Altman v Pierlite Pty Ltd

[1996] IRCA 207

DECISION NO:  207/96

C A T C H W O R D S

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - complaint of UNFAIR TERMINATION - RESIGNATION

Industrial Relations Act 1988 s.170EA

CASES:Mohazab v. Dick Smith Electronics Pty Ltd (No. 2) (1995) 62 IR 200;

Gunnedah Shire Council v. Grout (1995) 62 IR 150;

Rheinberger v. Huxley Marketing Pty Ltd (16 April 1996, Moore J, unreported).

PENELOPE TRICIA ALTMAN -v- PIERLITE PTY LTD

No. VI 5806 of 1995

Before:  Judicial Registrar Murphy
Place:  Melbourne
Date:  22 May 1996

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 5806 of 1995

B E T W E E N :

PENELOPE TRICIA ALTMAN
Applicant

AND

PIERLITE PTY LTD
Respondent

MINUTES OF ORDERS

Judicial Registrar Murphy              22 May 1996

THE COURT ORDERS:

1. The application is dismissed.

NOTE:  Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 5806 of 1995

B E T W E E N :

PENELOPE TRICIA ALTMAN
Applicant

AND

PIERLITE PTY LTD
Respondent

Before:          Judicial Registrar Murphy
Place:            Melbourne
Date:              22 May 1996

REASONS FOR JUDGMENT

In these proceedings the applicant seeks a remedy pursuant to s170EA of the Industrial Relations Act (“the Act”). The respondent’s primary defence was that the applicant resigned her employment and therefore, as required by the Act, there had been no termination of employment at the initiative of the employer.

The background to events on 6 November 1995
The parties parted company after a meeting on 6 November 1995 but in order to understand what happened on that day it is necessary to traverse events commencing with the applicant’s engagement by the respondent in July 1995.

The respondent is involved in the sale and distribution of industrial and commercial light fittings.  About eight people were employed in its office.  The applicant commenced employment as an internal sales clerk.  She had previous experience in the industry in positions that involved more responsibility for individual projects than was envisaged when she commenced with the respondent.  When she started she was being supervised by Mr Vantarakis, whose title was project co-ordinator/stock controller.  He was also responsible for training new staff. 

The applicant’s duties involved answering customer calls and processing sales orders on a computer system.  The applicant was shown how to perform her duties by Mr Vantarakis in a very cursory manner.  She also obtained instruction on how to operate the computer system from a manual prepared by Mr Vantarakis.  In addition she sought help from her predecessor in the position, Mr James Bunning. 

Over the period July to October problems arose with the way the applicant performed her duties.  Mr Vantarakis would raise with her about once a week mistakes that were being made with orders she was processing.  His evidence was that the applicant would acknowledge the mistake but the problem would recur.  A particular problem was the failure of the applicant to ensure that orders “entered” into the computer were not left in that state but were “printed”.  Failure to take this step meant that the order would not be further processed resulting in customer complaints.  Mr Vantarakis gave evidence that when he first raised these matters with the applicant she would listen but as time went on, she would respond aggressively.  There were also differences between the two of them as to whether the applicant was to be involved in project work.  By October it was common ground that communications between the two had broken down. 

The receptionist, Ms Kendall, confirmed the difficult relationship between the applicant and Mr Vantarakis. She also said that the applicant did not seem to get on with other people in the office and failed to return telephone calls.  A sales representative, Mr Tim Humphreys, gave evidence that he had received complaints from customers about orders for which the applicant was responsible.  He had relayed those complaints to Mr Clarke, the State Manager of the respondent.  Mr Humphreys also said that one evening in a hotel in late winter he discussed the applicant’s performance with her and told her she should “be more friendly” in the office.  In her evidence the applicant admitted she was very tense at the workplace and found it hard to get along with another sales clerk, Ms Crespo.

During October the respondent was due to move its business operations from Dandenong to Fitzroy. Also, a new employee, Mr Bryan Findlay, was to commence employment as customer service manager.  His role included being office manager and supervising the applicant.

Mr Clarke gave evidence that in the period up to October he had received a number of complaints from customers about the applicant’s performance and manner.  He decided not to raise the difficulties about the applicant’s performance until Mr Findlay commenced.  He formed the view that Mr Findlay would be in a position to supply a more mature managerial approach to the problem than Mr Vantarakis.  At that point Mr Vantarakis was reluctant to raise matters with the applicant as relations between them had broken down. 

The counselling meeting on 4 October 1995
Mr Findlay commenced work on 2 October 1995.  On 4 October a meeting occurred between the applicant, Mr Clarke and Mr Findlay.  Prior to that meeting Mr Clarke had completed a “Formal Counselling/Warning” form (Exhibit R4) used for disciplinary purposes within the respondent.  It included the following :

“Details of Counselling/Official Warning :

Follow through commitments made.
Take instruction without protest.
Try to improve relationship to staff internal/external.”

Mr Clarke gave evidence that he raised these three matters with the applicant in the course of a discussion that lasted about 45 minutes.  When the performance matters were raised by Mr Clarke the applicant then said “if that is the way it is I’ll resign”.  The applicant’s version was that she asked Mr Clarke “do you want me to resign?”.  It is common ground that the applicant first raised the question of resignation and that neither Mr Clarke nor Mr Findlay suggested she take that step.  She was counselled against resignation by Mr Clarke and Mr Findlay.  Mr Clarke’s evidence was that he said “let’s not be hasty” and that the parties should make efforts to address the performance concerns.  Mr Findlay’s evidence was that when the question of resignation was raised by the applicant she also said that she had “some problems with a few staff” and she found it “tiring driving to Dandenong”.  Mr Findlay’s evidence was that the conclusion of the meeting was that he would monitor the applicant’s progress.  The applicant was to be provided with additional training in order to have the performance issues addressed.   It ended on a positive note.

The applicant was asked to sign the counselling document.  She was given a copy a day or two later and read it.  The document is in a standard form and makes provision to record “Formal Counselling”, “First Official Warning”, and a “Second/Final Warning”.  The acknowledgment clause reads:

“I am aware that further or continuing breaches may result in termination of employment.”

Events between 4 October and 6 November 1995
Mr Findlay, upon his commencement took over direct supervision of the applicant from Mr Vantarakis.  There was still  interaction  between the latter two as problems continued with the applicant failing to properly process orders.  Mr Vantarakis raised these matters with Mr Findlay and with the applicant.  There was some dispute as to the applicant’s response.  She maintained that she advised Mr Findlay that she was busy.  His evidence was that she would blame the computer.  Both Messrs Findlay and Vantarakis denied any problems with the computer.  Mr Vantarakis placed a sign on each computer terminal to remind staff, including the applicant, to properly complete the processing of orders.  I am satisfied that whatever reason was given by the applicant, the problems continued and from the applicant’s viewpoint, resulted in a deterioration in the working relationship between herself and Mr Findlay.  The latter commenced diarising incidents relating to the applicant on 20 October.  Some seven matters were recorded over the next two weeks.  They related to lateness, failing to process the orders, and personal telephone calls.

Mr Findlay said that every time he tried to talk to the applicant “she would get angry and defensive”.  He said that what was said “seemed not to sink in, or (she was) not interested”.  He said that he had never come across anyone as “non co-operative” as the applicant.  He tried to encourage the applicant but it didn’t seem to work.  On 2 November the applicant was involved in an argument over the telephone with another staff member.  Mr Findlay asked her to apologise, which she did.  On 6 November she was late and upon arrival proffered no explanation.  Later that morning a Jason Thompson, who was known to Mr Findlay, attended the office uninvited and had a social chat with Messrs Findlay and Clarke.  He was unemployed at the time but both men denied that the question of employment was discussed.  On that day Mr Findlay decided that he should discuss the applicant’s performance with Mr Clarke.  They agreed that they would meet the applicant later that day to discuss her performance and give her a formal warning.

The final meeting on 6 November
Mr Findlay took to this meeting his diary and a number of examples of orders that had not been properly processed by the applicant.  He said the purpose of the meeting was to give the applicant a formal warning.  According to the applicant, Mr Clarke called her in to a meeting.  He then outlined a number of problems that were occurring.  He then said “At this point we’ve got two choices - you resign or we have to terminate your employment”.  The applicant replied “I suppose I’ll resign”.

On the applicant’s version Mr Clarke then handed her an already completed Termination of Employment form for her to sign.  She did so.  He then asked for her to give a written resignation, and dictated a form of words.  The applicant went out to her desk and wrote (Exhibit R5):

“6th November 1995
Dear Sir,
I wish to advise my formal resignation from Pierlite lighting.  To be affective (sic) immediateley (sic).
I thank you for the experience.
Regards,
(sgd) Penny Altman.”

According to Mr Clarke, he outlined that the purpose of the meeting was to administer a first warning due to continuing performance problems.  He referred to the orders that Mr Findlay had in his possession.  The applicant then said: “I said before that if I came in here again I’d resign.”  Mr Findlay confirmed that the meeting had not progressed very far when the applicant offered to resign.   He said the applicant was told that if she improved her performance she could “still stay employed but if you want to resign it may be better for you”.

When the applicant said that she would resign, Mr Clarke had said to her it would look better on her resume.  Messrs Clarke and Findlay agreed that the applicant was asked to put her resignation in writing.  They maintained that it was only then that Mr Clarke had her sign the respondent’s standard Termination of Employment form.   Messrs Clarke and Findlay denied forcing the applicant to resign or giving her an ultimatum.  They denied that the purpose of the meeting was other than to give her a first warning.

Did the applicant resign?
The central issue to be resolved in this proceeding is whether the applicant resigned or not.   There was nothing in the demeanour of the various principal witnesses to tip the scales one way or the other as to whose version was preferable.  The applicant’s version of events was that in the meeting of 6 November she was given a direct ultimatum:  “you resign or your employment will be terminated”.  The applicant then said “well I suppose I’ll resign”.  The respondent denies a forced resignation.  It submits that the applicant resigned due to unhappiness with her position and the respondent’s response to her performance problems.

The respondent’s version links the offer of resignation on 6 November to the meeting of 4 October.  At that meeting Messrs Clarke and Findlay claim that when the various performance issues were raised the applicant proffered her resignation.  The applicant disputes this and claims that she only asked the respondent whether she should resign.  It is common ground that the question of resignation was then put aside when Mr Findlay interrupted the conversation and suggested that the respondent would be moving to Fitzroy and that training and support would be supplied. 

In evidence that was not directly challenged, the respondent’s witnesses said that in the conversation on 4 October the applicant had expressed her unhappiness with working at Dandenong and suggested that the stress of travelling had contributed to the problems in her work performance.  This is consistent with the evidence of the respondent that there was unhappiness within that workplace as far as the applicant was concerned.  Ms Kendall gave evidence that the applicant did not fit in and it was common ground that relations between the applicant and Mr Vantarakis had broken down.   The applicant said that after the discussion with Mr Humphreys, and the meeting on 4 October she attempted to improve her relations with other staff, and in particular with Ms Crespo.  She admitted she did not get on with a number of people in what was a small office. She found Mr Clarke “distant”, “unapproachable” and not “up front”.   She did not dispute that the contents of the 4 October counselling document recorded what was discussed.  The evidence thus painted a picture of the applicant being unhappy at work that is at least consistent with the respondent’s version of the interview on 4 October.

In the period between 4 October and 6 November the evidence points strongly towards the applicant still not being comfortable in the workplace.  The applicant admitted that on a number of occasions Mr Findlay brought to her attention the fact that she was not completing the processing of orders.  There was a dispute on the evidence as to whether the applicant blamed the computer, as asserted by Messrs Findlay and Vantarakis, or whether she said that she was too busy and required more resources and training.  It was common ground however that the workplace was busy over that period.  Further, in the move to Fitzroy, one computer terminal that had previously been used by Ms Crespo was now to be shared with Mr Findlay.  Ms Crespo also left on 21 October and was not replaced.

Mr Humphreys gave evidence that after he spoke to the applicant in the hotel, he saw her relations with staff, over the next month, improve and then deteriorate.  At that point he said she “seemed unhappy” and “didn’t seem herself”.  The applicant admitted that her relations with Mr Findlay, who had been supportive in the meeting on 4 October, deteriorated in the period prior to 6 November.    She said that by then “he didn’t want to help me”.  It is not surprising that the applicant’s relations with Mr Findlay deteriorated as his diary records that from 20 October he noted that he had raised a number of matters with the applicant.  He said he had also raised matters relating to processing of orders with her prior to 20 October.  The entries record that on 24 October the applicant was late and that Mr Findlay talked to her about “continuing to leave orders in the system”.   On 27 October he records “personal calls and had to talk to her re her performance lately”.  On 30 October is a similar note.  On 1st November is a note “(the applicant) leaving orders in the computer still”.  On 2 November Mr Findlay recorded “had to talk to Penny re her mistakes.  Leaving orders in “entered” not “printed”.”   In evidence the applicant admitted that she was “definitely making mistakes and this increased after (Crespo) left”.  She admitted she was getting pretty frustrated, was very busy and was upset at not receiving a straight answer from Mr Findlay as to a replacement for Ms Crespo to relieve the workload.  She also said she was unable to cope with a new computerised ordering system that had been introduced.  The applicant expected further training in her role after the meeting of 4 October and this had not been forthcoming.

The evidence paints a picture consistent with the applicant being unhappy and frustrated in the workplace.  When this is combined with the evidence of Mr. Vantarakis, Mr Clarke and Mr Findlay that she would not admit error or fault, her reaction at the meeting on 6 November accords with common human experience.  There is an inherent likelihood, given this background, that she would offer to resign rather than further endure the discipline process and continue in a workplace where she was unhappy.  Her reaction is encapsulated in the disputed comment “but I said before that if I was here again I would resign”. 

It is significant that the applicant gave no evidence that she made any protest about the failure of the respondent to abide by its discipline procedure.  She said she understood she should have received two more warnings.  This is obvious from the face of the “Formal Counselling/Warning” document (Exhibit R4) that she had been given on 4 October.  She was also familiar with a need for a warning before dismissal from some advice received from an earlier employer.

The applicant’s version of the meeting on 6th November requires the Court to accept that the respondent’s two experienced managers would seek to force the applicant’s resignation in order to circumvent the disciplinary policy of the respondent, which having been invoked, required the applicant to be given a first and a second/final warning.   It requires Messrs Clarke and Findlay to agree to give her the ultimatum in clear breach of a policy the two of them had presented to her a month before.  While such a course of action is possible, it strikes the Court as unlikely, particularly given that the applicant had raised the question of resignation on 4 October.  If the respondent really wanted to achieve the resignation of the applicant, it knew that it was probably not necessary to confront her directly.

The suggestion was made that the presence in the office of Jason Thomson, who later took the applicant’s position, showed that arrangements had already been made for her replacement.  It was not disputed that he was offered her position after she had resigned, but the evidence of both Messrs Clarke and Findlay was that his presence on 6 November was purely coincidental.  Mr Thomson was not called. 

On the applicant’s version, Mr Clarke presented her with a company “Notice of Termination” already completed.  Surprisingly, on her version, he also asked her to write out a written resignation.  It is difficult to see why this was necessary if he had already obtained her signature on a document that is framed to be an employee’s Notice of Termination.  The applicant admitted that Mr Clarke discussed her final payment details with her over the form.  This is consistent with his evidence that he did this after obtaining her written resignation.  He said the form was to complete the paperwork of the respondent.

One discrepancy between the parties in the evidence is the applicant’s evidence that Mr Clarke had the Notice of Termination on the desk during the discussion on 6 November.  Mr Clarke said he had a further Formal Counselling/Warning document completed.  He said he destroyed that document after the discussion on 6 November as it was no longer required.  Mr Findlay said that as far as he was aware Mr Clarke had a copy of the 4 October Formal Counselling/Warning document.  Mr Findlay gave him the blank Notice of Termination form when the applicant went to write out her letter of resignation.  While Mr Clarke was in his evidence prone to some reconstruction, I prefer to accept Mr Findlay’s evidence that he handed to Mr Clarke a copy of the previous Formal Counselling/Warning document.  I accept Mr Clarke’s evidence that he did not have a Notice of Termination form with him in the meeting.  The divergence in the evidence of the two witnesses on this point is insufficient to cast doubt on what was otherwise a generally consistent and internally coherent account.

Conclusion - the applicant resigned.
Considering all the evidence I prefer the respondent’s version of events.  I find that on 4 October the applicant volunteered her resignation when Mr Clarke raised a number of performance matters with her.  Subsequently I am satisfied that issues relating to processing of orders, personal telephone calls and tardiness were raised with her by Mr Findlay.  I accept that after 4 October the applicant attempted to improve in the matters that had been raised in the meeting.  I find however that as a result of the additional pressure associated with a new ordering system and the departure of Ms Crespo, the applicant’s performance in the areas previously raised, deteriorated. 

This led to a decision by Messrs Clarke and Findlay on 6 November to have a further meeting with the applicant to discuss these matters.  I am satisfied that prior to this meeting there were no exploratory talks with Jason Thomson about employment.  I am further satisfied that there was no agreement prior to that meeting by Messrs Clarke and Findlay to seek the applicant’s resignation.  It was to deliver a first warning.  I find that when Mr Clarke outlined the purpose of the meeting on 6 November, the applicant offered to resign.  I do not accept her evidence that she was given an ultimatum and thus had no choice.

I accept the evidence of the respondent’s witnesses as to the applicant’s interaction with other staff, and find that the applicant really did not fit into the environment.  The applicant was frustrated at the pressure of work, and what she perceived to be a lack of assistance and training for her position.  As a person who aspired to high standards, I am also satisfied that the applicant chose to avoid further scrutiny of her performance and to escape an unhappy environment by proffering her resignation.

Has there been a termination at the initiative of the employer?
The jurisdiction of the Court is not enlivened unless there is a “termination at the initiative of the employer”.  The meaning of this phrase has been considered in a number of cases:  see eg. Mohazab v. Dick Smith Electronics Pty Ltd (No.2) (1995) 62 IR 200; Gunnedah Shire Council v. Grout (1995) 62 IR 150; and Rheinberger v. Huxley Marketing Pty Ltd (16 April 1996, Moore J, unreported).  Each case will turn on an examination of its own facts to see “if the dismissal is one where the employee did not resign willingly, and, in effect, was forced to do solely by the conduct of the employer” (Mohazab, above at 207).

In Mohazab, the Court also said at 205:

“It accords with the purpose of the Convention to treat the expression “termination at the initiative of the employer” as a reference to a termination that is brought about by an employer and which is not agreed to by the employee.

...

In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee.  That is, had the employer not taken the action it did, the employee would have remained in the employment relationship.”

In Rheinberger , Moore J referred to these extracts and went on :

“However it is plain from these passages that it is not sufficient to demonstrate that the employee did not voluntarily leave his or her employment to establish that there had been a termination of the employment at the initiative of the employer.  Such a termination must result from some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect.  I leave open the question of whether a termination of employment at the initiative of the employer requires the employer to intend by its action that the employment will conclude.  I am prepared to assume, for the present purposes, that there can be a termination at the initiative of the employer if the cessation of the employment relationship is the probable result of the employer’s conduct.
...

Mohazab (supra) illustrates a case where not only did the employer create the environment in which an employee tendered his resignation but also exerted pressure on the employee to follow the course he did.  In this case there is no real basis for suggesting that the Company, through Mr Wilson, exerted any such pressure or took any step which was intended to cause the applicant to say what she did about her resignation or would probably have that result.”

Applying this reasoning, I am satisfied that for the applicant to have the Court characterise her resignation as a termination at the initiative of the respondent, she must point to some pressure by the respondent or some step intended to cause her resignation.  Here I am not satisfied that the meeting of 6 November was called to bring about her resignation.  I am not satisfied that the respondent set out to, or did, create an environment intended to cause the applicant to resign.  I am not satisfied that she was pressured by Messrs Clarke and Findlay to tender her resignation.  Given the concerns with her performance over the period 4 October to 6 November, the respondent was entitled to proceed to a formal warning of the applicant.  The applicant admitted in her evidence that she had been failing to properly process orders.  It was not as though there was absolutely no foundation for bringing the performance matters to her attention.   The factual dispute between the parties was whether the performance problems were as a result of a failure to properly train and provide her with sufficient assistance.  These were matters that could have been canvassed by the applicant had she chosen to continue with the meeting rather than volunteer her resignation. The respondent’s actions were not actions that, on any reasonable view, were likely to bring about the applicant’s resignation. 

It follows that I am satisfied that the factual circumstances here are akin to those in Grout (above) and Rheinberger (above), rather than those in Mohazab (above).  The applicant voluntarily resigned and the respondent was entitled to accept that resignation.  There has therefore been no termination at the initiative of the employer and the application must be dismissed.

MINUTES OF ORDERS

THE COURT ORDERS:

1. The application is dismissed.

NOTE:  Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.

I certify that this and the preceding fourteen (14) pages are a true copy of the reasons for judgment of Judicial Registrar Murphy.

Associate:                 
Dated:  22 May 196

Solicitors for the Applicant:  Kinos
Counsel for the Applicant:  Ms D Mortimer

Solicitors for the Respondent:                  Maddock Lonie & Chisholm
Counsel for the Respondent:  Mr R Jackson

Date of hearing:  18 & 19 April 1996
Date of judgment:  22 May 1996