Clements v Lillian Kaneff Pty Limited

[1996] IRCA 301

DECISION NO:  301/96

CATCHWORDS

INDUSTRIAL LAW - Termination of employment - no point of principle

Industrial Relations Act 1988 s170DC, 170EA, 170DE and 170EE

No. AI 0154R of 1994

Clements v. Lillian Kaneff Pty Limited

MOORE J
SYDNEY
29 APRIL 1996

IN THE INDUSTRIAL RELATIONS COURT )
  )
OF AUSTRALIA - AUSTRALIAN CAPITAL )     No. AI 0154R of 1994
  )
TERRITORY DISTRICT REGISTRY      )
  )
GENERAL DIVISION                 )

BETWEEN:  CLEMENTS

Applicant

AND:               LILLIAN KANEFF PTY LIMITED

Respondent

JUDGE:     Moore J

PLACE:     Canberra

DATE: 29 April 1996

The Court orders:

1. That the respondent pay the applicant compensation in the sum of $2,500.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE INDUSTRIAL RELATIONS COURT )
  )
OF AUSTRALIA - AUSTRALIAN CAPITAL )     No. AI 0154R of 1994
  )
TERRITORY DISTRICT REGISTRY      )
  )
GENERAL DIVISION                 )

BETWEEN:  CLEMENTS

Applicant

AND:               LILLIAN KANEFF PTY LIMITED

Respondent

JUDGE:     Moore J

PLACE:     Canberra

DATE: 29 April 1996

EX TEMPORE JUDGMENT

The following represents an edited version of three judgments given ex tempore on Monday 29 April 1996.  They were given at three different points during the hearing that day and deal with a jurisdictional issue, the issue of liability and the issue of compensation.  For convenience they are set out in the one document.

JURISDICTION

Consistent with the approach that I earlier indicated and was accepted by the parties, it seems to me that I should rule on this question. It is foundational to the jurisdiction of the court to entertain the application under section 170EA. The issue is whether or not there was a termination of Ms Clements' employment at the initiative of the employer, namely, Lillian Kaneff Proprietary Limited. The evidence discloses that prior to the termination of the employment of Ms Clements there was an issue as to what hours she should work. She had, prior to the issue arising in July 1994, been working a regular pattern of hours although there was some difference between the parties as to whether it was 38 or 40 hours, but that difference for present purposes appears to me to be immaterial.

The applicant, Ms Clements, wished to undertake a course or to continue to undertake a course of study and as a result of the scheduling of her lectures it was necessary, she believed, for her to attend lecture during the day which hitherto she had not done.  The matter was raised by her with her employer.  There were discussions over a period of days about what should be done by way of changes to the hours to be worked by Ms Clements.  A proposal was put in writing by Mrs Kaneff on behalf of the employer which was not accepted by Ms Clements.  The net result was that there was no agreement between the parties to the contract of employment as to a variation of the contract insofar as hours of work were concerned.

As a consequence, Mrs Kaneff sought to resolve what may well have appeared to her to have been an impasse between her and Ms Clements by indicating orally to her that her employment was terminated.  In my view, that intimation involved a termination of Ms Clements' employment by Mrs Kaneff on behalf of the respondent company.  The impasse may have been capable of being resolved in other ways, or it may have been incapable of resolution.  One option would have been for Ms Clements to leave her employment so as to continue her course of study.  However the impasse had not been resolved nor had there been a variation of the contract of employment by the agreement of the parties involved.

In my view, the termination orally by Mrs Kaneff of Ms Clements' employment was a termination at the initiative of the employer.

LIABILITY

The question that now arises is whether or not the termination of Ms Clements employment by the employer was in contravention of any provision of the Act. The applicant, in its submissions, draws attention to both s170DC of the Act and s170DE. Insofar as s170DE is concerned, the Act casts an evidentiary onus on an employer to establish that there was a valid reason for the termination of the employment, having regard to, for present purposes, the employee's capacity or conduct. That provision, reversing the evidentiary onus is section 170EDA. The court is obliged to deal with this matter having regard to the legislation in its present terms.

The matters referred to by the respondent employer as evidencing conduct of the employee constituting a valid reason as that term appears in s170DE are the poor performance of the applicant during her period of employment and her final lack of cooperation in negotiating the question of hours in the period immediately preceding her termination. Other matters are also identified, including in particular her failure to come into the office on 21 July and her conduct from time to time during her period of employment, which it is said involved her, to use the language of Mrs Kaneff, throwing tantrums and writing rude notes in a notebook in response to a decision taken by the employer to place a bar on the telephones restricting STD and ISD telephone calls.

I have listened carefully to what Mr Youakim has said in support of the submission that the evidence discloses conduct on the applicant's part justifying her dismissal.  I am not satisfied, however, that this conduct discloses an employee who was conducting herself in a way that warranted her dismissal in the circumstances in which it occurred in July 1994.  The evidence can be described at best as slight.  There is no evidence of any moment to indicate that the applicant was failing to perform her duties in accordance with what her employer was asking of her.  There are one or two instances in the evidence that disclose what perhaps could be described as less than exemplary conduct on the part of the applicant, though some of these are in dispute and the factual foundation for them is contested.  However, even accepting the evidence as its highest for the respondent employer, they do not disclose matters which satisfy the statutory criteria of a valid reason, having regard to the conduct of the employee.

Moreover, it is contended that the termination was unlawful as the employer was not given an opportunity to respond to the allegations.  I think on any fair reading of the evidence, it is plain that at the time the applicant's employment was terminated, that is, July 1994, it had not been raised with her that there were matters concerning her conduct or the performance of her duties that might lead to her termination.  The termination occurred fairly abruptly and in circumstances where no real opportunity was given to the applicant to answer any allegation that might be thought to have founded the decision to terminate.

In those circumstances, I find there was both a contravention of s170DC and a contravention of s170DE. And as to that last matter, I do so having regard to the provisions of s170EDA which I earlier referred, reversing as they do, somewhat unusually, the onus of proof and requiring the employer to establish that there was a valid reason.

COMPENSATION

A point has been reached in these proceedings where it is necessary to give consideration to what compensation should be awarded, if any, having regard to the provisions of s170EE of the Act. The discretionary power to award compensation is now in terms that requires the court to consider it appropriate, in all the circumstances of the case, to make an order. In my view, this is such a case, that is, it is appropriate in all the circumstances to make an order for compensation. S170EE(3) deals with the question of compensation. It contains an expression or a provision that requires the court to have regard to the remuneration that the employee would have received, but for the termination of employment.

As I have expressed in other judgments, the expression "having regard to" requires that matter to figure prominently in the court's consideration of what compensation should be awarded. I have recently expressed a view in a judgment given in Canberra that the scheme in s170EE(3) directs attention to loss of remuneration for the period of six months following the termination.

In the present case the loss of remuneration, that is, the gross loss of remuneration for the six month period after termination is, on my calculations, the sum of approximately $2080. The respondent employer says allowance should be made for the sum of $1200 paid to Ms Clements by way of a payment in lieu of notice upon her termination. In my view it would be an error in principle to do so. If an employee's employment is terminated then ordinarily the employee is entitled either to some notice of that fact or payment in lieu. The fact that in this case there was payment in lieu is not a matter, in my opinion, to be offset against compensation that otherwise is or might be awarded under s170EE for a termination which was not lawful.

The Act itself requires payment of an amount in lieu of notice. Indeed, one of the matters raised by the applicant in support of the compensation claimed is what is said to be the inadequacy of the notice or the payment in lieu of notice. Another matter that is raised of a similar character is the costs that have been incurred in bring this application and the fact that those costs are not recoverable. Both the cost and the claimed additional notice to which it is said the employee might have been entitled are not, in my view, matters properly to be considered in assessing compensation under s170EE as they are matters otherwise specifically dealt with in the Act.

The other matters raised by the applicant in support of compensation relate to what is said to be the distress suffered by the applicant arising out of the termination.  The termination occurred in circumstances where there was something of an impasse between the employer and the employee.  I do not view this head of compensation as assuming any real significance in this matter.

In the circumstances it appears to me appropriate to award a sum by way of compensation intended to reflect the loss of income suffered by the applicant as a result of the termination with some small amount intended otherwise to compensate the applicant for the consequences of the unlawful act of the employer in terminating her employment.  I propose therefore to order an amount of compensation in the sum of $2500 and I so order.

I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore.

Associate:  ........ ........ ......

Dated:    ..../..../....

APPEARANCES

Counsel for the Applicant:          Mr Sloane

Solicitor for the Applicant:              Meyer Boettcher & Clapham

Counsel for the Respondent:               Mr E Youakim

Solicitor for the Respondent:             Michael T. Helman

Dates of Hearing:  29 April 1996