BAILEY & TRUSSES & FRAMES PTY LTD (CIVIL DISPUTE)
[2012] ACAT 71
•10 July 2012
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
BAILEY & TRUSSES & FRAMES PTY LTD (CIVIL DISPUTE) [2012] ACAT 71
XD 12/339
Catchwords: CIVIL DISPUTE –contract of employment – change of weekly work days – whether the applicant resigned from employment – repudiation of contract - variation to contract of employment: whether temporary or permanent - compensation for breach of contract of employment – the relevance of the term ‘constructive dismissal’ to proceedings in the Tribunal – the implied duty of mutual trust and confidence
List of legislation: Fair Work Act 2009 (Cth), s.26
Tribunal: Ms Mary-Therese Daniel - Member
Date of Orders: 10 July 2012
Date of Reasons for Decision: 5 November 2012
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 12/339
BETWEEN:
STEVEN BAILEY
Applicant
AND:
TRUSSES & FRAMES PTY LTD
Respondent
TRIBUNAL: Ms Mary-Therese Daniel - Member
DATE: 10 July 2012
ORDER
The respondent Trusses & Frames Pty Ltd is to pay to the applicant Steven Bailey the sum of $608.00 (gross) by 7 August 2012.
………………………………..
Signed …Ms Mary-Therese Daniel , Member
REASONS FOR DECISION
Background to proceedings
These proceedings were instituted by the applicant Mr Steven Bailey filing a civil dispute application on 21 March 2012 against his previous employer, Trusses & Frames Pty Ltd. The application sought that the respondent pay compensation for breach of a contract of employment, breach of the implied duty of mutual trust and confidence, and constructive dismissal, in the amount of $4,839.20, plus costs of the application.
The respondent Trusses & Frames Pty Ltd filed a response disputing the claim, asserting that the applicant had in fact resigned his employment and was not entitled to compensation.
Jurisdiction of the Tribunal
When the matter came before me for hearing on 15 June 2012, I queried the basis of the Tribunal’s jurisdiction in this matter, particularly in relation to the third ground asserted in the application which was ‘constructive dismissal’.
The Tribunal has jurisdiction in relation to ‘civil disputes’, which term encompasses an application in relation to a contract or for damages for breach of a contract. There was a contract of employment between the applicant and respondent, which would seem to fall within this jurisdiction. However, the term ‘constructive dismissal’ is a statutory phrase sourced from the Fair Work Act 2009 (Cth) – legislation in relation to which the Tribunal has no jurisdiction.
The applicant asserted that the Tribunal’s civil disputes jurisdiction was available, at the least in relation to a dispute involving a contract of employment. The respondent submitted that the Tribunal had no jurisdiction at all to hear the matter, and that the appropriate forum was Fair Work Australia, although the applicant’s recourse to that jurisdiction might be limited given that he had been employed less than 6 months..
After hearing oral submissions from both parties on this point, I indicated that I was satisfied, at least on a preliminary basis, that the Tribunal had jurisdiction in relation to the claim for breach of contract, and was prepared to commence hearing the matter on that basis. However, I indicated that I would have regard to any written submissions filed by the parties on the question of jurisdiction before proceeding to make any final orders in the matter. Specifically, I invited the parties to point to any provision in the Fair Work Act 2009 (Cth) or elsewhere which either expressly or by necessary implication excluded the Tribunal’s jurisdiction in relation to contracts of employment.
In written submissions, the respondent referred to excerpts of section 26 of the Fair Work Act 2009 (Cth) as demonstrating an intention by the Commonwealth for that legislation to ‘cover the field’ in the area of disputes relating to contracts of employment, and exclude the state and territory jurisdictions otherwise available in relation to a contractual dispute. However, reference to the complete text of that Act demonstrates that these provisions are directed at industrial laws of states and territories, and do not expressly or by implication exclude the jurisdiction of the Tribunal in a case for breach of a contract of employment. Indeed, section 27 of the Act clearly provides that section 26 does not exclude the operation of a Territory law dealing with rights or remedies in relation to enforcement of an employment contract, save where the issue involves the setting aside of a clause of a contract on grounds of ‘unfairness’.
Accordingly, I was satisfied that the Tribunal has jurisdiction in this matter.
The Facts
Evidence was given at the hearing by Mr Bailey, and by the Managing Director of Trusses & Frames Pty Ltd, Mr Tim Wilson. Evidence was also given by
Mr Bailey’s direct supervisor, Mr Klaus Schiller. There was no dispute as to the central facts of the matter, which were as follows.
On 31 August 2011 Mr Steven Bailey was offered employment as a factory labourer with Trusses and Frames Pty Ltd on a 4 days a week basis, working Monday to Thursday. He subsequently accepted that offer and commenced employment.
Mr Bailey was a fulltime university student, enrolled in a Bachelor of Professional Music Practice degree, and on Fridays during term he had a face-to-face supervision session which could not be rearranged.
The letter of offer of employment, signed by Mr Wilson, and accepted by Mr Bailey, provided “At least one week’s notice of resignation/termination is to be given.”
In around early December 2011, Mr Bailey started working on a 5 day a week basis with the agreement of his employer. It being the university break he did not have a commitment on Fridays. The agreement to work 5 days a week was given on behalf of the respondent by Mr Schiller, who had undertaken the original recruitment of Mr Bailey.
University resumed on the week of 20th February, with orientation week. Mr Bailey worked the Friday of that week, as he had no supervision session on that first Friday of the term.
On Thursday, 1 March 2012, Mr Tony Abbott MP, leader of the federal opposition, came on a pre-arranged visit to the factory. Mr Bailey approached Mr Abbott at the conclusion of Mr Abbott’s ‘walk’ around the factory floor and said words to the effect “Where are you going to get the $70 billion from? You have contempt for the Australian parliament and the Australian people”. This interchange was filmed by the television crews present, and reported on the television news that night.
When he arrived at the factory the next day, Friday 2 March 2012, Mr Bailey was given a message to go and see Mr Wilson. They went into a conference room, and sat down at a table, then Mr Wilson spoke with Mr Bailey about his behaviour the day before. Mr Wilson referred to the treatment of Mr Abbott as ‘bullying’, and said words to the effect that ‘it was not appropriate to treat a guest like that’, that ‘it was a selfish act’, and that ‘the events of the day – which had been a positive for many employees – had had a shadow cast over them’.
Mr Bailey did not accept Mr Wilson’s interpretation and criticism of his behaviour, and the two ‘agreed to disagree’ and stood up to return to their respective work areas.
At this point Mr Bailey raised the issue of returning to 4 days a week. While I could not be satisfied as to the exact order of subsequent words in the interchange that followed, it is undisputed that it was Mr Bailey who raised the topic. Mr Bailey said words to the effect that he needed to return to 4 days a week, and Mr Wilson said words to the effect that the role was not a 4 day a week role. Mr Bailey replied words to the effect that he couldn’t do 4 days a week and that, if the respondent insisted on that he might as well leave now.
At Mr Wilson’s request, Mr Bailey then wrote and signed a document in the following terms “Because CRT will not allow me to work Monday to Thursday (a 4 day week), and have insisted that work a 5 day week, I can no longer work at the business.”
Mr Bailey did not return to work that day. He was later paid out his wages for the days he had worked, and his benefits, but was not given any payment in lieu of notice. The respondent took the view that, Mr Bailey having resigned, he was not entitled to such a payment. The respondent did not retain any of Mr Bailey’s wages in lieu of notice of the resignation not being provided.
The contract of employment and its variation
It is clear from the evidence that there was a contract of employment for the position of factory labourer between the parties. It was a term of that contract that the hours of work and attendance were 4 days per week. This was varied by agreement between the parties. The respondent submitted that the variation to 5 days per week was permanent and ongoing, while the applicant asserted the variation was for the duration of the summer break only.
There was no documentation created to formally record the variation to the contract of employment, and so it is necessary to have regard to the words of the parties, their actions, and the factual context in order to determine what the terms of the variation were. If there was no meeting of minds on the variation, then, if necessary, the Tribunal may imply the required term.
A shared intention to permanently vary the hours of employment was not supported by the evidence. Mr Bailey was clear that in his conversations with Mr Schiller he did not commit to work 5 days a week during the semester periods. Given he was to resume study in March such an intention would have been highly impracticable. Mr Schiller’s evidence was that he understood the move to 5 days a week to be a commitment made only for the holiday period.
Mr Wilson, as the Managing Director of the respondent, gave evidence that he had a different understanding or other expectations of the role occupied by Mr Bailey, by March 2012 if not earlier. However, it was not Mr Wilson who in December 2011 negotiated or accommodated the change in working hours on behalf of the respondent. The persons involved in that arrangement were Mr Schiller and Mr Bailey, and they were of one mind as to the length of time that Mr Bailey would work 5 days a week. There was no suggestion that Mr Schiller was not authorised to undertake negotiations about temporary changes to working hours on behalf of the respondent.
The lack of documentation recording the change of working hours is consistent with the variation being only a temporary change.
By reference to the evidence of Mr Bailey and Mr Schiller, and the surrounding circumstances, I was satisfied that the change to working hours was intended to take effect for the duration of the summer vacation.
The meeting on 2 March 2012
Against this background, the respondent’s insistence in the meeting of 2 March 2012 that Mr Bailey work a 5 day week must be regarded as an attempt to unilaterally vary the contract. This amounts to a breach of a fundamental term of the contract of employment, and a repudiation of the contract.
Mr Bailey was entitled to accept that repudiation (as he did), treat the contract as at an end, and seek damages for the breach.
What compensation is payable?
Mr Bailey sought payment of $4839.20, which on his calculations amounted to 8 weeks’ lost wages, on the basis that that was a reasonable and sufficient time for him to be expected to find alternative employment. Mr Bailey referred to the fact that he had to search for employment while undertaking a full load of study; and he submitted that the recruitment processes for the public service positions he applied for would not have concluded in 8 weeks.
Mr Bailey also claimed that as a result of the respondent’s actions he had experienced severe financial hardship, unexpected debt, and his studies had been adversely affected. These ‘losses’ were not particularised or quantified in the proceedings, and there was insufficient evidence to satisfy the Tribunal to the required standard that compensation should be awarded in respect of these matters.
The respondent opposed any payment of compensation, first on the ground that Mr Bailey had resigned his employment, and secondly on the basis that the term of the contract in relation to the giving of one week’s notice of termination limited a claim for damages to that sum.
When damages for breach of contract are sought, the appropriate measure of compensation is that amount necessary to put the injured party in the financial position the party would have been in had the breach of contract not taken place, subject to the limiting principles of causation, remoteness and mitigation. The onus is upon the applicant to satisfy the Tribunal to the required standard that a payment of compensation in the amount sought is appropriate.
Mr Bailey’s evidence was that he was unemployed as a result of the ending of his employment, and that his attempts to find work in the public service were unsuccessful. There was no evidence that he had attempted to find work of an unskilled kind, or any work equivalent to the role of factory labourer which he had been performing.
It was not contested that Mr Bailey was unemployed for the 8 weeks for which he claimed lost wages. However, for this to be a loss for which he should be entirely compensated the applicant needed to satisfy the Tribunal that an extended period of unemployment due to lack of availability of public service positions was something that the parties, at the time they entered into the contract, contemplated or should reasonably have contemplated, would flow from a breach of the contract.
In the current matter, there was no evidence that such a loss was, or should have been, envisaged by the parties.
Under the terms of the contract of employment, the applicant had no expectation of a continuation of employment for longer than one week. If the contract had not been breached by the respondent, it could have been lawfully terminated on the giving of one week’s notice. I was satisfied by reference to the contract that it was reasonably within the contemplation of the parties that loss in the amount of one week’s wages could be expected to be suffered from repudiation of the contract.
That does not mean that, as submitted by the respondent, because of the clause in relation to notice contained in the contract, any claim by the applicant for damages was limited to one week’s worth of wages. That is to misstate the clause, and misunderstand the legal principle. If the applicant had been able to demonstrate by evidence that he had suffered other loss due to the repudiation of the contract, and the loss was proximate, such a loss could well have been compensable.
Breach of the implied term of mutual trust and confidence and constructive dismissal
The applicant sought relief in these proceedings also on the grounds of constructive dismissal and breach of the implied duty of mutual trust and confidence. The same circumstances which I was satisfied amounted to repudiation of the contract were the circumstances relied upon as amounting to both ‘constructive dismissal’ and breach of the implied duty.
I noted during the hearing that the term ‘constructive dismissal’ was not apt to the proceedings before the Tribunal. In another jurisdiction, circumstances which amount to repudiation of an employment contract and acceptance of that repudiation may be referred to as a ‘constructive dismissal’. Nonetheless, in this jurisdiction it is not helpful to utilise that terminology and accordingly I declined to make any findings in those terms.
In relation to the implied duty of mutual trust and confidence, it was the applicant’s case that Mr Wilsons’ insistence on the continuation of a 5 day week was not genuine but motivated as some sort of ‘pay-back’ for the Tony Abbott incident – that this insistence undermined the employment relationship, and thus amounted to a breach of the implied duty of mutual trust and confidence.
Mr Wilson gave evidence at the hearing about the reasons why the respondent needed Mr Bailey to work 5 days rather than 4 days a week. He adverted to safety implications if Mr Bailey was not on the factory floor on Fridays, and a need to improve productivity which also required Mr Bailey to work the extra day per week. This evidence was not supported by Mr Schiller, who as the factory floor supervisor would be expected to be aware of any safety aspects or need for increased productivity. I was not persuaded by Mr Wilson’s evidence in this respect.
Mr Wilson also gave evidence that Mr Bailey had been a good worker, and he did not want to lose him. Mr Wilson stated that, so far as he knew, he would have been within his rights to fire Mr Bailey for the ‘Tony Abbott incident’ but he had not.
I had some doubts that the actions of the respondent on 2 March 2012 amounted to a breach of the implied duty of mutual trust and confidence. However, in the end it was not necessary to determine the issue.
That is because even if the Tribunal found that the ground were made out, the consequence of breach of the duty would be an entitlement to damages for loss caused by the breach. In this case, there was no loss that could be attributed to breach of the implied duty that was not already compensated for in the award of damages for repudiation of the contract. It is not open to the applicant to seek compensation for the same loss, twice.
Accordingly, in this matter I made orders requiring the respondent to pay to the applicant the sum of $608.00 (gross) being the amount of one week’s wages under the contract of employment
………………………………..
Ms Mary-Therese Daniel, Member
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A
FILE NUMBER: | XD 12/339 |
PARTIES, APPLICANT: | Steven Bailey |
PARTIES, RESPONDENT: | Trusses & Frames Pty Ltd |
COUNSEL APPEARING, APPLICANT | n/a |
COUNSEL APPEARING, RESPONDENT | n/a |
SOLICITORS FOR APPLICANT | |
SOLICITORS FOR RESPONDENT | |
TRIBUNAL MEMBERS: | Ms M.T Daniel, Member |
DATES OF HEARING: | 15 June 2012 |
PLACE OF HEARING: | ACAT Canberra |
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
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