Dec 663/97 S Print P1859

AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 19961

s.170ECA appeal against a decision [Print N9198]

issued by Senior Deputy President Marsh on 25 February 1997

C. Tamayo

(C No. 20707 of 1997)

s.170EC application to Commission for consent arbitration

C. Tamayo

and

Alsco Linen Service Pty Ltd

(U No. 23964 of 1996)

VICE PRESIDENT ROSS

DEPUTY PRESIDENT DRAKE

COMMISSIONER CARGILL SYDNEY, 4 NOVEMBER 1997

Appeal re alleged unlawful termination

DECISION

This matter concerns an appeal by Mrs C. Tamayo against a decision by Senior Deputy President Marsh on 25 February 1997 [print N9198]. In the decision subject to appeal the Senior Deputy President concluded that Mrs Tamayo's termination was not `a termination at the initiative of the employer'.

Introduction

At the conclusion of the proceedings on 1 May 1997 we stated that we were satisfied that the appellant had advanced an arguable case in support of the proposition that the member at first instance had made a legal error. We then directed the parties into conciliation before turning to the second stage of the appeal process, namely, whether the error alleged by the appellant was established.

The matter was resolved by conciliation. In these circumstances we intend to only briefly set out our reasons for granting leave to appeal.

Preliminary Issue

A preliminary issue arises concerning the statutory provisions to be applied to the determination of this appeal

We are satisfied that the statutory provisions applicable to the matter at first instance and to the determination of the appeal are as set out in the former Industrial Relations Act 1988 (the former Act) prior to its amendment by the Workplace Relations and Other Legislation Amendment Act 1996 (the 1996 Amendment Act).

Section 170ECA of the former Act provided:

"(1) If:

(a) the parties to a conciliation elect under subsection 170EB(2) or (3) to have the matter to which the conciliation relates dealt with by consent arbitration; and

(b) there are in force, at the time of the election, regulations prescribing grounds for an appeal to a Full Bench of the Commission from an award of a single member of the Commission in a consent arbitration;

the parties may, with the leave of the Commission, appeal to a Full Bench from such an award on the grounds specified in the regulations as so in force.

(2) On the hearing of an appeal from an award of a single member of the Commission in a consent arbitration, a Full Bench may:

(a) confirm the awards; or

(b) vary the award; or

(c) quash the award and substitute a different award.

(3) If the Commission varies an award, or quashes an award and substitutes a different award, the award as varied or the substituted award must be an award of the kind referred to in subsection 170EC(4)."

In Re: Westend Pallets Pty Ltd (1995-1996) 69 IR 1 a Full Bench of the Commission considered the nature of a s.170ECA appeal and concluded that it involved three discrete stages:

"(i) leave to appeal: the appellant must advance an arguable case in support of the proposition that either member at first instance has made a legal error or the exercise of the discretion was miscarried in the House v R sense;

(ii) the merits in relation to the existence of an error: if leave is granted then the Appeal Bench hears the parties and considers whether the error alleged by the appellant has been established;

(iii) remedy: if it is decided that the member at first instance was in error then the Appeal Bench will consider whether the award subject to appeal ought to be varied or quashed and substituted by a different award. This question will be decided on the basis of the material before the Appeal Bench at the time it hears the appeal." [(1995-1996) 69 IR 1 at 12]

We have applied these principles in our consideration of the matter before us.

Leave To Appeal

The appellant has established an arguable case of legal error in relation to two of the grounds of appeal advanced, namely:

· the application of the rule in Jones v. Dunkel; and

· whether the termination was `at the initiative of the employer'.

The Jones v. Dunkel Issue

In Jones v. Dunkel (1959) 101 CLR 298 at 312, Menzies J made the following observations in relation to inferences which may be drawn in the event that a party fails to call certain evidence:

"(i) that the absence of . . . a witness cannot be used to make up any deficiency of evidence;

(ii) that evidence which might have been contradicted by [the witness] can be accepted the more readily if [the witness] fails to give evidence;

(iii) that where an inference is open from facts proved by direct evidence and the question is whether it should be drawn, the circumstances that the [party] disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference."

Some of the principles in relation to what is commonly termed `the rule in Jones v. Dunkel' are as follows:

1. The unexplained failure by a party to give evidence, to call witnesses, or to tender documents or some other evidence may in appropriate circumstances lead to an inference that the uncalled evidence would not have assisted the party's case.

The rule has no application if the failure is explained, for example, by the absence of the witness coupled with a reasonable explanation for not compelling attendance by subpoena, or by illness or some other availability: Payne v. Parker (1976) 1 NSWLR 191 at 202 per Glass JA.

The significance of the inference depends on the closeness of the relationship of the absent witness with the party who did not call the witness. Considerable significance may attach if the absent witness is either the party or a senior executive of a corporate party closely involved in the circumstances in question and present during the hearing of the case: Dilosa v. Latec Finance Pty Ltd (1966) 84 WN (Pt 1) (NSW) 557 at 582.

The rule provides that an inference may be drawn in certain circumstances not that such an inference must be drawn: Café v. Australian Portland Cement Pty Ltd (1965) 83 WN (Pt 1) (NSW) 280 at 287.

2. The rule permits an inference that the untendered evidence would not have helped the party who failed to tender it and entitles the Commission to more readily draw any inference fairly drawn from the other evidence. But the rule does not permit an inference that the untendered evidence would in fact have been damaging to the party not tendering it. The rule cannot be employed to fill gaps in evidence, or to convert conjecture and suspicion into inference: Jones v. Dunkel, op. cit., at 308, WN (Pt 1) (NSW) 557 at 582; Whitehorn v. R (1983) 152 CLR 657 at 690 per Dawson J.

3. The rule only applies where a party is `required to explain or contradict' something and this depends on the issues thrown up by the evidence in a particular case: Jones v. Dunkel, op. cit.

4. The rule only applies to the failure to call a witness who is not a party to the proceedings if it would be natural for the party to call that witness, or the party might reasonably be expected to call the witness in question, or as Glass JA said in Payne v. Parker, `the missing witness would be expected to be called by one party rather than another'. His Honour said that this condition:

". . . is also described as existing where it will be natural for one party to produce the witness, or the witness would be expected to be available to one party rather than the other or where the circumstances excuse one party from calling the witness, but require the other party to call him, or where he might be regarded as in the camp of one party, so as to make it unrealistic for the other party to call him, or where the witness' knowledge may be regarded as the knowledge of one party rather than the other, or where his absence should be regarded as adverse to the case of one party rather than the other. It has been observed that the higher the missing witness stands in the confidence of one party, the more reasons there will be for thinking that his knowledge is available to that party rather then to his adversary. If the witness is equally available to both parties, for example, a police officer, the condition, generally speaking, stands unsatisfied. There is, however, some judicial opinion that this is not necessarily so. Evidence capable of satisfying this condition has been held to exist in relation to a party's foreman; his safety officer; his accountant; his treating doctor."

A party is not necessarily expected to call their own employees, though the more senior employee the more reason for concluding that the employee's knowledge is available to his or her employer rather than any other party: Earle v. Castlemaine District Community Hospital (1974) VR 722 at 728 and 734.

5. The evidence of the missing witness must be such as would have elucidated the matter. In Payne v. Parker Glass JA said:

". . . according to Wigmore the . . . condition is fulfilled where the party or his opponent claims that the facts would thereby be elucidated. Under other formulations, the condition is made out when the witness is presumably able to put a true complexion on the facts, might have proved the contrary, would have had a close knowledge of the facts, or where it appears that he had knowledge. I would think it insufficient to meet the requirements of the principle that one party merely claims that the missing witness has knowledge, or that, upon the evidence, he may have knowledge. Unless, upon the evidence, the tribunal of fact is entitled to conclude that he probably would have knowledge, there would seem to be no basis for any adverse deduction from the failure to call him." (1976) 1 NSWLR 191 at 202.

While the impact of the Evidence Act (Cth) 1995 on the rule in Jones v. Dunkel is unclear, it would appear to have none: ASC v. AS Nominees Ltd (1995) 133 ALR 1 at 12 per Finn J.

The appellant argued that in the decision subject to appeal the Senior Deputy President misconstrued and/or misapplied the test in Jones v. Dunkel. The relevant part of the decision is as follows:

"The company did not choose to call Mr Waller to give evidence to support the version of events given by Mr Neeson. The reason given for the failure was the need to meet the operational requirements of the plant and as such it was difficult for both men to attend the hearing."

"The authorities are clear in relation to a party failing to produce evidence of this nature.

`The failure to bring before the tribunal some circumstance, document, or witness, when either the party himself or his opponent claims that the facts would thereby be elucidated, serves to indicate, as the most natural inference, that the party fears to do so, and this fear is some evidence that the circumstance or document or witness, if brought, would have exposed facts unfavourable to the party. These inferences, to be sure, cannot fairly be made except upon certain conditions; and they are also open always to explanation by circumstances which made some other hypothesis a more natural one than the party's fear of exposure. But the propriety of such an inference in general is not doubted.' (Jones v Dunkel and ors, (1959) 101 CLR 298 at 320-1)

`Unless a party's failure to give evidence be explained, it may lead rationally to an inference that his evidence would not help his case.' (p321)

The Commission accepts that the reason given for Mr Waller's failure to give evidence was due to the operational needs of the company. However, I note that no statutory declaration was furnished, nor an application made to adjourn the matter to a subsequent day when Mr Neenan could assume the running of the company. Therefore it must be inferred that Mr Waller's failure to give evidence, particularly when Mrs Tamayo's evidence is in stark contradiction on material aspects, means that the intended evidence would not assist the case of the company. It cannot be inferred however, that the company's case would be damaged. The inference drawn from this issue has formed part of my consideration of all the factors upon which I have exercised my discretion in this matter." [Print N9198 at 4, emphasis added]

In our view the Senior Deputy President erred in concluding that the uncalled evidence must lead to an inference that the respondents failure to call the evidence would not have assisted in their case. As we have noted above, the rule provides that an inference may be drawn in certain circumstances not that such an inference must be drawn: Café v. Australian Portland Cement Pty Ltd (1965) 83 WN (Pt 1) (NSW) 280 at 278.

An inference may arise from Mr Waller's failure to give evidence but it is not the case that such an inference must be inferred.

In the present case the inference drawn by the Senior Deputy President would have benefited the appellant. As the error in question would not have altered the outcome of the decision subject to appeal we would not have granted leave to appeal on this ground alone.

Termination at the Initiative of the Employer

The appellant submitted that her Honour erred in concluding that Mrs Tamayo had not been constructively dismissed.

In our view it is a distraction to treat the question posed in the present case as whether the applicant had been constructively dismissed. Rather it is necessary to concentrate on the expression `termination at the initiative of the employer', as that expression is central to the operation of Division 3 of Part VIA of the former Act. It cannot be assumed that decisions concerning other legislative formulations or cases concerning constructive dismissal are to be applied without qualification when considering the provisions of Division 3 [see McCarry `Constructive Dismissal of Employees in Australia' (1994) 68 ALJ 495].

Section 170EA(1) of the former Act provided:

"A person (`the employee) may lodge with the Commission an application for relief in respect of the termination of his or her employment."

Section 170CA of the former Act provided that the object of Division 3 of Part VIA was to give effect to the Convention concerning Termination of Employment at the Initiative of the Employer (the Convention) and the Recommendation concerning Termination of Employment at the Initiative of the Employer (the Recommendation). The Convention and Recommendation were set out as schedules 10 and 11 respectively of the former Act.

The former s.170CB provided that an expression has the same meaning in Division 3 of Part VIA as it has in the Convention. The terms `termination' and `termination of employment' are defined in the Convention as meaning `termination at the initiative of the employer'. Accordingly the terms `termination' and `termination of employment' in the former Act have the same meaning.

The Convention does not, however, define the expression at the initiative of the employer'. Nor does this expression appear in the former Act, it was imported into the former Act by s.170CB.

The task at first instance was to construe the expression `termination at the initiative of the employer' as it appears in the Convention and determine whether there had been such a termination in relation to the employment of the applicant.

The expression `termination at the initiative of the employer' was considered in Mohazab v. Dick Smith Electronics Pty Ltd (No. 2) [(1995) 62 IR 200]. At 205-206 the Court said:

"Viewed as a whole, the convention is plainly intended to protect workers from termination by the employer unless there is a valid reason for termination. It addresses the termination of the employment relationship by the employer. It accords with the purpose of the Convention to treat the expression `termination at the initiative of the employer' as a reference to a termination that is brought about by an employer and which is not agreed to by the employee. Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship. . .

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

In considering the nature of Mrs Tamayo's termination the Senior Deputy President stated:

". . . the issue to be resolved is: did the unintended conduct of Mr Neenan leave Mrs Tamayo with no choice but to resign?" (Print N6999)

In answering this question her Honour concluded:

". . . I cannot accept that Mr Neenan's conduct led to Mrs Tamayo having no choice but to voluntarily resign or that she didn't understand her decision to resign." [Print N9198 at p. 6]

In our opinion the more correct question for the Commission to direct its attention to is whether "the act of the employer [resulted] directly or consequentially in the termination of the employment". [Mohazab v. Dick Smith Electronics Pty Ltd (No. 2) (1995) 62 IR 200 at 205]

The question posed at first instance may be relevant in those cases involving coercion, e.g. where the employee is given the option of resigning in lieu of dismissal. In the present case the applicant relied on conduct which contains no element of force or coercion. However, she nevertheless alleges that the termination arose `directly and consequentially' from the actions of the employer.

It is therefore arguable that the Senior Deputy President may have made a legal error in directing her attention to the question of whether or not the applicant had no effective or real choice but to resign instead of to the question of whether the applicant's resignation was a consequence of the respondent's conduct. For these reasons we decided to grant leave to appeal.

Given the resolution of the substantive issues between the parties following conciliation it is unnecessary for us to deal further with the appeal. In this regard we emphasise that in view of the circumstances we have not considered whether the arguable error advanced by the respondent was in fact an error warranting review on appeal.

BY THE COMMISSION:

VICE PRESIDENT

Appearances:

C. Howell for C. Tamayo.

P. Newall for Alsco Linen Services.

Hearing details:

1997.

Sydney:

May 1, 21.

Decision Summary

		Termination of employment - unfair dismissal - unlawful termination - appeal - constructive dismissal - evidence - rules of evidence - leave to appeal granted - held appellant had arguable case of legal error in relation to i) application of rule in Jones v Dunkel (1959) 101 CLR 298 and ii) whether termination was "at initiative of employer" - principles in relation to rule in Jones v Dunkel discussed and applied - meaning of "termination at initiative of employer" discussed - Mohazab v Dick Smith Electronics Pty Ltd (No.2) (1995) 62 IR 200 applied - question that should have been asked at first instance was whether termination arose "directly and consequentially" from actions of the employer - parties directed into conciliation - substantive issues resolved between the parties.
Appeal by C Tamayo against decision of Marsh SDP (Print N9198) dated 4 November 1997
C No 20707 of 1997				Print P1859
Ross VP Drake DP Cargill C			Sydney	4 November 1997

Printed with the authority of the Australian Industrial Relations Commission

<Price Code C>

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1 All references to `Workplace Relations Act 1996' refer to the Workplace Relations Act 1996 in force until 31 December 1996.