Fenton v Swan Hill and District Aboriginal Co-op Ltd
[1996] IRCA 415
•21 August 1996
DECISION NO: 415/96
CATCHWORDS
INDUSTRIAL LAW - UNLAWFUL TERMINATION - employee refusing to withdraw signature on petition of no-confidence in respondent - VALID REASON - BREACH OF CONTRACT - implied terms of EMPLOYMENT CONTRACT - CONDUCT AND PERFORMANCE - OPERATIONAL REQUIREMENTS - whether HARSH, UNJUST OR UNREASONABLE
Industrial Relations Act 1988 s170DEBlyth Chemicals Ltd v Bushnell (1933) 49 CLR 66;
Burazin v Blacktown City Guardian (Industrial Relations Court of Australia, Madgwick J, 15 December 1995, unreported);
Gregory v Philip Morris Ltd (1988) 80 ALR 455.
FENTON v SWAN HILL & DISTRICT ABORIGINAL CO-OP. LTD
VI 5974/95
Before: MURPHY JR
Place: MELBOURNE
Date of hearing: 21 AUGUST 1996
Date of judgment: 21 AUGUST 1996
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 5974/95
BETWEEN:
LINDA FENTON
Applicant
AND
SWAN HILL & DISTRICT ABORIGINAL CO-OPERATIVE LTD
Respondent
BEFORE: MURPHY JR
PLACE: MELBOURNE
DATE: 21 AUGUST 1996
MINUTES OF ORDERS
THE COURT ORDERS THAT:
The application is dismissed.
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
VICTORIA DISTRICT REGISTRY
VI 5974/95
BETWEEN:
LINDA FENTON
Applicant
AND
SWAN HILL & DISTRICT ABORIGINAL CO-OPERATIVE LTD
Respondent
BEFORE: MURPHY JR
PLACE: MELBOURNE
DATE: 21 AUGUST 1996
REASONS FOR DECISION
Delivered ex tempore - revised from the transcript
These proceedings raise for determination a question involving conflict between the duties of an employee within the employment relationship and the duties of the employee as a member of a co-operative that is itself the employer. The precise legal status of the respondent did not emerge in the evidence but whether it is a body corporate or established as a true co-operative it is clear that it was run by a board of directors.
The applicant had been employed for some years by the respondent, and the predecessor organisation responsible for a housing program. She worked until 17 November 1995 and was described as a supported accommodation assistance program worker. There were some concerns as to the applicant's work performance and during 1995 she had been the subject of two warnings. Her performance, however, was not the reason for the termination of her employment.
In September 1995 a petition began circulating among members of the Aboriginal people of the Swan Hill district. That petition (Exhibit R9) contained a preamble that was headed "Vote of No Confidence in the Present Administrator and the Present Board of the Swan Hill Aboriginal Co-operation (sic) Directors". Pages of the petition called for a vote of no confidence in Mr Shannon, the administrator, and five-named directors. The applicant, along with about 150 other voting members of the Co-operative, and about 50 non-voting members, signed the petition.
The petition was used to call for an Extraordinary General Meeting (“EGM”) of the Co-operative. This took place on 24 October at which time the petitioners were unsuccessful. Five staff of the respondent, including the applicant, signed the petition. Evidence was led from Mr Shannon that after the meeting members of the staff who signed it were each asked to withdraw their signatures. Except the applicant, they all agreed to do so. There was a dispute as to whether one employee, Mr Kelly, did so.
On 16 November 1995 a meeting occurred to discuss a number of performance concerns relating to the applicant. Present were at least one director of the respondent, Mr Nicholls, and representatives of the Australian Services Union, as well as a representative from VECCI, an employer organisation. In the latter stages of that meeting the applicant was asked by Mr Nicholls whether she would withdraw her signature from the petition. If she did not do so, he said, she would be sacked. The applicant asked for 24 hours to think about it.
Mr Shannon gave evidence that after this meeting the directors of the respondent met and authorised him to dismiss the applicant if she did not withdraw her name from the petition. The next day the applicant attended at Mr Shannon's office. She said she spoke first and said to him “if I do not take my name off does that mean I will be sacked?” Mr Shannon replied, “yes”. The applicant then said “my name stays, I stand up for what I believe in”. He then said “that is your privilege”. He said he would contact VECCI in relation to her payments. The applicant then said “I will wait for proper notification”.
By letter dated 20 November the applicant was advised that she had been dismissed for gross misconduct. The letter (Exhibit R6) said:
“During this latest meeting (on 16 November) you were given the option of removing your name from a petition, which has been circulated through our community which was a vote of no confidence in our Directors, you have decided that you do not wish to remove your name from this document, the Directors view this as an act of gross misconduct, and accordingly we have no alternative but to terminate your employment with the Co-op forthwith. Your holiday pay and termination pay will be made up this pay day.”
In examination in chief the applicant said that she signed the petition because she wanted something better for the aboriginal people in her community. She said she knew the allegations were very serious. She said she believed they were correct and she remains of that belief. She said the Co-operative management was not good for the people. She also said she regarded her name staying as more important than her job. She said that it was her belief that Mr Shannon was not a good administrator.
The applicant was a witness who impressed as one with strongly held beliefs in what she believed was for the good of members of her local community. Mr Shannon was the only witness for the respondent. His evidence was that the applicant was dismissed because she was not loyal to the respondent. He said that the other staff members approached had withdrawn their signatures and the respondent could not have be an organisation where one member of the staff was “back stabbing” the organisation. The applicant had indicated to him that her loyalty to her people, the people she served, their children and their families was more important than her loyalty to the co-operative.
Was there a valid reason to terminate the applicant's employment?
The respondent has the onus of proof that it had a valid reason to terminate the applicant's employment. In its letter it referred to gross misconduct. I am satisfied that the respondent had a valid reason to terminate the applicant's employment.
The respondent was entitled to expect its employee to signify her loyalty to the administrator and the board of directors. The applicant, I am satisfied, knew that was being requested of her. She deliberated for a day and chose not to do so. By doing so she was repeating what she had signed in the petition. The petition was an accusation by the signatories that they lacked confidence in the named board members and Mr Shannon. The petitioners had failed to succeed in their endeavour in the EGM. The board was entitled in those circumstances to expect staff employed by the respondent to affirm their confidence in the management.
The failure of the applicant to do so was destructive of the necessary confidence in the employment relationship. It was conduct that met the tests set out in the High Court decision in Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66. In that case at 81, Dixon and McTiernan JJ said:
“Conduct which in respect of important matters is incompatible with the fulfilment of an employee's duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground for dismissal..... But the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to its future conduct arises.”
Here I am satisfied that the actions of the applicant were conduct that gave the respondent grounds connected with both its operational requirements and the applicant's conduct to dismiss her. The applicant's actions can also be characterised as a breach of an implied term of the contract of employment that was found in Burazin v Blacktown City Guardian (Industrial Relations Court of Australia, Madgwick J, 15 December 1995, unreported). There the court found that there was an implied duty in a contract of employment that the employer would not without reasonable cause conduct itself in a manner likely to damage or destroy the relationship of confidence and trust between the parties as employer and employee.
The contract of employment carries mutual obligations. I am satisfied that the applicant's action was in breach of an implied term of the contract of employment that she would not, without reasonable cause, conduct herself in a manner likely to damage or destroy the relationship of confidence and trust between the parties as employer and employee. The action was refusing to withdraw the allegations that she had signed in the petition, by withdrawing her name from that petition, as requested to do so on 16 November.
Was the dismissal harsh, unjust, or unreasonable?
The applicant carries the onus of proof that the dismissal was harsh, unjust or unreasonable. She has failed to discharge that onus of proof because, applying “moral values and prudential considerations current in the community” (see Gregory v Philip Morris Ltd (1988) 80 ALR 455 at 457 per Jenkinson J), it was not unreasonable for the respondent to dismiss her when she refused to recognise the decision of the EGM, and thus refused to recognise the authority of the board and the administrator. She put her lack of confidence in the respondent and in the administrator Mr Shannon ahead of her job. It cannot be harsh, or, unjust or unreasonable in those circumstances to terminate her services. The application must be dismissed.
I certify that this and the preceding five (5) pages
are a true copy of the reasons for decision of
Judicial Registrar Murphy as recorded in the transcript
and revised by the Judicial Registrar.
Associate: Karen Halse
Dated: 21 August 1996
APPEARANCES
Counsel appearing for the applicant: Mr Devries Solicitors for the applicant: Embleton & Associates Pty Counsel appearing for the respondent: Mr Bruce Shaw Solicitors for the respondent:
VECCI Date of hearing 21 August 1996 Date of Judgment: 21 August 1996
0
0
0