Christine Maria Stani v Jill Taylor and Associates Pty Ltd

[1995] IRCA 684

C A T C H W O R D S

INDUSTRIAL LAW -  TERMINATION OF EMPLOYMENT - claim for UNLAWFUL TERMINATION - whether VALID REASON - COMPENSATION - effect of undertaking on COMPENSATION - associated JURISDICTION

Industrial Relations Act 1988 Ss 170DB, 170DE, 170DF(1)(e), 170EA, 170EDA, 170EE
Annual Holidays Act 1944 (NSW)
Long Service Leave Act 1955 (NSW)

Aitken v CMETSWUA, IRCA No. 352, Lee J, 7 August 1995, unreported
Mullany v Active Concrete, IRCA No. 262 of 1995, Wilcox CJ, unreported

CHRISTINE MARIA STANI  -v-  JILL TAYLOR & ASSOCIATES PTY LTD -
NI95/2491

BEFORE:                 R D FARRELL JR

PLACE:  PERTH (HEARD IN SYDNEY)

DATE:  29 NOVEMBER 1995

IN THE INDUSTRIAL RELATIONS    )
COURT OF AUSTRALIA  )
WESTERN AUSTRALIA  )
DISTRICT REGISTRY  )          No. NI 95/2491

BETWEEN:  CHRISTINE MARIA STANI
  -          Applicant

AND:  JILL TAYLOR & ASSOCIATES
  PTY LTD
  -          Respondent

MINUTE OF ORDERS

BEFORE:                 R D FARRELL JR

PLACE:  PERTH (HEARD IN SYDNEY)

DATE:  29 NOVEMBER 1995

THE COURT DECLARES THAT:

1. The termination of the employment of the applicant contravened Sections 170DB, 170DE and 170DF of the Industrial Relations Act 1988.

AND THE COURT ORDERS THAT:

1. The respondent pay to the applicant damages pursuant to Section 170EE(5) in the sum of $2,600.

1. The respondent pay to the applicant compensation pursuant to Section 170EE(2) in the sum of $13,000.

1. The respondent pay to the applicant the sum of $3,360.50, which was not but ought to have been paid to the applicant pursuant to the Annual Holidays Act 1944 (NSW)

1. The respondent pay to the applicant the sum of $3,213.80, which was not but ought to have been paid to the applicant pursuant to the Long Service Leave Act 1955 (NSW)

1. The respondent pay to the applicant each of the amounts referred to above within 14 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

IN THE INDUSTRIAL RELATIONS    )
COURT OF AUSTRALIA  )
WESTERN AUSTRALIA  )
DISTRICT REGISTRY  )          No. NI 95/2491

BETWEEN:  CHRISTINE MARIA STANI
  -          Applicant

AND:  JILL TAYLOR & ASSOCIATES
  PTY LTD
  -          Respondent

BEFORE:                 R D FARRELL JR

PLACE:  PERTH (HEARD IN SYDNEY)

DATE:  29 NOVEMBER 1995

REASONS FOR JUDGMENT

This is an application under Section 170EA of the Industrial Relations Act 1988 for compensation arising from the alleged unlawful termination of the employment of the applicant, Christine Maria Stani (“Ms Stani”), by the respondent, Jill Taylor & Associates Pty Ltd (“JTA”).  Reinstatement is not sought.

There was also a claim under the associated jurisdiction of the Court, pursuant to Section 430 of the Act, for unpaid entitlements under the Annual Holidays Act 1944 (NSW) and under the Long Service Leave Act 1955 (NSW).

This application was heard with another application for compensation under Section 170EA of the Act, arising from the termination of the employment of Vicki Maree Miller ("Ms Miller") by JTA arising out of largely the same circumstances as this application.

There was no appearance by the Respondent. Having satisfied myself that the Respondent was properly notified of the time and place of hearing by the Court, I proceeded to hear the application in the absence of the Respondent.

Factual Background

Ms Stani commenced work with JTA on 1 July 1989, as a full time publicity consultant.  I am satisfied that she was an employee of JTA, rather than having merely been contracted to provide services. Tax was deducted from her wages (Exhibit S3). She received paid annual holidays and performed her duties at the direction of, among others, Jill Taylor (“Ms Taylor”), who was the principal of JTA. 

Ms Stani's evidence was that Ms Taylor and her family moved interstate in late 1990 to live at Sanctuary Cove.  This left Ms Stani responsible for the day to day running of JTA, with the assistance of Ms Miller, a part time publicity consultant also employed by JTA.  Ms Stani's starting salary was $28,340 gross per annum, and by the end of her employment, she was earning $33,800 gross per annum.

Ms Taylor was married to Mr Verne Harland (“Mr Harland”), who was a director of JTA at the time Ms Stani commenced employment (see Exhibit MS7).  Throughout the course of her employment, Ms Stani received instructions from Mr Harland in relation to the performance of her duties.  Mr Harland continued to so instruct Ms Stani even after he ceased to be a director of JTA in July 1993.

Mr Harland was also a director of Elizabeth Arden Pty Limited ("Elizabeth Arden").  Elizabeth Arden was a major client of JTA.

Ms Stani gave evidence that during 1990 she became concerned about the way in which the business at JTA was being run.  She said there were numerous transactions and business practices which she did not understand and which were not explained to her.  She said she was also concerned that some of the things she was directed to do were illegal.  She gave particulars of a number of incidents which caused her concern.  It is not necessary to relate the detail of those incidents save that many of them involved charges to Elizabeth Arden which did not appear to Ms Stani to be justified.  Ms Stani said that she found it very difficult at times to perform her duties because she didn't understand in commercial terms, and wasn't told, why the things she described were happening. 

During the middle of 1993, Ms Stani made a telephone call to the Sydney Fraud Squad.  She explained that she and Ms Miller were worried about what was going on where she worked, and was concerned that JTA were charging another company for services they hadn't provided.  She asked for guidance as to what she should do. The detective with whom she spoke cautioned her that JTA, and in particular Mr Harland, may be authorised to do the things that were concerning her and that she should be careful about making allegations if she didn't have all the facts.

Following these conversations Ms Stani continued to perform her duties at JTA, although she was still worried that she was involved in something that might be at worst illegal, and at least unfair to their clients.

Towards the end of 1994 and early 1995, Ms Stani became increasingly concerned about Mr Harland's activities in relation to Elizabeth Arden.  In particular, she was concerned about secret communications which appeared to be taking place between Mr Harland and Fiorucci. Ms Stani was aware from the ordinary course of her employment that Elizabeth Arden had a licence agreement to sell Fiorucci products in Australia and it was emphasised to her by Ms Taylor that she didn't want anyone from Mr Harland's workplace at Elizabeth Arden to see the communications between Mr Harland and Fiorucci.

In May 1995, nineteen boxes were delivered to JTA's offices by Mr Harland's secretary.  Doors and locks were put on the offices at Mr Harland's instructions.  When Ms Stani opened the boxes to retrieve personal documents at Mr Harland's secretary's request, she discovered that they contained documents relating to Elizabeth Arden, Pan Horizons (which was Mr Harland’s private company) and Fiorucci.

Ms Stani was subsequently told by Ms Taylor that, if anybody asked, she was to say that the boxes contained red wine, home goods and ski gear. 

In late May 1995, Ms Miller arranged a meeting with Phillip Cox, the Group Commercial Controller of Unilever Australia Limited (“Unilever”), which was Elizabeth Arden's parent company. Ms Stani attended the meeting.

Ms Miller told Mr Cox at the meeting that they were concerned that Mr Harland and Ms Taylor, with the help of others, were overcharging Elizabeth Arden for work not done, and also selling free stock supplied by Elizabeth Arden.  Ms Stani and Ms Miller told Mr Cox they were worried about their jobs, both at JTA and in the industry generally if they were caught up with these problems.  They outlined their concerns in detail.  Ms Stani stressed to Mr Cox that she did not want anybody to know that they were Unilever's main source of information.  Mr Cox gave her his assurance that he would keep both their names out of it.

Late in the evening of the following day, all the boxes were removed from JTA's office, apparently at Mr Harland's instigation. 

On 13 June 1995, Ms Stani was telephoned by Mr Cox from Unilever.  He told her he needed her consent to use her name in proceedings against Mr Harland.  He advised her that if she withheld her consent, Unilever could not go ahead with the court order they were seeking, and Mr Harland would “walk free”.  He gave her ten minutes to think about it.  She discussed the matter with Ms Miller.  They sought more time, which Mr Cox would not allow them.  Ms Stani felt she had no choice but to give her consent for Unilever to use her name in court.

At 3.00 pm that day Ms Miller and Ms Stani were served with court documents at JTA’s office by Unilever's solicitors. The documents included an Anton Pillar order (Exhibit MS5) founded on alleged breaches by Mr Harland, Ms Taylor, JTA and Pan Horizons Ltd of various provisions of the Corporations Law. Ms Miller and Ms Stani phoned Ms Taylor at Sanctuary Cove to tell her. They also faxed the documents to her.

Ms Stani and Ms Miller stayed at JTA’s office until 7.00 pm that night supervising the solicitor's execution of the Anton Pillar order.

Ms Stani attended work the next day, 14 June 1995, as usual. The solicitors continued to execute the Anton Pillar order until 11.30 am that day.

At 3.00 o'clock that afternoon, Mr Harland came into the office.   He told Ms Miller and Ms Stani that he was very surprised that they had shown their faces at the office.  Ms Stani said that they had no choice as they had not been dismissed.  Mr Harland said "Well, consider yourselves dismissed".  Ms Stani requested written confirmation of their dismissal and immediate payment of their termination  pay, which Mr Harland said they would receive in due course.  Mr Harland requested that they both leave the premises.  Ms Miller and Ms Stani left the premises immediately.  Ms Stani tried to telephone Ms Taylor from a nearby public telephone but was unable to contact her.

I am satisfied that Mr Harland had the delegated authority within JTA’s management structure to terminate Ms Stani’s employment.

Ms Stani said she was never given any reason for the termination of her employment. Nor was she given any notice of her termination, or pay in lieu of notice.

She has not been back to work at JTA since that day.

Damages for Failure to Give Notice

As an employee of more than 5 years standing, aged less than 45 years, Ms Stani was entitled under Section 170DB of the Act to at least 4 weeks notice of termination, which she was not given. Accordingly I will make an order for damages in lieu of notice under Section 170EE(5) of the Act for $2,600, being an amount equal to 4 weeks’ salary.

Unlawful Termination

Ms Stani contended that there was no valid reason for the termination of her employment, as is required under Section 170DE(1) of the Act, and further, that the termination was in breach of Section 170DF(1)(e) of the Act, because Ms Stani’s participation in proceedings against JTA involving alleged violations of laws and regulations was a reason for termination.

Section 170EDA confers the onus on JTA to satisfy the Court on the balance of probabilities that there was a valid reason for the termination of Ms Stani’s employment, and that Ms Stani’s participation in proceedings against JTA involving alleged violations of laws and regulations was not a reason for termination.

JTA led no evidence to meet that onus, and there was nothing in the evidence led by Ms Stani to satisfy me of those matters.

Accordingly, I find that JTA unlawfully terminated Ms Stani’s employment in breach of Sections 170DE(1) and 170DF(1)(e) of the Act.

Compensation

The primary remedy available under Section 170EE of the Act is reinstatement; under Section 170EE(2), it is only appropriate to award compensation where the Court thinks that reinstatement is impracticable. Ms Stani is not seeking reinstatement, and reinstatement is obviously impracticable.

Ms Stani seeks an order requiring JTA Company to pay to her compensation. I accept Ms Stani’s evidence that her salary was $33,800 per annum (or $650 per week) gross at the time of the termination of her employment. I have proceeded on the basis that she would have received remuneration of $16,900 in the 6 months after the date of termination, had JTA not terminated her employment, and that $16,900 is therefore the maximum award of compensation I can make.

In assessing Ms Stani’s loss flowing from the unlawful termination of her employment, I note that she had not at the date of hearing on 6 October succeeded in finding alternative employment. She advised the Court however that she had been receiving payments from Unilever maintaining her income at $590 gross per week, ie $60 less than her salary at JTA. There was a two week period in which Ms Stani received no income before the Unilever payments commenced. The Unilever payments had continued up to the date of hearing.

A letter was tendered (Exhibit S11) setting out the terms of Ms Stani’s arrangement with Unilever. It is dated 13 June 1995 and I accept that it resulted from discussions with Unilever personnel after the Anton Pillar order had been obtained, but before Ms Stani’s employment was terminated. The terms of the letter are as follows:

“Dear Christine,

In the event that you lose your employment with Jill Taylor and Associates, Unilever will undertake to help you find employment with another employer at no disadvantage in terms and conditions (eg with a supplier or agent of Unilever) or, if such efforts are unsuccessful, will itself offer you such employment. You will appreciate that Unilever will not be able to offer you any security of placement beyond that applicable to its other employees.

During the search for employment, Unilever will compensate you fully for any loss of earnings.

Yours sincerely,

R A Harrison
Personnel Director

Unilever Australia Ltd.”

The undertaking extended by Unilever is not, in my view, legally enforceable, given the absence of consideration. It was not negotiated until after Ms Stani had agreed to let her name be used in the Anton Pillar order proceedings, and in my view Unilever did not strictly need her agreement to so use her name in any event. The giving of the undertaking was an act of goodwill on Unilever’s part. On the evidence, it seems Unilever are not in fact compensating Ms Stani fully for her loss in earnings. She expressed concern that a forthcoming meeting with Mr Harrison might be the occasion for discontinuing payments.

In assessing Ms Stani’s loss, it is arguable that I should take into account the fact that, up to the date of hearing, the extent of her monetary loss had been reduced by Unilever’s payments to her.

However, in Mullaney v Active Concrete (IRCA No. 262 of 1995, unreported at 5), Wilcox CJ considered whether payments received from the Department of Social Security should be deducted in the calculation of compensation. Wilcox CJ held they should not. In so holding, he made a distinction between “remuneration received in respect of work done”, which should be taken into account in assessing loss, and “money received from other sources and unrelated to work done; for example, social security receipts or gifts received from organisations or persons who take a charitable interest in the employee’s plight”. 

It seems to me the Unilever payments fall into the latter category, and I have assessed Ms Stani’s loss on that basis. In any event, there is a real possibility that the undertaking will not be met in its terms by Unilever, and that in future her ongoing loss will not be similarly reduced.

I have taken into account and deducted the sum I have awarded of damages for lack of notice.

The assessment of Ms Stani’s remaining actual and future loss is inevitably speculative, but the Court must do the best it can. In all the circumstances, I will award a sum of $13,000 as compensation under Section 170EE (3).

Associated Jurisdiction

Evidence was led which satisfied me that Ms Stani had accrued entitlements to annual leave and to long service leave in the course of her employment. These entitlements are summarised in Exhibit S6. She received nothing in lieu of these entitlements at the time her employment was terminated.

Ms Stani seeks an order that JTA pay her the amount claimed in relation to her accrued and unpaid annual leave and long service leave entitlements, under the associated jurisdiction of the Court conferred by Section 430 of the Act.

Section 430 of the Act provides:

1. So far as the Constitution permits, jurisdiction is conferred on the Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Court is invoked.”

Section 418 of the Act further provides:

“In every matter before it, the Court is to grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided.”

I am satisfied that Ms Stani’s claims for accrued annual leave and long service leave entitlements unpaid on her dismissal are associated with Ms Stani’s claim of unlawful dismissal. Accordingly I find that the Court has jurisdiction pursuant to section 430 in respect of the claims to grant the remedy sought.

There was sufficient evidence before me to satisfy me as to the quantum of the claims, and I will therefore order that the Respondent pay to Ms Stani the amounts set out in Exhibit S6.

I certify that this and the preceding 9 pages are a true copy of the Reasons for Judgment of Judicial Registrar R. D. Farrell.

Associate

Date:

Counsel for the applicant:                  Ms C McArdle
Solicitors for the applicant:                Phillips Fox

No appearance by the respondent

Hearing date:        6 October 1995
Judgment date:     29 November 1995