2006 WAIRC 05238

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIESTIM BARTON

ClAIMANT

-v-

Rocom Pty Ltd

RESPONDENT

CORAMINDUSTRIAL MAGISTRATE G. CICCHINI

HEARDWednesday, 19 July 2006, Wednesday, 7 December 2005, Monday, 30 January 2006, Wednesday, 15 March 2006, Wednesday, 28 June 2006

DELIVEREDWednesday, 19 July 2006

FILE NO.M 129 OF 2005

CITATION NO.2006 WAIRC 05238

CatchWordsResignation by employee; notice of termination; non-acceptance of notice of termination; termination by employer; payment in lieu of notice; contractual benefit; enforcement of Metal Trades (General) Award 1966.

LegislationIndustrial Relations Act 1979

Metal Trades (General) Award 1966

ResultClaim dismissed

2006 WAIRC 05238

Representation

ClaimantMr J G Kitto, of Counsel, of Kitto & Kitto, Barristers & Solicitors appeared for the Claimant

RespondentMr R H Gifford of the Motor Trade Association of Western Australia (Inc) appeared as agent for the Respondent.

REASONS FOR DECISION

The Facts

1The Claimant commenced employment with the Respondent as a motor mechanic on 1July 2004. It is common ground that his employment with the Respondent was regulated by the Metal Trades (General) Award 1966 (the Award).

2On the morning of Friday, 17 June 2005 the Claimant handed a post-dated letter of resignation to Richard Dobson, the Respondent’s service manager. The letter dated 20 June 2005 stated:

To whom it may concern. I here by (sic) give 2 full working weeks notice, ie 10 days, to terminate my employment with Barbagallos. Friday the 1st of July 2005 being my last day at work.

Many thanks, yours sincerely.

3The Claimant testified that he gave two weeks’ notice because that was what he understood was required. He thought that because he was paid on a fortnightly basis, he should give two weeks’ notice of termination. He said that he handed over his resignation on Friday, 17 June 2005 rather than on Monday, 20 June 2005 so as to give his employer as much time as possible to find his replacement, in the knowledge that good mechanics were hard to find.

4Upon receiving the letter of resignation from the Claimant, Mr Dobson was informed by the Claimant that he was resigning to take up a position with Roadbend Motors. Roadbend Motors is considered by the Respondent to be its direct competitor. MrDobson, having taken the letter of resignation from the Claimant, told him to “leave it with him” and that Mr Dobson would get back to him later in the day. Mr Dobson then conferred with his supervisor Mr Todd Perejuan.

5Upon receiving the Claimant’s letter of resignation Mr Perejuan noticed that it had been post-dated. He contacted the Respondent’s payroll office and discovered that if the Claimant was to work out the entire period of his notice it would take him into his second year of employment. That had relevance because that would entitle him to work out two weeks rather than the one week which was prescribed by the Award. Mr Perejuan did not want the Claimant to continue working for the Respondent for any longer than necessary. His prospective employment with the Respondent’s competitor created commercial sensitivity. Furthermore Mr Perejuan was not happy about the Claimant’s resignation for other reasons. Indeed the Claimant had been highly regarded and was seen as a long term prospect. The Respondent had invested in him by sending him over to Sydney so that he could participate in a specialised training course. The skills acquired during such training and whilst on the job for the Respondent would as a consequence of the Claimant’s decision fall to the benefit of the Respondent’s competitor. In the circumstances it was decided that the Claimant should not be permitted to continue to work for the Respondent. Consequently at about 4.00 pm that day MrDobson called the Claimant into his office and informed him that he was terminated with immediate effect. He was paid out his entitlements which included one week’s pay in lieu of notice.

6The Claimant departed the Respondent’s premises and returned the following Monday in order to pick up his tools and return his uniform. As it turned out the Claimant was able to bring forward the commencement of his employment with his new employer resulting in no loss of income.

The Claim

7The Claimant asserts that he was entitled to receive two weeks’ pay in lieu of notice because his employment with the Respondent was to continue during the period of the notice and could only end on 1 July 2005 barring his summary dismissal for other reasons, in which case, he would forfeit any entitlement to payment.

8Further the Claimant contends that the post-dating of the notice is of little or no significance because the Claimant was entitled in any event to remain in employment until 1 July 2005 thereby entitling him to two weeks’ pay in lieu of notice. It is argued that the Respondent, in terminating his employment as it did, attempted to lessen the term of the Claimant’s employment so as to deny the Claimant the extra week’s pay in lieu of notice.

Response

9The Respondent argues that the obligation upon either party to provide notice of termination of a contract of employment is prescribed by clause 6 of the Award. Whilst subclause 6(1)(a) does allow a party to give a greater period of notice than that prescribed in subclause 6(2)(a), the subclause does not impose an obligation upon the other party to accept the greater period of notice. The Respondent’s action was in effect to decline to accept the greater period of notice. It follows that because the Claimant’s service was, at termination on 17 June 2005, less than one year the relevant period of notice required to be provided by the Respondent was one week. The Respondent contends that it has satisfied its obligations by paying the Claimant one week’s pay in lieu of notice.

Determination

10The facts in this matter are not in issue. Accordingly, the matters in issue are to be determined upon the application of the law to those undisputed facts. Such requires a consideration of the relevant Award provisions. I set out those provisions:

6. - CONTRACT OF SERVICE

(1) (a) A contract of service to which Part 1 - GENERAL of this award applies may be terminated in accordance with the provisions of this clause and not otherwise but this subclause does not operate so as to prevent any party to a contract from giving a greater period of notice than is hereinafter prescribed, nor to affect an employer's right to dismiss an employee without notice for conduct that justifies instant dismissal, including malingering, inefficiency or neglect of duty, and an employee so dismissed shall be paid for the time worked up to the time of dismissal only.

(b)Subject to the provisions of this clause, a party to a contract of service may, on any day give to the other party the appropriate period of notice of termination of the contract prescribed in subclause (2) of this clause and the contract terminates when that period expires.

(2) Notice of Termination by Employer

(a)In order to terminate the employment of an employee (other than a casual employee) the employer shall give the employee the following notice -

PERIOD OF CONTINUOUS SERVICE / PERIOD OF NOTICE
During the first month / 1 day
More than one month but less than 1 year / 1 week
1 year but less than 3 years / 2 weeks
3 years but less than 5 years / 3 weeks
5 years and over / 4 weeks

(b)An employee who at the time of being given notice is over 45 years of age and who at the date of termination has completed two years’ continuous service with the employer, shall be entitled to one week’s notice in addition to the notice prescribed in paragraph (a) of this subclause.

(c)Payment in lieu of the notice prescribed in paragraphs (a) and (b) of this subclause shall be made if the appropriate notice period is not given. Provided that employment may be terminated by part of the period of the notice specified and part payment in lieu thereof.

(d)In calculating any payment in lieu of notice the employer shall pay the employee the ordinary wages for the period of notice had the employment not been terminated.

(e). . .

(f). . .

(g). . .

(3)Notice of Termination by Employee

(a)The notice of termination required to be given by an employee shall be the same as that required of an employer, save and except that there shall be no additional notice based on the age of the employee concerned.

(b)If an employee fails to give the required notice or having given, or been given, such notice leaves before the notice expires, the employee forfeits the entitlement to any moneys owing to the employee under this award except to the extent that those moneys exceed the ordinary wages for the required period of notice.

11It will be obvious from the aforementioned provisions that subclause 6(2)(a) prescribes the periods of notice to be given for the termination of a contract of employment. Although that provision relates to termination by an employer, it has equal application to termination by an employee by virtue of subclause 6(3)(a). Notwithstanding the provision of those prescribed periods, subclause 6(1)(a) states that a party to a contract of employment is not prevented from giving a greater period of notice than that prescribed. The circumstance in which that may occur is in issue. Whether it can occur in the manner in which the Claimant gave notice or whether it can only occur in pursuance of a term of a contract of employment as was the case in Kilminster v Sun Newspapers Ltd(1931) 46 CLR 284 is a matter to be determined.

12If it was the case that the Claimant was entitled to give a greater period of notice than that prescribed by subclause 6(2)(a) of the Award, the question would remain as to whether the Respondent was entitled to refuse to accept such notice of termination. The Respondent suggests that it was not obligated to accept that greater period of notice. Its position is in conformity with what Kennedy C said in Clive Brown v John Dawkins 69WAIG 709. She said:

The facts of the termination of the contract of employment are as follows. Brown gave Dawkins notice of his intention to terminate the contract of employment by way of a letter dated 22 September 1988. It was not disputed by the respondent that this notice was received on that date or that the notice period was to have effect from that date. It follows that under the terms of the contract of employment the giving of notice on 22September 1988 would have resulted in the termination of the contract at the end of one week (seven days) from that day. That is to say that 29September 1988 would have been the last day on which the contract was on foot but Brown explicitly stated in his letter of resignation that the notice period would be up to and including 30 September, 1988; that is, one week and one day. In my view this can only be construed as a proposal by Brown to extend the notice period required by one day. It was open to Dawkins to reject this proposed variation in the terms of the contract. There is no evidence that Dawkins responded formally to this proposal at the time it was put or subsequently or in any way. In the context of the fact that Brown went on working on that notice after 22September, 1988 implies that Dawkins accepted Brown’s proposal that the notice period be extended by one day. Thus, it being an agreed variation in the terms of the contract between both parties were bound by it.

13With all due respect, I do not accept that the aforementioned statement in so far as it relates to the rejection of the notice is correct. Indeed the authorities make it clear that a valid notice of termination will operate according to its terms. The issue of the non-acceptance of a notice of termination is discussed by Macken, O’Grady, Sappideen and Warburton in their text entitled “Law of Employment 5th Edition”. With reference to the leading authorities the learned authors say, at page 177:

At times an employer or employee “refuses to accept” a notice of termination of employment. In the absence of special situations, Windeyer J has pointed out: “expressions such as the tendering and acceptance of a resignation, although commonly used, are merely linguistic courtesies”. Provided a notice is valid, a purported refusal to accept it cannot alter the legal situation, and the notice will operate to end the contract when the period specified therein expires, or is due to expire, unless the contract is properly ended in the meantime by some other independent cause, such as summary dismissal of the employee for misconduct, or unless the notice is withdrawn by mutual agreement.

14I respectfully agree with their statement as to the law. A notice can only be validly given if there is legal foundation for its issue. Such might arise from a statutory provision, at common law or by agreement. In this instance if the notice was validly given it operated according to its terms. The period of notice given was ostensibly reasonable. The period of notice could not in this instance of itself vitiate the validity of the notice. It follows therefore that if the notice was validly given it operated so as to conclude the contract of employment on 1 July 2005. In those circumstance the Respondent would have been bound to pay the Claimant until, and including, that date subject to an earlier determination of the contract of employment for some proper reason.

15In my view the Respondent had the opportunity to protect its commercial interests if it had any concerns in that regard by paying out the Claimant his two weeks’ notice period without requiring him to attend work. However it did not do that, but rather decided to terminate his employment immediately and pay him one week’s pay in lieu of notice. In my view the Respondent’s actions were specifically aimed at denying the Claimant payment for the second week of his notice period. It seems that the Respondent attempted to render nugatory the Claimant’s ability to claim for the second week of his notice period. Whether or not the Claimant was entitled to payment in lieu of his second week of notice and whether he was entitled to bring his claim within this jurisdiction remains to be determined.

16The jurisdictional issue is pivotal. In that regard I posed the following questions with respect to which I invited written submissions in response. The questions posed were:

1.Is (the) claim . . . , made pursuant to section 83 of the Industrial Relations Act 1979 (the Act), justiciable by the Industrial Magistrates Court?

2.Is (the) claim . . . a contractual benefits claim that is only justiciable pursuant to Section 29 of the Act?

17In their written submissions the parties were in agreement that this Court has jurisdiction to hear and determine the Claim. Both parties brought to my attention the decision of the Western Australian Industrial Relations Commission (the WAIRC) in Tim Barton v Alf Barbagallo and the Trustee for Barbagallo Investments Trust ABN 78 181 648 205 and Rocom Pty Ltd CAN 008 919 462 (2005) 85 WAIG 3788. In that matter Wood C dealt with the Claimant’s contractual entitlements claim made pursuant to section 29 of the Industrial Relations Act 1979(the Act). He also considered the Claimant’s application to amend his claim so as to bring an unfair dismissal claim out of time. His application to amend was rejected and the section 29 application was dismissed for want of jurisdiction. At paragraph 11 (page 3790) of his reasons for his decision Wood C said,

It is plain then having regard to s.83 of the Act that, given Mr Barton’s employment is governed by an award, and given the claim is for a denied contractual benefit of notice, that the claim must fail for want of jurisdiction. It is the case that any claim for notice in excess of the award may be considered by the Commission. However, this is only if there is a contractual basis to that claim outside of the award. No such submission was made. An order will issue dismissing the application for want of jurisdiction.

18It is apparent from reading Wood C’s reasons that he did not, given the concessions made by Counsel for the applicant, specifically consider clause 6 of the Award. With respect, had he been drawn to do so, he might have determined that the issue of whether the notice given by the Claimant was within the Award was not free from doubt. It seems that all concerned proceeded on the basis that the giving of the two weeks’ notice by the Claimant to the Respondent was an award entitlement. Indeed such is reaffirmed by Counsel for the Claimant in his written submissions received on 12 July 2006.

19The Respondent in written submissions also delivered on 12 July 2006 asserts that the claim cannot be one based on a denied contractual entitlement because the evidence would not support a finding that it was an express, or alternatively, an implied term of the contract of employment that the Claimant was entitled to give two weeks’ notice of termination. It says that the Claimant’s employment was regulated by the Award and that the notice periods set out in the Award are those which were applicable to the parties.

20With all due respect to the Respondent, whether or not there is evidence of an express or implied term of the contract of employment which enabled the Claimant to give notice as he did is a matter of fact which does not impinge on the jurisdictional issue that I need to consider. Such may be pleaded in defence to a claim based on a contractual entitlement. However, I need to consider whether the Award itself, outside of the contract between the parties, conferred an ability on the part of the Claimant to give two weeks’ notice of termination rather than the one week’s notice of termination as provided for in subclause 6(2)(a) and whether such is enforceable pursuant to section 83 of the Act. If so, the Claim may be maintainable. If not then I will be without jurisdiction notwithstanding the views of the parties. They cannot confer upon this Court jurisdiction that it does not otherwise have.