|
|
[Home]
[Databases]
[WorldLII]
[Search]
[Feedback]
Federal Court of Australia - Full Court Decisions |
Last Updated: 21 December 2007
FEDERAL COURT OF AUSTRALIA
Visscher v The Australian Industrial Relations Commission [2007] FCAFC 206
EMPLOYMENT LAW – contract of
employment – contract for personal service – breach of contract
– wrongful termination of employment
– application for
constitutional writs – jurisdictional fact – termination of
employment effective even though
wrongful – no error of jurisdiction
Workplace Relations Act 1996 (Cth) s
170CE
Ansett Transport Industries
(Operations) Proprietary Limited v Wardley [1980] HCA 8; (1980) 142 CLR
237
Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; (1946) 72 CLR
435
Brackenridge v Toyota Motor Corporation (Australia) Ltd (1996) 142
ALR 99
Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410
Coal
& Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47;
(2000) 203 CLR 194
Corporation of the City of Enfield v Development
Assessment Commission [2000] HCA 5; (2000) 199 CLR 135
Craig v South Australia [1995] HCA 58;
(1995) 184 CLR 163
Parisienne Basket Shoes Pty Ltd v Whyte [1938] HCA 7; (1938) 59
CLR 369
Siagian v Sanel Pty Ltd (1994) 1 IRCA 1; 122 ALR 333
T.
Visscher v Teekay Shipping (Australia) Pty Ltd – PR 972194
T.
Visscher v Teekay Shipping (Australia) Pty Ltd – PR
974225
Watson v Automatic Fire Sprinklers Pty Ltd (1946) 46 SR 336
TIMOTHY VISSCHER v THE
HONOURABLE PRESIDENT JUSTICE GIUDICE, THE HONOURABLE SENIOR DEPUTY PRESIDENT
DRAKE, COMMISSIONER ROBERTS (THE
FULL BENCH OF THE AUSTRALIAN INDUSTRIAL
RELATIONS COMMISSION), COMMISSIONER REDMOND, AUSTRALIAN INDUSTRIAL RELATIONS
COMMISSION AND
TEEKAY SHIPPING (AUSTRALIA) PTY LIMITED
NSD 679 OF
2007
RYAN, MADGWICK AND BUCHANAN JJ
21 DECEMBER
2007
SYDNEY
AN AMENDED APPLICATION
FOR AN ORDER TO SHOW CAUSE REMITTED FROM THE HIGH COURT OF
AUSTRALIA
THE COURT ORDERS THAT:
1. The proceedings are dismissed.
Note: Settlement and
entry of orders is dealt with in Order 36 of the Federal Court Rules.
AN AMENDED APPLICATION FOR AN ORDER TO SHOW CAUSE REMITTED FROM THE
HIGH COURT OF AUSTRALIA
|
BETWEEN:
|
TIMOTHY VISSCHER
Applicant |
|
AND:
|
THE HONOURABLE PRESIDENT JUSTICE GIUDICE, THE HONOURABLE SENIOR DEPUTY
PRESIDENT DRAKE, COMMISSIONER ROBERTS (THE FULL BENCH OF THE
AUSTRALIAN
INDUSTRIAL RELATIONS COMMISSION), COMMISSIONER REDMOND, AUSTRALIAN INDUSTRIAL
RELATIONS COMMISSION
First Respondent TEEKAY SHIPPING (AUSTRALIA) PTY LIMITED Second Respondent |
|
JUDGES:
|
RYAN, MADGWICK AND BUCHANAN JJ
|
|
DATE:
|
21 DECEMBER 2007
|
|
PLACE:
|
SYDNEY
|
REASONS FOR JUDGMENT
RYAN J:
1 I have had the advantage of reading in draft the reasons for judgment of Buchanan J. I agree with those reasons and with the orders which his Honour has proposed.
2 In my view, whether the events of 2001 amounted to a discharge of Mr Visscher’s existing contract of employment and the erection in its place of a new or varied contract was a question of fact. It may have been open to Commissioner Redmond to find that Teekay’s "demotion" of Mr Visscher from Chief Officer to Third Officer was a sham contrived to placate the AMOU and those officers with longer service with Teekay who had apparently complained that Mr Visscher and Mr Champkin had been promoted over them. A related motive for such a contrivance would have been to appear to have complied with Commissioner Raffaelli’s recommendation of 11 September 2001. However, Commissioner Redmond made no finding that there had been a sham of that kind and it does not appear that Counsel who then appeared for Mr Visscher invited the making of any such finding.
3 At all events, it was at least equally open to Commissioner Redmond to find that Teekay, in or about September 2001, had repudiated the contract of employment between it and Mr Visscher, who had accepted that repudiation. It was open to the Commissioner to infer the latter’s acceptance from Mr Visscher’s acquiescence in the intimation from Commissioner Raffaelli of 11 September 2001 without challenging what was there described as "the Company’s decision". That inference would have been reinforced if it had been found that Mr Visscher had been aware of pay slips issued after September 2001 which showed that his remuneration had been increased from that of a Third Officer to that of a Chief Officer by the addition of an amount expressed to be by way of a higher duties allowance. Acceptance of Teekay’s repudiation of its contract to employ him as a Chief Officer could also have been imputed to Mr Visscher if it had been found that he was aware, after its certification on 5 March 2002, that he was shown in Appendix A to the 2001 Agreement as holding the rank of Third Officer.
4 It is not to the point whether this Full Court or any other Tribunal would have resolved, in the same way as Commissioner Redmond did, the question of fact which I have just identified. Whether or not Mr Visscher’s employment had been terminated at the initiative of the employer was a matter within the jurisdiction of the AIRC and the AIRC’s resolution of that issue was a determination on the merits of his application; cp Parisienne Basket Shoes Pty Ltd v Whyte [1938] HCA 7; (1938) 59 CLR 369 per Dixon J, at 390-391. Like Buchanan J, I have been unable to discern any error of law by Commissioner Redmond in the course of resolving the primary issue entrusted to him by the relevant provisions of the Workplace Relations Act 1996 (Cth). Demonstration of such an error is essential to success in an application of the present kind for relief against an order of an administrative tribunal like the AIRC. As the High Court pointed out in Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163, at 179;
‘... If such an administrative tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it.’
Associate:
Dated: 21
December 2007
AN AMENDED APPLICATION FOR AN ORDER TO SHOW CAUSE REMITTED FROM THE
HIGH COURT OF AUSTRALIA
|
BETWEEN:
|
TIMOTHY VISSCHER
Applicant |
|
AND:
|
THE HONOURABLE PRESIDENT JUSTICE GIUDICE, THE HONOURABLE SENIOR DEPUTY
PRESIDENT DRAKE, COMMISSIONER ROBERTS (THE FULL BENCH OF THE
AUSTRALIAN
INDUSTRIAL COMMISSION), COMMISSIONER REDMOND, AUSTRALIAN INDUSTRIAL RELATIONS
COMMISSION
First Respondent TEEKAY SHIPPING (AUSTRALIA) PTY LIMITED Second Respondent |
|
JUDGES:
|
RYAN, MADGWICK AND BUCHANAN JJ
|
|
DATE:
|
21 DECEMBER 2007
|
|
PLACE:
|
SYDNEY
|
REASONS FOR JUDGMENT
MADGWICK J:
5 I agree with Buchanan J’s conclusions and reasons.
6 It was not argued before us that Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 142 ALR 99 was wrongly decided, but even if that decision should not be correct, it would make no difference here. Mr Visscher now asserts, contrary to his first reaction, that his demotion did not terminate the employment relationship.
7 In any case, there was, after the demotion, an employment relationship under which Mr Visscher was employed by Teekay Shipping (Australia) Pty Limited (‘Teekay’) and under which he worked for a considerable period. Mr Visscher was unable to show that, in the events that occurred and led to his departure, that employment relationship, even if it were a new relationship entered into after his 2001 demotion, was terminated at Teekay’s initiative. Teekay was perfectly willing to continue it.
8 All of this is unfortunate. Mr Visscher was badly treated by Teekay
in 2001. Possible remedies he might have had related,
so far as I can see, to
the events of 2001 rather than 2003-4.
|
I certify that the preceding four (4) numbered paragraphs are a true copy
of the Reasons for Judgment herein of the Honourable Justice
Madgwick.
|
Associate:
Dated: 21 December 2007
|
IN THE FEDERAL COURT OF AUSTRALIA
|
|
|
NEW SOUTH WALES DISTRICT REGISTRY
|
NSD 679 OF 2007
|
|
AN AMENDED APPLICATION FOR AN ORDER TO SHOW CAUSE REMITTED FROM THE HIGH
COURT OF AUSTRALIA
|
|
BETWEEN:
|
TIMOTHY VISSCHER
Applicant |
|
AND:
|
THE HONOURABLE PRESIDENT JUSTICE GIUDICE, THE HONOURABLE SENIOR DEPUTY
PRESIDENT DRAKE, COMMISSIONER ROBERTS (THE FULL BENCH OF THE
AUSTRALIAN
INDUSTRIAL COMMISSION), COMMISSIONER REDMOND, AUSTRALIAN INDUSTRIAL RELATIONS
COMMISSION
First Respondent TEEKAY SHIPPING (AUSTRALIA) PTY LIMITED Second Respondent |
|
JUDGES:
|
RYAN, MADGWICK AND BUCHANAN JJ
|
|
DATE:
|
21 DECEMBER 2007
|
|
PLACE:
|
SYDNEY
|
REASONS FOR JUDGMENT
BUCHANAN J:
9 These proceedings concern a challenge to decisions of the Australian
Industrial Relations Commission (‘the AIRC’) which
is constituted
under the Workplace Relations Act 1996 (Cth) (‘the WR Act’).
The case was remitted to this Court from the High Court of Australia. It is
based upon the contention
that both Commissioner Redmond, and later a Full
Bench, of the AIRC made jurisdictional errors in relation to an application
brought
to the AIRC by Mr Timothy Visscher against his employer, Teekay Shipping
(Australia) Pty Limited (‘Teekay’). Mr Visscher
alleged his
employment as Chief Officer/First Mate with Teekay was terminated in early 2004
and sought his reinstatement to that
position.
10 At the heart of his case is an argument by Mr Visscher that from 21 August 2001 he was permanently employed as a Chief Officer by Teekay. Teekay accepts that Mr Visscher was promoted to such a position on that date but says that on 20 September 2001 it rescinded his promotion. Even if the rescission constituted a repudiatory breach of his contract of employment Teekay argues that it was effective to bring any contract of employment with Mr Visscher as a permanent Chief Officer to an end.
11 Mr Visscher continued to perform the job of a Chief Officer for Teekay after 20 September 2001. He says he did so as a permanent Chief Officer. Teekay says he was acting in the position. In early 2004 matters came to a head. Mr Visscher left his employment with Teekay. He says he did so because Teekay again demoted him from the position of permanent Chief Officer and, on this occasion, he accepted the repudiation of his contract of employment. Teekay says that Mr Visscher resigned.
12 The proceedings commenced by Mr Visscher in the AIRC invoked the provisions of s 170CE of the WR Act prior to extensive amendments which took effect on 27 March 2006. Those amendments had come into effect by the time of Commissioner Redmond’s decision on 5 May 2006 (T. Visscher v Teekay Shipping (Australia) Pty Ltd – PR 972194) and the Full Bench decision on appeal on 9 October 2006 (T. Visscher v Teekay Shipping (Australia) Pty Ltd – PR 974225) but his application for reinstatement was, by reason of transitional provisions accompanying the amendments to the WR Act, dealt with in accordance with the provisions in place at the time the application was lodged.
Jurisdictional Fact
13 No relief in the form of a constitutional writ will be available in respect of either Commissioner Redmond’s decision or the decision of the Full Bench of the AIRC unless, in the exercise of their respective functions, they exceeded their jurisdiction or misunderstood the nature of the jurisdiction which they were to exercise with the result that it was not exercised when it should have been.
14 The jurisdiction of the AIRC to deal with Mr Visscher’s application depended upon the ‘termination of [his] employment at the initiative of the employer’. His application was rejected because Commissioner Redmond found that this precondition for the exercise of the AIRC’s jurisdiction was not established.
15 The jurisdiction of the Full Bench to hear and determine the appeal which Mr Visscher then brought against Commissioner Redmond’s decision arose under ss 45 and 120 of the WR Act. Section 120 makes the establishment of error a critical element in an appeal concerning termination of employment. Section 45 imposes an initial requirement that a Full Bench grant leave to appeal. Any contention that the Full Bench committed a jurisdictional error requires attention to its specific responsibilities and to its appellate function under the WR Act. Error made by a Full Bench in the discharge of its own responsibilities is not jurisdictional error unless it mistakes or fails to exercise its own appellate jurisdiction (see Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 at [31]).
16 However the AIRC cannot give itself jurisdiction by the formation of an erroneous opinion about a jurisdictional fact upon which its jurisdiction depends and that is so whether the error is made at first instance or on appeal.
17 In Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; (2000) 199 CLR 135 the High Court said (at [28]):
‘The term "jurisdictional fact" (which may be a complex of elements) is often used to identify that criterion, satisfaction of which enlivens the power of the decision-maker to exercise a discretion.’
18 Mr Visscher sought to support the availability of relief in this Court upon the contention that Commissioner Redmond and the Full Bench had failed to correctly identify a basic jurisdictional fact upon which the exercise of any power or discretion fundamentally depended. The basic jurisdictional fact which he argued was not correctly found or identified was the continuing existence in 2004 of a contract of employment between him and Teekay as permanent Chief Officer. If he is correct, Commissioner Redmond wrongly refused to consider his application for reinstatement on its merits.
19 In my view, Commissioner Redmond’s conclusion did involve a finding about a jurisdictional fact. It is examinable in the present proceedings. It will not be necessary to give specific attention to the manner of discharge by the Full Bench of its appellate role unless it is first shown that Commissioner Redmond failed to correctly identify and exercise the jurisdiction of the AIRC at first instance.
Background Facts
20 Mr Visscher is an experienced merchant naval officer. He holds a certificate of competency as Master Class 1. His certificate carries an Oil Tanker endorsement. It qualifies him for permanent employment with Teekay as a Chief Officer.
21 Mr Visscher commenced casual employment with Teekay on 4 March 2000 and on 26 March 2001 was offered permanent employment as a Third Mate. However, he sailed consistently thereafter in the position of Chief Officer until his relationship with Teekay ended in 2004. Teekay’s records show that he received higher duties pay so that he was remunerated for practical purposes always as a Chief Officer.
22 On 21 August 2001 Mr Visscher was made a written offer of permanent promotion to Chief Officer by Captain Mark Board, Marine Operations Manager for Teekay. On Mr Visscher’s evidence he received this letter of offer on 7 September 2001 when he returned home after a voyage. He accepted the promotion in writing on that day.
23 Mr Visscher’s employment at this time was, apart from the terms of his contract of employment, governed also by the provisions of the Maritime Industry Seagoing Award 1998 and the Teekay Australia/AMOU (Deck Officers) Agreement 1998 (‘the 1998 Certified Agreement), both instruments given statutory force and effect under the WR Act. The 1998 Certified Agreement was made between Teekay and the Australian Maritime Officers’ Union (‘the AMOU’), an organisation of employees registered under the WR Act. It contained provisions concerning promotions which included the following:
‘17.1 Promotions
17.1.1 Positions will be filled on merit, performance, experience and service subject to 17.1.2 and 17.1.4.
17.1.2 [This provision relates to filling temporary or casual positions]
...
17.1.4 The following qualifications are required by the company for promotions:
Master................................. Master Class OneChief Officer ........................ Master Class One
Second Officer ..................... Chief Mate Class One
Third Officer ........................2nd mate Class One’
24 Mr Visscher met these requirements. He was promoted on merit and having regard to his performance, experience and service and he held the necessary qualification for appointment to Chief Officer. However the AMOU protested his appointment and that of another officer at about the same time.
25 On 7 September 2001 solicitors for Teekay notified the existence of an industrial dispute to the AIRC and sought its assistance to avoid industrial action. The notification crystallised the competing industrial positions in the following way:
‘• The Company has a promotion policy that limits permanent appointments to those persons with specific qualifications. In the case of the position of 1st mate, the specific qualification is a Master’s certificate.
• the AMOU is demanding that the Company should hold open vacancies for permanent 1st mate positions to allow permanent deck officers, who have 1st mates certificates but not master’s certificates, to obtain master’s certificates and thereby become eligible for appointment as permanent 1st mates.’
26 The proceedings were listed for hearing before Commissioner Raffaelli of the AIRC on 10 September 2001. Mr Visscher became aware of these developments. On his evidence he indicated to Mr Smith, the Acting Human Resources Manager, that he intended to attend the proceedings to make submissions to Commissioner Raffaelli in his own interests. His evidence was that he was persuaded by Mr Smith not to attend the proceedings and given an assurance that Teekay would look after his interests.
27 There is no record of what was said at the proceedings or whether, and if so to what extent, any effort was made to look after the interests of Mr Visscher or the other officer who had been promoted. On 11 September 2001 Commissioner Raffaelli issued a statement. He was critical of the fact that the promotions had occurred. He recommended that they be rescinded. To a subsequent complaint by Mr Visscher Commissioner Raffaelli responded:
‘My recommendation was made in the context of my ability and responsibility under the Act to attempt to settle the matter by conciliation.
In that context, it was ultimately the Company’s decision to act in the way it did. If you seek to challenge the Company’s decision, do so.’
28 In the proceedings before this Court, Teekay sought to deflect any responsibility for the result of the conciliation conference by suggesting that Mr Visscher was represented by the AMOU, which was not represented in the proceedings in this Court. Mr Visscher appears to have been caught up in a process where his personal interests were of little apparent importance to the three active parties. However that circumstance, despite his submissions suggesting that Commissioner Raffaelli acted without jurisdiction, has no bearing, in my view, upon the legal position which is before the Court.
29 Mr Smith wrote to Mr Visscher on 20 September 2001. His letter included the following:
‘As you can see from the statement the commissioner recommended that the recent promotions be rescinded. Teekay have decided to comply with the recommendation, therefore we regret to inform you that your recent promotion to permanent 1st Mate is unfortunately rescinded.
Under the Workplace Relations Act 1992, employers are extremely vulnerable to protected "strike" action after an EBA has expired. Because of the threat of protected action by the AMOU and the commissioners’ [sic] recommendations, Teekay have decided to capitulate and rescind the promotions. This is extremely unfortunate as the promotions were made in good faith by the company and accepted in good faith by the individuals.’
30 Mr Visscher’s reaction to the advice to him on 20 September 2001 that his promotion to Chief Officer was rescinded was firstly to inquire if his employment had been terminated. He did so by facsimile dated 26 September 2001. It appears he received a message left upon his telephone answering machine that his employment had not been terminated. He sent another fax on 27 September 2001 declaring that in his view ‘in consideration of the manner and extent of my demotion, Teekay Shipping has terminated my employment’. On 1 October 2001 he wrote directly to Commissioner Raffaelli expressing the same view.
31 In the week following his letter dated 27 September 2001 he attended Teekay’s office for a meeting and while there spoke with Captain Board (who had signed the offer of his promotion to Chief Officer on 21 August 2001). Mr Visscher’s evidence was:
‘... I told him that I did not accept interference with my promotion and there was no basis for it. He assured me that I would continue to sail as Chief Officer. He said words to the effect of, "You’re doing a very good job, and as far as I’m concerned, you’ll continue to sail as Chief Officer."
I regarded my contract of employment as Chief Officer as remaining on foot and in all respects I continued to function in that capacity.’
32 Negotiations between Teekay and the AMOU resulted in an agreement to replace the 1998 Certified Agreement. On 5 March 2002 Commissioner Raffaelli certified the Teekay Shipping Australia/AMOU (Deck Officers) Seagoing-Officers Agreement 2001 (‘the 2001 Agreement’). It came into force on 5 May 2002 and applied to Mr Visscher’s employment thereafter. The 2001 Agreement continued to provide that positions would be filled on merit, performance, experience and service. However, new provisions enabled officers without the necessary certificate ‘due to lack of sea-time’ a period in which to complete requirements for the certificate and obtain promotion instead of those who were already qualified.
33 There are three provisions in the 2001 Certified Agreement which are of particular significance for the present proceedings. They are:
‘5.1 This agreement is binding on the employer, the officers and the AMOU. This agreement will be registered under division 2 of the Certified Agreement provision of the Act.
5.4 The parties agree that no officer, including Deck Cadets, shall be employed other than the terms of this agreement.
23.4 The grading (or rank/service) list attached will be the basis for future promotions/transfers, etc.’
34 Appendix A to the 2001 Agreement (the ‘list attached’) showed Mr Visscher ranking 36th in the seniority order of Teekay Deck Officers. He was shown as a Third Officer. At this time there were three positions of Chief Officer which were being held open for other officers who, unlike Mr Visscher, were not immediately qualified for permanent appointment as Chief Officer. It appears from the evidence that, at all relevant times thereafter, three or four positions as Chief Officer were held open for various other officers on this basis.
35 Mr Visscher was, on 5 July 2002, offered permanent promotion to the position of Second Mate. Mr Visscher’s evidence is that he rebuffed this as unnecessary in view of his continuing contract of employment as Chief Officer but it appears to have formed the basis for payment arrangements to him, with his salary thereafter being calculated on the basis of the pay of a Second Mate plus a higher duties allowance to Chief Officer.
36 On 26 June 2003 Mr Visscher was advised that Teekay had finally reached an agreed position with the AMOU ‘regarding the Mate’s grading list’. As part of this agreement the ‘agreed 12 month qualifying period for Second Mates to attain their Masters Certification was increased to 20 months’. This arrangement appears to have further blocked Mr Visscher’s permanent promotion to Chief Mate although throughout the relevant period, as was earlier noted, Mr Visscher continued to sail as Chief Officer in receipt of a higher duties allowance.
37 In November 2003 an incident occurred between Mr Visscher and the then Master of the Samar Spirit which Mr Visscher, on his evidence, found to be unacceptable. When the voyage was complete Mr Visscher informed Teekay that he did not wish to remain on the ship for future voyages. This led to various communications, both oral and written, which brought the question of Mr Visscher’s status to a head. Mr Visscher then sailed a voyage as Chief Officer on the Broadwater. He subsequently sailed one further voyage on the Broadwater as Chief Officer, without prejudice, before his relationship with Teekay finally ended.
38 Statements made by Teekay when he asked for another posting, away from the Samar Spirit, were treated by Mr Visscher as (again) demoting him from the position of permanent Chief Officer. They may be illustrated by the following points made in a letter to Mr Visscher by Mr Parmeter, Teekay’s Director, Human Resources on 5 April 2004:
‘1. As I explained at our meeting on 26 March, your permanent grading with the Company is as Second Mate.2. Due to the current shortage of Deck Officers, there is an ongoing need for you to act up as Chief Mate. At this stage the Company cannot say precisely for how long this situation will continue.
3. Consistent with point 1 above, the Company reserves the right to appoint you to a vessel as Second Mate.
4. You will be considered for permanent appointment to Chief Mate in accordance with the procedures laid down in the clause in the relevant Enterprise Agreement.’
39 On this occasion Mr Visscher accepted the ‘repudiation’ of his contract and sought redress.
The contractual position
40 It is not clear whether Teekay took the view, either initially or subsequently, that its engagement of the conciliation processes of the AIRC and its subsequent accommodation with the AMOU, on the recommendation of Commissioner Raffaelli, gave it the right to rescind Mr Visscher’s contract of employment by its letter dated 20 September 2001. In my view it had no such right. What it did was a breach of contract. The breach of Mr Visscher’s contract was not, at least at that time, legally immunised by the fact that it was the result of industrial compromise or that it had the active endorsement of the AIRC. By its letter dated 20 September 2001 Teekay declared that it would no longer be bound by its legal obligations towards him. There can be no doubt that Mr Visscher had the right, at this point, to treat Teekay’s conduct as a breach of contract, and as a termination of his employment, and exercise such rights as may have arisen as a result. That is not to say that he would have succeeded in an application to the AIRC for reinstatement. The success of any such application does not turn solely on legal entitlement.
41 However Mr Visscher did not accept the repudiation and take action for breach of contract or for the termination of his employment. He continued in employment with Teekay but, for the reasons which follow, it is not open to conclude that he remained employed as a permanent Chief Officer. That employment was effectively at an end.
42 Contracts of employment are a species of contracts generally. Many of the same legal principles apply to them. However because they are contracts for personal service they have some special features. Most of the pejorative consequences associated with an old fashioned view of the master/servant relationship have gradually disappeared but there remain some areas in which the characteristic of personal service sets contracts of employment apart from contracts generally. One example is the principle that employment (or an employment relationship) may be effectively discharged by wrongful termination of a contract of employment even if, for some limited purposes, the contract itself legally remains on foot. The case which is usually cited as the seminal authority for that proposition is Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; (1946) 72 CLR 435. Although the result in that case turned on the legal consequence of the National Security (Man Power) Regulations which were in effect during the Second World War the judgments also discuss the common law position. It is those observations which have been taken since as confirming that contracts of employment stand in a special position in this respect.
43 The case went on appeal to the High Court from the Supreme Court of NSW (Watson v Automatic Fire Sprinklers Pty Ltd (1946) 46 SR 336) which had dealt with it as a case stated by an arbitrator. It is instructive to read the judgments in the High Court in the light of the pronouncements made by the Full Court of the Supreme Court about the common law position relating to contracts of employment. The Full Court made the following statements (at 340 – 342):
‘• There is no special law of contracts of master and servant. A contract creating this relationship is subject to the ordinary law of contract, unless there is something special in the particular contract which involves a modification of that law. A lawful contract of any kind is governed by its express terms, by any additional terms necessarily implied in its express terms, by any further terms added by usage or by statute or other law to such a contract, and, subject to these terms, by the general law of contracts.
• It is part of that general law that, if one of the parties commits a breach of an essential promise of the contract, the other has ordinarily the right, at his option, either to treat the contract as at an end and recover damages on this basis, or else to leave it on foot, enforce it, and also recover compensation for any incidental damage occasioned by the breach.
• [A] party, by committing a breach of an essential promise, cannot compel the innocent party to put an end to the contract. The latter may ordinarily insist on keeping the contract on foot and going on with its performance.
• One essential promise which is implied in every contract is that neither party will, without just cause, repudiate his obligations under it, whether the time for performance has arrived or not, that is, that he will not expressly or impliedly intimate that he refuses to be bound by it in whole or part.
• In the absence of some provision in the contract ... (express or implied), in no case can an employer, without the consent of the employee, terminate a subsisting contract of service before it expires by effluxion of time. If he purports to do so, the employee may use the attempted wrongful dismissal as a ground for himself terminating the contract and suing to recover damages for the breach.’
44 In the High Court, notwithstanding that the appeal was dismissed by majority for other reasons, these statements were not approved. Latham CJ (who dissented from the result of the appeal but whose views of the common law accorded with those of other judges) summarised the effect of the Full Court judgment as follows (at 449):
‘In the reasons for judgment of the Full Court emphasis is placed upon the well-established rule that a contract cannot be brought to an end by breach by one party or by unilateral repudiation of its obligations. The contract continues in existence notwithstanding such breach or repudiation unless the other party accepts the breach or repudiation as discharging the contract and the breach or repudiation is of such a character as to entitle him to do so. The Full Court has applied this principle in the following way: the contract of employment was not terminated by the wrongful dismissal of Watson on 29th September 1944, which was a unilateral repudiation of the contract by the employers; the contract continued in existence unimpaired; the servant, Watson, was always ready and willing to perform his contract, and therefore was entitled to his salary until 19th September 1945, when he claimed damages for wrongful dismissal (to which he was entitled) and so did then (but not before) treat the contract as discharged.’
45 However, his Honour said (at 450 – 451):
‘But if a dismissed servant, as in the present case, does not accept his dismissal as a breach entitling him to regard the contract as discharged, he cannot ignore the wrongful dismissal and claim still to be the servant of his employer with the rights of a servant. The dismissal, though wrongful, is not a nullity.’
and (at 451):
‘Thus the wrongful dismissal determines the relationship of master and servant created by the contract, even though the servant may not have accepted his dismissal as entitling him to regard the contract as discharged. Any other view would in effect grant specific performance of a contract of personal service, a remedy which the courts have always refused in such a case’. (Citation omitted)
46 Dixon J drew attention to the quality of personal service when, having referred to that class of contracts where payment depends on actual performance, his Honour said (at 465):
‘A contract for the establishment of the relation of master and servant falls into the same general category of agreements to pay in respect of the consideration when and so often as it is executed, and is, therefore, commonly understood as involving no liability for wages or salary unless earned by service, even though the failure to serve is a consequence of the master’s wrongful act.’
and:
‘The common understanding of a contract of employment at wages or salary periodically payable is that it is the service that earns the remuneration and even a wrongful discharge from the service means that wages or salary cannot be earned however ready and willing the employee may be to serve and however much he stand by his contract and decline to treat it as discharged by breach.’
Similarly, his Honour said (at 466):
‘... broadly speaking, it is enough to say that wages are for the service reasonably demanded under a subsisting relationship of master and servant. That relationship may be ended by the servant forsaking the master or the master discharging the servant, although the act of the one or of the other amounts to a breach of contract.’
and (at 469):
‘For the reasons I gave in the earlier part of the judgment, I think that there is nothing in the general law preventing the wrongful dismissal of a servant operating to discharge him from service, notwithstanding that he declines to accept the dismissal as absolving him from further performance but keeps the contract open and remains ready and willing to serve.’
47 The approach to the common law position stated in Watson was affirmed in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410. Brennan CJ, Dawson and Toohey JJ said (at 427-8):
‘In speaking of "the relationship", Dixon J had in mind the relationship of employer and employee as distinct from the contract of employment. It does not appear to have been doubted in this country that a wrongful dismissal terminates the employment relationship notwithstanding that the contract of employment may continue until the employee accepts the repudiation constituted by the wrongful dismissal and puts an end to the contract. That was accepted by both the majority and minority in Automatic Fire Sprinklers Pty Ltd v Watson.’
and:
‘In England, the position was for a time not so clear, although the view taken in Australia appears now to be accepted there. Of course, even if an employee who is wrongfully dismissed chooses to keep the contract of employment on foot, he or she cannot claim remuneration in respect of any period after the wrongful dismissal because the right to receive remuneration for services is dependent upon the services having been rendered. The employee is also under a duty to mitigate any damage. Moreover, a court will not, save in exceptional circumstances, order specific performance of a contract of personal service. The possible continuation of the contract of employment after a wrongful dismissal will, therefore, ordinarily be of no real significance as it will for all practical purposes be at an end.
There is no reason to doubt that in the present case the dismissal of the appellants by the respondent rightly or wrongly put an end to the employment relationship. In Automatic Fire Sprinklers Pty Ltd v Watson the majority felt constrained by authority to say that the regulation in question prevented that from happening. We are bound to say that we prefer the reasoning of the minority to the contrary on the point.’
48 The principle has been recognised as applying under modern statutory arrangements. In Siagian v Sanel Pty Ltd (1994) 1 IRCA 1 (122 ALR 333) at 13 – 20 (ALR 345 – 352) Wilcox CJ referred to a number of cases bearing upon this issue commencing with a reference to the judgments in Watson. His Honour was concerned with the construction of the words ‘termination of ... employment’ in the Industrial Relations Act 1988 (Cth) (a predecessor to the WR Act). His Honour said (at 19 (ALR 351)):
‘Bearing all these matters in mind, and given that the courts have sometimes recognised the possibility of a differences between a termination of employment and a termination of the contract of employment, it seems preferable to treat the words "termination of ... employment" in Div 3 of Pt VIA of the Industrial Relations Act as including any act that brings to an end the employer-employee relationship, whether or not the act, or any acceptance of it, also brings to an end the contract of employment.’
49 In my view the legal consequence of the principles I have
referred to is clear. Mr Visscher could not insist on performance of
his
contract by Teekay even if the contract itself remained on foot for limited
purposes. His employment as a permanent Chief Officer
was brought to an end by
Teekay’s conduct, even though wrongful.
50 The fact that Mr Visscher remained in employment with Teekay and sailed as Chief Officer does not lead to any different conclusion. In Brackenridge v Toyota Motor Corporation (Australia) Ltd (1996) 142 ALR 99 a Full Court of the Industrial Relations Court of Australia considered whether, under the same statutory scheme as was considered in Siagian, a demotion amounted to a termination of employment. Ms Brackenridge was the chef supervisor at one of three staff canteens operated by Toyota in the Sydney metropolitan area. As a result of a confrontation with another employee she was demoted to the position of canteen assistant.
51 The case is factually different to the present because the Full Court held that there had been no breach of contract committed by the demotion. That was because Ms Brackenridge was found to have been guilty of wilful misconduct entitling the employer to lawfully terminate the first contract without notice. However, even though it concluded that the demotion brought the prior contract of employment (lawfully) to an end the Full Court agreed with the trial judge that the demotion did not constitute termination of employment. As Ms Brackenridge thereafter worked in the new position, although under protest, the employment relationship continued unbroken pursuant to a new contract.
52 The judgment of the Court records the following (at 101):
‘On 6 February 1995 Ms Brackenridge’s solicitors wrote to Toyota saying that she did not consent to "this unilateral termination of her employment contract". Nevertheless Ms Brackenridge continued working for Toyota as a canteen assistant, although from May 1995 she was on extended leave of absence.
Central to the claims made by Ms Brackenridge was the proposition that her demotion involved both a termination of her contract of employment as a chef supervisor, and a termination of her employment within the meaning of the Division. Counsel for Ms Brackenridge argued at trial, and on appeal, that her demotion brought about such a fundamental change in her contract of employment that it amounted to a termination of her employment as a chef supervisor, and her re-employment under a new contract as a canteen assistant.’
53 The contention there recorded was rejected, the Court saying (at 101):
‘As will appear when we turn to the contractual claims made in this case, we are of the opinion that the decision by Toyota to demote Ms Brackenridge involved a termination of her contract of employment as a chef supervisor. However, for the purpose of Div 3 of Pt VIA of the Industrial Relations Act, the relevant question is not whether there was a termination of the contract of employment but whether the applicant suffered "termination of his or her employment": see Siagian v Sanel Pty Ltd (1994) 1 IRCR 1 at 13 – 20. Ordinarily, the conceptual difference does not matter: dismissal will ordinarily terminate both the particular contract of employment and the employment relationship. In this case, however, Ms Brackenridge continued to be employed by Toyota after 3 February 1995. The employment relationship continued albeit under a new contract of employment.’
54 Teekay’s unlawful act was fully effective to terminate Mr Visscher’s employment as a permanent Chief Officer. In my view, the legal consequence of the continuing employment relationship, albeit under protest, was that Mr Visscher remained in employment as a permanent Third Mate, not a permanent Chief Officer.
55 Mr Visscher’s argument that in 2004 his contract of employment was again repudiated by an indication that Teekay would not regard itself as bound to sail him as Chief Officer must therefore be rejected. In 2004, whatever view is taken of the conversations which then occurred, he was not employed as a permanent Chief Officer.
The effect of the 2001 Certified Agreement
56 I earlier set out some important clauses from the 2001 Certified Agreement. Mr Visscher was at all times a member of the AMOU. The Certified Agreement was expressed to be binding upon him. It also imposed obligations directly upon Teekay. To the extent that it imposed obligations which were inconsistent with the position at common law (i.e. under Mr Visscher’s contract of employment) Teekay was bound by the superior legal force of the Certified Agreement (operating through the WR Act). In Ansett Transport Industries (Operations) Proprietary Limited v Wardley [1980] HCA 8; (1980) 142 CLR 237 at 287 Wilson J said, in a passage which applies equally to the 2001 Certified Agreement in the present matter:
‘Few, if any, awards reflect an intention to express completely, exhaustively or exclusively the law governing that contract between the parties. It will generally be a case of specific provisions which will, of course, have the effect of rendering inoperative any provisions of subordinate law, whether common law or statutory, touching that employment with which they are inconsistent.
57 In Byrne Brennan CJ, Dawson and Toohey JJ said (at 421):
‘In a system of industrial regulation where some, but not all, of the incidents of an employment relationship are determined by award, it is plainly unnecessary that the contract of employment should provide for those matters already covered by the award. The contract may provide additional benefits, but cannot derogate from the terms and conditions imposed by the award and, as we have said, the award operates with statutory force to secure those terms and conditions.’
58 The conclusion seems to me to be unavoidable that notwithstanding the clear breach of Mr Visscher’s contract which Teekay committed, nevertheless legally his interests were subordinated to the superior legal position reflected in the 2001 Certified Agreement from the time it came into operation. That is so even if the position under the general law is not as I stated it earlier. That is an additional reason why Mr Visscher's arguments cannot be accepted.
Conclusion
59 The conclusions expressed above about the contractual position and the operation of the 2001 Certified Agreement are, individually and in combination, fatal to Mr Visscher’s arguments. He is unable to make good the jurisdictional fact upon which his allegations of jurisdictional error depend. It follows that no jurisdictional error was made by Commissioner Redmond. There is no other, or independent ground to find jurisdictional error on the part of the Full Bench. No foundation for relief in this Court has been established. The proceedings must be dismissed.
|
I certify that the preceding fifty-one (51) numbered paragraphs are a true
copy of the Reasons for Judgment herein of the Honourable
Justice
Buchanan.
|
Associate:
Dated: 21 December 2007
|
|
|
|
Counsel for the Second Respondent:
|
|
|
|
|
|
Solicitor for the Second Respondent:
|
|
|
|
|
|
Date of Hearing:
|
|
|
|
|
|
Date of Judgment:
|
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/cases/cth/FCAFC/2007/206.html