Brian Wong and John Edward Hodes and Lawrence Kok-Loong trading as Hodes Lau & Co

[1994] IRCA 56

INDUSTRIAL RELATIONS COURT                  
OF AUSTRALIA  

SYDNEY DISTRICT REGISTRY  NI No. 193 of 1994

BETWEEN:  Brian WONG

Applicant

AND:  John Edward HODES and Lawrence KOK-LOONG Trading as HODES LAU & CO

Respondent

COURT:                   Judicial Registrar Tomlinson

PLACE:  Sydney

DATE:  26 September 1994

Reasons for Judgement

This an application under Section 170 EA of the Industrial Relations Act 1988 (“The Act”) wherein the applicant sought the following relief:

1. declaration that the termination of employment contravened Division 3 of Part VIA of the Industrial Relations Act 1988.

2.        order that the employer pay the applicant compensation in the sum of                    $798,000.

3.        such further order as deemed proper. 

In his application to the Court the applicant stated that he was employed by the respondent as an accountant from 1 August 1988 until 15 April 1994.  No reason was given for the termination and compensation was sought on the basis of the applicant’s yearly salary at the date of termination (being $38,000) for the remainder of the applicant’s working life (being a period of at least twenty one years as the applicant was then aged forty three years). 

In a statement of response filed under Order 75 Rule 3 dated 20 May 1994 the respondents denied that they terminated the applicant’s employment and it was stated that the applicant terminated his own employment.

In the alternative the respondents stated that if it was found that the applicant’s employment was terminated by the respondents, the respondents were entitled to terminate the employment due to failure by the applicant to satisfactorily perform work duties, of which failure the applicant was aware and given opportunity to respond.

On behalf of the respondents Mr. Lawrence Kok-Loong Lau stated that since the applicant commenced employment with the respondent he had been the applicant’s supervising partner with the exception of one job and from about 1992 that some of the applicant’s work was supervised by another accountant, Ms. Rose Wong.  Mr. Lau outlined various areas of concern he had about the applicant’s work. 

The events surrounding this application occurred on the 14 April 1994 when according to Mr. Lau the applicant was in his office while he reviewed draft taxation returns prepared by the applicant for clients.  An error was discovered.

Later on that day Mr. Lau discussed the error in the tax return with the applicant and stated that he tried to find out how such a mistake could occur.  Mr. Lau advised the applicant that he had lost confidence in the applicant that the applicant persisted in making mistakes.  The respondent stated that the applicant failed to pick up the mistake even when it was pointed out to him. 

The respondent in affidavit stated at this point the applicant said;

“In that case I resign, how much notice would you like?”

According to the respondent the conversation continued and the respondent stated that he waived the need for the applicant to give notice and advised the applicant could finish off tomorrow and invited the applicant to think about his position concerning holiday pay and to advise the respondent accordingly.

The respondent stated that on 15 April 1994 the applicant came into his office in the morning and said:

“Do you mind if I finish off at lunch time?”

Further the respondent in affidavit stated that the applicant had said:

“Do you mind if I tell the staff I resigned two weeks ago?”

The respondent agreed to this request on the basis that it was what the applicant wanted.  Later that day the respondent handed to the applicant a cheque for $6,746 being outstanding salary plus one month salary together with holiday pay.  The respondent handed the applicant a document showing how the amount was calculated. 

Under cross examination the respondent confirmed that on the afternoon of 14 April 1994 when the applicant failed to provide a satisfactory explanation as to the error that he had made the respondent told the applicant that he had lost confidence in him.  The respondent specifically denied the suggestion that he no longer intended to retain the applicant in employment.  The respondent told the court that each time that errors were made the applicant was advised accordingly, and from the respondent’s point of view each time that was the end of the matter.  The respondent stated he was surprised when the applicant resigned and shocked when he received the application from the applicant claiming nearly $1,000,000 for unlawful termination.

The respondent stated that after he received the resignation on 15 April 1994 he sat down with the applicant and worked through the applicant’s workload.  At the time the respondent said:

“Will you be able to get a job?”

The applicant replied that that would not be a problem.

By affidavit dated 25 July 1994 Ms. Rose Wong, an accountant employed by the respondent, stated that she supervised some of the work done by the applicant.  On occasion Ms. Wong made notes on the documents when mistakes occurred. 

Ms. Wong stated on 15 April 1994 another employee advised her that the applicant Brian Wong resigned and that shortly before lunch on that day the applicant advised her that he wished to go through files with her as he wished to leave by lunchtime. 

Ms. Wong stated that the applicant had assumed that she knew he was leaving.  She asked the applicant why he was leaving and he stated that he had been thinking about it for awhile, and that he would be working with his brother starting on Monday. 

Ms. Wong stated that she and the applicant worked through the files brought into her office and that she wished him good luck when the task was finished.

Ms. Wong denied that she had ever discussed her concerns about her job security with the applicant.

In his affidavit dated 16 May 1994 filed in court on 5 September 1994 the applicant referred to the events of 14 April 1994 and stated that during the review Mr. Lau found an arithmetic error.  Upon noticing the error, Mr. Lau became physically upset and the applicant stated the respondent said the words to the effect:

“How could you have made such an error!”

The applicant apologised and stated that the respondent said words to the effect:

“We can’t go on like this.  I am too busy to check all your work.  I need to see someone now and I will speak with you about this later.”

The applicant stated he was extremely intimidated by the hostile reaction of the respondent and that he was worried and confused.  Shortly after 2:30 pm on 14 April 1994 the applicant said that the respondent said words to the effect:

“It’s better that you go.  We are not terminating you, you had better resign.  It is better that you resign.  If we terminate you, I don’t think that you can find a job.”

The applicant stated that he did not know what to say and so he said:

“Would you like me to stay until all the work is finished?”

According to the applicant the respondent said that would not be necessary and that the applicant would be paid on 15 April 1994, that day being tomorrow.  The applicant was advised that he may as well leave on that day.

The applicant stated that the respondent then said words to the effect:

“As far as the other staff are concerned, I am not going to tell them about this.  We can either say that you are going to leave and then you just decide not to come back, or we can tell them that you have resigned, it doesn’t bother me.”

The applicant stated that he would advise the respondent of his position tomorrow.  He believed that his employment had been terminated by the respondent from the close of business on 15 April 1994 and that the only remaining issue to be determined was how his departure was to be portrayed to his colleagues.

The applicant stated that during the morning of 15 April 1994 he advised the respondent in words to the effect:

“...as you say, it is better to tell them I resigned two weeks ago.  If you don’t mind I will leave at lunch time.”

The respondent stated that during the course of the conversation he was preoccupied with the respondent’s suggestion that if he told his colleagues that he had resigned it would be far less embarrassing and humiliating.  The applicant deposed that the reason he suggested to Mr. Lau that he wanted to leave at lunchtime was that he was so hurt and embarrassed by the whole episode that he wished to get out of the office as soon as possible.

In his affidavit dated 16 May 1994 the applicant stated that he was never once warned nor counselled that the quality of his work or his performance was inadequate or that he was at risk of losing his job as a result of poor work quality or performance.

The applicant stated in his affidavit that after collecting a cheque for $6,700 which represented his salary for April, plus a further two weeks salary, plus the cash value of accrued annual leave, he left the offices of the respondent having previously told his colleagues that he was leaving on the day.  In his affidavit of 5 August 1994, the applicant stated that during a conversation with a fellow employee, Wendy Garcia he stated that he had resigned two weeks ago.  Further even though these words were inaccurate, he had said these words because he did not wish to be humiliated before his former colleague. 

In the same affidavit the applicant stated that during a conversation with Ms. Rose Wong, Ms. Wong stated that:

“Some day I will get the boot too.  I have the feeling that Mr. Lau might replace me with someone more qualified - like a chartered accountant.”

Under cross examination the applicant confirmed that in his affidavit it was stated that he decided that it would be far less embarrassing and humiliating if he resigned, or that he stated that he had resigned.  The applicant confirmed that he had told various staff members on the 15 April 1994 that he was going to work with his brother.

Additional evidence was placed before the Court that during the course of his employment with the respondent, the applicant received separate income from accountancy services that he provided to private clients.  This was done with the knowledge and consent of his employer.

Subsequent to leaving the respondent the applicant has worked for Mr. White, a person to whom he was referred by his brother, also an accountant.  Evidence was placed before the Court that although the applicant contacted an accountancy placements agency this line of enquiry was not actively pursued.  Nor did the applicant produce evidence that he took the initiative in any way to apply for accountancy positions advertised in the newspaper.

In conclusion counsel for the applicant suggested that Mr. Lau advised the applicant that he had lost confidence in him and that it would be implausible to believe that the respondent was prepared to continue the employment in this fashion.  Further, that the applicant would not resign from the employment as he had mortgage commitments.  Counsel conceded the applicant had in fact earned some income from subsequent professional endeavours.  There was no suggestion that the applicant had taken matters into his own hands and actively searched for a position via newspaper advertisements.

In the main the applicant relied on Sheffield v Oxford Controls Limited (1979) ICR396 and stated that this case propounds the principle that where an employee was threatened that if he did not resign he would be dismissed and the threat caused the resignation that amounted to a dismissal in law. Following on from that Counsel on behalf of the applicant argued that clearly there had clearly been a breach of Section 170 DC of the Act and was of the view that the employee had not been given opportunity to defend himself against the allegations. I do not find that this is the case.

This is a case that must be decided on the facts and in this case I find that the applicant resigned of his own accord and that the respondent did not terminate the employment. I find nothing implausible in the evidence provided by Mr. Lau that the events that occurred on 14 April 1994 fell into the same category as the same events relating to mistakes made by the applicant. There was no action on behalf of the respondent Mr. Lau that could be classified as a constructive dismissal. I find that there has been no contravention of Division 3 of Part VI A of the Industrial Relations Act 1988.

The facts in this case are similar to the case of the Australian Union Employees Union and The ANZ Banking Group Ltd, a decision of Deputy President Hancock of the Australian Conciliation Arbitration Commission given on 22 September 1988, there it was stated:

“It is not sufficient for there to be a finding of constructive dismissal, that an employee feels that he has little or no choice but to resign.  For example, a person may think - perhaps rightly - that his employer has lost confidence in him and, for the sake of self esteem, tender his resignation.  This is not a dismissal even though the employee may feel that he has no honourable alternative.”

In that case the former employee, Mr Stehbens was told that his position in the bank “Was seriously in jeopardy”.  No explicit reference was made to dismissal.  At or near the end of the interview, the bank employee offered to tender his resignation.  The Regional Manager advised the employee to think carefully before signing anything. 

The Deputy President in his decision stated:

“I sympathise very much with Mr Stehbens (the employee) in his unhappy predicaments; but the only possible answer to the question before me is he resigned.”

COURT:                   E. J. Tomlinson, Judicial Registrar

PLACE:  Sydney

DATE:                     26 September 1994

MINUTES OF ORDER

The Court orders that

1. The application of the applicant that the termination of the employment contravened Division 3 of Part VI A of the Industrial Relations Act 1988 be dismissed.

I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgement of Judicial Registrar Tomlinson.

Associate  :          

Date  :          26 September 1994

Appearances:

Counsel for the Applicant      :          Mr. I. Neil

Solicitor for the Applicant     :          Allen Allen & Hemsley

Counsel for the Respondent   :          Mr Sewell

Solicitor for the Respondent   :          Dibbs Crowther & Osbourne

Date of Hearing  :          5 September 1994

Judgement  :          26 September 1994