Fanjo Biber v Japengines Pty Limited
[1995] IRCA 702
•03 October 1995
CATCHWORDS
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - UNLAWFUL TERMINATION - RESIGNATION - CONSTRUCTIVE DISMISSAL - Payment of monetary value of annual leave
Industrial Relations Act 1988, ss 170DB, 170DE, 170EE
Annual Holidays Act 1944, ss 3, 8
APESMA and Carl Sparre -v- David Graphics Pty Limited (IRCA No. 221/95 27 March 1995)
FRANJO BIBER -v- JAPENGINES PTY LIMITED
NI 1503 of 1995
BEFORE: MCILWAINE JR
PLACE: SYDNEY
DATE: 3 OCTOBER 1995
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
No. NI 1503 of 1995
BETWEEN:
Franjo BIBER
Applicant
AND:
JAPENGINES Pty Ltd
Respondent
BEFORE: MCILWAINE JR
PLACE: SYDNEY
DATE: 3 OCTOBER 1995
REASONS FOR JUDGMENT
This is an application under Division 3 Part VIA of the Industrial Relations Act 1988, made by Franjo Biber for a remedy for the unlawful termination of his employment by his former employer Japengines Pty Ltd.
I have a certificate issued by Vice President McIntyre of the Industrial Relations Commission, which states “In accordance with subsection 170ED(2) of the Industrial Relations Act 1988, the Commission hereby certifies that it has been unable to settle this matter by conciliation”. I am therefore satisfied that the application is properly before me.
In this matter I understand that the parties are consenting to me handing down my orders and then publishing my reasons for my decision at a later date.
Mr Biber was born on the 2 October 1949 and at the time of the hearing was forty six years of age. He was born in Osijek in Croatia and migrated to this country arriving in Fremantle on 24 August 1972. Prior to his migration he had completed his high school education at the age of fifteen years and spent one year studying to be a tractor driver. He then drove tractors for about six years in his home country. He travelled from Fremantle to Sydney on 31 August 1972 and has lived in Sydney since that date. About thirteen days after he arrived in Sydney he commenced work as a builders labourer.
Mr Biber stayed with a company known as Alan’s Constructions for some months until it went into liquidation and he then worked for Macdonald’s Constructions for six years as a builders labourer. In 1978 he sustained a serious injury to his lower back while working for Macdonald Constructions. He then had a period of time off work, during which he was paid workers compensation. In 1981 he commenced a course retraining himself as a driving instructor. He obtained work with Macquarie Driving School at Parramatta and he worked consistently from 1981 to 1986 in that capacity.
In 1983 Dr. Sengupta carried out an excision of a disc at the lumbosacral level. The applicant had about three months off work and then returned to his previous employment as a driving instructor and worked up until 1986. Dr Sengupta further states:
"He made a satisfactory recovery and I did not see Mr Biber for a long time until August 1994 when he came back complaining of recurrence of low back pain, fairly persistent radiating to the right leg as far as the heel, aggravated with certain activity. At this stage, he was working as a cleaner."
On or about the 17 September 1986, Mr Biber commenced work for the respondent namely Japengines Pty Limited, which at that stage was known as Japanels Pty Limited. The premises are located at Moorebank in Sydney. There are apparently two main directors of the company, being Ray and Michael Griffin. Mr Biber dealt mainly with director, Mr Ray Griffin. Initially his work with the company was that of a cleaner, which included cleaning the office, washing cars, washing engines and cleaning toilets. Subsequently, he undertook training on a fork lift. This work involved him unloading containers and loading trucks with the fork lift as well as moving doors, bonnets, tail lights, gearboxes and other equipment for motor vehicles over to shelves. Originally there were only two employees working in the back of the factory, that is the applicant and Mr Steve Griffins, who was a brother of the Directors. Towards the end of his period of employment there were six male persons on the workshop floor who were involved in testing the engines and there were two females in the office.
The general nature of the business of the respondent was to import engines and second hand parts from Japan which were brought in by containers once or twice a week. The containers would then be unloaded in the premises and the engines would be put on one side of the building and the container cleaned. Then the engines were run and tested. The applicant testified that sometimes he would wash the engines and then they would be moved to another location in the factory where they would be tested by the engine testers. The engines would be on the floor and the applicant would wrap plastic around them. The applicant would also have to wash the bonnets of second hand cars with a steam cleaner or sometimes he did so by hand.
The applicant was also required to pick parts in accordance with an invoice handed to him by Mr Ray Griffin. The applicant also gave evidence of wrapping doors, bonnets and bumper bars in plastic. He gave evidence that if the spare parts were stored high someone would come with a pallet and lift him up on the fork lift, he would then drag the particular item down onto the fork lift. The heavier items such as the gearboxes and engines were transported by fork lift. However the applicant indicated that some of the engines were lifted by hand when they weighed about 25 - 30 kilograms. Although the tasks involved a lot of heavy lifting and bending, apparently this work was done from 1986 until about mid 1994 without any marked or reported problems with his back.
In July 1994, the applicant was driving a fork lift. He can't remember the exact time or day but he felt a “little pain in my right leg and I thought this may be just a muscle, then I was working all day went home and come back again and every day how I was working the pain was going worse and worse in my right leg”. At that time there was no pain in the lower back. This evidence contradicts the view taken by Mr Griffin and concurred in by the applicant in each of their current recollection of the various telephone conversations held between them, that Mr Biber said:
"He did not injure himself at his work at Japengines."
I am of the view Mr Biber and Mr Griffin are overlooking the probability of an aggravation of the pre existing back injury as a result of the nature and conditions of the work done by the applicant at the premises of the respondent.
The applicant gave evidence that he went to Dr. S.B. Chaudhuri of Merrylands Road, Merrylands and received time off work for two days. This evidence is supported by the medical certificate issued by Dr Chaudhuri dated 28.07.94. Dr Chaudhuri had apparently been seeing the applicant for about twenty years. The applicant gave evidence that his leg and back problems got worse and he attributed this to working with the respondent. The applicant had earlier been certified as unfit for two days from 4 July 1995, suffering diarrhoea. The applicant continued in employment until 9 September 1995 which was the last day that the applicant spent working with the respondent.
The applicant also gave evidence that before he left his employment the directors were well aware that he had a physical difficulty with his back, which could be observed from the way he was working. Sometimes he had to stop working because of this pain. At some stage both Directors had suggested to the applicant that he should have some physiotherapy for his back problem. These allegations were not denied in the evidence given on behalf of the respondent.
During the hearing the applicant demonstrated that he was wearing a Cosmodisc to support his back. It was not clear from his testimony when the applicant had commenced to wear this support.
The applicant left his work on Friday 9 September 1994 without speaking to either of the directors and on the following Monday 12 September 1994 Mr Ray Griffin rang him. The applicant indicates in his evidence that Mr Griffin was in the habit of ringing him fairly regularly. This was confirmed by Mr Ray Griffin in his evidence.
Exhibit 2 is a report of Dr. David Ho of Castlereagh Radiology, addressed to Dr. Sengupta dated Wednesday 14 September 1994 in the following terms:
"The L4/5 disc is intact. Some contrast is seen extending into the Schmorl’s mode along the inferior aspect of L4. During placement of the needle a little contrast extravasation occurred, at this level the patient experienced no pain. In the CT scan contrast is contained within the nucleus pulposus. The disc outline is smooth."
The L5/S1 disc is degenerate and ruptured. Contrast extravasation into the anterior epidural spaces has occurred. At this level, the patient experienced mild to moderate pain localised to the back. In the CT scan contrast has dispersed within the disc substance. There is also a focal collection of contrast in a right paramedian position. There is also contrast staining of the tear in the disc annulus. A previous laminectomy is noted at the L5/S1 level."
The applicant then gave evidence that after he received the report which is quoted in the previous paragraph he:
"Rang Ray, next day, when I come back from hospital to tell him what the find is, and I told him I had a Doctor find out that I have ruptured disc and I need surgery to be done on my back. He told me that's how he said, 'Sorry, Frank, we can’t wait for you until you get better. I have to employ somebody else', and that was it."
Mr Raymond Griffin, a director of the company gave evidence on behalf of the respondent. Mr Griffin testified he had first employed the applicant as a "general hand, cleaner, rouseabout". He described the job as:
"Helping, assisting and loading containers, sorting the spare parts, panels etc. Helping me whenever it was required, unloading, loading trucks with a fork lift and as the years went on we trained him in what we call parts interpreting, he could identify a part by sight. He could sort of - nothing was marked, it was unmarked or any thing like that but he could tell that was a fender for this car, that was an engine belonged to this model vehicle etcetera, and then as time went on we then trained him to become an engine tester where he would test our engines for us on a test cell and gave him quite a bit of mechanical knowledge."
Mr Griffin gave a summarised version of the telephone discussions between the two of them. For instance:
"During the discussion, I said to Frank himself, as (sic), "he tried - should try Social Security because he was - Frank was looking for money.
Yes? And also because he was looking for money, I also said, like you know, he said about his holiday pay, Frank said 'What about holiday pay?' and I said, 'Well, you can get all your holiday pay up, the way around that would be to resign.
Why would you make that statement?
Because he wanted money, he needed - Frank said to me, Frank said words to the effect of 'I need money, I have to have a operation.'
So he said that he needed money to have an operation? Yes, Frank said he needed money to have a operation.
And why did you say to him that in order to get his annual leave he would have to resign?
...To: Because he needed money. Frank said he needed money and all the money that he had left with us was as annual leave and to get it all, we decided that if he resigned, he would get all his annual leave. And then, of course, I said to Frank after he resigns that when he is better, to give me a call and we would have his job for him."
This evidence was given at the conclusion of the first day of hearing. In the second day of the hearing, Mr Griffin suggested that "Frank used the words to the effect of that he has a disc problem and that he has to leave the industry." This is clearly inconsistent with the earlier suggestion of the job being given back to him when he gets better. In view of the significant later variation in his evidence, I do not accept his denial that he said words to this effect to Mr Biber:
"Sorry Frank, we can't wait for you until you are better. I have to employ somebody else."
There is no doubt that discussion took place between them as to a way Mr Biber could be paid his annual holidays. In his evidence Mr Griffin clearly admits that he told Mr Biber that for this to happen he would have to resign.
Although there was a reference made in the evidence to the award under which Mr Biber was employed, the award was not tendered in evidence. In any event, Mr Griffin denied that he was fully aware of what "the award says about the cash value of annual leave". The only evidence from Mr Griffin of the advice he received was that when Mr Biber came to pick up his money, he rang his employer association to get confirmation about the Long Service Leave situation.
I observe that in the absence of any other evidence it seems to me that the Annual Holidays Act 1944 of New South Wales was the legislation applicable to the situation in contemplation by Mr Griffin. It is convenient to extract the relevant sections:
"ANNUAL HOLIDAYS ACT 1944 - SECTION 3
3 (3) If any worker and the employer so agree, the annual holiday or any such separate periods may be taken wholly or partly in advance before the worker has become entitled to the annual holiday.
(5) Except as provided in section 4 or section 4A, payment shall not be made by an employer to a worker in lieu of any annual holiday or part thereof to which the worker is entitled under this Act nor shall any such payment be accepted by the worker.
ANNUAL HOLIDAYS ACT 1944 - SECTION 8
8(1) The provisions of this Act shall have effect notwithstanding any stipulation to the contrary whether made before or after the commencement of this Act.
(2) No contract or agreement made or entered into either before or after the commencement of this Act shall operate to annual or vary or exclude any of the provisions of this Act."
Note: The underlining to section 3(5) is my emphasis
Most employers in New South Wales would have some knowledge of these provisions. I consider that Mr Griffin was concerned about the prohibition set out in Section 3(5) of the legislation. If he had taken advice on this issue he could have achieved the result he alleges Mr Biber wanted by placing him on annual leave or agreeing to pay him in advance for his annual holidays pursuant to section 3(3) of the Annual Holidays Act 1944, thus avoiding the suggested necessity for the resignation.
Mr Griffin testified that when he had spoken to Mr Biber, he advised him that he did not agree to give him the forms for workers compensation because he had been told by Mr Biber:
"That he had not been injured at their employment."
There is also the unchallenged evidence given by Mr Biber that his back was first injured at Macdonald constructions and had been operated on in 1983. Further under cross examination, Mr Griffin suggested that Mr Biber told him he injured himself at home. This is clearly wrong as it is inconsistent with the history given by Dr Chaudhuri in this report dated 20 April 1995 to the "Claims Manager, MTAA Industry Super Fund". I view this suggestion to be an exaggeration in his evidence by Mr Griffin.
Mr Griffin, was obviously anxious to resolve this matter. He was quite forthright in his evidence that he did not wish to be involved in a workers compensation claim. He emphasised that he thought Mr Biber was "using the system". A satisfactory way to resolve the matter from his point of view without any further liability would be to categorise the termination as a resignation.
Mr Biber was faced with what appeared to be an insurmountable difficulty. He had been advised by his Doctor that he needed to have a back operation. He would know he needed money if the operation was to be performed quickly. In New South Wales it's commonly accepted that if an operation has to be done in the public hospital system then there is a long waiting list. This does place extraordinary pressure on individuals to try and resolve the medical problem by other means. Therefore in this instance there was enormous pressure on both the applicant and the respondent from their different perspectives.
If Mr Biber had agreed to resign, it seems to me that the resignation could be classified as a forced resignation. In this regard I have carefully considered the decision of his Honour Chief Justice Wilcox in Association of Professional Engineers, Scientists and Managers Australia and Carl Sparre -v- David Graphics Pty Limited (IRCA No. 221/95, 27 March 1995, unreported) as follows:
"Mr Sparre gave evidence to the Judicial Registrar that, as a matter of pride, he preferred to resign rather than be dismissed. Having regard to that evidence, I think the correct analysis of the position is that he said he would leave, but only because he felt he had no other option. The proper description is that it was a forced resignation. It was a termination of employment at the instance of the employer rather than of the employee. It follows that, from the employee's point of view, there is no problem in relation to categorisation of the conversation. His problem relates to the date of the conversation. It took place before the relevant legislation came into effect."
Mr Biber denies that he used the words "Resign" or intended to resign in this conversation with Mr Griffin. Even if he were to have used those words in a conversation with Mr Griffin, I would have regarded it as a forced resignation given the circumstances of him being denied access to the workers compensation claim and to his possible superannuation claim. Finally, Mr Griffin supports his version of the termination of the employment of Mr Biber as being a resignation so he could receive his holiday pay. If that be the case, he had left Mr Biber with no other option than to resign.
I am fortified in this view by the way in which exhibit 7 was completed initially by an employee of the company. Exhibit 7 is an "Employers Report" required by the Department of Social Security. The evidence was that it was originally typed by a female in the office. It was then signed by Mr Griffin who instructed that the words "employee resigned" be added. The form in two respects supports Mr Biber's version as follows:
"3. Is or was his/her absence from work due to
sickness Ž accident Ž some other cause ŽEmployment
4. Has his/her employment been terminated Yes Ž No Ž
Employee Resigned
If Yes, on what date? 21/9/1994"
I have had the benefit of oral submissions from Mr Barko, Counsel for the respondent who urged me to accept the evidence of Mr Biber that he did not resign. In the alternative, Mr Barko suggests that I should find that a "constructive termination" of employment occurred.
Detailed and forthright written submissions were received from Mr Grace, the employers advocate who submits that the crucial question to be considered in this matter is whether Mr Biber resigned or was terminated. I have given careful consideration to both submissions however in the light of the conclusion I have come to that Mr Biber did not resign and was terminated at the initiative of the employer, it is not necessary to further consider those submissions.
In all the circumstances, I believe there to have been a termination of the employment of Mr Biber by Mr Griffin.
There was no dispute that the applicant was employed under the Federal Vehicle Industry Repair Services and Retail Award of 1983. The applicant also produced computer generated pay slips for the period from 30 June 1994 up until the 7 September 1994. He was paid up to the week ending 7 September 1994. The last time the applicant worked he was paid $520.71, however that was for 32.55 hours of ordinary time and 4.2 hours of overtime. His pay for a standard week was 38 hours at $425.20. The applicant submitted to me that this was an average of $598.70 gross per week. I reject this submission and I adopt the figure of $520.71.
Mr Biber is a man who has been in long standing employment with the company. It is true that at the present time it is unlikely that he would be able to continue to work in his former capacity. There was not an opportunity given to him to explore, for example, whether some light duties position could be available with the respondent which would allow him to continue in employment.
I am satisfied mainly on the evidence given by Mr Griffin that reinstatement is impracticable. It is a relatively small firm. Mr Griffin no longer trusts Mr Biber. I have also taken that view because of the long delay in submitting the claim. Moreover, there has been no medical evidence produced by the applicant to confirm he is fit for any type of work with the respondent.
Mr Griffin, in his evidence, denies Mr Biber rang him shortly after Wednesday 21 September 1994 to contest the statement contained in Exhibit 7, that he had resigned. However, in the favour of the applicant is the later concession by Mr Griffin under cross examination that he had a conversation of that nature in December 1994 with Mr Biber. Nevertheless I think the respondent was entitled to make arrangements on the basis that it could replace Mr Biber after September 1994 because of his delay in pursuing his legal remedy.
I turn now to the question of compensation. I have remarked earlier there was obviously a good longstanding working relationship between the employer and Mr Biber. Mr Biber has applied for a benefit under his superannuation policy with the respondent on the basis of a total disability. My experience of such policies and the current state of medical evidence suggests to me that his claim for total disability may not be accepted. However, I feel constrained to restrict the amount of compensation payable to the date when the employee recognised, by applying to the superannuation fund for payment on the basis he had a permanent disability. Exhibit E contained a document entitled:
"MTAA Industry Superannuation Fund
Application for payment of benefit
Total & permanent disablement/ill health"
The applicant concedes in this evidence that it is his signature on the document. Beside his signature the document bears the date 10 January 1995. There is also an endorsement on the document by Mr Ray Griffin as follows:
Employer details given are not to be taken as support of this application."
This section of the form was signed on behalf of the respondent by Mr Ray Griffin on 12 January 1995. The applicant's employment was terminated with effect from 21 September 1994. There is a period of approximately 16 weeks between these dates. Once that claim was put forward by Mr Biber, it seems to me that this changes the position with respect to the possibility of him resuming his former employment. In all the circumstances I think the appropriate amount of compensation to be awarded should revolve around his acceptance of this date as a time when he was permanently disabled.
In view of the finding which I have made that there was a termination at the initiative of the employer I also find that there is a contravention of section 170DB(2), in that notice should have been given. In view of the length of time that Mr Biber was employed, the amount of notice should have been 4 weeks. Mr Biber turned 45 years of age on 2 October 1994 after the termination of his employment.
The findings and orders which I made on the 3 October 1995 are as follows:
I find:
1. The termination of the applicant on 9 September 1994 was at the instance of the employer;
2. The respondent has contravened section 170DB(1) Industrial Relations Act 1988 in that no notice was given;
3. The respondent not to have had a valid reason for the termination of the applicant and therefore to have contravened section 170DE(1) Industrial Relations Act 1988;
4. Reinstatement to be impracticable.
I order that:
(1) The respondent to pay to the applicant $2082.84 being for payment in lieu of notice.
(2) The respondent to pay to the applicant compensation of $6248.52.
(3) The amount in order (1) is to be paid within seven days of today.
(4) The amount in order (2) is to be paid within 21 days of today.
(5)Exhibits may be returned at the expiration of twenty-one (21) days from today.
I certify that the preceding 15 pages are a true copy of the Reasons For Judgment of Judicial Registrar McIlwaine.
Associate:
Date: 24 January 1996
Appearances:
Counsel for the Applicant: Mr M Barko
Representatives for the respondent: Mr R Grace
Hearing dates: 4, 22 September, 3 October 1995
Judgment date: 3 October 1995
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
No. NI 1503 of 1995
BETWEEN:
Franjo BIBER
Applicant
AND:
JAP ENGINES Pty Ltd
Respondent
COURT: MCILWAINE JR
PLACE: SYDNEY
DATE: 3 OCTOBER 1996
MINUTES OF ORDER
THE COURT ORDERS THAT:
(1) The respondent to pay to the applicant $2082.84 being for payment in lieu of notice.
(2) The respondent to pay to the applicant compensation of $6248.52.
(3) The amount in order (1) is to be paid within seven days of today.
(4) The amount in order (2) is to be paid within 21 days of today.
(5)Exhibits may be returned at the expiration of twenty-one (21) days from today.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
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