Cali & Cali t/a Cali's Motor Body Works v Training and Employment Recognition Council [2008] QIRC 17 (2008) 187 QGIG 98

[Extract from Queensland Government Industrial Gazette, Dated 29 February 2008, Vol. 187, No. 7, pages 98-102] QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Vocational Education, Training and Employment Act 2000 - s. 230 - appeal to industrial commission against council Giovanni and Ida Cali t/a Cali's Motor Body Works AND Training and Employment Recognition Council (AT/2007/7) COMMISSIONER FISHER 22 February 2008 Appeal - Decision of Training and Employment Recognition Council to cancel Training Contract - Events leading to cancellation - Employer indicated likelihood of changes in business - Apprentice understanding business closing down - Staff to look for alternative employment - Apprentice offered and accepted another position - Employer would not consent to cancellation of Training Contract - Apprentice refused to return to employer - Show Cause process commenced - Nature of appeal - Rehearing on the record - Submissions received - Appropriate decision cancellation of Training Contract - Disciplinary action should not be taken- Appeal dismissed. DECISION Giovanni and Ida Cali trading as Cali's Motor Body Works (Cali's) have appealed against the decision of the Training and Employment Recognition Council (TERC) to cancel the training contract between Cali's and Murray Edwards (Apprentice Edwards). The decisions sought are:  the decision cancelling the contract be overturned;  an order that the apprentice under the contract resume undertaking the training; and  the apprentice be disciplined. The decision to cancel the training contract was made by Bert Hese, Acting District Manager, Training Queensland, Department of Education, Training and the Arts, Cairns (the Department) under delegation from TERC. The order to cancel the training contract was made and took effect on 27 November 2007. Section 65(5) of the Vocational Education, Training and Employment Act 2000 (the Act) empowers TERC to cancel a training contract if it considers that an apprentice under a training contract has purported to cancel it in a manner other than in accordance with the Act and that it is impractical to order the apprentice under the contract to resume undertaking the training. Section 230 of the Act enables an appeal to the Industrial Commission by a person aggrieved by a decision of TERC to issue an order under s 65(5) of the Act. Gary Cali, the Manager of Cali's, was appointed by Giovanni and Ida Cali as their agent in the appeal. Events leading to cancellation of the training contract Records of the Department show that a training contract between Cali's and Murray Edwards in Certificate III Automotive Vehicle Body (Panel Beating) was registered with a commencement date of 23 January 2006. The nominal duration of the contract was 48 months. Cali's is located in Tully. At some point in mid to late 2007 Gary Cali had a conversation with staff indicating the likelihood of changes occurring in the business. Apprentice Edwards understood the conversation to mean that the business was closing down and further that Mr Cali was advising staff to look for alternative employment. As he was in the midst of his training Apprentice Edwards took the initiative and began to seek work in the area. Alf's Smash Repairs in Innisfail offered him a position and to continue his training. Apprentice Edwards accepted the offer. It is not disputed that on 22 October 2007 Apprentice Edwards gave Mr Cali two week's notice of his resignation to take effect on 2 November 2007. At that time it appears that Apprentice Edwards did not give Gary Cali the relevant form to cancel the training contract but there was no indication when the resignation was notified that Cali's would be disputing the termination of the training contract. On the last day of his employment Apprentice Edwards gave Gary Cali the relevant form and it was only then that Mr Cali advised he would not consent to the cancellation of the training contract. On 2 November 2007 Gary Cali telephoned the Department to seek advice about Apprentice Edwards' intention to leave. Mr Cali was advised that an apprentice could not unilaterally cancel the training contract and that either a mutual decision had to be made or the apprentice could apply to the Department for a single party cancellation. Apprentice Edwards also spoke to the Department by telephone on 2 November 2007. He was advised of the procedures to be followed. According to the notes taken of the telephone conversations by the Departmental officers concerned each party was informed of the consequences if the correct procedures were not followed, including disciplinary action against the apprentice. -- 1 of 5 -- 2 Mr Cali telephoned the Department again on 2 November 2007 and was referred to Mr Hese. Their discussion concerned Apprentice Edwards' purported cancellation of the training contract and the action the Department intended to take in the event Apprentice Edwards did not attend for work on Monday 5 November 2007. On 3 November 2007 Apprentice Edwards and his father met with Gary Cali to discuss the situation and to retrieve the tools that were the property of the apprentice. The situation could not be resolved and Gary Cali denied Apprentice Edwards access to his tools. Despite the advice given by Mr Hese, Apprentice Edwards elected not to attend for work at Cali's on Monday 5 November 2007 nor at any time thereafter. He commenced employment with Alf's Smash Repairs on that date. Mr Hese verbally instructed Apprentice Edwards to return to Cali's on 5, 6, 7 and 8 November 2007. On each occasion Apprentice Edwards refused to follow the instruction. On 6 November 2007 a written request was received from Gary Cali seeking that Apprentice Edwards return to the workplace and the following day a written instruction was given by Mr Hese to the apprentice to return. On 7 November Mr Hese convened a meeting between Gary Cali, Apprentice Edwards and his parents in an attempt to mediate a return to work by the apprentice. At that meeting Apprentice Edwards elaborated on his reasons for refusing to return to Cali's. He said that Gary Cali had previously indicated that Cali's would be closing on 2 December 2007 and that as a result he had commenced seeking new employment. He had originally received an offer of an apprenticeship to commence in January 2008 but in late 2007 the opportunity with Alf's Smash Repairs had arisen. Apprentice Edwards had decided to take this when it arose. Gary Cali disputed that any proposed closure of the business was December 2007 but May 2008. He advised that he would be prepared to accept a cancellation by agreement at the end of December 2007 if Apprentice Edwards returned to work. Apprentice Edwards refused to return to work and confirmed that refusal to Mr Hese by telephone on 8 November 2007. Show Cause process As a result of Apprentice Edwards' refusal to return to Cali's, Mr Hese commenced the show cause process. A Show Cause Notice proposing to cancel the training contract pursuant to s. 65(5) of the Act was issued to both Cali's and Apprentice Edwards. The grounds for the proposed cancellation were: "1. The Training and Employment Recognition Council believes that the apprentice has purported to cancel the training contract other than in accordance with the Vocational Education, Training and Employment Act 2000 in that the apprentice has submitted a signed application to cancel his training contract without the signature or consent of the employer and has left the workplace. 2. The council considers it would be impracticable to make an order that the apprentice resume undertaking the training under the training contract as the apprentice has another job and refuses to return to the workplace.". The Show Cause Notice then provided further information as to why the action was proposed. In summary the facts and circumstances relied on were the history of the events over 2 to 8 November 2007 and as recounted in summary form above. The parties to the training contract were given until 26 November 2007 to respond to the Show Cause Notice. Apprentice Edwards did not respond. In the response submitted by Cali's, Gary Cali agreed that employees had been advised the business would be "in a transition" and that possibilities canvassed included a new manager and for the business to be leased, but that closure was a "worst case" scenario. Mr Cali also said that the date for change was updated to May 2008 and that at no time was it suggested by him that employees look for new employment. Mr Cali stated that the training contract requirements could be fulfilled and that he had a good working relationship with Apprentice Edwards. He expressed his disappointment with the mediation and his concern that assertive action was required to ensure the binding nature of the training contract was understood. After considering the response by Mr Cali, the decision was made by Mr Hese to cancel the training contract and an order was made under s. 65(5) of the Act to that effect. The parties were provided with an Information Notice setting out the reasons for the decision and the order. The reasons for the decision were (in summary):  TERC believes that the apprentice has purported to cancel the training contract other than in accordance with the Vocational Education, Training and Employment Act 2000;  The apprentice applied for cancellation of the training contract and the application did not contain the consent of the employer; -- 2 of 5 -- 3  TERC considers it would be impracticable to make an order that the apprentice resume undertaking the training contract because of the verbal and written instructions given by Mr Hese to Apprentice Edwards to return to the workplace and his refusal to do so;  The apprentice has commenced work with another employer; and  The apprentice's continual absence from the workplace and refusal to follow instructions from TERC to return and the apprentice having commenced employment with another employer is sufficient evidence that it would be impractical to order the apprentice to resume training. Submissions of the parties The submissions of the parties largely canvassed the events of late October/early November 2007 from their own perspectives. In addition, in its submissions TERC referred to the decision of the Industrial Court of Queensland in Murrays v Training Recognition Council (2002) 171 QGIG 93 where it was made clear that an employment contract underpinned a training contract. Hall P said: "The Training and Employment Act 2000 contemplates that training will be employment based training. The Act is structured on the basis that any training contract will always be underpinned by an employment relationship. The proposition is there cannot be a training contract in the absence of an employment relationship.". In the present matter TERC submitted that the employment relationship between Apprentice Edwards and Cali's had irretrievably broken down and relied on the following events in support of that position:  Mr Cali's refusal to mutually agree to cancelling Apprentice Edwards' training contract in circumstances where there was some uncertainty over the future of the business;  the actions by Mr Cali in preventing Apprentice Edwards from retrieving his tools; and  Apprentice Edwards' persistent refusal to obey instructions from Mr Hese to return to the workplace. In his submissions Mr Cali denied that the relationship with Apprentice Edwards had broken down and indicated his willingness to resume it. He said that it was always his intention to keep employees informed about the family's intentions with the business but that Apprentice Edwards' job security had not been and was not now at risk. Apprentice Edwards' father who appeared for the apprentice suggested that no ill will was harboured against Gary Cali but the events of early November 2007 had made Apprentice Edwards concerned about the prospect of returning. In particular, Mr Edwards stressed the importance of job security to his son and his desire to complete his training. Apprentice Edwards believed that his job security at Alf's Smash Repairs was superior and this would allow him the better opportunity to complete his training. In addition, Mr Edwards said there was no point in trying to put the contract back on foot if it was not going to work. In his response submissions Mr Cali emphasized the importance of the binding nature of training contracts and the use of correct procedures to cancel them. He also expressed concern that TERC did not invoke disciplinary action against Apprentice Edwards when he refused to obey instructions to return to the workplace and resume training. Conclusions Cancellation of the training contract The nature of the appeal to the Industrial Commission in this case is by way of rehearing on the record (s. 232(1) of the Act). This means that the parties are confined to making submissions about the materials involved in the decision. In some cases the Commission may decide to hear evidence afresh or additional evidence but this was not the manner in which this appeal proceeded. As a consequence the additional "evidence", that is, the statements from people not involved in the dispute, have not been considered. In any event such material was unable to be tested by cross- examination. The role of the Commission is to decide for itself, based on the documentation and submissions provided and having regard to the reasons given by TERC for its decision, what happens to the training contract in question. The Act prescribes methods by which training contracts can be cancelled. These include mutual agreement (s. 61) and methods by which one party to the contract can seek to have the contract cancelled. In most of the situations where one party seeks to cancel the training contract TERC must give its approval. Here, Apprentice Edwards eventually sought to proceed down the path of mutual cancellation but when that could not be achieved he purported to cancel the contract in a manner not permitted by the Act, i.e., by submitting a single party application for cancellation without consent and leaving the workplace. -- 3 of 5 -- 4 As a decision is based on the parties' submissions concerning the materials that were considered in making the decision to cancel the training contract, the Commission cannot be certain of the exact information provided by Mr Cali to Apprentice Edwards about the future of Cali's. TERC concluded, as do I, that Apprentice Edwards firmly believed that his employment prospects with Cali's were limited and that for the sole reason of continuing his training he sought fresh employment where this could occur. Although Apprentice Edwards had expressed some dissatisfaction with certain aspects of the training provided by Cali's there is no indication in the materials or submissions that he had any intention of leaving his employment except for the uncertainty about his future. There is no explanation provided for Mr Cali's failure to indicate on 22 October 2007 that he would not be agreeing to the cancellation of Apprentice Edwards' training contract and to delay the provision of such advice until the final day of employment. In my view the factors influencing Apprentice Edwards' decision not to return to the workplace and to resume training were not unreasonable. He had found secure, alternative employment which he considered provided him with prospects of completing his apprenticeship in circumstances where the future with Cali's was less than certain. Further, the actions by Mr Cali in not immediately advising Apprentice Edwards that his resignation would not be accepted and refusing him access to his tools would have only reinforced Apprentice Edwards' view that his long term future was better served at Alf's Smash Repairs. Later advice that his employment could be continued for a short time, either to December 2007 or May 2008, would have done little to ameliorate Apprentice Edwards' concerns. TERC was faced with a situation where Apprentice Edwards was resolute in his refusal to return to the workplace to resume undertaking his training. He had defensible reasons to so refuse and the employer had, in certain respects, acted capriciously. TERC could not physically enforce a return to the workplace. For all of these reasons I consider that the proper conclusion to be drawn is the same as that reached by TERC, that is, it is impracticable to order to Apprentice Edwards to resume undertaking the training at Cali's and the only appropriate decision in the circumstances is cancellation of the training contract. Discipline Section 230(1)(g) of the Act allows a person aggrieved by a decision of TERC to refuse to make a disciplinary order under s. 71 of the Act to appeal to the Commission. One element of Cali's appeal is Apprentice Edwards ought to have been disciplined by TERC for not complying with the training contract and refusing to obey instructions to return to the workplace to resume training. Gary Cali submitted that parties to a contract should be aware of their obligations under it and should accept that consequences will follow for non-compliance. TERC submitted that s. 71 of the Act provides for the disciplining of apprentices and trainees. Reference was made to the Explanatory Notes of the Training and Employment Bill 2000 to assist in the interpretation of s. 71 of the Act. Resort to extrinsic materials may be had to resolve ambiguities. The Explanatory Notes state: "The intention of this clause is to ensure that the provisions of the apprenticeship or traineeship contract can be enforced and the continuity of the training can be protected.". The justification for the decision not to impose disciplinary action against Apprentice Edwards was that his refusal to return to the workplace was not an incident of bad behaviour but an attempt to secure his future. It was contended that in the absence of bad behaviour discipline was unwarranted. Here, the employment relationship had broken down to a point where there was no prospect of restoring it. TERC argued that in circumstances where there is a total breakdown in the employment relationship such that the training contract cannot continue and the continuity of the training cannot be protected then it would be contrary to the intention of the Act to impose disciplinary action. Section 71 of the Act applies where TERC reasonably believes that a party to a registered training contract has contravened the Act or the contract. It is evident from the above consideration of the appeal over the decision to cancel the training contract that TERC considered that Apprentice Edwards had contravened the Act. The issue for consideration is whether disciplinary action should follow. Argument occurred in oral submissions about the nature of the instructions given by Mr Hese to Apprentice Edwards to return to the workplace. It is to be remembered that both oral and written instructions were issued. The Commission queried the standing and enforceability of such instructions given the term "instruction" was not defined in the Act. Such instructions are not orders under the Act which can only be imposed by fair procedures under the Vocational Education, Training and Employment Regulation 2000. Instructions are an intermediary step designed to make clear a party's obligations under the contract but are not enforceable per se. I accept Mr Cali's submission that it is important for apprentices (and indeed all parties to a training contract) to be aware of the obligations imposed on them by the contract and by law. Ordinarily disciplinary action should be imposed where one party to a contract has persistently refused instructions, but, as TERC has submitted, the refusal in this -- 4 of 5 -- 5 instance was not for reasons of bad behaviour. Apprentice Edwards' decision to disobey the instructions was based on reasons to secure his future and continue his training when his prospects at Cali's were uncertain. Moreover, Apprentice Edwards' resolve to not return to Cali's (for reasons given above) was evidence that by early November 2007 the employment relationship had broken down. In that context the imposition of discipline would not have the effect of protecting the continuity of training. Accordingly, the Commission considers that in the particular circumstances of this case disciplinary action against Apprentice Edwards should not be taken. The appeal is dismissed. Order accordingly. G.K. FISHER, Commissioner. Hearing Details: Appearances: 2008 11 February Mr G. Cali on behalf of Giovanni and Ida Cali t/a Cali's Motor Body Works. Mr J. Hanna and with him Mr R. McColm of the Training and Employment Recognition Council and with them Mr B. Hese for the Department of Education, Training and the Arts on behalf of the First Respondent. Mr J. Edwards on behalf of the Second Respondent. Released: 22 February 2008 Government Printer, Queensland The State of Queensland 2008. -- 5 of 5 --