Barrie Douglas Schulze v Crossbred Nominees Pty Ltd

[1995] IRCA 202

C A T C H W O R D S

INDUSTRIAL LAW - Termination of employment - claim for unlawful termination - whether applicant was terminated or left voluntarily.

INDUSTRIAL RELATIONS ACT 1988, S 170EA

Siagian v Sanel Pty Ltd (1994) 122 ALR 333

APESMA v Skilled Engineering Pty Ltd (1994) 122 ALR 471

Grout v Gunnedah Shire Council (1994) 125 ALR 355

BARRIE DOUGLAS SCHULZE v CROSSBRED NOMINEES PTY LTD - WI 460 of 1994

Before:   RYAN JR
Place:    Perth
Date:     26 April 1995

IN THE INDUSTRIAL RELATIONS   )
COURT OF AUSTRALIA             )
WESTERN AUSTRALIA              )
DISTRICT REGISTRY              )    No. WI 94/460

BETWEEN:  BARRIE DOUGLAS SCHULZE
  -    Applicant

AND:  CROSSBRED NOMINEES PTY LTD
  -    Respondent

MINUTE OF ORDERS

BEFORE:   RYAN JR

PLACE:    PERTH

DATE:     26 APRIL 1995

THE COURT ORDERS THAT:

1. The application is dismissed.

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

IN THE INDUSTRIAL RELATIONS   )
COURT OF AUSTRALIA             )
WESTERN AUSTRALIA              )
DISTRICT REGISTRY              )    No. WI 94/460

BETWEEN:  BARRIE DOUGLAS SCHULZE
  -    Applicant

AND:  CROSSBRED NOMINEES PTY LTD
  -    Respondent

BEFORE: RYAN JR

PLACE     PERTH

DATE:     26 APRIL 1995

EX TEMPORE REASONS FOR DECISION

The applicant has worked as a mechanic for 27 years and has specialised in heavy duty work, mostly farm machinery.  In April 1991 he began work in a garage and farm machinery centre, Dumbleyung Agrepairs.

In November 1993 the respondent purchased the business, having conducted a similar operation in nearby Narrogin for 14 years.  Geoffrey Perkins is the managing director of the respondent, Crossbred Nominees Proprietary Limited trading as Dumbleyung Agrepairs.  He planned to employ Tim Okey, an experienced header mechanic, and a former employee of the respondent company as manager of Dumbleyung Agrepairs.  For various reasons Okey was unable to commence as manager at Dumbleyung for 10 months, that is, until September 1994.

During this period the respondent through managing director Perkins arranged for the applicant to manage the Dumbleyung business.  This decision was unfortunate for both the applicant and the respondent.  The applicant admitted openly that he did not enjoy the supervisory responsibilities.  His evidence was the evidence of a man who seemed unwilling to accept those responsibilities even though in cross-examination, he reluctantly admitted that this was his role for 10 months.  The applicant admitted that he was happy to relinquish the supervisory responsibilities to Okey in September, but claims that in October, virtually without warning, counselling or consultation, managing director Perkins told him that he had to terminate his services because there was not enough work. 

The four respondent witnesses present a very different picture to the applicant.  They all confirm the applicant's own evidence that he was unhappy with supervisory responsibilities in the 10 months from November '93 to September '94.  They also confirm what the applicant initially denied but later admitted that he, the applicant, was considering the possibility of leaving the employer respondent and indeed setting up business in opposition.

It is clear from the applicant's evidence and the evidence of Perkins and Okey and two other respondence witnesses, Manton and Ram, that Dumbleyung Agrepairs was in difficulty in terms of operating viability.  Ram perceived that difficulty as dating from at least July 1994, but Perkins concedes viability problems for financial years 93/94 and 94/95.

Perkins is adamant that he did not terminate the employment of the applicant but suggested on 13 October 1994 that the applicant take 2 to 3 weeks off because business was so quiet, and that he undertook to do whatever was necessary to enable the applicant to collect unemployment benefits immediately.  The applicant really confirmed a discussion of that nature, although his recollection was that Perkins asked him to take 3 or 4 weeks off rather than 2 or 3 weeks.  Ram also confirms that steps were taken to ensure that the applicant was described as "retrenched" rather than "dismissed" and the applicant concedes that he wanted his position described as such to avoid a delay in unemployment benefits.

The real issue is whether the applicant was terminated or whether he left voluntarily as part of an arrangement which would allow him to get unemployment relief and in an expectation of possible re-employment when business picked up.  The respondent's evidence of some dissatisfaction with the applicant's mechanical work is really a peripheral issue.  It could be relevant as a ground for termination if the court was considering a termination at the initiative of the employer but the court must first establish whether or not there was a termination.

The credibility of the witnesses is very important.  The court responded to the suggestion of counsel for the applicant that credibility should not be seen as a major issue, as follows:

"I do not think you can avoid credibility being an issue, and indeed an issue of significance in this case, but I do not see it as the be-all and end-all. I have to say - and I might as well say it now even before I have examined any transcript - that there was a considerable number of inconsistencies and conflict in evidence of the applicant both here today and inconsistencies and conflict with his written evidence by affidavit. If the matter was to be resolved on the basis of preferring one version of the evidence over another, the applicant might well be in significant danger of failing. But it is not quite as simple as that because I have to determine whether the applicant was terminated within the terms of the Industrial Relations Act 1988 or whether he left voluntarily as part of an arrangement which would allow him to get unemployment relief and in an expectation of possible re-employment when business picked up."

Of course, the inconsistencies and changes and contradictions are certainly unlikely to assist the applicant's case.  However, even if I do prefer the evidence of the respondent over that of the applicant, I still have to determine whether there was a termination within the terms of the act, whether it was motivated solely or primarily by operational requirements, and if so, and it was a termination, whether such a termination was in any way harsh, unjust or unreasonable.

Because of the lack of available court time, counsel for both parties requested the opportunity to make final written submissions after consideration of the transcript.  I have had the opportunity to read the transcript and the written submissions.

The respondent's submissions were filed in Perth on 1 March and reached Melbourne on 7 March, but because of some breakdown in communication, the applicant's submissions while filed in Perth on 8 March were not referred to Melbourne until I initiated inquiries with the applicant's solicitors and the Western Australian Registry.

The opportunity has now arisen to determine the matter in Perth and I note that while both counsel reserved at the conclusion of the trial on the possibility of oral addresses following written submissions, neither counsel has sought to add to the written submissions.  I certainly do not think further oral comment would be either necessary or of assistance given the thorough nature of the written submissions and the regular reference in those submissions to the transcript of the hearing.

There is no need to comment further on the inconsistencies in the applicant's evidence.  These inconsistencies have been accurately identified in considerable detail in the respondent's written submissions.  Where there are conflicts between the evidence of the applicant and any and all of the four respondent witnesses, I unhesitatingly prefer the evidence of the latter.  I have concluded that the applicant agreed to leave the employer, the respondent, possibly for a short period, possibly for a longer period, and that he actively sought the co-operation of the respondent to ensure he received unemployment benefits as quickly as possible.

There is no doubt from the evidence of all five witnesses that the applicant had been unhappy during the period when he was expected to supervise the work undertaken in and from the Dumbleyung workshop. There is no doubt, from the evidence of all five witnesses, that the applicant had been actively considering setting up in competition with the respondent. This was not a termination of employment at the initiative of the employer, such as attracts the jurisdiction of this court under Division 3 Part VIA of the Industrial Relations Act 1988. There is ample authority for that proposition: Siagian v Sanel Pty Limited (1994) 122 ALR 333 at 371 per Wilcox CJ; APESMA v Skilled Engineering Pty Limited (1994) 122 ALR 471 at 482 per Gray J, Grout v Gunnedah Shire Council 125 ALR 355 at 372. The order of the court is that the application under section 170EA be dismissed.

I certify that this and the preceding five pages are a true copy of the Reasons for Judgment of Judicial Registrar Ryan.

Associate:

Date:

Counsel for the Applicant:     Mr D Alexander
Solicitors for the Applicant:       Birman & Ride

Counsel for the Respondent:         Mr J Picton-Warlow
Solicitors for the Respondent:  Messrs Picton-Warlow & Co.

Hearing Date:      10 February 1995
Judgment Date:     26 April 1995