Anastassios Carydias v The Greek Orthodox Community of Melbourne and Victoria
[1995] IRCA 134
•31 March 1995
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 1786 of 1994
BETWEEN:
ANASTASSIOS CARYDIAS
Applicant
AND
THE GREEK ORTHODOX COMMUNITY OF MELBOURNE AND VICTORIA
Respondent
REASONS FOR JUDGMENT
31 March 1995 Judicial Registrar Staindl
Application For Extension Of Time
On 3 October 1994 Mr Anastassios Carydias ("the applicant") filed an application in this Court alleging that his dismissal by the Greek Orthodox Community of Melbourne and Victoria ("the respondent") contravened the Act.
The respondent's committee of management had decided on 26 May 1994 to make the applicant's position redundant. Given the delay in these two dates it is necessary to consider the chronology of this case.
January 1992:
Applicant commenced full time employment with the respondent as General Manager.
26 May 1994:
Respondent's committee of management decided to make the applicant's position redundant.
27 May 1994:
Applicant told the respondent's decision and given a letter of termination.
6 June 1994:
Applicant lodged an unfair dismissal claim with Employee Relations Commission of Victoria.
29 June 1994:
Prima facie hearing in Employee Relations Commission.
28 July 1994:
Conference in Employee Relations Commission.
5 & 6 September 1994:
Hearing before Commissioner Stewein in Employee Relations Commission.
30 September 1994:
Decision of Stewein C. determining that there was no jurisdiction to hear the matter as applicant's employment was not governed by a classification contained in an award.
3 October 1994:
Applicant lodged unfair dismissal application in this Court.
The applicant acted promptly following the termination of his employment by lodging an application with the Employee Relations Commission of Victoria. From that time the respondent was aware that the applicant was challenging the dismissal and was seeking reinstatement. He pursued his application in the Employee Relations Commission until a ruling was given that the Commission lacked jurisdiction. Three days after that ruling the applicant lodged his application in this court.
In the case of Transport Workers' Union of Australia -v- National Dairies Ltd (Unreported, VI 153 of 1994, 22 August 1994) Keely J. considered an application for extension of time pursuant to subsection 170EA(3)(b) of the Act. His Honour referred to some principles enunciated by Wilcox J. in Hunter Valley Developments Pty Ltd -v- Cohen (1984) 3 FCR 344 when considering an extension of time pursuant to s.11 of the Administrative Decisions (Judicial Review) Act 1977. These principles have been referred to in many cases which do not fall within that act, but it is unclear whether they would apply to the exercise of discretion under s.170EA(3). In the TWU case Keely J. thought that it may well be easier for an applicant to persuade this Court that a "further period" should be allowed than the test under the Administrative Decisions (Judicial Review) Act 1977. However His Honour did not decide the matter as it had not been argued before him and it is unnecessary for me to decide the matter.
In the present case it seems to me that even if I apply the principles from the Hunter Valley case, then the applicant should be granted an extension of time. The applicant has shown an acceptable explanation for the delay (in that he was pursuing an application in the Employee Relations Commission) and it is fair and equitable in the circumstances of this case to extend the time.
The respondent argued that it suffered prejudice by the applicant initiating proceedings in the Employee Relations Commission. It was argued that it had incurred cost in defending those proceedings and that the applicant should have abandoned those proceedings at an earlier time, especially in light of the fact that he was legally represented in the early stages. Several points need to be made about this submission.
Firstly, I do not consider that cost in defending the proceedings in the Employee Relations Commission to be relevant. That was a cost incurred by the applicant choosing the wrong venue. It is not a cost to the respondent which is attributable to the delay in filing the present application.
If I am wrong in considering that the cost of defending the proceedings in the Employee Relations Commission is not relevant, there are other reasons for rejecting the respondent's submission. In the proceedings in the Employee Relations Commission the respondent was represented either by Mr Fountas or Mr Rallis, the respondent's president and vice‑president respectively. Although Mr Rallis is a member of counsel, he appeared in his capacity as vice‑president of the respondent organisation and without evidence on the point I am not prepared to assume that the respondent incurred costs in appearing in those proceedings. Furthermore, in the context of this case I do not regard any costs associated with attending a "prima facie hearing", a conference and a day of actual hearing as being significant. (I note that the hearing was adjourned on 5 September 1994 at the request of the respondent due to it not being ready to proceed: it is not appropriate to have regard to any alleged cost in respect to this day).
I do not regard as important the fact that the applicant was legally represented initially. He was successful in establishing that there was a prima facie case. The question of whether or not he was governed by a classification contained in an award was decided after the Commission heard detailed evidence concerning his duties (and by this time he was no longer legally represented). It seems to me there was some uncertainty about the applicant's position and it was not unreasonable for him to have pursued his application in the Employee Relations Commission.
Circumstances Of The Applicant's Dismissal
(a) Background
The respondent was established in 1987. It is an incorporated charitable and religious organisation which operates five churches, conducts Saturday morning Greek language classes and has an interest in Alphington Grammar School. It was responsible for supervising the administration of the Footscray Childcare Centre until the Centre was sold in about April 1993. The respondent is generally concerned with the social, cultural, religious and educational needs of Melbourne and Victoria's Greek community.
The applicant is 57 years old. He was previously employed by the respondent between 1987 and 1990. He actively participated in the affairs of the Greek community and late in 1991 was asked to assist the respondent with some financial duties. As noted earlier he commenced full time employment with the respondent in January 1992. He was responsible for the administration of the respondent's office and for liaising with the National Australia Bank concerning the respondent's debt. In January 1992 this debt was about $7 million and was escalating daily. The National Australia Bank demanded that the respondent appoint a full time employee to liaise with it concerning this debt. The applicant had experience in banking and I am satisfied that this demand by the National Australia Bank was the main reason for the applicant's employment.
On 29 September 1993 Mr John Perrins of the accounting firm Price Waterhouse was appointed as an administrator of the respondent. The deed of administration remained in effect until June 1994 although on about 17 January 1994 Mr Perrins handed back the day to day administration to the respondent.
(b) Committee Of Management Meeting On 26 May 1994
The committee of management had attempted over many months to obtain a loan or a guarantee from another source so as to be able to negotiate a compromise agreement with the National Australia Bank. On 26 May 1994 an urgent meeting of the committee of management was convened in order to consider the terms of a proposed loan from the National Bank of Greece. Mr Fountas had been to Greece to attempt to arrange this loan. The loan was sufficient to satisfy the respondent's debt with the National Australia Bank which had been compromised at $4.75 million. At this meeting it was decided to make the applicant's position redundant. The applicant was given no warning of this decision and there was no consultation with him about it.
In fact there had been some speculation concerning the applicant's continued employment in the Greek press in the weeks preceding this meeting. Although the applicant was on holidays from 12 April 1994 he had raised the question of the press reports with Mr Fountas prior to 26 May 1994. Mr Fountas had reassured him and told him that he knew nothing about the speculation.
(c) Termination Of Applicant's Employment
On 27 May 1994 the applicant was called to the respondent's office and told that his position was redundant due to the financial problems facing the respondent. Mr Fountas told the applicant hat he could perhaps work on a part time basis, although the applicant refused this. He was offered a cheque for $9,209.65 based on an annual salary of $47,00.00 and comprised as follows:
2 weeks holiday pay:
3 weeks in lieu of notice:
4 days worked:
Petrol allowance - one month:
6 weeks severance pay:Total:
Less Tax:
Net Pay:$1,807.68
$2,711.52
$723.04
$255.00
$5,423.04$10,920.28
$1,710.66
$9,209.65The applicant did not accept this cheque. He said that his salary package was in fact $59,000.00. This led to a detailed investigation of all amounts paid to the applicant. Following this the respondent alleged that the applicant had been overpaid by an amount of $13,275.00 during the period of his employment. More will be said about this later.
Was There A Valid Reason For The Dismissal Of The Applicant?
Mr Anthony, counsel for the applicant, argued forcefully that there was no valid reason for the termination of the applicant's employment. He pointed out that the applicant was employed at a time when the respondent's financial position was parlous: it owed more than $7 million to the National Australia Bank and its income was less than its expenditure. At the time of the applicant's dismissal the respondent's position had improved: it had compromised its debt to the National Australia Bank at $4.75 million and had obtained a loan on relatively favourable terms from the National Bank of Greece. However, I am satisfied that the respondent's continued viability meant that its outgoings had to be reduced. One of the most significant outgoings was in relation to the employment of the applicant. Furthermore the main reason for the employment of the applicant had now disappeared, i.e. there was no longer a need for the respondent to employ someone to liaise with the National Australia Bank. Although contact now had to be maintained with the National Bank of Greece I am satisfied that this entailed far less time than previously.
The applicant's employment in 1992 was necessary because of the drastic state of the respondent's finances. The respondent was facing bankruptcy with the forced sale of assets. This would have been especially unfortunate given the nature of the respondent's activities. However the fact that there was some improvement in its financial position did not mean that it did not have to still try and reduce its overheads. The administrator Mr Perrins had informed Mr Fountas on numerous occasions that it was necessary to reduce costs. I am satisfied that this was indeed the case and that the future viability of the respondent depended on this.
The reason given for the applicant's dismissal was that his position had become redundant. A "redundancy" occurs where an employer no longer requires the work done by anyone. See Termination Change and Redundancy Case (1984) 8 IR 34 at 56. It refers to a job becoming redundant and not the worker becoming redundant (although one may follow from the other). In the present case the applicant performed general administrative duties in respect to the respondent's operations. These duties will still need to be done, although as noted above the duties associated with the respondent's outstanding debt have decreased. I have some doubt as to whether the applicant's dismissal can strictly be classified as a redundancy, but I am satisfied that the dismissal was due to the respondent's operational requirements pursuant to subsection 170DE(1). Accordingly I find that the dismissal was for a valid reason.
Was The Dismissal Harsh, Unjust or Unreasonable
The applicant was given no warning prior to his dismissal. In my view it is likely that some members of the committee of management had discussed the applicant's position prior to the meeting of 26 May 1994. The speculation in the Greek press gives support to this. In particular Mr Rallis played a central role in these matters including moving the motion that the applicant's position be made redundant. It would be highly surprising if he had given the matter no thought prior to this meeting and there had been no discussions about it. I further note that the meeting was called at very short notice with no suggestion to the committee members that this issue was to be dealt with. Additionally, I am satisfied that at least one of the members of the committee was not informed about the meeting. It may well be that the calling of this meeting did not comply with the respondent's own constitution, but it is unnecessary and undesirable that I decide that question. It is a matter to be decided elsewhere. Given that the respondent purported to terminate the applicant's employment, and that this repudiation of the applicant's employment was accepted by him, I do not need to go further in deciding the question of the validity of the committee of management's decision on 26 May.
The circumstances surrounding the meeting lead me to the view that there was a deliberate and careful plan to terminate the applicant's employment prior to the actual meeting. In my view the applicant could and should have been consulted prior to such a decision being made. There was nothing advanced to suggest that a decision on the question had to be made that night: the applicant had been employed there for more than two years and it does not seem to me that a delay of a few weeks (or less) would have seriously prejudiced the respondent.
Mr Lacy, counsel for the respondent, argued that there was no requirement under the Act for procedural fairness in situations of redundancy. Procedural fairness (or more correctly stated, an opportunity to answer allegations) is a requirement under s.170DC. However this requirement only applies to situations where allegations made against an employee relate to his/her conduct or performance. It does not apply to a termination of employment based on the employer's operational requirements. Thus far I agree with Mr Lacy's submission. However he went on to argue that the inclusion in the legislation of the requirement for procedural fairness in defined circumstances indicated Parliament's intention that it should not apply elsewhere, i.e. the provisions of s.170DC constitute an exhaustive definition of the requirements of an employer to consult individual employees whose employment is being terminated.
He submitted that subdivision B of Division 3 of Part VIA of the Act is a code. It relies upon the ILO Convention concerning termination at the initiative of the employer. He referred to Article 7 upon which s.170DC is apparently based. Clause 3 of Article 9 of the Convention provides:
"3.In cases of termination stated to be for reasons based on the operational requirements of the undertaking, establishment or service, the bodies referred to in Article 8 of this Convention shall be empowered to determine whether the termination was indeed for these reasons, but the extent to which they shall be also empowered to decide whether these reasons are sufficient to justify that termination shall be determined by the methods of implementation referred to in Article 1 of this Convention."
Article 1 provides:
"1.The provisions of this Convention shall, in so far as they are not otherwise made effective by means of collective agreements, arbitration awards or court decisions or in such other manner as may be consistent with national practice, be given effect by laws or regulations."
Mr Lacy also noted that Article 13 of the Convention provides for consultation with workers' representatives in cases of terminations for reasons of an economic, technological, structural or similar nature. He submitted that there is no express requirement in the Convention for consultation with the worker directly. This is correct. It is unclear to me whether this Article is meant to apply only to terminations of more than one employee and to consultation with the representative of those employees. Article 13 requires consultation with the "workers' representatives concerned": this term is defined to mean the workers' representatives recognised as such by national law or practice, in conformity with the Workers' Representatives Convention, 1971. (See Clause 3, Article 13). Nothing was put to me concerning this convention and I do not know what provision is made (if any) in respect to workers who are not members of a trade union or other equivalent body. It may be that in such situations the workers' representative is the worker him/herself.
It would also be surprising in my view if there were an obligation to consult with workers' representatives in certain circumstances, and yet in identical circumstances no obligation to consult an individual where it is that individual's employment which is being terminated. I say this especially in view of Moore J's comments in Grout -v- Gunnedah Shire Council 125 ALR 355 at 372 to the effect that Division 3 is a beneficial legislation that should be construed liberally much in the same way as workers' compensation legislation has been construed.
Moreover I think there is another answer to Mr Lacy's submissions. Section 170DC deals with employees being able to respond to allegations made against them. This is sometimes referred to as procedural fairness. However the cases in this Court and other tribunals which have dealt with the question of redundancy have referred to their being an obligation on an employer to consult an employee prior to his/her position being made redundant. Although this is also sometimes referred to as procedural fairness the obligation is a different one. In my view the argument that s.170DC is an exhaustive definition of the occasions needed to give an employee an opportunity to answer allegations therefore misses the point. The obligation to consult is different and arises from the requirement that dismissals should not be harsh, unjust or unreasonable under s.170DE(2). Under Clause 1 of Article 9 of the Termination of Employment Convention this Court is to be empowered to examine the reasons given for the termination and the other circumstances relating to the case and to render a decision on whether the termination is justified. Under this Article and based on s.170DE(2) I am of the view that this Court has the power to consider as relevant the question of whether an employer has consulted with an employee prior to his/her dismissal on the grounds that the position is redundant.
My findings in this regard are well supported by decisions of this Court. In Mallen -v- Beasam Pty Ltd (Unreported, VI 544 of 1994, 26 October 1994) Parkinson JR said:
"There is no basis for drawing a distinction between cases in which termination occurs by reason of redundancy and cases in which termination occurs for reasons other than redundancy in respect of the obligation to accord procedural fairness which arises out of the use of the words "harsh, unjust or unreasonable" in S170DE(2) of the Act."
See also Kelsall -v- Diamond Valley Ultratune (Unreported, VI 202 of 1994, Parkinson JR, 3 August 1994). I have previously decided to like effect in Sargeant -v- Regent Press Pty Ltd (Unreported, VI 196 of 1994, 15 February 1995). In that case I referred to what President Zeitz of the Employee Relations Commission of Victoria said in Shearer -v- Action Mercantile Pty Ltd 5 VIR 149 at 151, and it is equally applicable in this case:
"When considering an application for a finding that a dismissal is harsh unjust or unreasonable where it is alleged by a respondent that redundancy is the reason for dismissal, the Commission will look to whether both substantive and procedural fairness has been afforded to an applicant when deciding whether it should intervene. An absence of substantive fairness will invariably lead to a finding that the dismissal was harsh unjust or unreasonable. An absence of procedural fairness, although not inevitably leading to such a finding, may lead to a finding that a dismissal was harsh unjust or unreasonable.
In this case it appears from the facts that there was a total absence of procedural fairness afforded to the applicant. Indeed, there appears to have been a callous disregard for the applicant in the conclusion being reached to dismiss him. Not only was the applicant not consulted about the matter but he was given no notice of the impending redundancy."
See also the decision of the Employee Relations Commission in Budget Couriers -v- Beshara (1993) 5 VIR 173.
Accordingly I am of the view that the complete failure by the respondent to inform or consult the applicant prior to his termination means that the termination is harsh and unreasonable.
Remedy
In my view reinstatement is impracticable given my findings concerning the respondent's operational requirements. I turn then to the question of compensation. At the time of the termination of his employment (and in addition to two weeks holiday pay, one month's petrol allowance and four days worked) the applicant was offered a cheque to cover payment for three weeks pay in lieu of notice and five weeks severance pay. The applicant's counsel could not point me to any legal entitlement on the part of the applicant to receive severance pay. Mr Apostolopoulos, an employee of the respondent's auditors, gave evidence that he had made enquires of an employer organisation as to an appropriate severance payment for the applicant. He was told that six weeks pay would be a fair amount and accordingly that is what was paid to the applicant. I assume that the period of notice was calculated with reference to s.170DB of the Act.
On the last day of the hearing in this matter the applicant was given a cheque for $2,711.54 (less tax) representing his entitlements to holiday pay and back pay. I take note of this in assessing what compensation should be paid. In my view an appropriate amount of compensation is $8,500.00. In arriving at this figure I have included an allowance of three weeks pay based on a salary of $47,000.00 as pay in lieu of notice.
Alleged Fraud Of The Applicant
I now deal briefly with a matter which became the central focus of the parties during these proceedings. This relates to the allegation that the applicant was guilty of fraud in respect to overpayments being made to him over a considerable period of time. This allegation only came to light following the termination of the applicant's employment: when presented with the letter of 27 May setting out his entitlements on termination the applicant insisted that his payments should be based on a salary of $59,000.00 not $47,000.00. Following the investigation of the matter the respondent alleged that the applicant had been overpaid by $13,275.00. It alleged that this was due to the applicant's fraud, although there was no counterclaim in these proceedings for a repayment of the overpayment.
Given that the allegation only came to light following the applicant's dismissal I had some unease in allowing such evidence to be led. I say this in view of what His Honour Mr Justice Gray said in Liddell v Lembke, (1994) 127 ALR 342 concerning facts which come to light since a dismissal. My unease grew as this case progressed the hearing of which extended over nine full hearing days.
The allegations against the applicant are very serious. In light of this I approach the standard of proof bearing in mind what was said by Dixon J in Briginshaw -v- Briginshaw (1938) 60 CLR 336 at 362:
“... it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequence flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.”
I intend to deal briefly with this matter because using this approach I am unable to conclude that the applicant was guilty of fraud. I was unimpressed with the applicant as a witness. His evidence was at times inconsistent and improbable. He stated that there was authorisation for his salary to be increased from $47,000.00 to $59,000.00 in the minutes of an Alphington Grammar School Council meeting dated 2 June 1993. I have difficulty in accepting that this constitutes such authorisation.
The applicant gave evidence that on 11 June 1993 he gave a letter to Mr Fountas setting out that the increase of $12,000.00 per annum was to be paid by way of rent payments and credit card payments. The applicant said Mr Fountas asked the applicant about the contents of the letter but threw it back at him. Mr Fountas flatly denied that this occurred and I am inclined to accept his evidence. Furthermore, following his dismissal the applicant was given an opportunity to explain his version of events to the committee of management. Although he stated at this meeting that Mr Fountas had agreed to the increase in salary, he did not produce the letter allegedly written on 11 June 1993.
Late in June 1993 the applicant also sought an increase in salary from the committee of management. This request was refused (or at least deferred), and so it seems even more strange that Mr Fountas would have acted in a manner contrary to the committee's decision.
However there are serious anomalies in the case for the respondent:-
The increased rent payments and credit card payments in respect of the applicant were paid over a period of eighteen months (and credit card payments were not a part of the applicant's package based on a salary of $47,000.00 per annum).
The cheques for rent and credit card payments had to be signed by two of the respondent's officers.
During the period of administration from 29 September 1993 to 17 January 1994 these payments were still made on behalf of the applicant. Although the administrator apparently thought that there was a $3,000.00 annual limit on payments relating to the applicant's car, he allowed very close to this amount to be run up in 3½ months with no checks being made about any previous expenditure during July, August and September of 1994. The amounts were paid despite the fact that the accountant who oversaw the period of administration (Mr Katos) was "very concerned" that the applicant had already spent the $3,000.00.
Details of payments made relating to the applicant's credit card were entered onto cheque butts with reference to them being for that purpose. These could easily have been inspected by members of the committee of management, the respondent's accountants or auditors.
In about March 1994 Mr Fountas saw one of the applicant's credit card statements in the supporting documentation relating to cheques which were to be signed. Although there was some discussion about the amounts on the statement there was no inquiry by Mr Fountas as to why the respondent should be paying the applicant's credit card bill.
Furthermore if the applicant had been engaged in fraud as alleged it is a surprising reaction on his part to dispute the amount of his termination pay because it should have been based on a salary of $59,000.00 per annum.
Accordingly I do not think the allegations of fraud are made out in applying the appropriate standard of proof.
I certify that this and the preceding eighteen (18) pages are a true copy of the reasons for judgment of Judicial Registrar Staindl.
Associate:
Dated: 31 March 1995
Solicitors for the Applicant:
Appearances for the Applicant:Mr C. O'Neill
Applicant in person initially and then Mr D. Anthony.Appearance for the Respondent:
Mr E. Rallis initially and then Mr B. Lacy
Dates of hearing:
23 December 1994, 13, 14 & 15 February 1995 and 20, 21, 22, 27 and 28 March 1995.
Date of Judgment:
31 March 1995
CATCHWORDS
INDUSTRIAL LAW - Termination of employment - extension of time - operational requirements of employer - valid reason - failure to consult with or warn employee over redundancy - harsh and unreasonable.
Industrial Relations Act 1988, ss.170DC, 170DE and 170EA
Termination of Employment Convention, Articles 1 and 9 and 13.
Transport Workers' Union of Australia -v- National Dairies Ltd (Unreported, VI 153 of 1994, 22 August 1994)
Hunter Valley Developments Pty Ltd -v- Cohen (1984) 3 FCR 344
Termination Change and Redundancy Case (1984) 8 IR 34 at 56
Grout -v- Gunnedah Shire Council 125 ALR 355 at 372
Mallen -v- Beasam Pty Ltd (Unreported, VI 544 of 1994, 26 October 1994)
Kelsall -v- Diamond Valley Ultratune (Unreported, VI 202 of 1994 , 3 August 1994)
Sargeant -v- Regent Press Pty Ltd (Unreported, VI 196 of 1994, 15 February 1995)
Shearer -v- Action Mercantile Pty Ltd 5 VIR 149
Budget Couriers -v- Beshara (1993) 5 VIR 173
Liddell v Lembke, (1994) 127 ALR 342
Briginshaw -v- Briginshaw (1938) 60 CLR 336
ANASTASSIOS CARYDIAS -v- THE GREEK ORTHODOX COMMUNITY OF MELBOURNE AND VICTORIA
NO. VI 1786 of 1994
Before: STAINDL JR
Place: MELBOURNE
Date: 31 MARCH 1995
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 1786 of 1994
BETWEEN:
ANASTASSIOS CARYDIAS
Applicant
AND
THE GREEK ORTHODOX COMMUNITY OF MELBOURNE AND VICTORIA
Respondent
MINUTES OF ORDER
31 March 1995 Judicial Registrar Staindl
THE COURT ORDERS THAT:
The applicant be given until 3 October 1994 to file his application.
The respondent pay compensation of $8,500.00 to the applicant within 21 days.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
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