissioner Lewin made on 14 August 2002 and of the Full Bench of the Australian Industrial Relations Commission made on 23 December 2002 be removed into this Court for the purpose of quashing those orders and those orders be quashed, and an order be made directing Commissioner Lewin to further hear and determine the application of the applicant against the second respondent made pursuant to s 170CE of the Workplace Relations Act 1996 (Cth) in accordance with the reasons for judgment.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 457 of 2003

ON REMITTAL FROM THE HIGH COURT OF AUSTRALIA

BETWEEN: AND:	DAMING HE APPLICANT THE HONOURABLE COMMISSIONER LEWIN, THE HONOURABLE SENIOR DEPUTY PRESIDENT POLITES, THE HONOURABLE DEPUTY PRESIDENT HAMILTON AND THE HONOURABLE COMMISSIONER LARKIN AS MEMBERS OF A FULL BENCH OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION AND THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION FIRST RESPONDENTS
	ENVELOPMENTS PTY LTD SECOND RESPONDENT

JUDGES:	GRAY, WHITLAM AND MANSFIELD JJ
DATE:	21 JUNE 2004
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

GRAY AND MANSFIELD JJ:

The nature and history of the proceeding

1 Prior to 29 January 2002, Mr Daming He, the applicant in this proceeding, was employed by Envelopments Pty Ltd, the second respondent. On that day, he was told that his employment was terminated. The termination was confirmed by letter of the same date. This proceeding is the result of attempts by Mr He to obtain orders from the Australian Industrial Relations Commission (‘the Commission’) in respect of his dismissal by the second respondent.

2 Mr He made application to the Commission, pursuant to s 170CE of the Workplace Relations Act 1996 (Cth) (‘the WR Act’). The original application is not before this Court. As required by s 170CF of the WR Act, the first step was an attempt to settle the matter by conciliation. The conciliation was conducted by Senior Deputy President Williams. On 1 May 2002, the Senior Deputy President gave a certificate that all reasonable attempts to settle the matter by conciliation had been, or were likely to be, unsuccessful. This certificate entitled Mr He to make an election pursuant to s 170CFA(2) of the WR Act to proceed to arbitration. He elected to do so. The arbitration was conducted before Commissioner Lewin, who gave his decision on 14 August 2002. The Commissioner found that the termination of employment was harsh, unjust and unreasonable. He declined to reinstate Mr He in his employment and made an order that the second respondent pay Mr He an amount in lieu of reinstatement. The amount ordered was $13 000, equivalent to Mr He’s salary for three months.

3 Not satisfied with this order, Mr He appealed to a Full Bench of the Commission. In his notice of appeal, he sought an order that the second respondent pay him a further $13 000 in lieu of reinstatement. The Full Bench that heard the appeal consisted of Senior Deputy President Polites, Deputy President Hamilton and Commissioner Larkin. On 23 December 2002, the Full Bench gave its decision. It refused leave to appeal.

4 Mr He then made application to the High Court of Australia. He sought writs of mandamus and certiorari ‘or constitutional relief’ against Commissioner Lewin, Senior Deputy President Polites, Deputy President Hamilton and Commissioner Larkin and the Commission (who are collectively described as ‘the first respondent’) and against the second respondent. The first respondent wrote a letter to the High Court registry, advising that they would abide any order (save as to costs) of the High Court and, if remitted, of this Court. On 28 March 2003, Hayne J made an order remitting further proceedings in the application to this Court.

5 Mr He canvassed several issues in his appeal to the Full Bench and in this proceeding. Before coming to them, it is necessary to set out something of the legislative provisions concerned, the terms of the certificate of Senior Deputy President Williams and the reasoning of Commissioner Lewin and the Full Bench.

The legislation

6 Division 3 of Pt VIA of the WR Act contains provisions relating to termination of employment. Subdivision C contains provisions giving substantive rights to employees. Section 170CK is designed to apply to Australian employees standards derived from international conventions relating to discrimination in respect of employment and occupation and to family responsibilities. Subsection (2) provides:

‘(2) Except as provided by subsection (3) or (4), an employer must not
terminate an employee’s employment for any one or more of the
following reasons, or for reasons including any one or more of the
following reasons:

(a) temporary absence from work because of illness or injury
within the meaning of the regulations;

(b) trade union membership or participation in trade union
activities outside working hours or, with the employer’s
consent, during working hours;

(c) non-membership of a trade union;

(d) seeking office as, or acting or having acted in the capacity of,
a representative of employees;

(e) the filing of a complaint, or the participation in proceedings,
against an employer involving alleged violation of laws or
regulations or recourse to competent administrative
authorities;

(f) race, colour, sex, sexual preference, age, physical or mental
disability, marital status, family responsibilities, pregnancy,
religion, political opinion, national extraction or social origin;

(g) refusing to negotiate in connection with, make, sign, extend,
vary or terminate an AWA;

(h) absence from work during maternity leave or other parental
leave.’

7 Subsections (3) and (4) exclude the operation of the ground in subs 2(f) in certain circumstances, namely where the reason is based on the inherent requirements of the particular position, or where an institution is conducted in accordance with the doctrines, tenets, beliefs or teaching of a particular religion or creed.

8 Section 170CL applies to the termination of the employment of 15 or more employees for reasons of an economic, technological, structural or similar nature. It prohibits the termination of employment unless the employer has given written notice in certain terms to a particular statutory body. Section 170CM prohibits the termination of an employee’s employment unless the employee has been given the required period of notice, or has been paid the required amount of compensation instead of notice, or the employee is guilty of serious misconduct. The section contains provisions by which the required period of notice can be calculated, according to the length of service and the age of the employee concerned. Section 170CN prohibits the termination of an employee’s employment in contravention of an order made by the Commission, pursuant to s 170FA. Section 170FA empowers the Commission to make orders for the purpose of giving effect to the requirements of certain provisions of an international convention relating to termination of employment.

9 Subdivision B of Div 3 of Pt VIA of the WR Act contains provisions designed to make the substantive rights found in subdiv C effective. To the extent to which they confer powers on the Commission, the provisions of subdiv B are designed to ensure that the powers conferred on the Commission are not part of the judicial power of the Commonwealth. See Miller v University of New South Wales [2003] FCAFC 180 (2003) 200 ALR 565 at [10] – [17] per Gray J, with whom Ryan and Gyles JJ expressed agreement at [76]. In the present case, it is unnecessary to canvass all of the provisions.

10 Section 170CE(1) of the WR Act provides:

‘Subject to subsections (5) and (5A), an employee whose employment has been terminated by the employer may apply to the Commission for relief in respect of the termination of that employment:

(a) on the ground that the termination was harsh, unjust or unreasonable;
or

(b) on the ground of an alleged contravention of section 170CK, 170CL,
170CM or 170CN; or

(c) on any combination of grounds in paragraph (b) or on a ground or
grounds in paragraph (b) and the ground in paragraph (a).’

11 For present purposes, it is unnecessary to have regard to subss (5) and (5A), which have the effect of restricting the right to make an application under subs (1) to certain kinds of employees. It is common ground in the present proceeding that Mr He was entitled to make an application to the Commission pursuant to s 170CE(1).

12 The power, and the obligation, of the Commission to attempt to settle the matter to which an application relates by conciliation is found in s 170CF(1) of the WR Act. Section 170CF(2) provides:

‘If the Commission is satisfied that all reasonable attempts to settle the matter by conciliation are, or are likely to be, unsuccessful so far as concerns at least one ground of the application, the Commission:

(a) must issue a certificate in writing stating that it is so satisfied in
respect of that ground or each such ground; and

(b) must indicate to the parties the Commission’s assessment of the merits
of the application in so far as it relates to that ground or to each such
ground; and

(c) if the Commission thinks fit, may recommend that the applicant elect
not to pursue a ground or grounds of the application (whether or not
also recommending other means of resolving the matter); and

(d) if the Commission considers, having regard to all the materials before
the Commission, that the application has no reasonable prospect of
success, it must advise the parties accordingly.’

13 The purpose of requiring a certificate in respect of each ground of an application not settled or likely to be settled is apparent when s 170CFA is considered. That section requires that an applicant make an election as to whether to pursue the matter further and, if so, whether to pursue one or, in some cases, both of two possible courses. If the only ground the subject of the certificate is the ground that the termination was harsh, unjust or unreasonable, to which s 170CE(1)(a) refers, and if the applicant elects to proceed, the applicant must elect to proceed to arbitration. If the certificate identifies one or more of the grounds referred to in s 170CK, 170CL, 170CM or 170CN, and if the applicant elects to proceed, the applicant must proceed in a court. In a case involving the ground referred to in s 170CE(1)(a) in combination with one or more of the grounds referred to in ss 170CK, 170CL and 170CN, an applicant who elects to proceed may proceed to arbitration in respect of the ground referred to in s 170CE(1)(a), or may proceed in a court in relation to all or some of the other grounds. This is because any attempt by the legislature to confer on the Commission jurisdiction to deal with grounds of the kinds referred to in ss 170CK, 170CL, 170CM and 170CN would incur the risk of invalidity. The requirement to consider remedies in respect of past breaches of statutory rights might be considered to involve a conferral of the judicial power of the Commonwealth on a body which is not a court for the purposes of Ch III of the Constitution. See Miller at [6] and [18]. Thus, s 170CFA(2), which is the subsection relevant to the present case, provides:

‘If the certificate given by the Commission under subsection 170CF(2) identifies only:

(a) the ground referred to in paragraph 170CE(1)(a); and

(b) the ground of an alleged contravention of section 170CM;

as grounds where conciliation is, or is likely to be, unsuccessful, the applicant must elect to do either, both, or neither of the following:

(c) to proceed to arbitration to determine whether the termination was
harsh, unjust or unreasonable;

(d) to begin proceedings in a court of competent jurisdiction for an order
under section 170CR in respect of the alleged contravention of section
170CM.’

14 In the event of an arbitration, s 170CG applies. Section 170CG(3) provides:

‘In determining, for the purposes of the arbitration, whether a termination was harsh, unjust or unreasonable, the Commission must have regard to:

(a) whether there was a valid reason for the termination related to the
capacity or conduct of the employee or to the operational
requirements of the employer’s undertaking, establishment or service;
and

(b) whether the employee was notified of that reason; and

(c) whether the employee was given an opportunity to respond to any
reason related to the capacity or conduct of the employee; and

(d) if the termination related to unsatisfactory performance by the
employeewhether the employee had been warned about that
unsatisfactory performance before the termination; and

(da) the degree to which the size of the employer’s undertaking,
establishment or service would be likely to impact on the procedures
followed in effecting the termination; and

(db) the degree to which the absence of dedicated human resource
management specialists or expertise in the undertaking, establishment
or service would be likely to impact on the procedures followed in
effecting the termination; and

(e) any other matters that the Commission considers relevant.’

15 The ‘valid reason’ for which s 170CG(3)(a) provides is not the existence of a legal right to terminate a contract of employment. In Miller at [13] – [15], Gray J said:

‘In terms of legal rights, the employment of most employees in Australia is terminable on some form of notice. The right to terminate by notice might arise from the express or implied terms of the contract of employment, or from an award or other collective instrument governing the terms and conditions of the employment. Generally, the notice may be given by either party. Also generally, it might be given for good reason, bad reason or for no reason at all. If the "valid reason" contemplated by s 170CG(3)(a) of the WR Act involved no more than an inquiry into the legal rights of the parties, in most cases it would be a short inquiry. It would be answered by saying that the employer had a right to dismiss the employee on notice and had exercised that right. The provision refers to a "valid reason" in another sense altogether. The reason must be related to the capacity or conduct of the employee, or to the employer’s operational requirements. What is sought is not the existence of a legal entitlement to terminate the employment, but the existence of a reason for the exercise of that right that is related to the factual situation. The validity is not to be judged by reference to legal entitlements, but to the Commission’s assessment of the factual circumstances as to what the employee is capable of doing or has done, or as to what the employer requires in order to continue its activities.

It is true that the Commission might be invited to take the view that there was no valid reason, because the employer did not have a legal right in the circumstances to terminate the employment...This does not mean, however, that the Commission makes a final and binding determination of the existence or non-existence of a legal right to terminate. It means that the Commission forms an opinion as to existing legal rights and obligations as a step towards its assessment as to whether there is a valid reason of the kind contemplated by s 170CG(3)(a), which in turn is a step towards determining whether the termination is harsh, unjust or unreasonable, having regard to the existence or otherwise of the valid reason and the other required factors. Counsel for the respondent in the present case conceded that the Commission could have determined that there was a valid reason (of the kind contemplated) for the respondent to terminate the appellant’s employment, whether or not the appellant’s conduct was considered to justify summary termination. The concession serves to emphasise the nature of the task performed by the Commission and the role played by legal rights and obligations in that task.

In a given case, it would be open to the Commission to determine that there was no valid reason for termination of the employment, even if the employer had a legal right to terminate the employment. As I have said, the existence of a legal right to terminate the employment is not sufficient to lead to the conclusion that there is a valid reason for the termination, in terms of s 170CG(3)(a). Conversely, it would be open to the Commission to find that there was a valid reason, of the kind contemplated by that provision, even if the termination was in breach of the contract of employment, an award, or a collective agreement...It would be open to the Commission to proceed straight to the questions it is required to determine, ignoring any question of legal rights, although the Commission might choose to deal with the issue of legal entitlement to bring the employment to an end.’

16 Section 170CH then provides for remedies. So far as relevant to the present case, the section provides:

‘(1) Subject to this section, the Commission may, on completion of the
arbitration, make an order that provides for a remedy of a kind
referred to in subsection (3), (4) or (6) if it has determined that the
termination was harsh, unjust or unreasonable.

(2) The Commission must not make an order under subsection (1) unless
the Commission is satisfied, having regard to all the circumstances of
the case including:

(a) the effect of the order on the viability of the employer’s
undertaking, establishment or service; and

(b) the length of the employee’s service with the employer; and

(c) the remuneration that the employee would have received, or
would have been likely to receive, if the employee’s
employment had not been terminated; and

(d) the efforts of the employee (if any) to mitigate the loss suffered
by the employee as a result of the termination; and

(e) any other matter that the Commission considers relevant;

that the remedy ordered is appropriate.

(3) If the Commission considers it appropriate, the Commission may make
an order requiring the employer to reinstate the employee by:

(a) reappointing the employee to the position in which the
employee was employed immediately before the termination.

(b) appointing the employee to another position on terms and
conditions no less favourable than those on which the employee
was employed immediately before the termination.

(4) If the Commission makes an order under subsection (3) and considers
it appropriate to do so, the Commission may also make:

(a) any order that the Commission thinks appropriate to maintain
the continuity of the employee’s employment; and

(b) subject to subsection (5)any order that the Commission
thinks appropriate to cause the employer to pay to the
employee an amount in respect of the remuneration lost, or
likely to have been lost, by the employee because of the
termination.

...

(6) If the Commission thinks that the reinstatement of the employee is
inappropriate, the Commission may, if the Commission considers it
appropriate in all the circumstances of the case, make an order
requiring the employer to pay the employee an amount ordered by the
Commission in lieu of reinstatement.

(7) Subject to subsection (8), in determining an amount for the purposes
of an order under subsection (6), the Commission must have regard to
all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s
undertaking, establishment or service; and

(b) the length of the employee’s service with the employer; and

(c) the remuneration that the employee would have received, or
would have been likely to receive, if the employee’s
employment had not been terminated; and

(d) the efforts of the employee (if any) to mitigate the loss suffered
by the employee as a result of the termination; and

(e) any other matter that the Commission considers relevant.

(8) In fixing an amount under subsection (6) for an employee who was
employed under award conditions immediately before the termination,
the Commission must not fix an amount that exceeds the total of the
following amounts:

(a) the total amount of remuneration:

(i) received by the employee; or

(ii) to which the employee was entitled;

(whichever is higher) for any period of employment with the
employer during the period of 6 months immediately before the
termination (other than any period of leave without full pay);
and

(b) if the employee was on leave without pay or without full pay
while so employed during any part of that periodthe amount
of remuneration taken to have been received by the employee
for the period of leave in accordance with the regulations.

(9) In fixing an amount under subsection (6) for an employee who was not
employed under award conditions immediately before the termination,
the Commission must not fix an amount that exceeds:

(a) the total of the amounts determined under subsection (8) if the
employee were an employee covered by the subsection; or

(b) the amount of $32,000, as indexed from time to time in
accordance with a formula prescribed by the regulations;

whichever is the lower amount.’

The certificate

17 The original application, by which Mr He commenced his proceeding in the Commission, was not made available to the Court as part of the material provided in support of, or in opposition to, Mr He’s application to the High Court. The certificate of Senior Deputy President Williams, dated 1 May 2002, pursuant to s 170CF of the WR Act, was handed up to the Court by counsel for the second respondent, in the course of argument, and added to the court book. It is in the following terms:

‘CERTIFICATE

An application for relief in respect of termination of employment has been lodged on the following ground or grounds:

[radical] the termination was harsh, unjust or unreasonable
an alleged contravention of section 170CK of the Act
an alleged contravention of section 170CL of the Act
[radical] an alleged contravention of section 170CM of the Act
an alleged contravention of section 170CN of the Act

In accordance with subsection 170CF (2) of the Workplace Relations Act 1996, the Commission certifies that all reasonable attempts to settle the matter by conciliation have been, or are likely to be, unsuccessful in respect of the following ground or grounds:

[radical] the termination was harsh, unjust or unreasonable
an alleged contravention of section 170CK of the Act
an alleged contravention of section 170CL of the Act
[radical] an alleged contravention of section 170CM of the Act
an alleged contravention of section 170CN of the Act

An assessment of the merits has been indicated to the parties in the following terms:

It is not possible to make an assessment due to a conflict in the factual position and the necessity to hear evidence.’

The Commissioner’s reasons for decision

18 The following summary of the facts is based on the findings expressed in Commissioner Lewin’s reasons for decision. Mr He is a highly qualified engineer, who was born and grew up in China. He has tertiary qualifications from a Chinese university and a post-graduate qualification from an Australian university. Prior to July 1997, he was employed by a company called AMS Polycraft. In July 1997, his employment was, in effect, transferred to the second respondent.

19 Mr He was employed as a research and development engineer. He was responsible for the design and development of a machine for folding paper, to be part of a process for the production of continuous stationery. He succeeded in developing a prototype folding machine. As a result, the second respondent owned intellectual property which, if developed successfully, could have led to the production of paper-folding machinery for sale, or to the sale of the technology to a possible manufacturer. First, it was necessary to develop a further prototype, to overcome problems in speed of production and function.

20 In 1998, Mr He had become dissatisfied with his remuneration. His salary was only $35 000 per annum, which had been his commencing salary with AMS Polycraft in 1994. The appointment of a Mr Hume as Chief Executive Officer of the second respondent, who was being paid more than Mr He, increased Mr He’s dissatisfaction. Mr He was more highly qualified than Mr Hume, and had been responsible for the design of the first prototype machine. There was a meeting with a Mr Wilson, a director of the second respondent, at which Mr He’s salary and the development of a second prototype folding machine were discussed. The meeting resulted in a serious misunderstanding as to what had been agreed, which led to a breakdown in the relationship between the parties. Mr He’s salary was increased to $52 000 per annum. Mr Wilson expected that, in consideration of this salary increase, Mr He would work towards the design and building of the second prototype machine. Mr He believed that there was to be a further increase to $70 000 per annum from 1 January 1999, but Mr Wilson’s position was that there was to be a salary review at that time, leading to a possible increase, depending upon Mr He’s performance in the development of the second prototype machine.

21 In the result, no salary review took place. Mr Wilson took the view that Mr He was not cooperating as agreed in the development of the second prototype. The relationship became more and more dysfunctional. By the time of the termination of employment, the possibility of any serious cooperative activity between Mr He and Mr Hume was almost nothing. Neither man had well developed communication skills and they were fundamentally incompatible.

22 In the war of attrition, Mr Hume tried to secure Mr He’s involvement in the development of the second prototype machine. Mr He insisted on confining his efforts to maintaining and developing detailed aspects of the existing prototype and producing folded paper. As a result of a meeting on 6 July 2000, which discussed Mr He’s role, Mr He was left with the impression that he need not involve himself in the design of the new machine. Thereafter, he was underemployed. A ‘language game’ ensued, in which Mr He and Mr Hume struggled with their competing and conflicting views of whether or not Mr Hume’s directions were in relation to ‘the new machine’ or ‘the existing machine’. In the Commissioner’s words, ‘[g]iven Mr Hume’s introverted and somewhat tortured communication style and Mr He’s impenetrable Sino-English the results were disastrous.’ Mr He doggedly refused to do anything that could be characterised as work on the new machine and Mr Hume attempted to characterise requests or directions as related only to the development of the existing machine.

23 The directors of the second respondent managed the situation remotely. There was a great deal of wasted time and effort trying to extract from Mr He concrete realisation of the considerable accumulation of knowledge which had come from his initial efforts, in order to create the second prototype. Mr He was holding out for more money and Mr Hume was demanding more design and development work.

24 The initial prototype, while technically effective, was rudimentary and primitive. It was unsuitable, not only as a technical specification for manufacture, but also as a prototype to interest investors. A lot of the design and development of its component parts had not been documented. Mr He’s personal intuitive knowledge and understanding was essential to meet the demanding maintenance requirements. The prototype required some very dangerous manual tasks for its continuous operation. Because it was Mr He’s creature, he had assumed the unique position of intellectual and operational privilege in relation to the initial prototype. This explained the stalemate which emerged over the development of the second prototype.

25 Eventually, the directors decided that the situation could no longer continue and set about bringing matters to a head. A means was devised to test Mr He’s preparedness to work on the new machine. This took place in December 2001 and January 2002. Mr He was given warnings covering issues arising from the breakdown of the relationship and his non-compliance with the directions of Mr Hume and his refusal to undertake work on the new machine. His lack of response to the warnings was characterised as a refusal of duty for which Mr He was summarily dismissed for alleged serious and wilful misconduct by refusing to obey a lawful and reasonable direction of his employer.

26 The Commissioner found that there was a valid reason for the termination, related to Mr He’s capacity or conduct or the operational requirements of the second respondent. It was not the serious and wilful misconduct alleged against him. The Commissioner found that the meeting in July 2000 recast the relationship so that Mr He was not required to develop a second prototype machine. He was obliged to perform development tasks on the existing prototype, to maintain it, and to produce folded paper using it. In the difficult circumstances, he did these things. He refused tasks which he claimed were for the purposes of designing and building a second prototype. There was much disagreement and dispute about this aspect of the relationship. There was some ambiguity in the tasks required and the second respondent had reason to be dissatisfied with Mr He’s selective performance. Without clear and effective communication about the distinctions involved, the Commissioner did not blame either Mr He or Mr Hume. He found it was simplistic and erroneous to characterise the disagreement, and Mr He’s refusals, as simply a rejection of his responsibilities under the contract of employment, as it was after July 2000. On the contrary, Mr He’s conduct, rightly or wrongly, was in performance of his understanding of his revised role.

27 The reason for the Commissioner’s conclusion that there was a sound, defensible and well-founded reason for the termination of Mr He’s employment was that the employment relationship had become completely and utterly dysfunctional and was beyond repair. This was partly Mr He’s responsibility, partly the board’s responsibility and partly Mr Hume’s responsibility. Mr He’s commitment to the employment was wanting, except on terms that he had been unable to achieve. The board’s involvement, particularly in overseeing the engineering design aspect of the business, was inadequate. The management of the relationship between Mr He and Mr Hume was ineffectual. Mr Hume was prepared to take shortcuts with safety and to attempt to badger or coerce Mr He to conform with the second respondent’s wishes that he contribute to the development of the second prototype. A hopeless standoff, full of unresolved conflicts, developed. Over two years, this destroyed the relationship between the parties and made it untenable to continue with the business goals of the second respondent. At the heart of the disagreement was Mr He’s underlying demand for a greater share in the economic rewards of the development of the folding machine technology, of which he was the principal engineering resource. Some of the tasks Mr Hume attempted to persuade Mr He to perform could have been characterised as either or both work in relation to the first prototype machine, or work in relation to development of the second prototype. The issue was not addressed effectively by open and honest communication.

28 In the Commissioner’s view, it was impossible to continue the employment relationship involving consistent and continuous negotiation of the duties within the scope of Mr He’s employment. If Mr He was not to work on the development of the second prototype, there was no need to continue to employ him. If the second respondent was not prepared to pay Mr He what he wanted in order to work on the second prototype, there was a compelling case for the termination of the relationship on the basis of the operational requirements of the second respondent.

29 The Commissioner found that Mr He was notified of the reason for the termination of his employment, in a ‘rather unsatisfactory but nevertheless effective way’. Mr He did have an opportunity to respond, and explained that his remuneration was inadequate. There were warnings from Mr Hume to Mr He. All of the warnings were highly problematic. One was withdrawn, some were inappropriate and others misconceived. The Commissioner took the view that the warnings had to be considered in the broader context of the relationship. In some respects they were part of a plan to bring the matter to a head and lay the groundwork for the termination of Mr He’s employment. They thereby formed part of the second respondent’s strategic response to the stalemate.

30 The Commissioner made a finding that the size of the second respondent’s undertaking had an impact on the procedure followed in effecting the termination. The dismissal was managed remotely, or stage-managed, by the board acting most likely with legal advice either from Mr Wilson or other solicitors, somewhat removed from the everyday of the workplace and with Mr Hume following instructions on how Mr He’s employment was to be terminated. The procedure was inadequate as a result of the absence of dedicated human resource expertise. Rather than set up a procedure based on the erroneous notion that Mr He had to follow any direction given by Mr Hume, human resource management expertise would have identified the nature of the problem and addressed it much more thoroughly.

31 The Commissioner found that the manner in which Mr He’s grievance over his remuneration was dealt with was inadequate. The one attempt made by Mr Wilson to solve the problem should have been followed up. The board should have recognised that Mr He remained discontented and Mr Hume was not capable of dealing with the problem. Neither side was prepared to budge and the board left Mr Hume and Mr He to their own devices. They did not have the will or the wherewithal to create a viable solution, let alone the necessary room to negotiate one, because of the lack of immediacy in the board’s governance.

32 The Commissioner’s ultimate findings were expressed as follows:

‘The termination was harsh unjust and unreasonable because the dispute about what was or was not within Mr He’s responsibility was genuinely in
dispute. Mr He was not simply rejecting direction. In fact the evidence shows he was complying with a great deal of direction in relation to the existing prototype, including modification, development and maintenance as well as producing paper. A summary dismissal for serious and wilful misconduct was unfair and misconceived. In light of the situation, in my view, the termination would have been reasonable if it had been with notice. The parties and the business were no longer working to mutual advantage and the operational requirements of a research and development company were not being met by the continued employment of Mr He on the unsatisfactory terms which arose as a result of the meeting of July 2000. If Mr He and the company could not come to terms on how a second prototype would be designed and developed the relationship was of little utility.’

33 The Commissioner then turned to the question of remedy. For all of the reasons he had already expressed, he found that reinstatement would be completely inappropriate. He turned to consider whether he should make an order that the second respondent pay Mr He an amount in lieu of reinstatement. He found that an order for an amount equivalent to the value of reasonable notice would have no effect on the viability of the second respondent’s undertaking. Mr He had not been replaced and salary savings were being made. The company had been supported by its shareholders and there was no reason to believe that a remedy of this kind would cause the business to close. The length of Mr He’s service from 1997 to 2002 was sufficient to warrant a remedy of that kind. The Commissioner then made a finding that:

‘The remuneration Mr He would have received but for the summary termination of his employment in my view is equivalent to a period of reasonable notice.’

34 The Commissioner found Mr He had made efforts to find a job unsuccessfully and that those efforts were adequate. Relying on the common law principles, used by courts to arrive at an assessment of what is reasonable notice in cases of wrongful dismissal, contained in Quinn v Jack Chia (Australia) Ltd [2000] VSCA 75; [1992] 1 VR 567 at 580, the Commissioner found that reasonable notice would be three months. Accordingly, he ordered that the second respondent pay Mr He $13 000.

The reasons of the Full Bench

35 In its reasons for decision, the Full Bench expressed some frustration with the manner in which the appeal had been conducted. It said that Mr He did not appear to understand that the appeal was not as of right, that he must get leave to appeal and that he must show appellable error. Efforts by members of the Full Bench to remind Mr He that he should deal with the appeal on the basis of the grounds of the appeal were unsuccessful. So were efforts to take Mr He to the Commissioner’s decision, in order to have him identify appellable errors.

36 The Full Bench found that Commissioner Lewin’s conclusion that the termination would have been reasonable on notice was one which was reasonably open to him on the evidence. Indeed, the Full Bench thought it was correct. Various other grounds in Mr He’s notice of appeal were not sustained and did not disclose any appellable error. Otherwise, the conclusions of Commissioner Lewin were reasonably open to him.

37 The Full Bench continued:

‘There is one short observation we should make. Mr He seems to be fixated with alleged breaches of the Occupational Health and Safety Act by the respondent. It is essentially to this matter that grounds 1, 2 and 3 and a considerable portion of his oral submissions related. Lewin C appears to have formed the view that the respondent did breach the Occupational Health and Safety Act. So much is implicit in his finding that:

"Mr Hume was prepared to take short cuts with safety and to attempt
to badger or coerce Mr He to conform with the company’s wishes that
he contribute to the design and development of the new prototype by
one means or another." [PR921270]

However, notwithstanding this finding Mr He seemed to maintain that Lewin C did not make such a finding or take it into account. We disagree. Lewin C clearly did take the matter into account.

We believe that the conclusion by Lewin C that the relationship had completely broken down was one which was clearly open to him on all of the evidence as noted above was one with which we agree. We affirm that we do not think that Lewin C made any appellable error with respect to the termination.’

38 The Full Bench then discussed the possibility of error in relation to the remedy. It held that, in the circumstances of the case, Commissioner Lewin was entitled to apply the principles in Quinn. It discussed whether the Commissioner’s finding about the length of Mr He’s service was correct. It had been conceded that Mr He’s previous employment with AMS Polycraft was to be regarded as part of a continuous period of employment by the second respondent. In the result, the Full Bench held that Commissioner Lewin did not make an appellable error in relation to the fixing of three months’ pay in lieu of notice in relation to Mr He’s employment. In discussing the parties’ respective submissions on that issue, the Full Bench referred to suggestions by Mr He as to corrections which he said should have been made to the transcript of proceedings before Commissioner Lewin.

The legality of the termination

39 Mr He contended that the Commission had failed to exercise its jurisdiction because it had failed to consider the issue of the legality of the termination of employment. He referred to the provisions of s 170CK(2)(e) of the WR Act, which prohibit an employer from terminating an employee’s employment for the reason of the filing of a complaint, or the participation in proceedings, against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities. The material filed by Mr He in the High Court alleged that the second respondent dismissed him because of two issues, one relating to workplace safety and the other to superannuation.

40 In his material, Mr He alleged that Mr Hume had instructed him to install a device using a crane with a capacity of 125 kilograms, for the purpose of lifting rolls of paper weighing 200 kilograms or more from the ground floor to the first floor of the second respondent’s premises. Mr He said that he refused to obey this instruction. He alleged that the second respondent had coerced him to lift the paper rolls with the 125 kilogram hoist whenever the rolls were delivered, right up to the termination of his employment. He had continually told Mr Hume that he could not handle the stress caused by this dangerous operation. Mr Hume insisted that the hoist was capable of lifting the paper rolls.

41 Mr He also alleged that he complained to the management of the second respondent about underpaid superannuation. All employees had received letters from the trustee of the superannuation fund, stating that contributions had been underpaid, in September 2001. Mr He alleged that, after he made this complaint, Mr Hume started to learn to operate the machine of which Mr He was in charge. Because of underpayments of contributions, the superannuation trustee terminated Mr He’s membership of the superannuation fund on 8 December 2001. Mr He complained to the second respondent on 12 December 2001. On the same day, Mr Hume stopped him at the gate as he was leaving and gave him an envelope containing a final warning letter and a direction to take annual leave from the following day. On his return from annual leave, he was told that his employment was terminated.

42 In relation to the issue of the crane, Mr He relied on s 54(d) of the Occupational Health and Safety Act 1985 (Vic), which prohibits the dismissal of an employee by reason that the employee has made a complaint in relation to health and safety. He also referred to s 97 of the WR Act, which requires the Commission, in determining an industrial dispute, to take into account the provisions of any law of a State or Territory relating to the safety, health and welfare of employees in relation to their employment.

43 The most serious problem that Mr He had in attempting to raise the ground specified in s 170CK(2)(e) of the WR Act is that the Commission did not have jurisdiction to deal with that ground, as a specific ground of the arbitration in Mr He’s case. This is because Mr He’s application to the Commission was not made on that ground. Section 170CE(1) of the WR Act would have permitted Mr He to apply to the Commission for relief in respect of the termination of his employment on the ground of an alleged contravention of s 170CK of the WR Act. As the certificate of Senior Deputy President Williams shows, Mr He did not exercise this right. His application was based only on the ground referred to in s 170CE(1)(a), namely that the termination was harsh, unjust or unreasonable, and on the ground of contravention of s 170CM, namely the failure to give adequate notice. These were the two grounds on which Senior Deputy President Williams certified pursuant to s 170CF(2)(a) that he was satisfied that all reasonable attempts to settle the matter by conciliation were, or were likely to be, unsuccessful. It was the presence of that certificate, relating to those two grounds, that entitled Mr He to make his election pursuant to s 170CFA(2) to proceed to arbitration in the Commission in respect of the first of the grounds. It followed that the only ground upon which the Commission had jurisdiction to conduct an arbitration was the ground that the termination of employment was harsh, unjust or unreasonable. If there had been a certificate relating to a ground specified in s 170CK, and an election to proceed, it would have been necessary for Mr He to have proceeded in the Court, pursuant to s 170CFA(3) in respect of that ground. The Commission could not conduct an arbitration in relation to a ground referred to in s 170CK(2)(e).

44 The fact that no application was made to the Commission in respect of any ground specified in s 170CK may not have been an accident. At the time of his application, and in the hearing before Commissioner Lewin, Mr He was legally represented. So far as the evidence before this Court goes, it appears that the only complaints Mr He made about the issue of the crane capacity and the issue of underpayment of superannuation were complaints made to management of the second respondent. Section 170CK(2)(e) is directed to the making of complaints to outside authorities, either by way of instituting proceedings against an employer, or by way of making allegations to officials who are empowered to investigate such allegations. The ground would not be established by the making of complaints directly to the employer alone.

45 There was a suggestion that the second respondent’s premises were inspected by the Victorian Workcover Authority and that a prohibition notice was issued in respect of the system of lifting paper rolls. The prohibition notice was dated 1 November 2002, well after the time when Mr He’s employment had been terminated. Similarly, there was a suggestion that Mr He received a payout of his superannuation entitlements from the Australian Taxation Office in August 2002. Again, this is well after the termination of employment. The Court’s attention was not directed to any evidence that Mr He made any complaint to any external authority at any time prior to the termination of his employment.

46 This does not mean that the issues of crane capacity and underpayment of superannuation were entirely irrelevant to the proceedings in the Commission. If it had been the case that Mr He had been dismissed in consequence of refusing to obey illegal instructions, or complaining about failures of the second respondent to comply with the law, these issues would have been relevant to the question whether the termination was harsh, unjust or unreasonable, particularly whether there was a ‘valid reason’ for the termination. To the extent to which they were agitated before Commissioner Lewin, he obviously took them into account. Commissioner Lewin made a specific finding that Mr Hume was prepared to take shortcuts with safety. He found, in Mr He’s favour, that all of the warnings he was given were highly problematic, one was withdrawn, some were inappropriate and others misconceived. He did not make a specific finding that any warning was based on either the issue of crane capacity or the issue of superannuation contributions. It does not appear from anything Commissioner Lewin found that the second issue was agitated before him. It must be emphasised, that the Commissioner did not find against Mr He on the ground that he had been given a series of warnings. Indeed, the Commissioner found in favour of Mr He on the issue that the termination of employment was harsh, unjust or unreasonable. It is futile for Mr He to attempt to establish that the same finding in his favour should have been made on other grounds.

47 The Commission had no jurisdiction directly to enforce the prohibition on termination expressed in s 54(d) of the Occupational Health and Safety Act 1985 (Vic). There is no provision of the WR Act conferring jurisdiction on the Commission in that respect. A State Act by itself cannot operate to confer such jurisdiction, even if s 54 had purported to do so in its terms, which it does not. Nor did s 97 of the WR Act import a requirement that the Commission take into account the provisions of the Occupational Health and Safety Act 1985 (Vic). Section 97 is found in Pt VI of the WR Act, as one of a number of provisions governing the manner in which the Commission exercises its arbitral functions in relation to industrial disputes. The provisions under which the Commission was operating in Mr He’s case are found in Pt VIA of the WR Act, which relates to the minimum entitlements of employees. The provisions of Div 3 of Pt VIA contain their own code as to how the Commission is to exercise its arbitral function in relation to terminations of employment.

48 For all of these reasons, Mr He has failed to make out the ground of failure to exercise jurisdiction on the basis that the Commission failed to consider the legality of the termination of his employment.

The accuracy of the transcript

49 Mr He alleged that the transcript of the hearing before Commissioner Lewin was inaccurate in some respects. He alleged that it had been tampered with. He made a similar allegation in relation to the transcript of the hearing before the Full Bench. He entered into correspondence with the President of the Commission, in which he made the same allegation. He suggested that the errors in the transcript showed errors in the Commissioner’s and the Full Bench’s decision-making processes by demonstrating that they had acted on a wrong principle, allowed extraneous or irrelevant matters to guide or affect them, mistaken the facts, or failed to take into account a material consideration.

50 The material before the Court included a copy of the transcript of the hearing before Commissioner Lewin and of the hearing before the Full Bench. The transcript was marked up, apparently by Mr He, for the purpose of showing what he regarded as particular errors. Mr He drew the attention of the Court specifically to several parts of the transcript which he said had been altered. In one instance, the capacity of the crane appeared in evidence of Mr He as ‘525 kg’ instead of ‘125kg’. Plainly, this inaccuracy of the transcript had no influence on the outcome of the proceeding. The Commissioner did not make a finding to the effect that the crane that Mr He had been asked to rig up had a capacity of 525 kilograms. It is unlikely that he would have done so, had he made specific findings about the capacity of the crane, because the whole thrust of Mr He’s case on that issue was that the paper rolls, weighing upwards of 200 kilograms, were too heavy for the capacity of the crane. In the result, as is pointed out above, the case did not turn upon specific findings about the issue of the capacity of the crane.

51 The other errors to which Mr He drew specific attention were similarly irrelevant. In two places, Mr He alleged that the word ‘illegal’ had been rendered as ‘legal’. In one place, words had been attributed to the wrong speaker. On three occasions, Mr He said that words spoken by the Commissioner had been deleted. In each case, he inserted the words he said had been deleted. They are completely inconsequential in terms of the outcome of the case. On six occasions, Mr He alleged that the transcript contained words which were not on the audio tapes from which the evidence was transcribed. Looking at those passages, it is plain that, not only were they also inconsequential in terms of the outcome of the case, but, if Mr He is right, the exchanges concerned would not have flowed naturally without the additional words. Whatever might be the explanation for the insertion of additional words (if that had been done), sporadic insertions did not have any bearing on the outcome of the proceeding.

52 For these reasons, any question of the accuracy of the transcript does not entitle Mr He to the relief that he sought from the High Court.

Compensation

53 Mr He contended that he was entitled to relief on the basis that the Commission had failed to deal with the claim for compensation according to law. In the first place, he said that the second respondent owed him seven days’ wages. That was not a claim that Mr He was entitled to pursue in the Commission and is not one that he is entitled to pursue in this proceeding. More importantly, Mr He contended that the Commission had not calculated the remuneration that he would have received, or would have been likely to have received, if his employment had not been terminated, as required by s 170CH(2)(c) of the WR Act.

54 The remuneration that the employee would have received, or would have been likely to receive, if the employment had not been terminated is a matter that the Commission is obliged to take into account, along with the other matters referred to in s 170CH(2).

55 The Commissioner’s reasoning on the calculation of compensation has been set out above. He made a finding that the remuneration that Mr He would have received, but for the summary termination of his employment, was equivalent to a period of reasonable notice. He then said he was applying the principles in Quinn and determined that reasonable notice would be three months. The Full Bench expressed the view that, in the circumstances of the case, the Commissioner was entitled to apply those principles.

56 Quinn is an example of the application of a well-established principle. The principle is that, where a contract of employment does not contain a term fixing the length of notice required for termination of that contract, usually there will be an implied term to the effect that the contract is terminable on reasonable notice. What constitutes reasonable notice is to be worked out at the date of termination, having regard to the length of time for which the employment has subsisted, the seniority and level of responsibility of the employee, and the remuneration attached to the position. Other factors may be relevant in particular cases.

57 The common law principle as to the implication of a term requiring reasonable notice may be relevant when damages are sought for breach of contract by terminating the employment, a claim usually characterised as a claim for wrongful dismissal. If there has been summary termination, or termination on notice that is considered to have been less than what is reasonable, the court may say that the dismissed employee is entitled to damages equivalent to what he or she would have received if paid wages or salary in lieu of notice for the full period for which notice should have been given. This approach is taken because of a rule limiting damages for wrongful dismissal to the amount the employee would have received if given proper notice. The rule is derived from Addis v Gramophone Co [1909] AC 488. It is an artificial rule, not applied to any other form of contract. It assumes that, if an employee had not been dismissed summarily or on inadequate notice, the employee would have been dismissed on proper notice, at the same time, in any event.

58 The rule in Addis does not find its way into s 170CH(2)(c). In determining the remuneration that the employee would have received, or would have been likely to receive, the Commission is required to give its attention to an actual state of facts. It is not necessarily the case that, had an employer become aware that its attempt to dismiss an employee summarily was ineffective, the employer would necessarily have proceeded to dismiss the employee on notice. For instance, it is unlikely that a dismissal on notice would have occurred in a situation in which an employee is dismissed summarily for some offence of which he or she turns out to be entirely innocent. The assumption that would be made by the common law would not be made if there were no occasion whatever for the termination of the employment. In each case, it is necessary for the Commission to address itself to the question whether, if the actual termination had not occurred, the employment would have been likely to continue, or would have been terminated at some time by another means. It is necessary for the Commission to make a finding of fact as to the likelihood of a further termination, in order to be able to assess the amount of remuneration the employee would have received, or would have been likely to receive, if there had not been the actual termination.

59 In Mr He’s case, Commissioner Lewin did not make any finding of fact as to whether the second respondent would have dismissed Mr He on notice if it had realised that its contrived attempt to dismiss him summarily would not succeed. The question is not susceptible of one answer only. Although the relationship between Mr He and Mr Hume had become unsustainable, it does not follow necessarily that Mr He would have been dismissed on notice, or that he would have been so dismissed at any particular time. All that can be said is that, in December 2001 and January 2002, the second respondent was attempting to bring about a situation in which it could claim the entitlement to dismiss Mr He summarily. In the absence of that attempt, and realising that it was constrained in exercising its power to terminate the employment of Mr He by reason of the provisions of the WR Act, the second respondent might have tried a different strategy. The directors might have made more serious attempts to resolve the conflict between Mr Hume and Mr He. They might even have decided that Mr He’s expertise was of more value to them than Mr Hume’s idiosyncratic management skills, and have decided to terminate Mr Hume’s employment instead. Of course, all of this is speculation. It merely underlines the fact that the Commissioner did not explore at all the issue of whether termination of employment would have occurred in some other way and at some other time, if its summary termination were ineffective. Instead, the Commissioner made the assumption that underlies the rule derived from Addis.

60 It is true that the Commissioner did express his finding of fact that the remuneration Mr He would have received was equivalent to a period of reasonable notice. In the absence of any antecedent finding of fact about the occurrence and timing of another dismissal, the Commissioner’s finding of fact cannot be sustained.

61 The result is that Commissioner Lewin failed to take into account a relevant consideration in a way that affected the exercise of his power. The relevant consideration is that for which s 170CH(2)(c) of the WR Act provides. Failure to take account of such a relevant consideration in a way that affects the exercise of power is a jurisdictional error. See Craig v State of South Australia [1995] HCA 58; (1995) 184 CLR 163 at 179 and Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 (2001) 206 CLR 323 at [82] per McHugh, Gummow and Hayne JJ, with whom Gleeson CJ agreed. Subject to the exercise of the Court’s discretion, such an error would entitle Mr He to relief of the kinds that he seeks in this proceeding.

Discretion

62 The exercise of the discretion in relation to the remedies of certiorari and mandamus in the present case turns on an issue raised in the course of argument. When it was pointed out to counsel for the second respondent that Commissioner Lewin may have failed to take into account a relevant consideration, the Court raised the question whether the second respondent would be better served by paying to Mr He a further sum of $13 000, rather than by having the matter remitted to the Commission for further hearing. The further sum of $13 000 would take the total amount paid by the second respondent to Mr He up to the limit specified in s 170CH(8) and (9), namely the total remuneration to which Mr He was entitled for six months immediately before the termination. Mr He’s annual salary was $52 000. He had already been paid $13 000, following upon Commissioner Lewin’s decision. He sought the payment of a further $13 000 in his application for leave to appeal to the Full Bench.

63 Not surprisingly, counsel for the second respondent indicated that his client would prefer to pay an additional $13 000 than to be forced to continue to contest Mr He’s application in the Commission. Having regard to the history of the proceeding, the payment of the additional amount is likely to be substantially cheaper than the costs of the further conduct of the proceeding.

64 If Mr He were to receive an additional $13 000, he would have received all that he claimed, and all that he could have claimed in his proceeding before the Commission. Having regard to the findings of fact made by Commissioner Lewin, it is plain that reinstatement was not a viable remedy. If the matter were to be returned to the Commission for further hearing, there is no doubt that Mr He would attempt to continue to agitate the issues that have absorbed his attention to a very high degree, both before the Full Bench and in this Court, the issues being the legality of the termination and the inaccuracy of the transcript. It is unlikely that Mr He will take heed of the judgment of this Court in relation to those issues, so strong is his desire to be vindicated with respect to each of them.

65 For all of these reasons, if an order can be made that will ensure that Mr He receives a payment of an additional $13 000, without the matter having to be contested further in the Commission, such an order should be made. In the event of such a payment being made, the exercise of the Court’s discretion would lead to the Court refusing the orders sought in the application. If such a payment were not made or tendered promptly, in the light of the reasons, orders should then be made removing into the Court the orders of Commissioner Lewin made on 14 August 2002 and of the Full Bench of the Commission made on 23 December 2002 for the purpose of quashing those orders. Further, an order should be made directing Commissioner Lewin to further hear and determine the application of Mr He pursuant to s 170CE of the WR Act against the second respondent in accordance with these reasons for judgment.

The form of order

66 To make it clear that the Court’s orders are intended to dispose finally of the issues in the proceeding, the application for an order nisi should be granted. In accordance with the reasoning expressed in [65], the Court should order that, upon the payment or tender by the second respondent to Mr He of the sum of $13 000 (or such sum less any amount from such sum which the second respondent is required to remit to the Australian Taxation Office) within 21 days of the date of these reasons for judgment, the order nisi be discharged and the orders sought in the application be refused. As it is necessary that the Court be satisfied as to the fact of the payment or tender of that sum, there should be a further order requiring the second respondent to produce evidence to the satisfaction of a registrar of the Court of payment or tender of the said sum as a pre-condition to the refusal of the orders sought in the application. In the event that the sum of $13 000 is not so paid or tendered, orders should be made in the terms set out in [65]

67 Having regard to the provisions of s 347 of the WR Act, no order for costs can be made. The proceeding is one in a matter arising under the WR Act, even though the application is in form one for remedies of the kinds available pursuant to s 75(v) of the Constitution. The jurisdictional limitations raised by the application are dependent upon the terms of the WR Act, and not on the Constitution itself. See Re: McJannet; Ex parte Australian Workers’ Union of Employees, Queensland [No. 2] [1997] HCA 40; (1997) 189 CLR 654 at 656.

I certify that the preceding sixty-seven (67) numbered paragraphs are a true copy of the Reasons for Judgment herein of their Honours Justices Gray and Mansfield JJ.

Associate:

Dated: 21 June 2004

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 457 of 2003

ON REMITTAL FROM THE HIGH COURT OF AUSTRALIA

BETWEEN:	DAMING HE APPLICANT
AND:	THE HONOURABLE COMMISSIONER LEWIN, THE HONOURABLE SENIOR DEPUTY PRESIDENT POLITES, THE HONOURABLE DEPUTY PRESIDENT HAMILTON AND THE HONOURABLE COMMISSIONER LARKIN AS MEMBERS OF A FULL BENCH OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION AND THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION FIRST RESPONDENTS ENVELOPMENTS PTY LTD SECOND RESPONDENT

JUDGES:	GRAY, WHITLAM and MANSFIELD JJ
DATE:	21 JUNE 2004
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

WHITLAM J

68 The applicant, Daming He, used to be employed by the second respondent, Envelopments Pty Ltd (‘Envelopments’). On 29 January 2002 Envelopments purported summarily to terminate Mr He’s employment. Pursuant to s 170CE(1) of the Workplace Relations Act 1996 (Cth) (‘the Act’), Mr He applied to the Australian Industrial Relations Commission (‘the Commission’) for relief in respect of the termination of his employment. The matter proceeded to arbitration. On 14 August 2002 the Commission (Lewin C) determined that the termination was harsh, unjust and unreasonable and made an order requiring Envelopments to pay Mr He an amount of $13,000 in lieu of reinstatement. Mr He appealed against that order, but on 23 December 2002 a Full Bench of the Commission (Polites SDP, Hamilton DP and Larkin C) refused leave to appeal.

69 Mr He then commenced this proceeding in the High Court by notice of motion dated 21 February 2003, seeking an order nisi for writs of mandamus and certiorari or ‘Constitutional relief’ in respect of the Commission’s decision of 23 December 2003. The first respondents, to whom the writs are proposed to be directed, have entered submitting appearances. The proceeding was remitted to this Court on 28 March 2003.

70 The way in which the Commission dealt with Mr He’s application is explained in my colleagues’ reasons for judgment, where the relevant statutory provisions are also set out. Mr He was, as their Honours note, represented by counsel at the hearing before Lewin C. He has since conducted his appeal to the Full Bench of the Commission and this proceeding in person. Perhaps unsurprisingly therefore, the draft order nisi exhibited to Mr He’s supporting affidavit does not clearly state the grounds upon which such an order is sought. In any event, for the reasons given by Gray and Mansfield JJ, the alleged contravention of s 170CK(2)(e) and any transcript errors cannot be relied on to establish jurisdictional error on the part of the Commission.

71 I think, however, that Mr He has tripped over a good point in relation to s 170CH(2)(c) of the Act. His counsel submitted to Lewin C, and he submitted to the Full Bench, that the Commission was required by this statutory provision to calculate the remuneration that he would have received up to the time of the arbitration. The relevant ground for relief is not well expressed in the draft order nisi, where Mr He baldly states that the Commission did not calculate remuneration in accordance with the requirements of s 170CH(2)(c) and complains that the Commission used the principles applicable to an action for wrongful dismissal. This ground was hardly developed by Mr He in his oral argument.

72 The hypothesis stated in s 170CH(2)(c) is ‘if the employee’s employment had not been terminated’. It is not ‘if the employee’s employment had been terminated on reasonable notice’, which was the assumption used by the Commission because Lewin C took the view that the termination of Mr He’s employment occurred in circumstances which did not justify summary dismissal. The reasonable notice formula that the Commission employed reflects the common law rule that damages for wrongful dismissal will be equivalent to remuneration for such period of notice as would have been of sufficient length lawfully to terminate the employment. In asking the question ‘what is reasonable notice’, I consider that the Commission made an error of law. Section 170CH(2)(c) required the Commission to assume that the employment had not ended. Put another way the statutory hypothesis is not ‘if the employee’s employment had been lawfully terminated’.

73 It follows that I do not, with respect, agree with Gray and Mansfield JJ that s 170CH(2)(c) requires the Commission in each case to address the question they identify. Remuneration is normally dependent on service. The use of the past conditional ‘would have received’ suggests a closed period. The requirement for actual service having been done away with by the hypothesis, it seems to me clear enough that service up to the time of arbitration is also to be assumed for the purposes of the quantification of the notional remuneration. The expression ‘would have been likely to receive’ is apt to quantify notional remuneration determined on a less certain basis, such as commission or piece rates. That language does not compel consideration of theoretical scenarios under which the employee would not receive remuneration from the employer referred to in s 170CH. It may be noted that, if the Commission makes an order under s 170CH(4)(b), the amount the employer is to pay must be ‘in respect of the remuneration lost, or likely to have been lost’. This provision does not, of course, require that such amount be equivalent to the notional remuneration determined under s 170CH(2)(c), but it does mean that such a determination will have to have been made in respect of the whole of the period between termination and reinstatement in order to assess the amount ordered to be paid.

74 In my view, the Commission is not obliged to consider under s 170CH(2)(c) the likelihood that, if the employee’s employment had not been terminated, it would have been subsequently terminated in some other way. Subsequent events may, of course, be relevant to the Commission’s consideration under s 170CH of the Act. A factory might be destroyed. Energy supplies might disappear. The ‘circumstances of the case’ referred to in s 170CH(2) may then include the possibility of a subsequent termination, but such a matter will be relevant because of the case made by an employer.

75 The exercise by the Commission of its power under s 170CH(6) of the Act was, in my view, affected by its erroneous construction of par (c) in subss (2) and (7) of s170CH. Whilst it is very likely that Lewin C was aware of the correct arithmetic, his failure to state the total amount of the remuneration lost by Mr He up to the time of the arbitration may well have affected the exercise of his discretion in fixing an amount under s 170CH(6) of the Act. Accordingly I see no basis to refuse Mr He the relief necessary to have his application under s 170CE of the Act determined according to law. There is no purpose in quashing the decision of the Full Bench, but the decision of Lewin C should be quashed and a writ of mandamus issued.

76 The orders proposed by Gray and Mansfield JJ have a ring of common sense to them. If the parties could reach an agreement between themselves as to the disposition of this proceeding on the basis of such a payment as is proposed, I should readily join in a consent order refusing the application. However, no such agreement exists. The Court does not have any power to make an order under s 170CH of the Act, and I do not think that the Court should withhold relief it would otherwise grant because one party is willing to tender an amount that the Court cannot order to be paid. It is also at least arguable that the Commission should have adverted to the matters listed in s 170CH(2) before declining under s 170CH(1) to make an order of reinstatement under s 170CH(3) of the Act. The applicant still seeks such an order from the Commission, and the amount of any order under s 170CH(4)(b) is not limited by s 170CH(8) and (9). Accordingly I respectfully decline to join in the orders proposed. I agree that no order for costs can be made.

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam.

Associate:

Dated: 21 June 2004

Counsel for the Applicant:	The Applicant appeared in person
Counsel for the Second Respondent:	G McKeown
Solicitor for the Second Respondent:	Middletons
Date of Hearing:	20 November 2003
Date of Judgment:	21 June 2004