Carden v Allied Pickfords Pty Ltd
[1996] IRCA 413
•16 August 1996
DECISION NO: 413/96
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 1349 of 1995
B E T W E E N :
PETER MICHAEL CARDEN
Applicant
AND
ALLIED PICKFORDS PTY LTD
Respondent
Before: Judicial Registrar Murphy
Place: Melbourne
Date: 16 August 1966
EX-TEMPORE REASONS FOR JUDGMENT
Relevant Wages.
In this proceeding the first matter to be determined is whether or not the applicant was excluded from the jurisdiction because his “relevant wages” exceeded the limit set by s170CD of the Industrial Relations Act (“the Act”). The evidence was that the applicant was being paid a salary of $56,375.00 p.a. plus his own superannuation, and the respondent's superannuation contributions. In addition, he was being paid an amount of $8,313.00 p.a. as a car allowance. On the submission of the respondent this took his total wages above the statutory limit. The car allowance was subject to PAYE taxation.
The question of whether or not allowances are to be categorised as “relevant wages” for the purposes of s170CD has been the subject of consideration in a number of cases. The leading case is Ardino v Count Financial Group Pty Ltd (1994) 1 IRCR 221. In that case Wilcox CJ noted at 278 that the question is not the genesis of the obligation but its nature. Here, the payments made referable to a car allowance were to compensate the applicant for the use of his car. There are a number of other decisions of the Court considering the question of car allowances and whether they are to be included in relevant wages. I am satisfied that decisions such as Fleming v National Mutual Funds Management Limited (Murphy JR, 17 July 1995, unreported) and Brown v Listaglen Pty Ltd (1994) 1 IRCR 440, make it clear that the way that the payment is categorised is an important consideration. Here it is clear that the car allowance was not included in the total salary of the applicant. Therefore, as I have held in Brown (above) and Fleming (above), often the terms “wages” and “salary” are interchangeable. Here the salary is the $56,375.00 and his salary could not be said to include an amount that included the car allowance. I am therefore satisfied that the applicant is not excluded from the jurisdiction.
The substantive application.
There was much evidence in this proceeding that was not relevant to the determination of the critical matter before the Court. The critical question to be determined is whether or not the applicant resigned from his employment or whether there was a termination at the initiative of the employer. It was the respondent's version that the applicant resigned his employment in writing on 10 January 1996.
The applicant was employed as the Corporate Sales Manager of the respondent. He had been employed from August 1994 on a substantial salary package as I have indicated. His initial supervisor was a Mr Flynn but from the middle of 1995 he reported to Mr Campbell, a director of the respondent. A major project of the applicant involved the marrying of two computer systems that were being used to generate management information. There were discussions between Mr Campbell and the applicant and it was included in his key performance objectives document (Exhibit R1). This was to be achieved by 23 December 1995. As events unfolded, particularly in December 1995, the applicant was unable to achieve this. Arrangements were made by the applicant for Mr Campbell to have some training in relation to the computer system in early 1996.
The key events in this case occurred between 8-10 January 1996. The applicant's version of events is that on 8 January 1996 he had a discussion with Mr Campbell in relation to the computer system and indicated that he had been unable to achieve the 23 December deadline. On 8 January Mr Campbell wrote a letter (Exhibit A4) to the applicant regarding his discussions that morning about the computer project. At that point a consultant was on the premises to assist in achieving the computer project. Subsequently the applicant worked until 1.00 am on 9 January on the project.
Mr Campbell gave evidence that after the meeting with the applicant on 8 January, he determined to attend at the software company, Unitrack, that was assisting the respondent. At that point he ascertained for the first time that the existing management data system in fact was not being generated by the Unitrack system, but was generated by Unitrack, and another computer software program known as Microsoft Access. He received other information from Unitrack in relation to the progress of the computer project that gave him some considerable concern.
He did not return to the office on 8 January but returned early on 9 January. The applicant gave evidence that he had a short meeting with Mr Campbell that morning after he arrived at work around 8 a.m. He had indicated to Mr Campbell that he had worked until 1.00 am that morning.
On 9 January, after he had been to Unitrack, Mr Campbell wrote a further letter to the applicant (Exhibit A5) listing a number of concerns in relation to the project. He also referred to information that he had received in relation to whether the applicant had left the premises at 1 am that morning. It recorded that he had “spoken to Bruce Lott.....” who had advised him that the applicant had in fact left at midnight. The letter to the applicant also seeks information from the applicant in four discrete areas, with deadlines listed for later that week or earlier the next week. The letter also records: “your performance overall is of great concern to me. I believe that you have taken on a job that is too big for you and that you have not had the ability to recognise that the job is too large, nor have you asked for help. We will discuss this further during our meeting on Wednesday 10 January.”
It is the applicant's evidence that this letter was handed to him by Mr Campbell in the kitchen or canteen at the respondent late on the afternoon of 9 January and there was no discussion in relation to it. Mr Campbell's evidence is that he discussed the letter in detail with the applicant on the morning of 9 January. The applicant's version was that he took the letters of 8 and 9 January home that night and briefly mentioned to his wife that he was having a meeting the following day to discuss them. The applicant's wife gave evidence that indicated that the question of resignation was not discussed between the two of them that evening.
The applicant's version is the following morning he had a meeting with Mr Campbell as previously arranged. At the beginning of the meeting the applicant suggested to Mr Campbell that he wished to reply to the matters of criticism in the two letters. Mr Campbell had indicated he did not have a copy of the letter of 8 January and the applicant had then said to him that he would read the matters out. He then proceeded to commence to read out the content of the letter of 8 January. This proceeded for a period of about five minutes when Mr Campbell put his hands up and said “You are wasting your time, we cannot work together any longer. I suggest you look for other employment.”
The applicant said he was shell-shocked at this. There was further discussion and Mr Campbell said to him that the respondent was prepared to let him look for other employment while he remained employed. There was discussion about the tendering of a resignation. The applicant's evidence was that Mr Campbell said: “I want your resignation and I will give you an hour to think about it”. The applicant had replied “What if I do not provide it to you, are you going to fire me?” Mr Campbell had then leant back in his chair and said “Let me simply say I can make life very difficult for you if you do not ...” (give the resignation). Mr Campbell had proposed a period of six to eight weeks for notice. The applicant had replied that he would take 10 weeks. The applicant had sought some time in relation to the matter. He then rang his wife.
Mrs Carden gave evidence that she was at home on Wednesday, 10 January and she had received a telephone call from her husband to indicate that he had been asked for his resignation. As far as she was concerned that was the first that matter had been heard of.
The applicant in the early afternoon then typed up a letter of resignation (Exhibit A6) and handed it to Mr Campbell. There was no discussion at that time. The letter of resignation records:
“Further to our discussions this morning I wish to advise that I will be terminating my employment with this company as at 20 March 1996.”
In the conversation between Mr Campbell and the applicant on 10 January the applicant had corrected a statement in the letter of 9 January that he had left the premises at midnight, not 1 a.m. the previous day After the conversation on 10 January where the applicant, on his version, had told Mr Campbell that he had left at 1 am and that the letter was incorrect, Mr Campbell gave evidence that when the applicant had raised this discrepancy he had raised the matter with Mr Forsythe and Mr Lott and ascertained that the applicant was correct. Later in the morning on 10 January Mr Campbell had then delivered a letter to the applicant (Exhibit A7) recording that he was wrong in his letter of 9 January. The letter reads:
“I refer to my correspondence of 9 January 1996 and wish to apologise for an incorrect statement in the letter. I indicated that Bruce Lott the supervisor of the nightshift on 8 January had indicated to myself and Jim Forsythe that you had left the premises around midnight. Following your indication to me on the morning of 10 January that this was incorrect both Jim Forsythe and myself carried out a further discussion with Bruce Lott during which he revised the time that he felt you left the premises to that of somewhere closer to 1 am. I reiterate my apologies for the incorrect statement but was acting on information given to me by a supervisor in the presence of his immediate manager.”
Mr Campbell in his evidence was unable to explain why in this letter he made reference to a conversation between himself and the applicant that morning of 10 January. He was unable to explain why the applicant would make reference to discussions between them on the morning of 10 January in his letter of resignation.
The key finding here is in fact the date of the conversation that led to the termination of the applicant's employment. The applicant maintained that it took place on the morning of 10 January. The applicant's documentary evidence in the form of his letter of resignation of 10 January, supports this. The applicant's wife supports this. The respondent's documents to some extent, support this. In particular, the letter of 10 January 1996 (Exhibit A7) to the applicant relating to the time that he departed supports the fact that there had been a conversation that morning. The only documentary evidence contrary to the applicant's version is the memorandum from Mr Campbell to Ms Sullivan, the Human Resources Officer, dated 9 January (Exhibit R5) which records a conversation between Mr Campbell and Mr Carden relating to his performance that day. It was the submission for the solicitor of the applicant that this memorandum recorded a conversation that did not occur on the date that the memorandum bears.
The letter of 9 January 1996 (Exhibit A5) supports the applicant's version of events in that it records that Mr Campbell spoke to Mr Lott after a conversation with the applicant. The applicant's evidence was that there was only a brief conversation between himself and Mr Campbell on the morning of the 9 relating to the time that he arrived at work. Mr Campbell records in his letter:
“I have spoken to Bruce Lott the supervisor of the nightshift who advised me that you left the office at 12 am, indicating to him, after he questioned you, that you had put the security system on for Area 1.”
When all the documentation and the evidence is looked at I am more than satisfied that the letter of 9 January (Exhibit A5) relating to the performance concerns of the applicant was not discussed with him on that day, and that Mr Campbell is mistaken in his evidence on that point. I prefer the applicant's evidence that the crucial conversation in relation to his future with the company took place on the morning of 10 January.
The next issue is whether or not in that conversation the applicant resigned or whether his employment was terminated at the initiative of the respondent as required by s170EA of the Act.
The applicant presented as a truthful witness about the conversation. He said he had diarised it and had a good recollection of the conversation. He said he was shell-shocked in the conversation but the sort of conversation that occurred is one that, as a matter of human experience, he would have remembered. He was a person aged 49 at the time and a middle ranked executive. It is unlikely that he would have tendered his resignation voluntarily unless something had happened as a result of some action of the employer that forced him to do that. He gave evidence that he had committed himself to a motor vehicle lease in late 1995 and clearly he had no alternative employment arranged at that time. His evidence was that previously he had remained in jobs for considerable periods and was invited to assume the position he held at the time. His wife’s evidence, while necessarily the subject of extra scrutiny, supports his evidence.
On the crucial question of what happened at the meeting where the letter of 9 January 1996 was discussed I prefer the applicant's version of events. I am satisfied that he was told by Mr Campbell that they could no longer work together. Further, he was told that he should look for other employment. He was told by Mr Campbell that he wanted his resignation that afternoon. There was a discussion about how long the respondent would allow him to work while he searched for a position. 10 weeks was agreed. I am satisfied that the applicant did ask Mr Campbell what would happen if he did not resign and he was told that: “Let me simply say, I can make life very difficult for you if you do not.”
I am satisfied that statement was made and made this resignation a “termination at the initiative of the employer”. It was a breach of the employer’s duty of fidelity: it gave the applicant no effective choice. The actions of the respondent in these circumstances met the tests set out in Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200 and Rheinberger v Huxley Marketing Pty Ltd, 16 April 1996. In the latter case Moore J, after quoting extracts from the Mohazab decision, said:
“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 determination 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 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.”
I am satisfied that the statements made by Mr Campbell, and in particular the statement “I can make life very difficult for you ...”, are such that the probable result was that the employment relationship would conclude. It follows that there has been a termination of employment at the initiative of the employer.
I do not accept the submission that there was any duty on the applicant to do anything else at that point. The respondent had taken the repudiatory step and taken the initiative to terminate the employment. The Court therefore has jurisdiction to determine this matter. The respondent had no valid reason to terminate the applicant's employment and has therefore breached s170DE of the Act.
Remedy.
It was agreed by the parties that reinstatement was impracticable. The applicant worked until 6 March 1996 and was paid until 20 March 1996. He has not been able to secure employment since that time and a claim of $15,000.00 compensation is made on the basis this represents his losses. As from July 1996 he has established a business.
I am satisfied that as a result of the unlawful actions of the respondent the applicant lost the opportunity that procedural fairness would have given him. Mr Campbell had indicated in his evidence that had the applicant not agreed to resign, which was his version of events, he would have taken some of the responsibilities that the applicant held away from him and switched him into a purely sales position. The applicant's salary would have been maintained until the annual salary review.
It is clear that the applicant is a talented middle level executive and had Mr Campbell granted procedural fairness, I am satisfied there is a very high probability that the applicant, although clearly there had been some difficulties with the computer project, would have survived in his employment for at least a reasonable period. It may well have been that at some point in the medium term the parties would have parted ways, but I am satisfied that had Mr Campbell dealt with the applicant in a way that was not in breach of the respondent's duty of fidelity it is likely that he would have remained with the respondent for some considerable period.
In these circumstances I am satisfied that the proper measure of compensation is the loss that the applicant has sustained as a result of the respondent's actions, which on the evidence is $15,000.00. I propose to order that the respondent pay the applicant that sum by way of compensation.
MINUTES OF ORDERS
THE COURT ORDERS THAT:
The respondent, within 21 days, pay to the applicant $15,000.00 by way of compensation.
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 ten (10) pages are a true copy of the reasons for judgment of Judicial Registrar Murphy.
Associate:
Dated: 16 August 1996
Solicitors for the Applicant: McDonald & Charman
Appearing for the Applicant: Mr A J McDonald
Representative for the Respondent: VECCI, Mr Robert Ironmonger
Counsel for the Respondent: Mr B Lacy
Date of hearing: 16 August 1996
Date of judgment: 16 August 1996
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT relevant WAGES - REMUNERATION - car allowance - alleged RESIGNATION- VALID REASON - COMPENSATION
Industrial Relations Act 1988 ss.170CD, 170DE, 170EA
CASES: Ardino v Count Financial Group Pty Ltd (1994) 1 IRCR 221;
Fleming vNational Mutual Funds Management Limited (Murphy JR, 17 July 1995, unreported);
Brown v Listaglen Pty Ltd (1994) 1 IRCR 440;
Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 195;
Rheinberger v Huxley Marketing Pty Ltd (Moore J, 16 April 1996, unreported).
PETER MICHAEL CARDEN -v- ALLIED PICKFORDS PTY LTD
No. VI 1349 of 1996
Before: Judicial Registrar Murphy
Place: Melbourne
Date: 16 August 1996
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 1349 of 1996
B E T W E E N :
PETER MICHAEL CARDEN
Applicant
AND
ALLIED PICKFORDS PTY LTD
Respondent
MINUTES OF ORDERS
Judicial Registrar Murphy 16 August 1996
THE COURT ORDERS THAT:
The respondent, within 21 days, pay to the applicant the sum of $15,000.00 by way of compensation.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
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