Cooper v Javani Pty Ltd (McPhee Meat Catering)
[1996] IRCA 172
•10 May 1996
DECISION NO: 172/96
C A T C H W O R D S
INDUSTRIAL LAW - Termination of employment - Probation - Compensation
Industrial Relations Act 1988 ss.170DE(1), 170DE(2), 170DC
CASES:
Slifka v Sanders Pty Ltd I.R.C.A. (19 December 1995). Decision No 701/95.
Nicolson and Heaven and Earth Gallery (1994) 1 IRCR 199
COOPER -v- JAVANI PTY LTD (MCPHEE MEAT CATERING)
No. VI-5162 of 1995
Before: Judicial Registrar Ryan
Place: Melbourne
Date: 10 May 1996
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI-5162 of 1995
B E T W E E N :
RICHARD EDWARD COOPER
Applicant
AND
JAVANI PTY LTD (MCPHEE MEAT CATERING)
Respondent
MINUTES OF ORDERS
Judicial Registrar Ryan 10 May 1996
THE COURT ORDERS:
That the Respondent pay to the Applicant compensation in the sum of $8,750.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI-5162 of 1995
B E T W E E N :
RICHARD EDWARD COOPER
Applicant
AND
JAVANI PTY LTD (MCPHEE MEAT CATERING)
Respondent
Before: Judicial Registrar Ryan
Place: Melbourne
Date: 10 May 1996
REASONS FOR JUDGMENT
UNLAWFUL TERMINATION OF EMPLOYMENT
The Application
The Applicant claims unlawful termination of employment. Initially, he sought reinstatement and compensation but when the matter was heard in March 1996 he was only pressing compensation.
The Applicant was employed to assist the Manager of the Respondent’s meatworks in Tullamarine. The operation at Tullamarine specialises in supplying portion controlled meats to an established customer base including “blue ribbon” restaurants and hotels.
The Applicant was employed for seven weeks between 7 August and 29 September 1995. There is some dispute as to whether he was employed as Manager, Co-Manager, Assistant Manager or Boning Supervisor at the Tullamarine premises.
The Court has concluded that while he responded to an advertisement for Manager of the Tullamarine premises of McPhee Catering the Applicant was in reality employed as an assistant to the incumbent Manager, Mr Gus Salerno.
The Applicant was dismissed on the 29 September 1995. He was not given a specific written notice of termination but he included with his claim a copy of an Employment Separation Certificate dated on the date of termination and stating that the employment was terminated because of “unavailability of this type of work”. The type of work was not specified in the Employment Separation Certificate and it is possible that the alleged “unavailability of ..... ....... work” was recorded to facilitate the speedy payment of unemployment benefits.
The Applicant also included with his claim a copy of a Statement of Termination Payment of $1283. This sum was paid by cheque on 29 September 1995 and comprised:
wages week ending 29/9/95 $ 673.08
one week in lieu of notice $ 673.08annual leave 23.4 hours $ 414.48
Total $1760.64
tax deducted $ 477.64
Cheque No. 4022827 $1283.00
The Managing Director of the Respondent company at the time of termination was Mr John McPhee, the proprietor of the Wodonga Meats/McPhee Group of Companies. His evidence confirmed that the actual employer was Javani Pty Ltd. The Employment Separation Certificate also identified Javani as the employer.
Solicitors for the Respondent filed a notice of appearance stating that McPhee Meat Catering was the “true employer” but it is clear that Javani Pty Ltd was the employer and the Court has amended the application to provide Javani Pty Ltd (McPhee Meat Catering) as the Respondent.
Ex Tempore Judgment 25 March 1996
The matter was heard over two days on 8 and 25 March. At the conclusion of the hearing the Court determined the matter in the following terms.
“I am in a position to determine this matter and determine it now. I will later give detailed reasons for my decision.”
I am not satisfied, first of all, that the Applicant was on a period of probation or was told he was on a period of probation, or was told he was on a period of probation for a period which was reasonable in the circumstances. I will give reasons for those conclusions.
Having concluded that, I have also concluded that the respondent breached S170DE(1), DE(2) and S170DC.
I am satisfied that the respondent did not give the applicant an opportunity to respond to the allegations against him and I am not satisfied that any effective allegations were made against the applicant in any event.
I have assumed, although it has not been put clearly, that the respondent asserts that the Applicant was terminated for a valid reason associated with performance.
I am not satisfied that there is evidence that the respondent did in fact terminate the applicant for the valid reason of inadequate performance. In any event, I have concluded that the termination, even if it had been for valid reason was harsh, unjust and unreasonable.
I have also concluded that reinstatement would be impracticable. I propose to order compensation pursuant to S170EE.
In terms of the determination of the compensation I want to examine Slifka’s case before I determine whether or not I am going to award the maximum compensation available. (i.e. Slifka v Sanders Pty Ltd I.R.C.A. (19 December 1995) North J. Case No VI94/2741R, Decision No 701/95).
I will flag that, in the event that I was to award maximum compensation, I would not be taking into account any suggestion of economic loss associated with the purchase of a motor vehicle. Subject to reading Slifka’s case, I would be minded to reduce any compensation ordered by something in the order of $3400. I will do the calculations after I have examined the evidence but will take into account $150 for 12 weeks, that is the $1800.
The Dunn and Bradstreet work (which I need to calculate more carefully) seems to produce earnings in the order of $1600 which would suggest that I would be likely to deduct that also from any order for compensation.
Reasons will be given for this decision. The amount of the compensation ordered will be provided with those written reasons when I have had the opportunity to consider Slifka’s case.”
Probation
Leonard Michael Cook, Personnel Manager, Wodonga Meats Pty Ltd, gave evidence that:
the Respondent company is part of the Wodonga Meats (McPhee) Group of Companies
he as Personnel Manager provides services to the companies in the group including the Respondent company
he was placed on a probationary period of three months when he was appointed to his position and the probation was confirmed in writing (Exhibit R2)
he placed an advertisement for the position to which the Applicant was appointed
the position was described in the advertisement (Exhibit R3) as “McPhee Catering Manager” but there was no reference to probation in the advertisement
he spoke to the Applicant by telephone to arrange for him to attend an interview on 11 July 1995 with the Managing Director of the Respondent company (at that time), Mr John McPhee
(vii)in that discussion “to the best of my recollection....we would have touched on conditions of employment...in essence, with a salaried staff position one talks about the range of conditions which apply to salaried staff as opposed to those people who are normally covered under awards...that would include...working hours...leave conditions ..some indication of salary and it would also include any condition like trial or probationary period...basically the job duties as described in the advertisement were perhaps a limit of my knowledge of the operation at that stage so I didn’t go too much further than that”
(viii)a few days after the interview with Mr McPhee at which Mr Cook was not present the Applicant telephoned Mr Cook “seeking feedback from the interview...questions about timing...when will decisions be made...that type of conversation...I (i.e.Cook) indicated to Mr Cooper that (salary) would be a matter for Mr McPhee to determine...conditions...I repeated from previous discussions when the position first came up and we spoke; salaried staff conditions including probationary periods and the special conditions which might apply”
The quotations in (vii) and (viii) above are from the transcript of the hearing on 8 March 1996 (T8, T9 and T11). They are not clear, positive expressions of discussions on probation.
At T25 and T26 under cross-examination Mr Cook said in relation to “hours, leave, nature of duties, salary and probation”.....”I believe the context of most of those remarks were in the first discussion with Mr Cooper prior to interview ...I think, I believe that all of it applied to the earlier conversation because that would be the natural information given to any Applicant for a job....in all honesty, I don’t think I can give you precise words....as precisely as I can, I believe I answered the question earlier, the normal role of the Personnel Manager, Human Resource Consultant, in dealing with this type of position is to try and make sure that any Applicant has full knowledge about conditions of employment”.
Again, the Court does not regard this evidence as clear, positive evidence that probation was discussed by Mr Cook and the Applicant.
Mr Gus Salerno, who described himself as “Manager for McPhee Meats...at 25 Assembly Avenue, Tullamarine” gave evidence that:
“I first met him (the Applicant) with John McPhee in the car park of Tullamarine, 25 Assembly Drive and that’s when we interviewed Richard (the Applicant) as far as the job was concerned” (T39 and T40)
John (McPhee) clearly stated that there would be a three months trial period and he also asked me would I be happy with that and I said ‘yes’, and I in turn said to Richard that, “likewise, we would be on trial as far as he was concerned because he mightn’t like the job”
On the second day of the hearing, after Counsel for the Respondent had closed his case, he made application for leave to call Mr McPhee to give evidence in respect of the probationary period and the possible provision of a motor car for the use of the Applicant in his employment with the Respondent.
Counsel for the Applicant opposed but the Court did allow the Respondent to call Mr McPhee.
Counsel for the Applicant put to Mr McPhee that the Applicant was adamant that probation was never discussed with him at any time before or after he was employed. Referring specifically to the meeting at Tullamarine on 11 July 1995 when the Applicant was offered employment, Counsel for the Applicant said (T35):
“I am asking you, even if you had it in your mind to raise it with him, that it is possible that it was not raised at that meeting?”
Mr McPhee replied:
“I would be very surprised if it wasn’t. I believe it was discussed when he started employment with us with our Personnel Manager of the group, Mr Cook. I believe Mr Cook discussed it with him at some stage.”
Again at T37 Counsel for the Applicant said:
“I put it to you, Mr McPhee, and I am bound to do this, that even if you have a policy in relation to this trial period...this three month trial period, that Mr Cooper, for whatever reason, was not advised of it at the outset or at any time during his employment...what do you say about that?”
Mr McPhee replied:
“Mr Cooper’s entitled to say that...that’s why I am here today isn’t it?... that’s why we’re all here.”
Again at T40 Counsel for the Applicant said:
“Who would have been responsible for giving Mr Cooper a contract of employment or a letter confirming his employment? Whose job is that?”
Mr McPhee replied:
“Yes, that’s a good question. Normally it would come from Mr Cook but in this particular case I guess Mr Salerno has got to shoulder the responsibility that it was never done properly. If I’d kept out of it, it probably would have been done properly”
Finally, at T45, Counsel for the Respondent in re-examination asked Mr McPhee:
“Could you explain why the group has the policy of the trial period?”
Mr McPhee replied:
“To avoid unfair dismissal cases.”
By and large the Court finds Messrs Salerno and McPhee open, honest witnesses. Neither had a detailed recall but both were co-operative witnesses. In particular, Mr Salerno presented as a loyal, hard working and overworked Manager. He was quite positive that probation was mentioned by Mr McPhee in that part of the interview which took place in the car park on 11 July. However, there was several inconsistencies between his evidence and that of Mr McPhee. In my view, both were recalling matters as well as they could and both were witnesses of truth although it is unlikely either had a complete or accurate recall of the events on 11 July.
The Applicant in some ways was a less impressive witness but he was quite adamant that at no stage was probation mentioned. While the Court finds:
the Applicant’s evidence of how he initially reacted after being provided with a statement of termination payment on 29 September and
his response after he had telephoned Mr McPhee on 30 September and been told “that he was unsuitable” which was “thank you very much” (T12 - 25 March 1996)
responses which could have been consistent with an employee who did know he was on probation, the uncertain evidence of Messrs Cook and McPhee and the conflicts in the evidence of Mr Salerno and Mr McPhee have led the Court to a position in which it cannot be satisfied, on any balance of probability test, that probation was offered to and applied to the Applicant.
Valid Reason - Section 170DE(1)
The Court was not impressed with the Applicant’s claim as to his effectiveness during his seven weeks employment with the Respondent.
The evidence of Mr Salerno is preferred.
Mr Salerno gave evidence that:
“we felt that if we were to get someone else as a Manager..well it would relieve me of all the duties I have and it would then enable me to do a little bit more and...pick up new clients or just whatever I could do, apart from being tied down all the time there in the premises” (T39)
“what I told Mr Cooper was...to come in, have a look, have an oversee of the place and if he feels that there is anything there that he can see that could be done better, or corrected, or basically just have a good look at the place for the first week and just have a feel and get to know the fellows that are working there and then give me a report” (T42)
“I felt personally that Richard Cooper had no knowledge of this particular side of the meat industry and that is restaurants and hotel supply” (T44)
“I felt that as time would go on may be there might be something there that he could do and I discussed it with John, and I think it was the fifth week, or so, of his employment that....I expressed myself to John McPhee what I felt and the fact that there was no pressure taken off me; that, if anything, I had a little pressure in my position because I not only had to continue doing what I was doing but also find things for Richard to do” (T45)
“I had a couple of discussions...with Richard and expressed the fact that I didn’t believe that he was producing enough, or progressing enough...I just said - well, what are you doing Richard? Who have you seen?...I wasn’t happy with the amount of calls he was doing... look I really can’t remember exactly what I said, honestly I just cannot” (T48)
“he is being taken on as a Manager...to improve the business and to continue improving it...quality control, servicing customers, the way we might buy our meat, hang it, chill it, pack it, label it. I don’t know, just everything concerned is of importance...I had one major discussion with him (McPhee) when I felt that Richard wasn’t suitable for the job” (T58 and T59)
“I assessed him as not having the knowledge of this particular side of the business...he did not have the knowledge to explain himself in our services or identify meat cuts...or improve the business as far as I was concerned” (T60)
“I didn’t think Richard had the ability and I couldn’t see him getting the ability even if he was to stay on...I don’t believe that Richard is helping me at all and I don’t think he is able to help me...it’s just not working...he hasn’t got the knowledge basically...I am sorry John but that’s the way I see it but I’ll leave everything else up to you but I can’t see any help there” (T62)
“I mean I’m not going to work 60, 70 hours a week and have someone else there getting paid basically for doing nothing and that’s the way I see it, not John McPhee or McPhee Meats but me, and I had to express that because it was getting under my skin...I can’t tell Mr McPhee...I can’t say I want him dismissed....what I said was that I didn’t think he was capable of the job we have put him on for. It wasn’t helping me, it wasn’t relieving me and it wasn’t improving the business at all...I couldn’t see anything in the future that Richard could help us with to be honest...the only thing I can do for Mr McPhee is tell him who is performing and who is not basically, to make it simple, and that’s what I was doing (T63)
“I wasn’t happy with Richard as far as what we employed him as and what to do and what John McPhee done, after I had spoken to him, was he came down the following weekend on the Friday night ...or the weekend after, I am not sure, but that is when we had the interview and instead of John taking my advice that he was no good for the job, not that I said get rid of him or anything like that...we juggled it around and we give him another position in the company and that’s what John wanted to do and I was happy with that” (T64)
“I was not only unsatisfied I was very unsatisfied...I mean, I might as well have put a taxi driver on because that’s exactly the way I looked at it” (T67)
“at the meeting with (me), Mr McPhee, Mr Daszek...about 20 September...he was told we weren’t happy with what he was capable of up to then and we felt that maybe another position in the company would suit him better” (T71)
“my main concern was that sending someone like Richard out to see any of my important clients or have any discussions on the telephone as far as meat is concerned, from our premises supplied to theirs, would jeopardise the outlook they would have on us as a hotel and restaurant supplier...it just made me feel as if we would not look professional enough...Richard just did not have the knowledge to assist me in supplying these people” (T87)
The Court in general accepts the evidence of Mr Salerno. The Court was impressed with him as an experienced butcher. The Court believes that if fair processes had have been applied, if the Applicant had been counselled and warned and given an opportunity to answer the complaints against him, the overwhelming likelihood is the Applicant would have had his employment terminated. The termination would have been for valid reason of inadequate performance and that would have been achieved fairly and justly, in all probability by the end of 1995.
Long term employment prospects
The Court has little doubt that in the terms expressed in Nicolson and Heaven and Earth Gallery (1994) 1 IRCR 199 at 213 that the Applicant’s long term employment prospects with the Respondent were very low indeed. It is a case in which “a fair chance of retaining the employment, with its attendant security, had been lost”.
Unlawful Termination - Sections 170DC and 170DE(2)
However, the Court is not satisfied that the Applicant was ever told directly that his performance was inadequate. He was never given a valid reason for his termination. He was never told what that reason was. At least not until the day after his termination when Mr McPhee told the Applicant by phone that “he was unsuitable”.
Mr McPhee said that he left advice on performance to Mr Salerno. Mr Salerno implied it was a task for Mr McPhee. Both Mr Salerno and Mr McPhee gave conflicting evidence on what initial role was allocated to the Applicant. The Court is not satisfied that the Applicant was ever given a satisfactory description of his duties. The Applicant was not counselled or warned. Mr Salerno claimed that he suggested to the Applicant that his performance was not up to scratch but, if he did, his evidence suggests that his references were oblique and indirect.
Indeed, the Court assesses Mr Salerno as a hard working and overworked Manager of a busy meat works, a professional butcher with rather limited skills in supervision and counselling.
Under cross-examination, he admitted that his concerns were expressed to Mr McPhee not to the Applicant. His philosophy and approach are summed up in this exchange with Counsel for the Applicant (at T61).
“You have not had that discussion (on performance) with Mr Cooper, however, have you?”
“No”
“No. You have just gone behind his back and spoken to Mr McPhee?”
“That’s right because, I mean, if someone’s going to...answer an ad like that that’s very very explainable...they should know what’s expected of them”
Compensation
On 25 March the Court indicated that it would award compensation and would determine the amount of the compensation after consideration of Slifka’s case.
In Slifka the circumstances led the judge on review to make an award which took account of the incidence of taxation to ensure equitable compensation for actual loss. The reduction of the gross amount of lost earnings to exclude income tax which was not to be paid and the increase of the net amount so obtained sufficiently to allow for payment of tax on the award was, in that case, for the reasons there given, preferred to the alternative of an award of the gross amount of lost earnings without reduction for income tax payable.
This is not a case in which the tax on an award is likely to be very much less than income tax on the lost earnings. This is not a case in which an award of the gross amount of lost earnings would lead to substantial over compensation. This is not a case of a long serving employee likely to work for the Respondent until retirement.
The circumstances in Slifka are different to the circumstances here. I have concluded that the Applicant, in this case, would have been terminated for valid reason and fairly and justly in all probability by the end of 1995, i.e. three months after the actual termination on 29 September.
The Court therefore considers adequate compensation to be the equivalent of three months salary plus the value of meat provided and petrol expenses for such a period less the Applicant’s earnings in the period from termination to 31 December 1995.
Annual earnings of the Applicant with the Respondent (had he worked for twelve months) are assessed at $35,000. Meat valued at $50 a week for say 48 weeks a year amounts to $4,800. A petrol allowance of say $50 a week for 48 weeks a year also amounts to $4,800. Annual earnings and allowances with the Respondent are notionally set at $39,800 a year. Such earnings and allowances for three months are therefore calculated at $9,950.
The Court makes no discount for the earnings at Dunn and Bradstreet in 1996 and calculates that the Applicant earned approximately $150 a week at the garage for 12 weeks, i.e. $1800; with eight weeks of those earnings in 1995, i.e. $1200.
In the ex tempore judgment on 25 March the Court indicated that it “was minded to reduce compensation by something in the order of $3,400”. However that calculation took account of the inclusion in the reduction of Dunn and Bradstreet earnings initially calculated at $1600. In fact, the Court calculates Dunn and Bradstreet earnings to 25 March at $2,238 but that is neither here not there. There is no reduction for earnings after 31 December 1995.
The Court therefore orders compensation in the sum of $9,950 less $1200, i.e. $8,750.
MINUTES OF ORDERS
THE COURT ORDERS:
That the Respondent pay to the Applicant compensation in the sum of $8,750.
I certify that this and the preceding 11 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan.
Associate:
Dated: 10 May 1996
Solicitors for the Applicant: MacPherson & Kelly
Counsel for the Applicant: Ms L Fleming
Solicitors for the Respondent: Henty Jepson & Kelly
Counsel for the Respondent: Mr B Shaw
Date of hearing: 8 and 25 March 1996
Date of judgment: 10 May 1996
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