Clarke v Hancock [1993] ICQ 18 (1993) 143 QGIG 589

588 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE [6 August, 1993 I r •l r 6 August, 1993) QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 589 #################################################### QU EENSLAND INDUSTRIAL COURT Industrial Relations Act 1990 s. 9.2(3) - appeal from deci sion of indu st rial magistr ate Gregory Francis Cla rk e AND Neil Hancock (No . CS of 1993) JUSTICE MACKENZIE, PRES IDENT 21 Ju ly 1993 Appeal - Industrial Magistrate - Notice - Engineering Award - State - Te rm ination of Emp loyment - Redun dancy - Continuity of Service - Transfer of Bus in ess - Appeal Allowed with Cos ts. JU DGMENT This is an appeal aga inst th e dismi ssal by an Industrial Magistrate at Southport of a summons for payment of wages in lieu of notice by Mr Hancock to an employee, Danny Norman Draeger. M r Draeger had been employed for a num be r of years by Mr H an cock in a mari ne repairs business at Ru naway Ba y. The eviden ce is that over a period of some months prior to Jan uary 1992, Mr Hancock had been discu ss ing the sale of the business w i th the persons who ultimately purc ha sed i t. M r Draeger had gone on holidays in December 1991 and upon his return to wo rk on 6 January 1992 he was told that Mr Hancock had sold the busin ess. The quest ion involved is wh et her the condit ions of the Eng ineering Award - State had been complied wi th in fai ling to give Mr Draeger the period of notice prescribed there in. It was Mr Hancock 's conten tion that becau se Mr Draeger knew that negotiatio ns were under w ay for the sa le of the business and t he continuity of his work in the business h ad not been interr upted th ere h ad n ot been a contravention of t he Award. The Industrial Magistr at e decid ed that the complaint had n ot been made out and dismi ssed it. His decision proceeds on the basis that there wa s no termi nation of employment by Mr Hancock. He ca me to thi s conclusion on the bas i s of a provision in the redundan cy provisio ns of the Award to the effect that where a business is transferred from one emp loyer to another and an emp loyee of the former becomes an employee of the latter, the con tinuity of the employment of the employee is deemed not to have been brok en by re ason of the tra nsfe r and the per iod of employment wi th the former is d ee med to be service wi th t he latte r. The period of employment in the context of a redundancy ha s consequences in re lation to the amount of t he seve ra n ce pay to wh ic h the employ ee is entitl ed . When used in the context of t he clause in the Award, the word "deemed" i mp lies that the state of affairs which is sa id to exist does not act ual ly exist. The word is used to extend a concept to cover a subject matter which it does not properl y des i gn ate (R v. Norfolk County Coun cil 60 LJQB 37 9, 380; Day v. Com missioner of Stamp Du ties (1 940) St .R . Qd 77, 81; Muller v. Dalgecy & Co Lt d (1909) 9 CLR 693, 696). Th is approach accords with the princi ple that where an employer ceases to car,y on bus iness the employee's contract of employment ceases upon the cessa tion of busi ness. (Brace v. Calder (1 88 7) 19 QBD 26 4; In re Fosler Clark Lid's lnde nlure Tr usts (1966} 1 WLR 125 Burton v. Litlon Business Sys lems Pty. Ltd. (19 77) 16 SASR 162). T he In dustrial Magistrate has interpreted the "trans mission of bus i ne ss" provision as one which appl ies to a case such as the present whe re the employee of t he first employer im mediately becom es an employee of the second employer upon the sal e of t he business. The structure of the award does not support this construction. The "tran smission of business" provision is intended to protect an employee who is ma de red un da nt by the seco nd employer by recognising the whole of h is service in the b us iness enterprise. . Insofar as it d eals wi th te rm in at ion, th e Award provi des that in order to terminate the employment of an emp l oy ee the employer must give a period of notice according to a sca le which has rega rd to t he dura ti on of the employee's employment. In the case of Mr Draeger it was agreed tha t four weeks' notice were requ ired. The i ssue in t he case is whether the requi red notice had been given in all of the circum sta n ces. Mr Hancock's case is that 143432-53 Mr Draeger was aware for a considerable period that negotiations wit h respect to selling the business were under way. He sa id that Mr Draeger knew of this for several months prior to the fi na l isa t ion of the contract. However it i s apparent from the evidence th at there were di fficulties in the negotiations and the ag re ement that was final ly reach ed occurred quickly. Alt hough Mr Hancock had some exp ectations that the bus i ness would be sold it was never, until that t im e, certain that it would be. Mr Hancock's submi ss ion was that as M r Draeger knew that t he negotiat ions were under way and that if they were successful he would cease to be employed by Mr Hancock, he had therefore h ad more than sufficient notice. It is n ot in dispute that Mr D raege r was fi rs t told that t he sa le ha d finalised when he re turned from ho lidays on 6 January 1992 . Pr ior to that, the negotiations had been inconclusive. T he critical factor is that Mr Draeger was never told of a date wh en his employment wit h Mr Hancock would ceas e until 6 Janua,y. On the facts of the case the proposition that he h ad been given the requi red period of notice ca nnot be su sta ined. The applicant is therefore entitl ed to payment in lieu of notice in accordance with the award. M r Draeger's weekly wage was $600 per week. There remains one comp lication. There is some evidence that suggests that at least part of Mr Draeger's wage for about a week after 6 Ja nua,y was paid by Mr Hancock. The ev idence d oes not es tablish h ow much was c on tributed by him. It seems that the arrangement was arrived at between M r Hancock and the new owners of the busi ness to ta ke into account that Mr Draeger was to perform certain tasks for Mr Hancock duri ng that week. T he award provid es that emp loyment may be terminated by part of the period of notice specified and pa rt paymen t in lieu thereof. Given the nature of the arrangement I do not think that it can be sa id the payment was made in li eu of no tice. Once i t is accepted t ha t Mr Draeger was employed by the new owners at that t im e, any pr ivate arra ng ement between them and Mr Hancock is irrelevant to the question of not i ce. The order of the Court w ill be that the appeal is al lowed. In lieu of the order made by the Industri al Magistrate it is ordered that Ne il Hancock pay Danny Norman Draeger the sum of $2400, with cos ts . Dated this twenty-f irst da y of July, 1993. K. G.W MACKENZIE, Pres ident. Appearances:- Mr P.C. Greenhill, for the Department of Employment, Vocational Edu cat io n, Traini ng and Industrial Rel at io ns. Mr N. Hancock appeared on h is own be hal f. Operative Date: NIA Ju dgment - G.F . Clarke and Neil Hancock Re le ased: 22 Ju ly 1993 #################################################### -- 1 of 1 --