FEDERAL COURT OF AUSTRALIA

Australian Postal Corporation v Stephens [2011] FCA 947

THE COURT ORDERS THAT:

1.    The interlocutory application filed on 4 August 2011 be dismissed.

2.    The application for leave to appeal filed on 29 July 2011 be fixed for hearing on 19 August 2011 at 10:15am.

THE COURT DIRECTS THAT:

3.    The applicant serve and provide a copy to the associate to Rares J any further written submissions in support of its application for leave to appeal on or before 15 August 2011.

4.    The respondent serve and provide a copy to the associate to Rares J any further written submissions in support of his application for leave to appeal on or before noon on 18 August 2011.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(REVISED FROM THE TRANSCRIPT)

1     On 8 July 2011, the Federal Magistrates Court ordered that Australian Postal Corporation, known as Australia Post, reinstate Larry Stephens as an employee. It also ordered that the parties had liberty to apply by application in a case for further orders in relation to the implementation and operation of that order. Australia Post filed an application for leave to appeal from that order on the last day in which such leave could be sought, namely, on 29 July 2011. On 4 August 2011, Australia Post applied to the duty judge for leave to commence an interlocutory application for a stay of the reinstatement order pending determination of its application for leave to appeal against it or further order of the Court.

Issues on the appeal

2    It is not necessary to go too deeply into the underlying dispute between the parties. The draft notice of appeal upon which the application for leave to appeal is based challenges a considerable number of the factual findings made by the trial judge in relation to the underlying dispute. It also seeks to challenge, in grounds 21 to 23, his Honour’s findings that underlay the making of the reinstatement order. Australia Post contends that by making this order, in what it describes as an unconditional form, his Honour failed to act in conformity with the principles identified in Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539.

3    Mr Stephens argued that the application for leave to appeal was incompetent because his Honour’s order for reinstatement was final. I reject that submission. The parties had asked the trial judge, and his Honour decided, to defer consideration of whether and what penalties should be imposed until after hearing further submissions, if he found that Australia Post was liable as claimed. In substance that was an order for a separate issue that all matters apart from penalty be heard and determined separately and before penalty. Such an order means that the orders in relation to reinstatement were interlocutory because they did not finally determine the whole of Mr Stephens’ claim that he had taken to the court below: Jefferson Ford Pty Limited v Ford Motor Company of Australia Limited (2008) 167 FCR 372 at 392 [64], 393–394 [71] per myself and 420 [182] per Gordon J.

The immediate factual context

4    The context of the dispute is that Mr Stephens had been employed by Australia Post as a driver/sorter, initially on two successive fixed-term contracts for 25 hours a week. The initial fixed-term contract was in effect from 11 May 2009 until 28 October 2009. The contract that is the subject of these proceedings had a fixed-term duration from 29 October 2009 to 20 January 2010 inclusive. Mr Stephens was paid at the rate of $657.82 per week. Relevantly, the written terms of the contract:

    specified that the employment was to cease on 20 January 2010 unless a further offer of employment was made to Mr Stephens in writing;

    warned Mr Stephens that he should not hold any expectation that Australia Post’s award of this contract would lead to his permanent employment;

    provided that his employment could be terminated at any time prior to the expected cessation date by reason of grounds of termination arising under the Workplace Relations Act 1996 (Cth).

5    By reason of some activities that occurred on 5 January 2010, an officer of Australia Post, Mr Brennan, decided that he would terminate Mr Stephens’ contract. This occurred with effect from 7 January 2010. Mr Stephens was given one week’s pay in lieu of notice. It is common ground that had this action not taken place Mr Stephens’ fixed-term contract had a further nine working days to run until its expiry on 20 January 2010.

The parties’ arguments on the effect of the reinstatement order

6    The parties debated before the trial judge what consequence might flow from an order of reinstatement, and his Honour considered that in his reasons for judgment. The trial judge dealt with the principles the parties had put to him in relation to reinstatement. He considered the discussion of the statutory basis of reinstatement under the former legislation, having regard to what was said by each of the justices in Blackadder 221 CLR 539. His Honour concluded that the power to make an order for reinstatement under s 545(2)(c) of the Fair Work Act 2009 (Cth) was not confined. He found that while Mr Stephens’ contract had only nine days to run at the time of his termination, it was probable that Australia Post would have offered him further employment, and that it would have had regard, in doing so, to any rehabilitation obligations it may have in respect of his work injury.

7    The parties are at loggerheads over what the terms of his Honour’s order for reinstatement mean. Australia Post argues that on the basis of his Honour’s findings the effect of the order is to reinstate Mr Stephens to his position under his previously existing fixed-term contract, including all its terms and conditions, and to require that it employ him for a period of nine further days, being the balance of the unexpired term of his contract at the time of Australia Post’s wrongful termination. Australia Post accepted that it will have to make some adaptations having regard to Mr Stephens’ existing medical condition. It accepts that this condition is genuine and its effects formed part of the underlying circumstances in which Mr Stephens’ contract came to be terminated. Those circumstances were that Mr Stephens had been on the telephone with a senior officer of Australia Post discussing the delay of over a month in dealing with his claim for workers compensation for his injury. His Honour accepted Mr Stephens’ case that this telephone discussion caused him to be late in collecting mail from a customer.

8    Mr Stephens contends that the operation of the order for reinstatement is not constrained by the fact that his contract had only nine further days to run. He argues that he was, in effect, to be reinstated to his former position and employment but without any particular limitation of the term or duration during which the employment would continue.

9    Australia Post has given no evidence or explanation as to why it has not complied with his Honour’s order to reinstate Mr Stephens, even on its own terms. I infer that the existence of this dispute between the parties may have formed a basis for his Honour’s order granting liberty to the parties to apply to deal with any issues in relation to implementation or operation of that order. Neither side has chosen to take advantage of that order.

Consideration

10    The power to order reinstatement under s 545(2)(c) of the Fair Work Act is different from that under the terms of s 170CH(3) of the Workplace Relations Act set out in McHugh J’s reasons in Blackadder 221 CLR at 543 [8]. Relevantly, s 545(1) and (2) of the Fair Work Act provides:

“(1)    The Federal Court or Federal Magistrates Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.

(2)    Without limiting subsection (1), orders the Federal Court or Federal Magistrates Court may make include the following:

…

    (c)    an order for reinstatement of a person.”

11    The ordinary English meaning of the word “reinstate” is to put back or establish again as in a former position or state (the Macquarie Dictionary online), or to reinstall or re-establish a person or thing in a former position or condition (the Oxford English Dictionary online).

12    In essence, Blackadder 221 CLR 539 held that the power to reinstate under s 170CH(3) of the Workplace Relations Act was not confined to restoring only the contractual or other legal rights alone of the person who was reinstated. That power extended to putting that person back into his or her place in the employer’s business, so as to offer him or her meaningful employment in his or her position of the kind that he or she had prior to the termination but with such adaptations as were necessary if the employee had been injured, or the circumstances of the employer had sufficiently changed to allow for new circumstances: Blackadder 221 CLR at 544-545 [14]-[16] per McHugh J, 549-550 [33]-[34] per Kirby J, 552-553 [43]-[46] per Hayne J and 564-565 [75] per Callinan and Heydon JJ.

13    Recently, Bromberg J has observed that the considerations leading to the historical reluctance of courts to grant orders for specific performance of employment contracts has now been overtaken by an increasing judicial realisation that those considerations are no longer applicable to modern day employment relations: Quinn v Overland (2010) 199 IR 40 at 59 [97]-[98]. He recognised that statutory unfair dismissal regimes, providing for the reinstatement of dismissed employees as a suitable remedy, have now been in place for over a generation and continued:

“Dismissed employees are regularly reinstated into their former employments without apparent consequent difficulties. The long-standing nature of this remedy, and its acceptance as part of the industrial furniture, is a testament to the fact that as a matter of practice, a breakdown in confidence is not necessarily irreconcilable.”

14    In this case there is no challenge to the trial judge’s findings that the allegations of breaches by Mr Stephens of his obligations as an employee on which Mr Brennan exercised the power of termination, had not been correctly reported to him. There is an issue as to whether, nonetheless, the exercise of that power can now be supported on the basis that Mr Brennan acted in good faith. That issue will need to be considered as part of any appeal or application for leave to appeal.

15    His Honour took into account in determining whether to order reinstatement, his findings as to the likelihood of Mr Stephens being offered further employment with appropriate adaptation of its conditions to accommodate any rehabilitation requirements arising from his work injury. It is not difficult to see why his Honour chose that path. Since Australia Post had seen Mr Stephens substantively as an employee worthy of its consideration for further employment, it is likely that if he were reinstated, as his Honour found, it would have offered him a further contract. However, his Honour’s reasons for making the order for reinstatement are different from the order he pronounced. Those reasons do not create some basis on which to interpret or confine the clear terms of the actual order for reinstatement or the operation of s 545(2)(c).

16    In my opinion, his Honour’s order for reinstatement made on 8 July operated from that day. It obliged Australia Post to reinstate Mr Stephens to his former employment for the balance of its term of nine further days. It is not arguable that his Honour exercised his power, in effect, to restore the parties to their positions prior to the wrongful termination, while simultaneously ordering a longer or indeterminate period of reinstatement. In those nine further days, the rights of the parties would have to be ascertained and developed according to what happened, as his Honour stated. This would include whether Mr Stephens would have some further rights by reason of any continuing effect of his injury or pre-existing medical condition under other legislation, such as the Safety, Rehabilitation and Compensation Act 1988 (Cth), and whether, having regard to all relevant matters, Australia Post would decide to make him an offer in writing as contemplated under the existing contract for a further contract on terms that it would specify.

17    Mr Stephens’ contention that reinstatement to his position would be impossible on the terms of his previous contract because the date of 20 January 2010 had passed and therefore the order operated to effect a reinstatement for some unspecified term, is untenable. The ordinary and natural meaning of s 545(2)(c) and the fact that it is a remedial provision all tend against such a construction. The purpose of the order for reinstatement is, so far as possible and in a real sense, to put the employee back in the position he or she would have been in but for the wrongful act of the employer that provided the occasion to enliven the power to order reinstatement under s 545. The employee is entitled to neither more nor less. If he or she may achieve more, it will be because of the fact that the employer will have chosen to revisit its own attitude towards the employee and perhaps to have repaired the unfortunate wrong that was done, having regard to its now judicially determined wrongful conduct.

18    Because Australia Post was obliged from 8 July 2011 to reinstate Mr Stephens and has breached that obligation, no purpose would be served by ordering a stay. On one view, the order is spent. If it is not spent and Australia Post wishes to remedy its breach of the order by offering Mr Stephens employment, it can choose to do so now. It is not appropriate for the Court to grant relief retrospectively to stay an order in circumstances where the time for compliance with the order has already, in practical terms, expired. The consequences that flow from any breach of the order is another matter. But neither party explained why, despite persisting in their disagreement about the terms of the reinstatement that had been ordered, neither sought to use the liberty his Honour granted to them to apply. Nor did Australia Post explain its delay in applying for a stay.

Conclusion

19    It follows that the application for a stay was misconceived and should be refused.

20    During the course of today the parties have sought to mediate their differences with the assistance of the Registrar, having consented to me making an order for mediation. Regrettably, they failed to achieve a resolution. They have both agreed that, in the interests of expedition and since I am now familiar with the issues, it is suitable that I hear the application for leave to appeal next Friday.

Associate:

Dated:    18 August 2011