Fenech v Perfecthealth Medical Centres Pty Ltd
[1996] IRCA 452
•13 September 1996
DECISION NO: 452/96
C A T C H W O R D S
INDUSTRIAL LAW - Termination of Employment - initiative of employer - valid reason - misconduct - accrued jurisdiction - compensation for distress - damages for distress - notice
Industrial Relations Act 1988 ss.170DE, 170EA, 170EE, S430
CASES:
Selvachandran v Peteron Plastics (1995) 62 IR 371
FENECH -v- PERFECT HEALTH MEDICAL CENTRES PTY LTD
No. VI-1491 of 1996
Before: Ryan JR
Place: Melbourne
Date: 13 September 1996
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI-1491 of 1996
B E T W E E N :
ROSLYN FENECH
Applicant
AND
PERFECT HEALTH MEDICAL CENTRES PTY LTD
Respondent
MINUTES OF ORDERS
Judicial Registrar Ryan 13 September 1996
THE COURT ORDERS:
The Respondent pay the Applicant the sum of $25,000 for breach of S170DE(1).
The Respondent pay the Applicant the sum of $2,884.62 for breach of S170DB.
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-1491 of 1996
B E T W E E N :
ROSLYN FENECH
Applicant
AND
PERFECT HEALTH MEDICAL CENTRES PTY LTD
Respondent
Before: Ryan JR
Place: Melbourne
Date: 13 September 1996
REASONS FOR JUDGMENT
Delivered Ex Tempore
The Respondent conducts medical centres. The secretary of the Respondent company is the driving force behind the centres. The secretary is Geoffrey Walter Edelsten. He also describes himself as the medical administrator of the centres.
The Applicant asserts that she commenced employment with the Respondent on or about 1 July 1992 performing administrative duties on a part-time basis and on the basis that she would not receive a salary for the first 12 months of her employment. At this stage or soon thereafter, I think at this stage, she was living with Dr Edelsten.
On 28 February 1993, the Applicant was appointed a director of the Respondent company. The Respondent asserts that this appointment was without remuneration. The Applicant claims that in or about July 1993 she was promoted to a position of Human Resources Manager and thereafter worked full time for the Respondent. She claims that when appointed as Human Resources Manager, the Respondent agreed to:
pay a salary of $40,000 per annum for 12 months from July 1993
pay a salary of $50,000 from July 1994
pay and/or reimburse motor vehicle expenses incurred in the course of the employment
provide a mobile telephone and pay and/or reimburse expenses incurred by the Applicant in the course of the employment
pay superannuation
pay all expenses incurred by both the Respondent and/or Dr Edelsten incurred by using the Applicant's credit card facilities
The Respondent denies (1) above, that is, an agreement to pay a salary of $40,000 for 12 months from July 1993 and claims that from mid 1994 until the end of 1994 the Applicant was employed as a consultant at the rate of $300 per week.
In respect of (2) above, the Respondent concedes that there was an agreement to pay the Applicant a salary of $50,000 per annum but that this agreement related to the period 2 January 1995 to 31 January 1996 and not from July 1994.
The Respondent also asserts that the employment agreement, as varied, provided for a salary of $40,000 per annum from 1 February 1996, such salary reduction reflecting a reduction in working hours. The Applicant describes this as “a unilateral salary decrease and a demotion”.
The Respondent denied, in contentions of fact and law an agreement to reimburse car and telephone expenses and expenses incurred by the Respondent and/or Dr Edelsten, [(3), (4) and (6) above], but the evidence of both Dr Edelsten and a director of the Respondent company, Alex Mahl, suggests that a loose arrangement to that effect did exist and the Respondent concedes a car and mobile phone were provided.
The Respondent concedes an agreement to make superannuation contributions as required by the Superannuation Act. There is no evidence this was ever done. The Respondent admits liability to pay superannuation in paragraph 8A of its contentions of fact and law and suggested during the trial, through counsel, that the superannuation liability will be determined and discharged.
The Applicant asserted in her contentions of fact and law and in evidence that the Respondent terminated her employment on 18 March 1996 and that no reasons were given for the termination.
The Respondent does not appear to address this assertion in contentions of fact and law, or in supplementary contentions of fact and law, possibly because these contentions and the supplementary contentions concentrated to no small degree on a cross-claim which the Respondent sought leave to pursue in the Court's accrued jurisdiction.
Leave to pursue the cross-claim was refused at the commencement of the hearing. I was not satisfied the cross-claim arose from the same substratum of facts as the termination of employment. Taking account of the refusal of Marshall J to grant interlocutory relief in this matter, and the limited appeal from that decision for which leave was granted by Gray J, (unreported) 2 May 1996 and having regard to the orders of Gray J, (17 June 1996) I would not have exercised the discretion to allow the cross-claim even if I had been satisfied it arose out of the same substratum of facts.
In essence, Mr Mahl and Dr Edelsten deny that either of them terminated the Applicant's employment on behalf of the Respondent but Dr Edelsten, by affidavit, has stated that Mr Mahl informed him that the Respondent had terminated the Applicant's employment.
Counsel for the Respondent in his primary submission asserts termination for valid reason, that being the serious misconduct of the Applicant. No evidence has been led as to when that took place and who delivered the coup de gras. Indeed, the Respondent seems caught between a rock and a hard place, asserting that the termination was for valid reason but, if the Court does not accept that, then as an alternative, there was no termination but an agreement by the Applicant and the Respondent not to continue the employment. Such submission arose late in the hearing and is not adequately outlined in the Respondent's contentions of fact and law.
The Respondent has simply failed to discharge the onus of demonstrating a valid reason for termination, that is, a sound, defensible, well-founded reason. I rely on the dicta of Northrop J in Selvachandran v Peteron Plastics (1995) 62 IR 371 at 373.
The Respondent has not even given evidence as to when the termination took place or who acted on behalf of the Respondent. The Court is left with unchallenged evidence from the Applicant. Where there is conflict, (and there is real conflict between the Applicant and Mr Mahl and Dr Edelsten), as to what the Applicant asserts happened on 18 March 1996, the Court accepts, on the balance of probabilities, that the termination was by the Respondent via Mr Mahl on 18 March 1996.
In other words, where the evidence of Mr Mahl and Dr Edelsten on the one hand, and the Applicant on the other, conflicts as to the termination, the Court accepts and prefers the evidence of the Applicant. There is no real evidence, and certainly no acceptable evidence, that the Applicant was terminated for the misconduct alleged in the Respondent's contentions of fact and law and again in submissions today. I do not accept the claims of the Respondent that the Applicant was guilty of serious misconduct allegedly arising from unlawful detention of property and unauthorised absence from work.
The Court finds that the Respondent breached S170DE(1) and that the Respondent also breached S170DB.
The Respondent paid the Applicant nothing on termination and the Applicant may well have valid additional claims in this Court or elsewhere in respect of payments borne by her on behalf of the Respondent and Dr Edelsten.
I have concluded that, by whatever arrangement, the Respondent agreed to pay the Applicant $50,000 per annum and has so stated in its contentions of fact and law. The circumstances of this termination lead me to conclude that the Applicant is entitled for breach of S170DE(1) to the maximum compensation open under sections 170EE(2) and (3), that being $25,000. Reinstatement is impracticable and conceded as such by both parties.
Under S170DB, I order that the Respondent pay to the Applicant $2884.62 being the equivalent of three weeks' salary in lieu of notice.
For the record I order now that the Respondent pay to the Applicant the sum of $25,000 for breach of S170DE(1).
In respect of exemplary damages, the claim has been made in an application under S170EA and I have awarded the maximum compensation open under S170EE. There is no room for additional compensation under S170EE for exemplary damages or for damages for distress but, if there had been room open, I would not have awarded compensation under S170EE for distress in the absence of independent professional evidence. I simply note that there was no claim in the accrued jurisdiction of the Court which could have founded a claim for damages for breach of contract.
I think, apart from reserving on costs, that is it.
MINUTES OF ORDERS
THE COURT ORDERS:
The Respondent pay the Applicant the sum of $25,000 for breach of S170DE(1).
The Respondent pay the Applicant the sum of $2,884.62 for breach of S170DB.
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 4 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan.
Associate:
Dated: 20 September 1996
Solicitors for the Applicant: Rigby Cooke
Counsel for the Applicant: Mr J D Loewenstein
Solicitors for the Respondent: Webb Korfiates and Hassett
Counsel for the Respondent: Mr I Upjohn
Date of hearing: 12 and 13 September 1996
Date of judgment: 13 September 1996
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