Visscher v The Hon President Justice Giudice [2009] HCA 34 (2 September 2009).

A majority of the High Court (Heydon, Crennan, Kiefel and Bell JJ – Gummow J dissenting) has handed down an interesting employment case dealing with the often contested jurisdictional point in unfair dismissal cases as to whether the employment was terminated at the initiative of the employer or the employee. If the former, the Australian Industrial Relations Commission (AIRC), had jurisdiction to hear whether the dismissal was “harsh, unjust or unreasonable”; if the latter, the matter would be struck out.

The appellant, Timothy Visscher, relevantly was employed as a Chief Officer or Chief Mate by Teekay Shipping (Australia) Pty Ltd on a number of its ships.  Mr Visscher, a member of the Australian Maritime Officers Union (AMOU) was one of those unfortunate individuals whose individual interests were squeezed between the demands held in concert by the employer and the union in relation to union policy. Such occurrences are not unknown in Australian industrial law where individuals are sometimes left out in the cold because their attitude or position conflicts with union policy supported by the employer (see Latham v Singleton [1981] 2 NSWLR 843; Turner v Australasian Coal and Shale Employees’ Federation (1984) 6 FCR 177).  Further, Mr Visscher is also one of those indomitable characters who, despite set backs in lower Courts and on appeal, was prepared to take his case to the highest Court in the land to vindicate his position.  Such courageous characters are not unknown and in fact form the basis of a book by a Professor of Political Science at the University of California, Peter Irons, entitled “The Courage of Their Convictions” (Penguin, 1990). That book recounts the struggles of 16 Americans who fought their way to the United States Supreme Court in order to protect their rights. The Visscher decision is a very important one on a number of bases in relation to employment law and no doubt will be the subject of many academic papers and will make its way well and truly into the text books.

The facts of this case were that Mr Visscher was a Third Mate on one of the Teekay Shipping’s vessels.  In August 2001, he was qualified for and offered promotion to the position of a Chief Mate (also referred to as a Chief Officer or First Mate) which he accepted on 7 September 2001. The AMOU disputed the promotion and said that Teekay should have held open vacancies for permanent positions of Chief Officer to allow employees with longer service to obtain the necessary qualifications. An industrial dispute was brought before the AIRC and Commissioner Raffaelli issued a statement critical of the promotions and recommended that the employer rescind them.

Teekay notified Mr Visscher on 20 September that it intended to comply with the recommendation and that his “recent promotion to permanent First Mate is unfortunately rescinded”. Mr Visscher did not accept the rescission. However, he remained in Teekay’s employ, continued to undertake the role and duties of a Chief Officer and received an amount equal to the salary of a Chief Officer (see [40]–[41]). The pay which Mr Visscher was receiving was said to be the pay of a Third Mate with a loading for acting in higher grade. The employer maintained that on the revocation of the permanent position of Chief Officer he reverted to his substantive position of Third Mate. A further development in the case was the certifying of an industrial agreement by the AIRC in March 2002. The Certified Agreement was expressed to be binding on employees of Teekay who were members of the AMOU (which included Visscher) engaged as Masters or Deck Hands on vessels operated or managed by Teekay. It dealt with a number of subjects including clause 23.4 which provided that the “grading (or rank/service) list attached will be the basis for future promotion/transfers etc”.  Mr Visscher was listed in that attachment as a Third Officer, that is a Third Mate. In about July 2002, Teekay wrote to Mr Visscher and offered him a permanent position as a Second Mate. His evidence was he rejected the offer as unnecessary, given his existing contract of employment as a Chief Officer. Subsequent to this letter, Mr Visscher’s name appeared in the gradings listed as a Second Mate (see [42]–[43]). At the time of his promotion to Chief Officer, Mr Visscher was engaged on the Samar Spirit and continued to perform the duties of a Chief Officer on that vessel until early January 2004 (see [44]). In or about January or February, directions were given to Mr Visscher upon the conclusion of his tour of duty on the Samar Spirit – he was directed to sail as a Second Mate. By email in late February 2005, Mr Visscher said: “The requirement to sail as a Second Mate constituted a demotion and that he considered his employment as terminated by Teekay upon his leaving the Broadwater, the vessel upon which he was currently serving.

Mr Visscher filed an application for unfair dismissal with the IRC on 11 March 2004 (see [45]–[46]).  A preliminary point was run before Commissioner Redmond who found that Mr Visscher had resigned and therefore there was no jurisdiction to hear his unfair dismissal claim. Mr Visscher appealed that finding to the Full Bench of the AIRC which dismissed the appeal.

Mr Visscher challenged that matter before the Full Court of the Federal Court of Australia. Justice Buchanan with whom Ryan and Madgwick JJ agreed, held that Teekay’s letter of 20 September 2001 amounted to a breach of contract. However, His Honour considered that it had the effect in law of bringing Mr Visscher’s employment as a Chief Officer to an end, even though Teekay’s conduct was wrongful (see [51]).

Mr Visscher then took the matter to the High Court. The majority of the High Court however found that Justice Buchanan had erred by confusing the concepts of termination of an employment relationship and the discharge of a contract of employment. The concepts are different. It was said that “it did not follow from the fact that a wrongful dismissal is effective in bringing the employment relationship to an end that it thereby discharges the contract of employment” (see [53]).

This is particularly so in Mr Visscher’s case when he continued to work after 20 September 2001 still fulfilling the role of a Chief Officer. In the Full Federal Court, Justice Buchanan had noted that the employment relationship continued after 2001 however his Honour assumed that the relationship continued by reference to a new contract of employment, one by which Mr Visscher was a Third Mate (see [56]). At no stage did Mr Visscher accept the repudiation of his contract of employment by Teekay. Accordingly, up until February 2004, the High Court held that Mr Visscher continued to be employed as a Chief Officer and the purported demotion in February 2004 amounted to a dismissal at the initiative of the employer (see [81]).

A further important matter argued by the employer before the High Court was that the Certified Agreement which purported to place him on a list of deck hands as a Third and subsequently a Second Mate was determinative of his contract of employment. If the Certified Agreement had directly touched upon that issue, it would have prevailed over the terms and conditions of his employment agreement to the extent of any inconsistency (see [71]). However, the High Court considered the terms of the Certified Agreement and found that the subject matter of it did not include a reallocation of the position of individual officers. The listing made to it of Mr Visscher as a Third Mate initially had been assumed, at least by the AMOU, as a statement correctly reflecting the position achieved by Teekay’s letter of 20 September. The High Court said “that it was wrong, there would be no impediment to its correction along with other changes to personnel made in the annexure and made available to employees on a monthly basis. The statement in the annexure did not constitute a term of employment to which Mr Visscher was bound (see [78])”.

The Certified Agreement therefore was deficient in that it did not have a direct inconsistency in relation to Mr Visscher’s employment and consequently had no effect upon his original contract as an employee.

Like the character Jefferson Smith played by James Stewart in Frank Capra’s classic movie, ‘Mr Smith goes to Washington”, Mr Visscher, despite all the forces ranged against him, by way of his dogged determination, won through. Mr Visscher’s case has been referred back to the AIRC to be heard in accordance with law so as to determine the unfairness or otherwise of the dismissal.