Visscher v the Honourable President Justice Giudice

[2009] HCA 34

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(Judgment by: Gummow J)

Visscher
vthe Honourable President Justice Giudice

Court:

Judges:
Gummow JHeydon J
Crennan J
Kiefel J
Bell J

Legislative References:
Workplace Relations and Other Legislation Amendment Act 1996 (Cth) - Schedule 8, Item 19
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) - s 2; Schedule 1
Workplace Relations Amendment (Termination of Employment) Act 2001 (Cth) - Schedule 1, Item 9
Workplace Relations Act 1996 - s 3(h); s 120; s 170LT; s 170LZ(1); s 170LZ(4); s 170M(1); ss 170LO; s 170LP; s 3(b); s 170LI; Pt VIE; s 170CH(3); s 170CD(1); s 170CH(3)
Industrial Relations Act 1988 (Cth) - The Act

Hearing date:
Judgment date: 2 September 2009

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Judgment by:
Gummow J

1. The appellant (Mr Visscher) is an experienced merchant naval officer. On 9 March 2004 he filed an application to the Australian Industrial Relations Commission ("the AIRC"). He sought reinstatement in response to what he maintained was the harsh, unjust or unreasonable termination of his employment by the second respondent, Teekay Shipping (Australia) Pty Limited ("the employer"). Following a hearing on 1-2 March 2006, on 5 May 2006 the application was dismissed by Commissioner Redmond. After a hearing on 23 July 2006, an application for leave to appeal to the Full Bench was dismissed on 9 October 2006 by the President, Senior Deputy President Drake and Commissioner Bacon.

2. From this Court Mr Visscher now seeks special leave to appeal against the dismissal by the Full Court of the Federal Court (Ryan, Madgwick and Buchanan JJ ^[1] ) of his application, commenced in this Court but remitted by consent to the Federal Court, for mandamus and certiorari directed to Commissioner Redmond and the Full Bench. These members of the AIRC together comprise the first respondent in this Court.

3. At the heart of Mr Visscher's case for mandamus and certiorari are the contentions that jurisdictional error attended the dismissal by Commissioner Redmond of his application to the AIRC and that the Full Bench therefore erred in refusing him leave to appeal; he submits that his employment had been terminated at the initiative of the employer, within the meaning of the legislation, and that to hold to the contrary was to fall into jurisdictional error.

4. The Full Court correctly approached the application for relief under s 75(v) of the Constitution on the footing that no question of the exercise by the Full Bench of its powers arose unless it was first shown that Commissioner Redmond had fallen into jurisdictional error.

5. The phrases "jurisdictional error" and "jurisdictional fact" take their content from the particular terms of the conferral of authority on the decision-maker in question. Even where that authority is conferred in terms of "satisfaction" that a stipulated state of affairs exists, it will still attract review under s 75(v) ^[2] . The present dispute does not fall in that category. Rather, the jurisdiction of the AIRC was enlivened only if, in the statutory sense, Mr Visscher was an employee whose employment had been terminated at the initiative of the employer.

The legislation

6. The first task is to construe the relevant statutory provisions. These appeared principally in Pt VIA, Div 3 Subdiv B of the Workplace Relations Act 1996 (Cth) ("the Act") as it stood at 22 February 2004 ^[3] , which, as outlined later in these reasons, is the date on which Commissioner Redmond found Mr Visscher to have resigned. Part VIA was headed "Minimum entitlements of employees" and Div 3 (ss 170CA-170HI) "Termination of employment". Subdivision B (ss 170CE-170CJ) was headed "Application to [AIRC] for relief in respect of termination of employment". Further, Pt VIB (ss 170L-170NI) provided for "Certified agreements". Part VIB had been introduced into the Act in 1996 ^[4] .

7. Mr Visscher was an "employee" for the purposes of the termination of employment provisions because he was a "Federal award employee" employed by a "constitutional corporation" (s 170CB(1)(C)). The expression "Federal award employee" includes "an employee any of whose terms and conditions of employment are governed by ... a certified agreement" (s 170CD(1)).

8. The relevant certified agreement in force on 22 February 2004 was the "Teekay Shipping Australia/Australian Maritime Officers Union (Deck Officers) Sea-Going Officers Agreement 2001", which had come into force from 5 May 2002 ("the 2001 Certified Agreement"). Mr Visscher was at all relevant times a member of the union ("the AMOU") and the 2001 Certified Agreement was expressed by cl 3 to be binding upon him (and other Masters and Deck Officers), the AMOU, and the employer. Accordingly, they were bound to the 2001 Certified Agreement by force of s 170M. As a matter both of law and practical reality, it would not have been open to the employer to deal with matters of promotion and seniority of Masters and Deck Officers contrary to provisions of the 2001 Certified Agreement.

9. Section 170CE(1) relevantly provided that "an employee whose employment has been terminated by the employer may apply to [the AIRC] for relief in respect of the termination of that employment ... on the ground that the termination was harsh, unjust or unreasonable ...". The word "termination" means "termination of employment at the initiative of the employer" (s 170CD(1)).

10. Section 170CE(1) thus both creates a new right in the employee and confers jurisdiction on the AIRC ^[5] . The functions of the AIRC include those conferred on it by the Act (s 8A).

11. By his application to the AIRC, Mr Visscher sought the remedy of "reinstatement". This was an invocation of the power of the AIRC, if it considered it appropriate, to make an order requiring the employer to reappoint him "to the position in which [he] was employed immediately before the termination" (s 170CH(3)(a)).

The statutory framework

12. Before turning to the particular circumstances of the litigation, something more should be said respecting the statutory framework. It will be apparent that Mr Visscher did not claim any common law remedy and that, rather, he sought from the AIRC the statutory remedy of reinstatement on the ground that the alleged termination of his employment was, in the terms of the statute, "harsh, unjust or unreasonable". The reinstatement which he sought was to his position. But the terms and conditions of his employment were to a significant degree governed by the 2001 Certified Agreement.

13. It is well settled that, in those circumstances, the relationship between the 2001 Certified Agreement and the terms of any contract between Mr Visscher and the employer, was that the former controlled the relationship as to all matters to which it applied ^[6] . The result is that the "employment", the termination of which Mr Visscher complained pursuant to s 170CE(1), was a relationship which represented a compound of statutory elements (by operation of the Act upon the certified agreements) and of the common law of contract, but the statutory elements predominated. The employer correctly submits that it would be a distraction to construct and apply an hypothesis of what would have been the contractual relationship between the parties in the absence of the legislation.

14. This consideration received no adequate response in the submissions of Mr Visscher to this Court. He sought to show that in the events that happened there had been a contractual repudiation by the employer. However, as Buchanan J, who gave the leading judgment in the Full Court, pointed out, whatever Mr Visscher's position under the general law may have been in a legislative vacuum, the general law was subordinated to the superior operation of the 2001 Certified Agreement from the time it came into operation on 5 May 2002. Accordingly, the treatment of the general law respecting unaccepted repudiation of employment contracts by this Court in Automatic Fire Sprinklers Pty Ltd v Watson ^[7] and the House of Lords in Rigby v Ferodo Ltd ^[8] cannot be determinative of the application of the Act in the present case.

Factual findings

15. The Full Bench agreed with the construction of the material events accepted by Commissioner Redmond. Mr Visscher was qualified for employment as Chief Officer on the oil tankers operated by the employer. In March 2000 Mr Visscher commenced casual employment and in March 2001 he was offered permanent employment as a Third Mate. At that time the relationship between Mr Visscher and his employer was governed by two industrial instruments given force and effect by the Act in the sense described above. They were the Maritime Industry Seagoing Award 1998 and the Teekay Australia/AMOU (Deck Officers) Agreement 1998 ("the 1998 Certified Agreement"). It follows that the relationship between Mr Visscher and the employer was not formed in circumstances in which it was governed exclusively by the general law respecting employment contracts.

16. Early in September 2001 Mr Visscher accepted an offer of promotion on merit from Third Mate to Chief Officer. The 1998 Certified Agreement had provided for positions to be filled "on merit, performance, experience and service", subject to qualification which in Mr Visscher's case was satisfied. However, the AMOU protested against the promotion of Mr Visscher and at least one other promotion. On 7 September 2001 the employer notified a dispute and sought the assistance of the AIRC to avoid industrial action. Thereafter, as Buchanan J remarked, Mr Visscher appears to have been caught up in a process where his personal interests were of little apparent importance to the other parties.

17. The AMOU had sought the holding open of vacancies for permanent First Mate positions to allow permanent deck officers to obtain masters' certificates (as already had Mr Visscher) and so become eligible for appointment as permanent First Mates. The dispute was listed before Commissioner Raffaelli and on 11 September 2001 he issued a statement. This was critical of the making of the promotions and recommended that the employer rescind them. The Commissioner recommended that "the parties continue their enterprise bargaining discussion generally and in particular in respect of the Promotions Policy".

18. On 20 September an officer of the employer wrote to Mr Visscher. The letter referred to a statement by a member of the AIRC which was critical of the promotion of Mr Visscher. It continued:

"Because of the threat of protected action by the AMOU and the commissioners' recommendations, [the employer has] 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.

What this will mean for you at this present time is still a little unclear. [The employer does] need to discuss the issue with the AMOU. Until the [Enterprise Bargaining Agreement ('EBA')] is agreed and registered, it means that no permanent promotions can be effected. It does not mean that you will not be promoted in the future. Also, [the employer is] committed to any promotions that are made after the registration of the new EBA, all promotions will be backdated to the effective date of the vacancy occurring."

19. The 2001 Certified Agreement was the product of negotiations which then were conducted between the employer and the AMOU. Clause 23 made detailed provision for the filling of positions on merit, performance, experience and service. But cl 23 also contained provisions to assist officers who "due to lack of sea-time" did not have the necessary certificate; they were allowed a period in which to complete requirements for the certificate and to obtain promotion instead of those already qualified.

20. Significantly for the situation of Mr Visscher, cl 23.4 stated:

"The grading (or rank/service) list attached will be the basis for future promotions/transfers, etc."

Item 36 of the "Deck Officers Grading List", as at 15 February 2002, which was Appendix A, listed Mr Visscher as "3rd Officer", whose employment at that grade had commenced on 23 March 2001.

21. The context in which the Certified Agreement was negotiated, including the letter to Mr Visscher of 20 September 2001, as well as the express terms of cl 23.4 and Item 36, make it plain that this instrument laid down the basis upon which thereafter the gradings of currently serving officers was to be considered under the promotions system for which it provided.

22. i In the Full Court, Buchanan J remarked:

"To the extent that it imposed obligations which were inconsistent with the position at common law (ie under Mr Visscher's contract of employment) [the employer] was bound by the superior legal force of the [2001] Certified Agreement (operating through [the Act])."

The treatment by the employer of Mr Visscher as holding a position other than that which accorded with the grading system in the 2001 Certified Agreement would be at odds with its statutory force given by the Act. It is not a matter simply of asking whether this grading system is conclusive as to the position of Mr Visscher; the question is to be answered by acceptance of the binding and paramount operation of the relevant law of the Commonwealth which is given by covering cl 5 of the Constitution ^[9] .

23. Thus, in Ansett Transport Industries (Operations) Pty Ltd v Wardley ^[10] , Stephen J, with reference to Amalgamated Collieries of WA Ltd v True ^[11] , considered that a right to terminate the defendant's employment upon reasonable notice would conflict with the termination provisions in cl 6B of the relevant certified agreement under the Act. His Honour went on, with the other members of the majority, to decide the central issue in the case by holding that there was no inconsistency, in the sense of s 109 of the Constitution, between the certified agreement and the Equal Opportunity Act 1977 (Vict).

24. The further significance of the 2001 Certified Agreement and the events which followed, were explained by Buchanan J as follows:

"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 [ on ] the terms of this agreement .

23.4 The grading (or rank / service) list attached will be the basis for future promotions / transfers, etc .'

Appendix A ... (the 'list attached') showed Mr Visscher ranking 36th in the seniority order of [the employer's] 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.

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.

On 26 June 2003 Mr Visscher was advised that [the employer] 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.

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 [the employer] 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 [the employer] finally ended."

The events of 2004

25. Mr Visscher contends that from 7 September 2001 he was permanently employed as a Chief Officer. The employer 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 would have constituted a repudiatory breach of his contract of employment, the employer argues that it would have been effective to bring any contract of employment with Mr Visscher as a permanent Chief Officer to an end.

26. Mr Visscher continued to carry out the duties of a Chief Officer for Teekay after 20 September 2001. He says he did so as a permanent Chief Officer. The employer says he was only acting in the position. As Buchanan J noted, after an incident in November 2003, matters came to a head. Mr Visscher left his employment with the employer. He says he did so because the employer again demoted him from the position of permanent Chief Officer and, on this occasion, he accepted the repudiation of his contract of employment. The employer says that Mr Visscher resigned. It stresses the finding by Commissioner Redmond that the employer did not intend to end the employment relationship, and, to the contrary, it wished the relationship to continue.

27. On 8-9 January 2004 there were conversations between Mr Visscher and Mr Bray, the employer's personnel officer. The Full Bench was prepared to accept the account given by Mr Visscher. This was that after his current tour of duty on the MV "Samar Spirit" he was to join MV "Broadwater" for a single tour of duty, thereafter, he would be sailing as Second Mate. With that latter proposal Mr Visscher disagreed.

28. On 22 February 2004, Mr Visscher wrote to his employer (by e-mail) recording that it had required him to sail as Second Mate. He continued, in a manner which the Full Bench described as pre-emptive, by saying:

"This constitutes a demotion from my position of Chief Officer and it is unacceptable. Demotion is a constructive termination of our contract of employment by [the employer]. I will therefore consider my employment as being terminated by [the employer] upon leaving the MT Broadwater on or about 26 February 2004.

At your earliest convenience please pay into my bank account all entitlements."

The employer responded on 24 February that he had "never been graded Chief Officer" and was "currently graded Second Mate", and continued:

"You have a contract of employment with [the employer] as a Deck Officer. You were originally employed as a Third Mate. [The employer] does not consider a demotion in rank for any officer to constitute constructive dismissal.

On this basis [the employer] is treating your email as a resignation."

29. Commissioner Redmond found that the actions of the employer had not repudiated the contract of employment, that there was no termination at the initiative of the employer and that Mr Visscher had brought his employment to an end on 22 February 2004 by his resignation. It followed that he had no right conferred by s 170CE(1) to apply to the AIRC and the application had to be dismissed for want of jurisdiction.

Conclusions

30. There was no termination of the employment of Mr Visscher at the initiative of the employer. It may be accepted that "termination" for the purpose of s 170CE(1) may include a "demotion in employment" which involves a significant reduction in the remuneration or duties of the demoted employee (s 170CD(1B)). However, from its commencement the 2001 Certified Agreement had specified the place of Mr Visscher in the Deck Officers Grading List at a rank lower than that of Chief Officer.

31. Mr Visscher had been paid as a Second Mate with a higher duties allowance to Chief Officer and had performed those duties. But the employer correctly submits that, given the predominant operation which must be accorded to the 2001 Certified Agreement, whilst Mr Visscher was acting in the position of Chief Officer he was not permanently engaged as such. To construe the course of events by reference to no more than what in the absence of the Act would be the operation of the common law of contract would be to apply the remedial provisions of Pt VIA (in particular, of ss 170CE-170CJ) without giving effect to the certified agreement provisions of Pt VIB.

32. The relationship between the employer and Mr Visscher came to an end following his unjustified assertion by the 22 February 2004 email of "demotion from my position of Chief Officer" as constituting "constructive termination of our contract of employment".

33. The employer properly denied that there had been any demotion in Mr Visscher's current grade, and Commissioner Redmond correctly concluded that the jurisdiction of the AIRC under s 170CE(1) had not been attracted.

Orders

34. Special leave to appeal should be granted but the appeal should be dismissed. Section 347 of the Act makes special provision respecting costs in a matter, including an appeal, "arising under" the Act, and the general provision in s 26 of the Judiciary Act 1903 (Cth) is to be read accordingly ^[12] . No order under s 347 is sought, and, in any event, this would not be a case for an order under that section.