Frank Martinac v AWU West Australian Branch [1995] IRCA 493

C A T C H W O R D S INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - UNLAWFUL TERMINATION - Contract of Service Industrial Relations Act 1988, S170CA, S170CB, S170DF, S170EA CASES: Siagian v Sanel; Apesma v Skilled Engineering; Grout and Gunnedah Shire Council, all reported in 1994 (1 IRCR at 1, 106 and 143 respectively). Nicolson v Heaven and Earth Gallery Pty Ltd (1994) 1 IRCR 199 Courtney and Fairbairn Ltd v Talaini Bros (Hotels) Ltd (1975) 1 All ER 716 Dietrich v Dare (1980) 54 ALJR 388 FRANK MARTINAC v AWU WEST AUSTRALIAN BRANCH No. WI-1609/95 Before: Ryan JR Place: Bunbury Date: 15 September 1995

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY Matter No WI-1609/95 B E T W E E N: FRANK MARTINAC Applicant AND: AWU WEST AUSTRALIAN BRANCH Respondent RYAN JR MINUTES OF ORDER 15 SEPTEMBER 1995 THE COURT ORDERS THAT: That the application is dismissed. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY Matter No WI-1609/95 B E T W E E N: FRANK MARTINAC Applicant AND: AWU WEST AUSTRALIAN BRANCH Respondent COURT: RYAN JR PLACE: BUNBURY DATE: 15 SEPTEMBER 1995 REASONS FOR JUDGMENT (EX TEMPORE) Francis Patrick Martinac lodged a claim of unlawful termination of employment on 22 May. The claim is that the Australian Workers Union gave him a "verbal contract of employment but sacked (him) before (he) commenced duty". On 24 May Michael Daniel Llewellyn, Industrial Officer, AWU, West Australian Branch, AWU-FIME Amalgamated Union, filed a notice of employer's appearance. The notice was accompanied by a letter to the Registrar of the Court. The letter included the following statement: " We do not believe there is a case to answer as there was no contract of employment entered into, either verbal or written. The applicant was simply one of a number of persons interviewed for a position with the organisation." On 31 May the applicant was referred to the Australian Industrial Relations Commission for conciliation. On 13 June Commissioner Bryant certified that the Commission had been unable to settle the matter. On 6 July Ms Judith Anne McCulloch of the Media Entertainment and Arts Alliance appeared at a Directions Hearing on behalf of the applicant. Mr Llewellyn appeared for the respondent. Various orders were made probably by consent. The orders included requirements for both parties to file and serve summaries of fact and to provide each other with lists of documents and witnesses. Statements or summaries of fact appear to have been exchanged and are now on the Court file. On 12 July the matter was set down for hearing in Bunbury on 13, 14 and 15 September. On 1 September after hearing a motion for the applicant a Judicial Registrar granted leave pursuant to Section 497(7) and (9) of the Industrial Relations Act 1988 for the Media Entertainment and Arts Alliance to represent the applicant at the trial. This case turns on whether the respondent employed the applicant. If the Court finds that there was a contract of employment entered into and in effect the Court will need to determine whether any termination by the employer was for valid reason. The applicant asserts that he was employed by the respondent union as an organiser primarily to recruit members for the union particularly in the outlying areas around Kalgoorlie. He claims the respondent terminated the employment before he even began but after the contract had been settled. He claims that the president of the union in Western Australia, Glen Anderton, telephoned Daniel Martinac, the applicant's son, in April 1995 "about Easter" and stated that he had a job for the applicant. The applicant states he rang back the same day and that Mr Anderton inquired of him as to whether he was working and told him that there was a job available for him in Kalgoorlie if he was interested. The applicant states he accepted the offer of employment then and there. He seems to be arguing that the contract of employment came into force then even though he did not know and had not been provided at that stage with terms and conditions. The applicant gave inconsistent and conflicting evidence as to whether Mr Anderton arranged to set up a subsequent meeting at the union office in Perth or whether he (the applicant) initiated the meeting. However, the applicant is adamant the meeting was not to assess him for possible employment but rather to settle the terms and conditions of employment on the basis that Mr Anderton had already offered him the job and he had already accepted it. The applicant cannot remember when the meeting took place. He thinks the meeting might have been on a Tuesday and he is "pretty sure" it was after Easter. When pressed he thinks the meeting probably took place on or around Anzac Day, Tuesday 25 April, because he recollects that he expected to begin in Kalgoorlie "about three weeks after the meeting" and he remembers that he expected to begin in Kalgoorlie about Monday 15 May. Daniel Martinac first identified the original telephone call as taking place in early April but conceded in cross-examination that it might have been mid April. Mr Anderton claims the telephone call to Daniel Martinac and Frank Martinac's return call were both on or about Monday 3 April but he gave no convincing reason as to how he knows this was the approximate date of the two telephone discussions and there is considerable evidence to suggest he is wrong. The applicant and the respondent agree that the State Secretary of AWU (West Australian Branch) Peter Trebilco and Don Bartlem, an organiser with special duties in the mining area, were present at the meeting and that Mr Anderton was present for perhaps the last ten or fifteen minutes of the meeting. Mr Anderton puts the meeting in the week after the telephone calls. If he is correct about the telephone calls occurring on or about Monday 3 April and if he is correct in placing the meeting in the next week this puts the meeting in the week before Easter, that is the week beginning Monday 10 April. The Court does not accept this uncertain evidence. For reasons which will appear in the evidence of Messrs Trebilco and Bartlem the Court accepts the meeting took place on 19 April 1995. As far as the Court is concerned the exact dates of the telephone calls and the meeting are not crucial although the imprecise recollection of the applicant and Mr Anderton might be of some relevance in respect of credit. However, when the Court is confronted with diametrically opposed versions of crucial facts, imprecise recollections of dates which are not crucial are more likely to muddy the waters than cast any light or provide assistance in deciding on a balance of probabilities which party is giving accurate evidence of the crucial facts if indeed either party is giving accurate evidence. When the Court refers to crucial facts this is a reference to whether the applicant was employed by the respondent through an oral contract of employment or whether he was simply an unsuccessful candidate for a position which ultimately went to a Mr Barney Fyffe. If there was a contract of employment entered and in effect then the Court must determine whether the respondent entered the contract of employment and if so whether it was ended for valid reason. If there was no contract of employment entered and in effect then the applicant must inevitably fail in an application for remedy under Division 3 Part VIA of the Industrial Relations Act 1988 because jurisdiction is only attracted by an act of the employer which ends either the employment relationship or the contract of employment. Siagian v Sanel; Apesma v Skilled Engineering; Grout and Gunnedah Shire Council, all reported in (1994) 1 IRCR at 1, 106 and 143 respectively. The Court observes at this stage that the applicant would also fail if there was a contract of employment which was for a fixed term of less than six months or a contract of employment with a probationary period which was reasonable in the circumstances. Regulation 30(B)(1)(c) excludes from the operation of subdivisions B, C, D and E of Division 3 of Part VIA employees serving a period of probation determined in advance that is reasonable having regard to the nature and circumstances of employment. See Nicolson v Heaven and Earth Gallery Pty Ltd (1994) 1 IRCR 199. It is academic in this case but the Court notes the contract with Mr Fyffe (Exhibit R3) is not excluded under Rule 30(B)(1)(aa) because the specific period is not less than six months. However, first the Court must determine whether the respondent employed the applicant. If the respondent did not employ the applicant he is not assisted by the fact or the possibility that Mr Anderton in his initial telephone discussion or Messrs Trebilco, Bartlem and Anderton in their interview might have given the applicant the firm but false impression that he was likely to be appointed. If Mr Anderton misled the applicant in the telephone call that may be unfair and reprehensible but it cannot found an application for remedy for unlawful termination of employment if the employment never began by way of a contract of employment. If Mr Anderton and/or Mr Trebilco and/or Mr Bartlem gave the applicant false hopes at the interview, that was unfair and reprehensible but it cannot found a remedy for the applicant under Division 3 Part VIA if there was no contract of employment between him and the respondent. The Court did not find Frank Martinac or Glen Anderton particularly impressive witnesses. However, the Court found Daniel Martinac an open, honest, impressive witness. The Court has concluded that Mr Anderton gave the applicant the clear impression the job was as good as his. Alas it was not his job to give. Rule 44(1)(a) of the Rules of AWU-FIME 20 February 1995 (Exhibit R2) is as follows: "The branch secretary shall act generally according to the instructions of the branch executive and be responsible for the administration of the branch. The branch secretary shall have the power to appoint, control and dismiss the clerical, research, accountancy and other staff of the branch." Mr Llewellyn for the respondent has rightly pointed out that the parties to a contract of employment must have the lawful ability or capacity to enter such a contract. He also pointed out, albeit indirectly, that peculiar problems surround the contractual capacity of particular people who have suffered or suffer limited contractual capacity. A corporation must observe prescribed formalities when entering a contract. It has been observed that "as the corporation includes industrial unions, trading companies, local body authorities and the Crown, it is clear that most employers in the industrial relations environment in this country will have to observe these formalities" Clearly, Mr Anderton could not and did not employ the applicant by way of a telephone conversation which later evidence suggests probably took place on 18 April 1995, the Tuesday after Easter. It is not strictly material whether that was the date of the telephone conversations first with Daniel Martinac and later with Frank Martinac but the Court believes this was the most likely date. The Court must now turn to the meeting between the applicant and Messrs Trebilco and Bartlem with Mr Anderton present part of the time. This requires an assessment of the evidence of Messrs Trebilco and Bartlem and some comparison of that evidence with that of Mr Anderton and the applicant. Here, the Court must record that it found Messrs Trebilco and Bartlem, and particularly the latter, far more concise, precise and impressive in their evidence than Mr Anderton or the applicant. Having said that, and having noted certain inconsistencies in the applicant's evidence, the Court has no reason to conclude other than that the applicant genuinely believed that he had been offered employment by Mr Anderton and that the interview with Messrs Trebilco and Bartlem (and in part Mr Anderton) confirmed his belief that not only had he been offered employment but that it was, in effect "signed sealed and delivered", albeit only by way of oral assurances. Messrs Trebilco and Bartlem are quite firm and clear in their evidence. They say they and Mr Anderton determined on Tuesday 18 April to take steps to appoint an organiser to recruit union members in what the former called the "goldfields Murchison area" and the latter the "Kalgoorlie Murchison area". They both say that the discussions began around Easter and the Court notes that this coincides generally with Mr Trebilco's appointment as acting secretary of the State Branch of the Federal Union on 10 April 1995. They both are quite adamant that the applicant was interviewed on Wednesday 19 April and that it was clearly stated to him that the initial intention was a temporary appointment of six months and that continuation of the position depended on the degree of success of the occupant in recruiting and increasing union membership by way of a position to be based in the Boulder office of the union. The Court finds Mr Trebilco's notes on salary, leave and superannuation (Exhibit A6) quite consistent with the initial establishment of a temporary position which had the potential to become permanent (see also Exhibit R3). Both Mr Trebilco and Mr Bartlem are adamant, and on this issue Mr Anderton also, that the applicant directly asked Mr Trebilco whether he had the job and that Mr Trebilco replied that the applicant was "90% of the way there but there were other people to be interviewed" and that "they would get back to (the applicant) in the next few weeks". Mr Anderton said that Mr Trebilco said to the applicant: "You are 90% there but there are other people to talk to" Mr Bartlem said: "Frank asked Peter 'have I got the job?' and Peter said 'you are 90% there - there are other people we need to talk to'" Mr Bartlem said that at that stage the only other person to be interviewed was Mr Barney Fyffe and that he had put Mr Fyffe forward as a possible and suitable candidate just as Mr Anderton had put the applicant forward as a possible and suitable candidate. Mr Trebilco gave evidence confirmed by Mr Bartlem that he too had approached a third person but that that person was not interested in the proposed temporary recruiting position. Where the evidence of Messrs Trebilco and Bartlem conflicts with that of Mr Anderton the Court has no difficulty in accepting the evidence of the former. They displayed a far clearer grasp and recollection of what occurred and when. Where the evidence of Messrs Trebilco and Bartlem conflicts with that of the applicant, Mr Frank Martinac, the Court again has no difficulty in accepting the evidence of the former. However, in fairness to Frank Martinac it must be said again that the Court found him a genuine if at times confused witness. He was bitterly disappointed that he did not receive an appointment which he believed he had been offered by Mr Anderton and on which he had reported joyfully to his family. It also must be said that, apart from certain crucial aspects of the interview on 19 April and apart from some uncertainty on dates, there is considerable consistency between the evidence of the applicant and Messrs Trebilco and Bartlem. The parting of the ways is of course in the crucial area of whether on 19 April the respondent, via Mr Trebilco, offered the applicant a position which was accepted then by the applicant or, the applicant would say, was accepted again by him in confirmation of his acceptance earlier by telephone in his conversation with Mr Anderton. The applicant, through his representative, Ms McCulloch, suggests that not only was he employed in what he claims was a permanent, full-time position but that he was terminated without valid reason. He goes further. He asserts that he was terminated on prohibited grounds in breach of Section 170D(F)(1)(b) and (f). Mr Martinac puts this assertion as follows. He and Tim Daly, now joint secretary of what was AWU-FIME, have long been adversaries. On 9 April 1992 (Exhibit A1) Mr Daly, then secretary of the Forest Products Furnishings and Allied Industries Industrial Union of Workers, WA, in a circular letter to his members, accused the applicant of "visiting various mills and timber workers at their homes and asking them to sign a petition which seeks to have members of the union express an interest in joining the Construction, Forestry, Mining and Energy Workers Union (CFMEU)". In April 1995 the applicant appears to have successfully moved or initiated a motion at the meeting of the Collie Branch of the Australian Labor Party which was critical of Mr Daly. Mr Anderton and the applicant are members of the same ALP Branch. Mr Anderton knew of the motion if only because the applicant told him and extracted an assurance from Mr Anderton that the motion would not damage his chances of obtaining employment with the AWU. The applicant's case then seems to take a quantum leap and a leap for which the Court can find no evidence. The leap is initially an allegation of conspiracy. The applicant, through Ms McCulloch, alleges that the respondent, having really appointed him to a full-time permanent position, terminated the employment presumably because of some unspecified pressure from or on behalf of the applicant's long term adversary, Mr Daly. This, asserts Ms McCulloch, amounts to termination in breach of Section 170DF(1)(b) and (f). It is alleged that it is a termination based in whole or in part on the applicant's union activities, thus Section 170(1)(b), and political activities, thus Section 170(1)(f). The difficulty with this is that there is not a scintilla of evidence to support a termination of the applicant on such grounds. Messrs Trebilco and Bartlem have both given evidence that they knew nothing of the Collie ALP Branch motion against Mr Daly and that Mr Anderton has never discussed such a motion with either of them. The Court accepts their evidence but even if they had been informed of such a motion that in itself could not constitute any evidence of a termination of the applicant on prohibited grounds. Turning again, and for the last time to the meeting on 19 April, this is the meeting which reveals the existence or non-existence of a contract of employment. Negotiations which may lead to employment and an agreement to negotiate may be forerunners of an employment contract, a contract of service, but they are not of themselves part of the final contract, be it written or be it oral or be it partly written and partly oral. The law is interested in identifying that moment in time when a clear offer in precise terms was unconditionally accepted by the person to whom it was made. Put another way, the law looks to the moment when negotiations are ended. That proposition has been expressed in Courtney and Fairbairn Ltd v Talaini Bros (Hotels) Ltd (1975) 1 All ER 716 at 720. Denning LJ said: "If the law does not recognise a contract to enter into a contract (when there is a fundamental term yet to be agreed), it seems to me it cannot recognise a contract to negotiate. The reason is because it is too uncertain to have any binding force. No court could estimate the damages because no one can tell whether the negotiations would be successful or would fall through; or if successful, what the result would be. It seems to be that a contract to negotiate, like a contract to enter into a contract, is not a contract known to the law." The relevance of that proposition to persons who are negotiating around a possible job are obvious. Yet while the proposition is easy to express it is not as easy to apply in practice and many rules have developed to guide the parties and the courts in isolating the point of time when negotiations ripen into legally binding and enforceable agreement - that is, a contract. A necessary element of a contract of employment is that mutuality of obligation known as consideration. This consideration must executory, in other words, the obligations are yet to be performed. Obviously this will cause problems when an employment trial or interview is contemplated. Just such a problem came before the High Court in Dietrich v Dare (1980) 54 ALJR 388 at 390. In deciding that the arrangement did not give rise to a contract of service, the majority stated that while the existence of a contract of service depends on the details or arrangements between the parties, a fundamental element of a contract of service is a mutual agreement for work to be performed (see also (1981) 55 ALJ 818 at 819). In Dietrich at 390 the majority stated: "It seems to us that the arrangement lacked the element of mutuality of obligation essential to the formation of such a contract. A contract of service is by its nature a bilateral contract". I have no doubt that the applicant wanted to believe that he had the job but equally I find that he was not certain and I find, consistent with the evidence of Messrs Trebilco, Bartlem and in this instance Anderton, that that is why he asked Mr Trebilco near the end of the 19 April meeting: "Have I got the job?" The applicant cannot recall Mr Trebilco saying words to the effect of: "You are 90% there...but there are other people we need to talk to" But it is revealing to note that he gave evidence that if such words were used he would treat them as confirming that he had the job. I find that these words were used and that they do not amount to any binding offer of employment to the applicant. The Court is satisfied that the respondent never offered the applicant the Kalgoorlie Boulder recruiting position. There was no offer for the applicant to accept. There was no contract of employment. As there was no contract of employment there was no termination at the initiative of the employer. There is no jurisdiction which could found an application under Section 170EA. The application must be dismissed for lack of jurisdiction. ORDER Application dismissed.

I certify that this and the preceding 9 pages are a true copy of the Reasons for Judgment of Judicial Registrar Ryan. Associate : Date : 20 September 1995 Appearances: Judith Anne McCulloch (M.E.A.A.) for the applicant. Michael David Llewellyn (A.W.U.) for the respondent. Date of Hearing : 13 and 14 September 1995 Judgment : 15 September 1995