Boston deep sea fishing v ansell case summary

Termination of Employment

Employment and Industrial Law

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Right to termination employment contract pursuant to terms of contract at common law

No requirement to terminate fairly of with just cause at common law (see later for statutory remedies)

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Factors taken into account in awarding reasonable notice at common law include grade of appointment or seniority; salary; the nature of the employment; the length of service; the professional standing of the employee; the employee’s age; the employee’s qualifications and experience; the employee’s degree of job mobility; the expected period of time it would take to find alternative employment; the period it was likely that the employee would continue in the employment; what the employee gave up to move to the present employer; the employee’s prospective pension

(see cases cited in Macken’s Law of Employment, 8th Ed 2016 [9.40]

[Note Compulsory minimum notice provisions under s117, Fair work Act 2009 (Cth)]

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Reasonable Notice

Payment in lieu of notice under s117 Fair Work Act 2009 (Cth)

Where notice is in excess of statutory minimum – see Sanders v Snell (1998) 196 CLR 329.

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Payment in lieu of Notice?

Constructive dismissal – where employee successfully argues they had no choice or alternative except to terminate their employment contract.

Wrongful dismissal claim where termination occurs in breach of the contract.

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Summary or instant dismissal – usually cases about serious misconduct

Conduct found to be serious misconduct includes:

disobedience (Adami v Maison De Luxe Ltd (1924) 35 CLR 143)

gross negligence (Eshak v Public Transport Corporation (unreported Industrial relations Court of Australia 4 January 1996),

dishonesty (Boston Deep Sea Fishing & Ice co v Ansell (1888) 39 CH D 339 at 363; and

drunkenness (Clouston & co Ltd v Carry [1906] AC 122).

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Most beneficial rule (Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 92)

Damages calculated on basis of loss of earnings (typically for duration of relevant notice period): see Cockburn v Alexander (1848) 136 ER 1459 at 1468 ;British Guiana Credit Corp v Da Silva [1965] 1 WLR 248 at 259-260

Damages calculated in reference to where chance of continuing employment?

Mitigation of loss (other income earned subtracted)

No damages for injured feelings as a result of manner of dismissal Addis v Gramophone Co [1909] AC 488; Burazin v Blacktown City Guardian (1996) 142 ALR 144; [1996] IRCA 629

Damages for fixed term contracts: Van Efferen v CMA Corporation Limited (2009) 183 IR 319; [2009] FCA 597 at [64].

Specific Performance

In the employment context = continued employment with the employer who dismissed the employee, rarely if ever given

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Assessment of Damages

What is constructive dismissal?

When might there be a claim for wrongful dismissal under a fixed term contract?

Why would an employer wish to make a payment in lieu of notice?

What is usually the main issue in summary dismissal cases?

What sort of employees appear to be pursuing common law claims in the courts for termination of employment?

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Quick Quizz

Unfair dismissal

general protections

Main types of remedies for dismissal under Fair Work Act

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In this Part, employee means a national system employee, and employer means a national system employer: s380

Who can make a claim for unfair dismissal under the FW Act?

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A person is protected from unfair dismissal at a time if, at that

time:

(a) the person is an employee who has completed a period of

employment with his or her employer of at least the

minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation

to the employment;

(iii) the sum of the person’s annual rate of earnings, and

such other amounts (if any) worked out in relation to the

person in accordance with the regulations, is less than

the high income threshold: s382

Definition of earnings – see s332

Who can make a claim for unfair dismissal?

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The minimum employment period is:

(a) if the employer is not a small business employer—6 months ending at the earlier of the following times:

(i) the time when the person is given notice of the dismissal;

(ii) immediately before the dismissal; or

(b) if the employer is a small business employer—one year

ending at that time: s383

Who can make a claim for unfair dismissal?

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(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer. . .: s386(1)

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S386(1) Meaning of dismissed

(2) However, a person has not been dismissed if:

(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season;

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S386(2)(a) Meaning of dismissed

Explanatory Memorandum to FW Bill 2008 para 1532:

Khayam v Navitas English [2017] FWCFB 5162

S386(2)(a) interpretation

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(2) However, a person has not been dismissed if: . . .

(c) the person was demoted in employment but:

(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and

(ii) he or she remains employed with the employer that effected the demotion.

Gerrard v UPS Pty Ltd (unreported, Eames C, 19 March 2004, PR944681)

Vischer v Guidice (2009) 239 CLR 361

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Is demotion a dismissal?: s386(2)(c)

Exclusions from making other statutory claims: see ss725-732

Unfair dismissal Application under s394

Time limits for making a claim: s394

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Procedure for making an unfair dismissal claim

FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.

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s396 Initial matters to be considered before merits

Should small businesses be exempt from mainstream unfair dismissal legislation?

Question

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It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal.

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Small business dismissal code – immediate dismissal

the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response.

The Australian Small Business and Family Enterprise Ombudsman Report on code

Small business code – dismissal other than immediate

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(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the

operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the

employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer: s389

Hallam v Sodexo [2017] FWCFB 6847

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Meaning of genuine redundancy

A person has been unfairly dismissed if FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair

Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

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S385 - What is an unfair dismissal?

A dismissal may be:

unjust because the employee was not guilty of alleged misconduct;

unreasonable because the evidence before the employer did not support the conclusion

harsh on the employee due to economic and personal consequences resulting from being dismissed; and

harsh because the outcome is disproportionate to the gravity of the misconduct: Byrne v Australian Airlines Ltd (1995) 185 CLR 410

Harsh unjust unreasonable

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In considering whether it is satisfied that a dismissal was harsh,

unjust or unreasonable, FWC must take into account:

(a) whether there was a valid reason for the dismissal related to

the person’s capacity or conduct; and

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

(c) whether the person was given an opportunity to respond to

any reason; and

(d) any unreasonable refusal by the employer to allow the person

to have a support person present in dismissal discussions; and

(e) whether the person had been warned about any

unsatisfactory performance; and

(f and g) the degree to which the size of the employer’s enterprise or the absence of human resource management specialists would be likely to impact on the dismissal procedures; and

(h) any other matters that FWC considers relevant:

paraphrase of s387

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s387

Rode v Burwood Mitsubishi (unreported, AIRCFB, 11 May 1999 Print R4471

Selvachandran v Peteron Plastics (1995) 69 IR 371

Interaction of valid reason and procedural factors

Royal Melbourne Institute of Technology v Asher (2010) 194 IR 1

Byrne v Australian Airlines (1995) 185 CLR 410

Australian Meat Holdings v McLaughlin (1998) 84 IR 1

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Valid Reason

Remedies for unfair dismissal- reinstatement; compensation – see s390-393

S392(2)(d) applicant must show they have taken steps to mitigate their loss by seeking new employment.

no compensation can be awarded for shock distress or humiliation due to the manner of the dismissal s392(4)

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Should the current unfair dismissal laws should be retained, amended or abolished?

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Would an employer be more likely to hire employees if the employer is not subject to unfair dismissal regulation?

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In the absence of any evidence about the matter, it seems to us the suggestion of a relationship between unfair dismissal laws and employment inhibition is unproven. It may be accepted, as a matter of economic theory, that each burden that is placed on employers, in that capacity, has a tendency to inhibit, rather than encourage, their recruitment of additional employees. However, employers are used to bearing many obligations in relation to employees (wage and superannuation payments, leave entitlements, the provision of appropriate working places, safe systems of work, even payroll tax). Whether the possibility of encountering an unlawful dismissal claim makes any practical difference to employers’ decisions about expanding their labour force is entirely a matter of speculation. We cannot exclude such a possibility; but, likewise, there is no basis for us to conclude that unfair dismissal laws make any difference to employers’ decisions about recruiting labour.

Hamzy v Tricon International Restaurants (2001) 115 FCR 78 per Wilcox, Marshall and Katz JJ:

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General Protections under the Fair Work Act

Part 3-1 of the FW Act

Scope of Part 3-1 see use of ‘constitutionally-covered entity’ including ‘action taken by a constitutionally-covered entity’ in s338.

Note on state referral of industrial powers to the Commonwealth (recalling our study of the coverage of the Fair Work Act)

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s340 Protection

(1) A person must not take adverse action against another person:

(a) because the other person:

(i) has a workplace right; or

(ii) has, or has not, exercised a workplace right; or

(iii) proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or

(b) to prevent the exercise of a workplace right by the other

person.

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s341 Meaning of workplace right

(1) A person has a workplace right if the person:

(a) is entitled to the benefit of, or has a role or responsibility

under, a workplace law, workplace instrument or order made

by an industrial body; or

(b) is able to initiate, or participate in, a process or proceedings

under a workplace law or workplace instrument; or

(c) is able to make a complaint or inquiry:

(i) to a person or body having the capacity under a

workplace law to seek compliance with that law or a

workplace instrument; or

(ii) if the person is an employee—in relation to his or her

employment.

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Workplace law

S12 Definition

Contract of employment not workplace law or workplace instrument: Barnett v Territory Insurance Office (2011) 211 IR 439 [29]‒[32]; Daw v Schneider Electric (Australia) Pty Ltd [2013] FCCA 1341 [106]‒[114].

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S342(1) Item 1 – Adverse Action

Adverse action is taken by an employer against an

Employee if the employer:

(a) dismisses the employee; or

(b) injures the employee in his or her employment; or

(c) alters the position of the employee to the employee’s prejudice; or

(d) discriminates between the employee and other employees of the employer.

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Other protections include:

Protections against adverse action on the basis a person engages in industrial activity or does belong or does not belong to a trade union: see s346-350 - Protection from co-ercion: s343

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‘because’

‘because’ used in s340, s346, s351, s352, s354

Question is why was adverse action taken? Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 220 IR 445 [44] per French CJ and Crennan J

Question of fact; consider reason or reasons of decision-maker Bendigo TAFE v Barclay [41]-[42] [45] per French CJ and Crennan J

Unless adverse action was taken ‘because’ of a proscribed reason there will be no breach

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‘because’

Example (FWC General Protections Handbook)

1. An employee may claim a breach of the general protections provisions if he or she is dismissed because he or she had taken temporary leave due to illness.

2. An employee cannot claim a breach of the general protections provisions simply because he or she was dismissed while on temporary leave due to illness if that was not a reason for the dismissal.

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S360 multiple reasons for action

For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason: s360

Substantial and operative reason: Bendigo TAFE v Barclay [102]-[104] Per Gummow and Hayne JJ

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Proceedings for contraventions of the general protections

One process for dismissal proceedings; another process for claims which do not involve a dismissal (See FWC general protections handbook p130-131)

Federal Court or federal magistrates court can order a penalty applies; compensation; reinstatement: see s545, 546

Compensation for humiliation and distress: Australian Licenced Aircraft Engineers Association v International Aviations Service Assistance Pty Ltd (2011) 193 FCR 526 [443]‒[444];Ucchino v Acorp Pty Limited (2012) 218 IR 194 [78]

In 2012-2013 2429 general protections claims were lodged; 18.5% rise in claims 2013-2014; 17.5% rise in claims 2014-2015

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Rebuttable presumption s361

“361 Reason for action to be presumed unless proved otherwise

(1) If:

(a) in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and

(b) taking that action for that reason or with that intent would constitute a contravention of this Part;

it is presumed, in proceedings arising from the application, that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.”

S361(2) no reverse onus for interim injunction

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Based on the decision in Bendigo Tafe v Barclay (2012) 220 IR 445 how should an employer argue their case in the courts if an active member of a union dismissed by the employer alleges that the employer has contravened s346 of the Fair Work Act?

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Bendigo Tafe v Barclay – French CJ and Crennan J

Determining why a defendant employer took adverse action against an employee involves consideration of the decision-maker's "particular reason" for taking adverse action (s 361(1)),

Clearly a defendant employer interested in rebutting the statutory presumption in s 361 can be expected to rely in its defence on direct testimony of the decision-maker's reason for taking the adverse action. The majority in the Full Court correctly rejected an argument put by the respondents that the introduction of the statutory expression "because" into a legislative predecessor to s 346 [19], in place of the previous statutory expression "by reason of"[20], rendered irrelevant the state of mind of the decision-maker[21].

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Bendigo Tafe v Barclay – French CJ and Crennan J

There is no warrant to be derived from the text of the relevant provisions of the Fair Work Act for treating the statutory expression "because" in s 346, or the statutory presumption in s 361, as requiring only an objective enquiry into a defendant employer's reason, including any unconscious reason, for taking adverse action. The imposition of the statutory presumption in s 361, and the correlative onus on employers, naturally and ordinarily mean that direct evidence of a decision-maker as to state of mind, intent or purpose will bear upon the question of why adverse action was taken, although the central question remains "why was the adverse action taken?". . . direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity

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Bendigo Tafe v Barclay – French CJ and Crennan J

60. it is erroneous to treat the onus imposed on an employer by s 361 as being made heavier (or rendered impossible to discharge) because an employee affected by adverse action happens to be an officer of an industrial association

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Bendigo Tafe v Barclay – French CJ and Crennan J

Central to the respondents' argument on this appeal was the contrary and incorrect view that Mr Barclay's status as an officer of an industrial association engaged in lawful industrial activity at the time that Dr Harvey took adverse action against him meant that Mr Barclay's union position and activities were inextricably entwined with the adverse action, and that Mr Barclay was therefore immune, and protected, from the adverse action. If accepted, such a position would destroy the balance between employers and employees central to the operation of s 361. . . it is a related error to treat an employee's union position and activity as necessarily being a factor which must have something to do with adverse action, or which can never be dissociated from adverse action.

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