Carol Anne Kiel v H C Curwen-Walker
[1994] IRCA 128
•27 Oct 1994
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRAR VI 687/94
B E T W E E N :
CAROL ANNE KIEL
Applicant
AND
H C CURWEN-WALKER
Respondent
BEFORE: Judicial Registrar Millane
PLACE: Melbourne
DATE: 27 October 1994
Reasons for Judgment
The Applicant brings this proceeding pursuant to Section 170 EA of the Industrial Relations Act 1988 (“the Act”). She alleges that her employment with the Respondent was terminated by him without valid reason and that such termination was harsh, unjust or unreasonable both in a substantive and procedural sense.
The relief sought under Section 170 EE of the Act before its amendment in June this year includes:-
1(a) An order declaring the termination of the employees employment to have contravened Division 3 of part VIA of the Industrial Relations Act 1988;
(b) An order that the Respondent pay compensation.
Such other order or orders as will put the employee in the same position (as nearly as can be done), as if the employment of the employee by the Respondent had not been terminated: see Section 170 EE of the Act.
The Respondent’s primary argument is that the Applicant resigned from her employment. Alternatively, he argues that at interview the Applicant misled him as to her capacity to perform the duties of a law clerk the job for which she was hired at a rate of pay commensurate to that position. As a result, the Respondent claims to have been entitled to rescind and terminate the contract of employment once he became aware of the Applicant’s lack of capacity. The misrepresentation permitted the contract to be terminated immediately without complying with any terms of the contract of employment even as to termination or, it was argued, without offering any warnings and period of time within which to improve the Applicant’s performance. Further the Applicant’s lack of capacity to meet the job requirements constitutes a valid reason under the Act for terminating the Applicant. Again this could be done without offering any warnings or training. Although, this was not stated explicitly in the Respondent’s submission I understood the second limb of the Respondent’s case to be that the evidence given by the Respondent as to a series of events which occurred during the currency of the Applicant’s short lived employment was evidence of her lack of capacity to meet the job requirements. This evidence was not relied upon to characterise the termination as one for reasons related to her conduct or performance where Section 170 DC(a), Article 7 of Schedule 10 and paragraph 8 of Schedule 11 to the Act sign post steps to be taken by an employer to incorporate procedural fairness in the termination process.
The following witnesses were called to give evidence:-
by the Applicant -
The Applicant
Julian Alexander Tey, Solicitor
Timothy John Robertson, Solicitor
Vicki Elizabeth Berger, fellow employee
Ernest John Kirk, builderby the Respondent:-
The Respondent
History
The Respondent is a solicitor and sole practitioner who, as at April 1994 operated three law practices in country Victoria; one at Ballan, one at Castlemaine and one at Daylesford. These were boutique practices each specialising in conveyancing and probate work. At some earlier date the Respondent had commenced the practice at Bendigo through a secretarial service and in April 1994 wished to open an office in that town. To that end on 9 April 1994 the Respondent placed an advertisement in the Bendigo Advertiser. There was considerable argument between the parties as to the meaning of that advertisement, the precise wording of which was -
LEGAL CONVEYANCING
SECRETARY
Senior position for busy conveyancing/probate
based practice in central Bendigo.
The successful applicant will be independent
and an excellent communicator as the
position will involve substantial client contact.
Written applications in strictest confidence to:
H.C. Curwen-Walker
Barristers & Solicitors
21 Wattle Street, Bendigo
Phone: 42-6733
The Applicant is 26 years of age and by April this year had been employed for some 18 months by a Bendigo Solicitor, Timothy John Robertson. From her description, her duties broadly included reception and legal secretary duties and the application of law clerk skills. Mr Robertson’s evidence was that the Applicant was employed by him as a secretary and law clerk and later as a book keeper cum accountant. He described the work she did for him as primarily conveyancing work noting that, amongst other things, when the Applicant came to work for him she had, in his words, “a fair bit of experience” and came from a Castlemaine firm where she had performed conveyancing work similar to that performed in Mr Robertson’s office. Mr Robertson spoke highly of the capabilities of his former employee and described her as a very competent operator and “amongst the better law clerks”. He noted that her computer skills were particularly good; he had received a lot of good comments from clients on how willing she was to help the clients and her general enthusiasm for the work. Further she was bright and confident and positive in her outlook on life and she was capable of being left alone to get on with her work. The Applicant had sought a pay rise greater than that he was offering and she left him to, in his words, “enhance her career”.
Mr Tey a Solicitor also gave evidence on behalf of the Applicant. His office was located in the same building and next to that of Mr Robertson. From his observation of her in Mr Robertson’s office and from his interaction with the Applicant, particularly in conveyancing and mortgage transactions, he described her as “efficient, competent and certainly appeared to know what she was doing”. He also believed she had an independent role in Mr Robertson’s office in obtaining instructions on conveyances and interacting with clients. Mr Robertson’s evidence broadly supports the latter view.
Mr Kirk was also called by the Applicant to give evidence. He was a builder and client of Mr Robertson’s. He had dealt with the Applicant whilst she was employed by Mr Robertson. He rang through all his company’s instructions on land transactions to the Applicant and stated that when he had moved into the field of selling house and land packages he had used the Applicant to guide him through these transactions in the early days and she had assisted him and other people from his company in completing transactions and attending settlements for the company.
The Respondent interviewed the Applicant for the advertised position on 16 April 1994. It is not disputed that at that interview the Respondent offered the Applicant employment and on the following day the Applicant accepted the offer. The terms of the contract of employment and the extent to which any representations were made at that interview were the subject of considerable debate between the parties. At a date subsequent to 17 April 1994 the parties agreed on Monday 16 May 1994 as the commencement date. It was not contested the agreed salary was $25,000.00 per annum. This was some $4,000.00 per annum greater than the salary received by the Applicant from Mr Robertson. In addition the Applicant alleged that the Respondent had also offered her bonuses to be awarded throughout the year on her performance, although the amount and method of calculating such bonuses was never discussed. The Respondent denied ever paying bonuses to any of his employees employed at any of his offices and further denied ever offering bonuses to the Applicant. On balance I am not satisfied that any concluded agreement was entered into to pay bonuses to the Applicant. Accordingly, I have proceeded on the basis that the Applicant’s agreed remuneration was the sum of $25,000.00 per annum.
It was not disputed that the Applicant commenced employment on the agreed date and, after only ten working days, her employment ceased on 27 May 1994. What was said at the meeting between the Applicant and the Respondent on the evening of 27 May 1994 culminating in the cessation of the Applicant’s employment was also the subject of considerable dispute.
The Contract of Employment
The Respondent alleges that at the interview during which he made the offer of employment the Applicant misled the Respondent in that she claimed, amongst other things, that -
(a) she had “all the skills that a law clerk would be expected to have”;
(b)she had her own clients whom she was looking after exclusively at Mr Robertson’s office;
(c) she took instructions on and prepared draft wills at Mr Robertson’s office;
(d)she had experience in preparing applications for probate and conducting probate files;
(e)she could independently operate her own probate/conveyancing files, from taking instructions from the client through to completion;
(f)she was able to use a Word Perfect computer programme without the Law Perfect programme. (The latter of which is apparently designed for conveyancing clerks. The Respondent alleged the programme made the conveyancing functions on the computer simpler. On the other hand Mr Robertson referred to the Law Perfect system as a sophisticated system of macro’s enhancing the general utility of Word Perfect);
(g)she felt she was qualified as a Law Clerk and operated as a Law Clerk at Mr Robertson’s office and should therefore be paid $25,000.00 per annum at a minimum.
The Applicant’s account of the matters raised in the interview varied considerably to that of the Respondent.
The Applicant is a confident, direct and self possessed young woman. Whilst it is to be expected that job applicants will describe their experience and abilities in the best possible light the Applicant flatly denied embellishing or exaggerating her skills at interview. Her recollection was that the skills she offered were “receptional (sic), word processing skills and conveyancing skills”. She agreed she had expressed the view, a view she still held, that in her employment with Mr Robertson she was operating at the level of a law clerk and should be remunerated for this skill.
On the question of whether she was engaged as a law clerk, the Applicant pointed to the position advertised, clearly seeking a legal conveyancing secretary not a law clerk. This much the Respondent conceded but somewhat inconsistently claimed he was looking for someone with a law clerk’s qualification and that was the capacity in which the Applicant was appointed.
It is worth noting at this point that, according to the Respondent, Vikki Berger a witness called by the Applicant was the unsuccessful applicant for the job to which the Applicant was appointed. Ms Berger’s evidence was that she was not trained in conveyancing or probate matters nor did she have law clerk skills. Eventually she was hired to assist the Applicant who was to train her. However the Applicant departed prior to 6 June 1994, the date Ms Berger’s employment commenced. When she did commence her employment, despite her lack of skill in conveyancing and probate matters Ms Berger was given the task of performing the job the Applicant had vacated.
It was further argued by the Respondent that the use of the words “conveyancing/probate practice” in the advertisement to describe the Bendigo practice in some way indicated to a prospective employee that, although the person was being employed as a legal conveyancing secretary, they would be required to do probate work and take instructions on wills. In the Respondent’s experience both law clerks and legal conveyancing secretaries are competent in probate matters.
The advertisement certainly makes no specific reference to probate skills. It would be asking a great deal of job applicants to assume that a person applying for a position described as “legal conveyancing secretary” would understand that position was one where they were required to have probate skills including experience in taking instructions to draft wills, and further the employer was really looking for someone with a law clerk’s qualifications.
The Applicant strenuously denied any reference in interview to probate work or the taking of instructions to draw wills. So far as her experience was concerned in probate matters, the taking of instructions to draw a will and the attending to the execution of a will, both the Applicant and Mr Robertson stated that she had typed probate documents under his supervision, that she had arranged for and attended to the execution of wills but had no experience in taking instructions for the drafting of wills. The Applicant believed the latter job was one which should be performed by a solicitor, and in this regard Mr Robertson informed the Court that he took instructions to draw wills himself. Mr Tey went so far as to say that he would not leave this task to a law clerk but believed these instructions should be taken by a solicitor.
From the evidence it was not clear to me precisely what legal matters a law clerk is required to be proficient in. The Applicant’s evidence was that she had law clerk skills in conveyancing matters and that was all she was offering in the interview. There was no suggestion from either party that she had or should have undertaken any course of study to gain formal qualifications. I understood her evidence to mean her experience had equipped her to work at the same level as a law clerk in conveyancing matters.
The weight of the evidence favours the view that a person with law clerk qualifications might be proficient in one or both areas of work. In cross examination Mr Tey appeared to draw a distinction between a law clerk and a general law clerk, the latter of which he identified when referring to a person who was proficient in both disciplines. Accordingly, I am not satisfied that by referring to law clerk skills alone the Applicant can have been taken to have represented that she offered skills other than those related to conveyancing matters. Further the Respondent has held a full practising certificate as a solicitor since 1982 with four years as an articled clerk prior to that. The narrow ambit of the advertisement placed by him suggests that law clerk skills and probate matters were not a high priority for the position offered. Taking these matters into account I am not satisfied that the question of the Applicant’s probate skills and her experience in taking instructions on the drafting of wills was discussed at interview nor was there any attempt to clarify what she meant by law clerk skills. It must also be kept in mind that the Respondent did not ask for nor did he independently seek references as to the Applicant’s capacity.
Apart from the alleged representations as to skills as a law clerk and in probate matters the Respondent in seeking to prove that the Applicant had misrepresented her capacity to perform the job being offered alleged the Applicant was not able to work independently on her own files or in the taking of instructions from clients generally. She was not able to use the word processing computer programme without the addition of a law perfect programme and she did not have her own clients whom she looked after whilst employed by Mr Robertson. Needless to say, the Applicant denied these allegations. I am much assisted by the independent evidence of Mr Robertson, Mr Tey and Mr Kirk, each of whom presented as straightforward witnesses with no apparent interest in exaggerating the capabilities of this young woman. In all it seems remarkable that the Respondent was able to arrive at the conclusion, after only two working days from the date of installation of the computer on 25 May 1994 in the new office, that the Applicant could not use the wordperfect system without the aid of a support programme. Apart from the fact that she was still setting up the computer when her employment came to an abrupt end, the evidence of Mr Robertson was that she had training in this system whilst employed by him, that she had adapted to it very quickly, and she had shown an enthusiasm for the computer and the improving of the systems on the computer.
The events relied upon by the Respondent to demonstrate lack of capacity
Putting to one side the Applicant’s alleged misrepresentation of her law clerk skills at interview and the representation as to her probate skills, the Respondent sought to demonstrate by a reference to numerous incidents over the ten day period of the Applicant’s employment that the Applicant lacked the capacity to fulfil the requirements of the job, both as to her ability to work independently and to handle conveyancing transactions.
Not surprisingly, the shift in the burden of proof requiring an employer to prove a valid reason or reasons for termination of employment brings with it a tendency for Respondents to enumbriate in great detail each and every failing of the employee. Indeed, if the Court was only to rely on the Respondent’s list of grievances compiled in the ten days the Applicant worked with him little or nothing she turned her hand to was performed competently. This is at complete odds with the testimonials from Mr Robertson, Mr Tey and Mr. Kirk. As already indicated I have accepted their evidence as to the Applicant’s capacity but must now analyse the broad range of complaints to determine whether they demonstrate a true want of capacity to work as a legal conveyancing secretary with law clerk skills.
The Respondent alleged that during the second week of the Applicant’s employment he made notes as and when specific incidents occurred, or as and when he recollected those incidents, having made a decision to have a meeting with the Applicant on 27 May. The Respondent did not warn the Applicant that her employment was at risk when each incident occurred, rather he saved his criticism for what turned out to the be the last day of the Applicant’s employment.
The first matter complained of was that when the Applicant commenced employment on 16 May 1994 she declined to do a settlement because that settlement was with Mr Robertson’s office. According to the Applicant she was familiar with the matter and felt uncomfortable about returning to Mr Robertson’s office to do the settlement when she had told Mr Robertson she was taking leave before starting the new job but had changed her mind and started with the Respondent earlier than planned. I could not help wondering whether the parties to the transaction, not to mention the Respondent, should not have perceived some conflict in the Applicant changing employment and by so doing changing clients in the transaction. Be that as it may, on his own evidence the Respondent accepted this proposal and completed the settlement himself without any reprimand, warning or direction to the Applicant to attend to the settlement. Of itself the incident does not demonstrate a want of capacity.
The next complaint concerned the Applicant being asked to make enquiries from various caterers and cafes in Bendigo to obtain a price for catering for approximately 100 people to attend an opening of the office. This was done. However, according to the Respondent, the Applicant asked Vikki Berger to obtain the quotes and had not informed him that she had done this. Ms Berger was due to commence employment with the Respondent on 6 June 1994 to assist the Applicant. Both Ms Berger and the Applicant confirmed that they had a discussion during which Ms Berger offered to make the telephone enquiries for the Applicant because the Applicant was busy setting up the office. This does not appear to be a substantive issue nor one which could possibly suggest a lack of capacity. At best this incident as well as the first incident and others to be referred to, demonstrate that the Applicant is independent in her approach. In the absence of any specific instructions or training in his office practices, she acted on her own initiative in accepting the offer of assistance from Ms Berger.
The Respondent also relied upon an incident which occurred some three days after the Applicant commenced her employment when a client, Mrs Schrivener rang the Bendigo office enquiring whether the Respondent had “checked the paper work on the purchase of a freehold business, which purchase included a lease document”. The Respondent alleges he was standing next to the Applicant when she took the telephone call and she told the client to sign the contracts. These contracts had not been checked by the Respondent, although it is alleged by the Applicant that she believed he had checked them. In all, the Applicant’s evidence was somewhat confused on this matter. She expressed the belief that even if the contracts were signed the client was not at risk until there was an exchange of contracts. The belief that there was no risk to the client in signing the contracts appeared to stem from the view that in a conveyance the client’s signed contract documents would be returned directly to the Respondent by his client. The Respondent pointed to the alleged practice of some agents in collecting the signed contract from the purchaser directly and by-passing the solicitor; in other words effecting an exchange of contract which, if the contract documents and attached lease were not in order, could have been detrimental to the client. The Respondent alleges that the lease was not signed and his purchaser client was put at risk by being advised to sign the contracts. On balance, I am satisfied that the Applicant at worst showed a lack of caution in this matter and was somewhat naive in her approach. There is no evidence to suggest that she knew or indeed ought to have known of the alleged practice of Real Estate Agents which could bring about an exchange of contracts. Despite the alleged seriousness of the event the Respondent conceded in cross examination that he did not warn the Applicant on this occasion, nor did he seek her explanation of what took place. The Respondent alleges that he did raise the Schrivener incident with the Applicant on the last day of her employment and she responded by apologising.
The Respondent’s failure to act decisively on this occasion suggests first that the incident was at the time not as serious as he now alleges because he spoke to the client shortly afterwards and clarified the position and secondly this incident was not so serious as to warrant a summary termination of the contract of employment for want of capacity. Of course, the argument as to capacity begs the question of the standard of skill an employee expressly or impliedly warrants when engaged as a legal conveyancing secretary with law clerk skills in at least conveyancing matters. I am not satisfied that this incident demonstrates that the Applicant did not have the degree of skill required for the job.
There was much argument concerning the giving of conveyancing quotes by the Applicant to prospective clients. The Respondent alleges that this practice was discussed briefly at the initial interview and that on the Applicant’s first day he verbally gave her the figures for quoting which comprised four figures ranging between $300.00 and $450.00 depending on the work involved. This was not specifically put to the Applicant in cross examination rather the cross examination focused on the giving of a quote for $350.00 on or about 19 May, 1994 for what the Applicant believed was a flat fee. According to the Applicant she gained that belief from one of the Respondent’s other employees at the Castlemaine office, to whom the Applicant had been referred by the Respondent for assistance in all matters. The Applicant denies any prior discussion of quotes and denies that she was warned concerning this practice. No evidence was called by the Respondent from any of his other employees on these matters or for that matter on any of the allegations made by him alleging for instance that the Applicant on one occasion had upset these employees.
These events as with many other events relied upon by the Respondent raise the question of whether the Applicant received any proper instruction on or any reasonable period for induction into the practices and office procedures of the Respondent. The Respondent alleges he sought a senior and independent person for the position taken by the Applicant and paid her as a law clerk. Accordingly, the Respondent was of the belief that the Applicant should not require any training. On the other hand the Applicant quite strongly asserts that she received no formal instruction or guidance from the Respondent as to his work practices. There is clearly a distinction to be made between training a non-skilled person to meet the job criteria and training a person in the practices, procedures and approaches followed in the office of the employer. The evidence concerning the giving of quotes indicates a want of training in the Respondent’s practice requirements rather than a lack of capacity to work as a legal conveyancing secretary with law clerk skills.
Arising out the incidents concerning quoting, the Respondent also complained that the Applicant failed to take telephone numbers from persons who had rung to enquire about conveyancing fees. The Applicant concedes that on some occasions she may have failed to do this but offered the explanation that on one occasion the client hung up the telephone too quickly and on other occasions she was led to the belief that the Respondent already had the client’s telephone number. Again this complaint highlights a lack of prior training in office practices but falls far short of showing a true want of capacity.
The next incident complained of concerned the shifting of an internal doorway in the office. It was alleged by the Respondent that he asked the Applicant if her husband might assist in this matter. In response the Applicant is alleged to have said that it was not her area of responsibility. The Applicant denies this and says that she asked her husband to assist and he was only too happy to help. It seems remarkable that the employer should now complain about this incident as there is no suggestion that at the time of incident or the date on which the Applicant ceased her employment this incident was the subject of any complaint. In any event it cannot be inferred from the nature of the contract that a legal conveyancing secretary’s contract of employment required her to arrange for her spouse to assist in structural alterations to the Respondent’s offices. Relying on the very positive reports from the other witnesses called I am far from satisfied the Applicant was unco-operative in her place of employment.
The Respondent alleges that as early as the date of interview he informed the Applicant that as a marketing exercise she would be required to visit local real estate agents and introduce herself. The Applicant denies that she was asked to do this at interview but conceded that during the course of her employment the Respondent did ask her to visit local agents. At that time and whilst she was in the process of setting up a completely new office she informed the Respondent that she had been too busy to attend to this request. Further she felt uncomfortable attending on the agents by herself and believed it was something the Respondent should do with her. It is interesting to note that the Respondent states that in the period of the Applicant’s employment he in fact took real estate agents out for lunch. However, there is no suggestion that he made any effort to bring them back to the office manned by the Applicant to introduce them to her. I am satisfied that the question of meeting the Real Estate Agents did not arise until after the Applicant commenced her employment and her terms of employment did not require her to engage in any direct marketing exercise for clientele. Further, the disinclination to engage in a direct marketing exercise of itself does not demonstrate that she lacked the capacity to work as a legal conveyancing secretary with law clerk skills.
There was also an allegation by the Respondent that the Applicant had declined to seek instructions on a will. The Applicant does not deny this but relies on the matters already canvassed in this judgment. In finding as I have that she was not specifically engaged to do probate work and take instructions to draw wills it is unnecessary to take this complaint any further. However, the incident does point to a reason for the employment relationship breaking down. The Applicant was obviously not backward in telling the Respondent that she thought it was a solicitor’s job to take instructions on a will. This was not the only time the Applicant told the Respondent what she thought was the appropriate course to take. The incident on the first day where she declined to attend the settlement and the marketing exercise are other instances.
In relation to conveyancing matters the Respondent alleged that the Applicant required constant supervision, this was said to show a lack of capacity. He further alleged that the Applicant was unwilling or unable to take instructions on purchases or contracts of sale. Again this evidence is at complete odds with the experience of the Applicant and the evidence of the other witnesses.
The Respondent relied upon two specific transactions. The first was a contract of sale between Campbell and Lewien (exhibit R1). It was alleged that the Applicant prepared the contract of sale which bore the reference details of the Applicant and Respondent. The Applicant could not recall preparing this document. The Respondent alleges that the Section 32 statement attached with the certificate of title and plan was incorrect. On looking at the exhibit it is apparent that the property being sold was at 21 Magellan Crescent, Kangaroo Flat. The certificate of title on its face referred to the correct registered proprietor and address and then referred to a lodged plan number LP 222133H, a separate document for further details and boundaries. The plan shows various lots all situated at addresses other than Magellan Crescent. The plan is at odds with the information contained in the contract of sale and the information on the face of the certificate of title. The Applicant gave evidence that this error was never raised with her by the Respondent and the first she knew of the allegation was on the hearing date. Indeed the Respondent conceded in cross examination that this error was first brought to his attention by the other solicitor to the transaction after the Applicant was no longer in the Respondent’s employ. This concession indicates that the Respondent was either not in the habit of checking contract of sale documents leaving his office, even those prepared by new employees within days of commencing employment or, having checked the document, he overlooked the error himself. In his cross examination the Respondent alleged that he checked some 80% of the documents leaving his four offices and this was not one he had checked. However, he did not satisfactorily explain how he covered all four offices each working day and it is more probable than not that any practice of checking documents was carried out on a more ad hoc basis. The error in the title documents was not known to the Respondent on the date the Applicant’s employment ceased and of itself cannot stand as a valid reason for terminating her employment, (see Savvidis v Privilege Clothing Pty Ltd unreported, Parkinson JR 28/11/94).
The second conveyancing transaction relied upon to by the Respondent was a contract of sale between Baker and Butcher (exhibit R2), in which the vendors solicitor was Mr Robertson. The document bore both Mr Robertson’s and the Applicant’s reference details because as at the date of sale the Applicant was still employed by Mr Robertson. The Applicant conceded that she had prepared that document in her former employment. The allegation was that the section 32 statement was incorrect because it did not contain a copy certificate of title. The exhibit attached a letter dated 2 December 1993 from the Land Titles Office containing new title details and a copy plan of subdivision. The Applicant contended that no certificate of title was available at the time and that was all the information the vendor had when the section 32 statement was prepared. It was put to the Applicant in cross examination that the Respondent had rung her, because he was then acting for the purchaser and he told her that the section 32 statement was not adequate. In response it is alleged that the Applicant said “Tim Robertson said it was okay”. The Applicant did not recall this conversation however Mr Robertson in his evidence in chief stated that he acted for the developer and subdivider and the title had been issued from the Land Titles Office. He also acted for the vendor Baker who needed to produce some evidence of her power to sell. The letter from the Land Titles Office indicated that the plan of subdivision had been approved and the copy of the executed transfer of land indicated that Baker was in the process of becoming the owner. Mr Robertson gave evidence that this process was a common scenario where subdividers and developers were involved. It had been his decision to prepare the document in that form. The conveyance had settled and Mr Robertson could not recall receiving a complaint from the Respondent concerning this contract of sale. The Respondent did not produce any copy of an amended section 32 statement or any other amended documents to show that steps had been taken to amend the section 32 statement prior to settlement.
The Baker and Butcher contract of sale was prepared by the Applicant prior to commencing her new employment and under the supervision of her former employer. Despite the alleged direct complaint to the Applicant during the course of her former employment, the Respondent still saw fit to employ the Applicant. The Respondent’s evidence regarding this matter is completely inconsistent with his subsequent behaviour.
The Respondent also alleged that the Applicant made numerous typographical errors in documents. He did not produce any documents to support this allegation nor did he produce any further conveyancing documents to demonstrate the Applicant’s lack of capacity.
Taking into account all the abovementioned matters I am not satisfied that the Respondent has demonstrated a want of capacity on the part of the Applicant constituting a valid reason or reasons connected with her capacity. At best the employer’s complaints demonstrate that the employer and the Applicant were temperamentally unsuited to working with one another. From the beginning the Respondent failed to provide the Applicant with any detailed written or verbal instructions to enable her to identify precisely the manner in which he conducted his practice. It also follows from matters already canvassed in this judgment that I am not satisfied on the evidence that at interview the Applicant misled the Respondent as to her experience and skills or made any representations concerning particularly probate skills and experience in taking instructions to draw wills.
In his submissions to the Court the Respondent’s counsel, Mr Bourke, argued that because the Applicant had oversold herself at interview and misled the Respondent as to her capacity to perform the job, the Respondent was entitled to terminate the contract of employment immediately. My findings on the facts do not require me to take that submission further. Suffice to say that there is common law authority for the proposition that a contract of employment may be brought to an end summarily where it is shown that an employee breached an express or implied warranty as to the employee’s skills. (See Printing Industry Employees Union of Australia v Jackson and O’Sullivan Pty Ltd (1957) IFLR 175). In order for an employer to exercise this common law right the breach would need to be a fundamental one demonstrating that the employee did not have the requisite skills. However, the question remains whether this common law right to summarily terminate is preserved by the Act.
It is worth noting that Section 170 DE(1) is expressed in terms of a valid reason or valid reasons connected with the employees “capacity” or “conduct”. In contrast Section 170 DC legislates for an employee to have an opportunity to respond to allegations and speaks in terms of the employee’s “conduct” or “performance” and insofar as it imports concepts of procedural fairness into the legislation it draws a distinction between “capacity” and “performance” so that the first may be seen as dealing with the employee’s capabilities and the second concentrates on the employee’s application in carrying out the employment. Whilst lack of consistency in the wording of the sections of the Act may lead to some difficulties in interpreting the Act some of these difficulties are overcome by reference to Section 170 DE(2) which introduces standards as to substantive and procedural fairness in allowing the Court to determine whether a termination was harsh, unjust or unreasonable. If it were the case that the Respondent, as in this proceeding, held the belief, albeit a mistaken belief, that all law clerks and legal conveyancing secretaries have probate skills and take instructions to draft wills, any termination arising out of this belief may be characterised as harsh, unjust or unreasonable.
Because the employer has failed to establish a valid reason or reasons connected with the Applicant’s capacity any termination must be characterised as harsh, unjust or unreasonable in the circumstances.
Resignation or Termination?
This is probably a case where the last issue should have been the first. Nevertheless, to make sense of the last meeting as employer and employee, it has been necessary to deal with the second limb of the Respondent’s case first.
The Applicant alleges that on the evening of the 27 May 1994, a Friday evening, she spoke to the Respondent suggesting that she go into the office on the following day to put up precedents on the computer which had arrived 2 days earlier. The Respondent’s response was to ask her to sit down and what ensued was a discussion during which the Respondent informed the Applicant that they were not going to have a long term relationship, he was concerned about a number of things she was doing and, on a number of occasions, told her he wanted her to resign. It is also alleged by the Applicant that he said to her “Carol if you arrive on Monday it is going to be very, very difficult for both of us, I don’t want you to be here”. The Applicant claims to have been devastated because in the preceding two weeks she had not gained any impression that there were problems in her relationship with the Respondent; although she acknowledged there were some things she could have performed better. Despite this she did not want to resign and denies that she did resign. Indeed, no written resignation was submitted by her.
The Applicant further alleges the Respondent informed her that he did not have time to train her and she needed a lot of training. In the course of the discussions between them the Respondent told her “Carol if you don’t resign, in accordance with the law I only have to give you three warnings and you are sacked...”. She believed she was under a lot of pressure and did not want to resign. Ultimately he offered her a $1,500.00 sum together with an excellent reference.
The Respondent alleges that during the same week he decided to raise his concerns with the Applicant on the Friday evening. He states that he informed her he was unhappy with her performance, that he needed to constantly supervise and check her work and further he felt that she had misled him in relation to her abilities. Apart from a discussion about whether she had the abilities of a law clerk or not the Respondent said he raised a number of specific matters which have already been set out earlier in this judgment.
In his evidence in chief the Respondent recalled that the Applicant, at one stage, had said “Are you dismissing me?”. His response was that he was not because there was new legislation requiring certain procedures to be followed in the event someone was performing unsatisfactorily. The Respondent alleges he told the Applicant that she would have to start performing and her reply was that she could not without training and time. The Respondent alleges he offered the Applicant the opportunity to train at the Castlemaine office “in your own time”, and this offer was declined. It is the Respondent’s allegation that the Applicant raised the question of resignation by stating that if he wanted her to resign she wanted three months salary. He alleges he then indicated to the Applicant that he would pay her one month’s salary, tax paid, amounting to $1,500.00. In addition, the Applicant asked for a reference to which request the Respondent agreed.
For there to be a termination of employment under the Act it must be at the initiative of the employer. It is argued by the Respondent that the employment came to an end with the Applicant agreeing, for consideration to resign. However, for there to be a voluntary resignation there must be a real choice to be exercised; that is to say, a choice to either continue in employment with an opportunity to train and improve or resign and take some payment in lieu of notice together with an excellent reference. On the evidence I am not satisfied that when the Respondent decided to meet with the Applicant on the Friday evening he offered or was offering her any real choice. The offer if made to train in her own time at the Castlemaine office when she was working in his Bendigo office is totally unrealistic. The Respondent believed that the Applicant had misled him as to her capacity and both parties agreed that he stated this to her during their last meeting. The Respondent’s view that he was misled is consistent with an intention to bring the employee’s employment to an end rather than offer any opportunity for training. The fact that the Respondent understood that the new Federal legislation had been enacted and that such legislation placed restrictions on the way in which an employee might be terminated is also consistent with an intention to place pressure on the Applicant to resign rather than go through any process of attempting to train her in his office procedures and practices.
Undercover of a letter dated 30 May 1994 the Respondent provided the Applicant with a reference (Exhibit A2). The letter reads:-
“This is to confirm that your resignation tendered on Friday 27 May 1994 is accepted.
I enclose a cheque in your favour in the sum of $1,500.00 being the sum agreed in consideration of my request for your resignation.
I honestly do wish you the very best and will happily confirm the contents of the enclosed reference with anyone who wishes to discuss same with me”.
The accompanying reference is as follows:-
“In the short space of time for which Mrs Carol Kiel was available to work for me she displayed excellent secretarial and conveyancing skills. Carol displayed a willingness to accept any task whether or not it necessarily related to her position, which makes her an ideal person for a small office such as my own. Carol quickly established a warm and confident relationship with clients. She is honest, forthright and friendly.
It is with great regret that I accept Carol’s resignation. I have no hesitation in recommending her for a position of responsibility in any legal office and wish her well”.
The Respondent in cross examination expressed the view that the use of the words “my request for your resignation” in the letter was unfortunate and was not an accurate reflection of what in fact occurred at the meeting. He also agreed with the proposition put to him in cross examination that on the Respondent’s version of events the reference was “a fabrication”.
In context I cannot accept that the Respondent as a solicitor misused the word “request”. If indeed he did understand that the Act imposed procedural requirements in order to lawfully terminate, it is more likely than not that he set out to obtain the Applicant’s resignation with no intention of keeping her in his employment beyond the date of the last meeting. The written reference is at complete odds with the Respondent’s allegation that the Applicant lacked the capacity to fulfil the job requirement. Its contents are consistent with the evidence given by the witnesses called by the Applicant as to the Applicant’s capacity. Otherwise, the giving of the reference presumably in circumstances where the Respondent had no belief in the veracity of its contents is consistent with an intention and desire to terminate the employee’s employment immediately.
On these facts I am satisfied that the Respondent’s actions amounted to a constructive dismissal of the Applicant (see East Sussex County Council v Walker (1972) 7 ITR 280, In Re Michaelis Bayley Trading Co. and New South Wales Sales Representatives and Travellers Guild (1979) AR (NSW) 392 at page 393 and Weller and Transport Superannuation Board 4 VIR 353). The question to be asked is whether the Applicant would have agreed to resign if the Respondent had offered her the option of remaining and further the instruction and training in his office procedures and practices. On the evidence it is more likely than not that she would have remained in her employment. Accordingly, the termination of her employment was brought about by the initiative of the Respondent.
Remedy
Within weeks of the termination of her employment the Applicant found alternative employment and her position with the Respondent was taken by Ms Berger. Both parties recognised that reinstatement was impracticable and addressed themselves to the alternative remedy of compensation. On the evidence I am satisfied that reinstatement is impracticable particularly in circumstances where the Applicant commenced her new employment on 17 June 1994 and has remained in that employment. The other matter I have taken into account on the question of reinstatement is the small office environment within which the Applicant would be required to work in close proximity to the Respondent.
The Applicant’s new employment is as a receptionist and clerical assistant. On her evidence she was unable to gain employment as a legal conveyancing secretary with law clerk skills following the termination of her employment on 27 May 1994. During the interval between the termination and the commencement of her new employment the Applicant received $683.00 in unemployment benefits. The $1,500.00 cheque paid to the Applicant by the Respondent at termination has not been presented and was tendered as Exhibit A2.
In his submissions on behalf of the Applicant Mr Jackson noted that under Section 170 EE(3) the Applicant’s maximum entitlement to compensation is $12,500.00. In calculating compensation he urged the Court to have regard not only to the remuneration lost by the Applicant but to, in his words, “broadly compensate this Applicant for all that has happened to her”.
The section requires the Court to have regard to the remuneration payable. In so doing it does not limit the matters for which an Applicant can be compensated to remuneration only. It leaves at large the question of what other items may be considered in determining the compensation payable up to the limit imposed by Section 170 EE(3).
In his submission to the Court Mr Jackson appeared to argue that since the advent of the Federal termination of employment law, the Court should imply a term in the contract of employment that there is to be compliance with the Act and such term should be implied by reference to the criteria established in the decision in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 16 ALR 363 in order to give business efficacy to the contract of employment.
On the facts I cannot see any basis for saying that in order to give business efficacy to the contract of employment a term need be implied to the effect that there is to be compliance with the Act. An employer cannot contract out the minimum requirements of the Act. Prior to the reforms introduced by the Act there was considerable argument as to whether a term of an award to the effect that “termination of employment by an employer shall not be harsh, unjust or unreasonable” was by implication incorporated into the contract of employment giving rise to contractual remedies in case of breach. The decision of the Full Court in Byrne v Australian Airlines Ltd and Frew v Australian Airlines Ltd 120 ALR 274 by majority decided that it was for the employer and the employee to agree whether award provisions were to be expressly incorporated in the contract of employment. It is now the case that since the enactment of Section 170 DE(2) all employees covered by the Act are entitled to the benefit of this provision without seeking to demonstrate that their contract of employment contains any express or implied term protecting them from a termination characterised as harsh, unjust or unreasonable.
It has already been decided that matters other than remuneration, such as security of employment may be considered in assessing the compensation payable (see Nicolson v Heaven and Earth Gallery Pty Ltd Chief Justice Wilcox, case number NI 127 of 1994 unreported, dated 20 September 1994).
Mr Jackson urged on behalf of the Applicant that the Court compensate the Applicant for the mental distress, anxiety, loss of dignity and injury to feeling brought about by circumstances in which her employment was terminated. In support of this contention I was referred to the decision of Mr Justice Gallen in Whelan v Waitiki Meats Ltd (1991) 2 NZLR 74 in which the Court concluded that it was open to the Court in an appropriate case to award damages for mental distress, anxiety, humiliation, loss of dignity and injury to feeling. In arriving at that conclusion the Court declined to follow the authority of Addis v Gramophone Co. Ltd (1909) AC 488 (HL). The New Zealand Court’s decision involved the dismissal of an employee, and amongst other things, raised the question of whether there was an implied term in the employer’s contract of employment that the employer would not without reasonable and proper cause conduct itself in a manner calculated or likely to destroy or seriously damage the reputation of the plaintiff or to cause him undue mental stress, anxiety, humiliation, loss of dignity and injury to feelings. His Honour sought to draw a distinction between the commercial climate at the time Whelan’s case was decided and that applicable at the time of the decision in the Addis case. In the latter case the House of Lords found that a servant, wrongfully dismissed from his employment, cannot claim compensation for the manner of the dismissal, for his injured feelings or for the loss he may sustain from the fact that the dismissal of itself makes it more difficult for him to obtain fresh employment.
I was also referred to Mr Justice Gray’s article “Damages For Wrongful Dismissal: Is The Gramophone Record Worn Out?”. This is one of the essays contained in the recent publication entitled “Employment Security” (The Federation Press 1994). Without embarking on a lengthy analysis of the contents of His Honour’s article, it is sufficient to say that His Honour concludes, after analysing the modern law of contract as it applies to the employment relationship, that there is no reason why damages should not be awarded to employees for breach of the employment contract for items such as the difficulty faced by an employee in gaining further employment, the loss of the opportunity of continuing employment and the loss associated with the anxiety, mental distress, humiliation, loss of dignity and injury to feeling.
In Mrs Kiel’s case and on the evidence given by her I am not satisfied that even if the legislation as enacted takes the scope of compensation beyond the constraints imposed by the common law in Australia in awarding damages for wrongful dismissal, the Applicant has established such a claim. The evidence given was that she was “devastated” and “shocked”. There was no other substantive evidence led on these matters.
In assessing compensation and taking into account the limits imposed on the amount of such compensation by Section 170 EE(3)(a) I have given consideration to the reduction in income suffered by the Applicant in being required to change her employment and accept employment at a sum of $22,000.00 per annum. There was no evidence given by the Applicant as to any attempts made by her to gain employment as a legal conveyancing secretary with law clerk skills at a rate of income equal to that received by the Respondent after she commenced her current employment and to the date of the hearing. In all the circumstances it would be reasonable to allow the claimed shortfall in remuneration for one year before the Applicant makes further attempts to obtain paid employment in a position comparable to that which she lost.
In assessing the Applicant’s entitlement, I have treated the payment of $1,500.00 to her by the Respondent on or about 30 May 1994 as being, in effect, compensation in lieu of notice exceeding the minimum requirements of Section 170 DB(1)(a). This sum covers the three week period of unemployment up to the date the Applicant commenced her new employment on 17 June 1994. I propose to order a further payment of compensation of $2,317.00. This payment also takes into account the receipt by the Applicant of unemployment benefits.
Mr Jackson sought the payment of costs by the Respondent if the Applicant was successful in her application. There is clear authority in this Court that the Court’s powers to order payment of costs pursuant to Section 347 of the Act is limited to cost orders made in favour of or against third parties (see Nicolson v Heaven and Earth Gallery Pty Ltd), otherwise costs payable to the successful party cannot be ordered unless the party against whom the costs are sought instituted the proceedings vexatiously or without reasonable cause. Accordingly, I see no basis for acceding to the submission of Mr Jackson.
The only other outstanding matter is the question of witnesses expenses. This was an issue I asked Mr Jackson to address me on specifically because of the implications for his client even if she succeeded in her application. Mr Robertson and Mr Tey sought orders for their expenses in the sum of $575.00 and $600.00 respectively. They both have legal practices in Bendigo and were required to travel to Melbourne losing one day’s work in attending Court in response to the Applicant’s subpoena to give evidence on her behalf. Mr Jackson was not able to extract any significant concessions from the witnesses on the quantum of their expenses and ultimately relied on the discretion the Court has under Order 27 of the Industrial Relations Court Rules to order costs against the party who requests the issue of the subpoena. On balance I am satisfied that each witness has incurred substantial expense in complying with the subpoena and I should make an order for an amount to be paid to each of them by the Applicant to compensate them for the expenses reasonably incurred. To that end I propose to make an order that the Applicant pay each witness expenses in the sum of $300.00.
MINUTES OF ORDER
THE COURT ORDERS THAT:
The termination of the employees employment contravened Division 3 of Part
VIA of the Industrial Relations Act 1988.
The Respondent pay to the Applicant compensation in the sum of $2,317.00 within 21 days of the date of this order.
The Applicant pay witness expenses in the sum of $300.00 to Timothy John Robertson and witness expenses in the sum of $300.00 to Julian Alexander Tey within 28 days of the date of this order.
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 twenty seven (27) pages are a true copy of the reasons for judgment of Judicial Registrar Millane.
Associate:
Dated:
Solicitors for the Applicant:
Solicitor appearing for the Applicant:Maddock Lonie & Chisholm
Mr R Jackson
Solicitor for the Respondent:
Counsel for the Respondent:
H C Curwen-Walker
Mr J BourkeDates of hearing:
27 October 1994
Date of Judgment:
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 687 of 1994
B E T W E E N :
CAROL ANNE KIEL
Applicant
AND
H C CURWEN-WALKER
Respondent
MINUTES OF ORDER
Judicial Registrar Millane
THE COURT ORDERS THAT:
The termination of the employees employment contravened Division 3 of Part
VIA of the Industrial Relations Act 1988.
The Respondent pay to the Applicant compensation in the sum of $2,317.00 within 21 days of the date of this order.
The Applicant pay witness expenses in the sum of $300.00 to Timothy John Robertson and witness expenses in the sum of $300.00 to Julian Alexander Tey within 28 days of the date of this order.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
C A T C H W O R D S
INDUSTRIAL LAW - Termination of Employment - Contract of Employment - employee’s capacity to perform employment - whether employer misled as to employee’s capacity to perform employment - resignation - damages.
PRACTICE AND PROCEDURE - Costs - witness expenses - Order 27 Industrial Relations Court Rules.
Industrial Relations Act 1988, ss,170DE, 170DC, 170EE
CASES: Savvidis v Privilege Clothing Pty Ltd VI 357 of 1994 (Parkinson JR
unreported, dated 28 November 1994)
Printing Industry Employees Union of Australia v Jackson and
O’Sullivan Pty Ltd (1957) IFLR 175
East Sussex County Council v Walker (1972) 7 ITR 280
In Re Michaelis Bayley Trading Co. and New South Wales Sales
Representatives and Travellers Guild (1979) AR (NSW) 392
Weller and Transport Superannuation Board 4 VIR 353
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 16
ALR 363
Byrne v Australian Airlines Ltd and Frew v Australian Airlines Ltd
120 ALR 274
Nicholson v Heaven and Earth Gallery Pty Ltd (Wilcox CJ, NI 127 of
1994 unreported, dated 20 September 1994
Whelan v Waitiki Meats Ltd (1991) 2 NZLR 74
Addis v Gramophone Co. Ltd (1909) AC 488 (HL).
CAROL ANNE KIEL -v- H C CURWEN-WALKER
No. VI 687/94
Judicial Registrar: F Millane
Place: Melbourne
Date: 27 October 1994
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