Forbes v Shape-Up Fitness Centre Pty Ltd
[1996] IRCA 369
•31 July 1996
DECISION NO: 369/96
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY NI 1433 of 1996
CARLOYN LOUISE FORBES
Applicant
SHAPE-UP FITNESS CENTRE PTY LTD
(A.C.N. 069 468 284)
Respondent
Coram: Judicial Registrar Linkenbagh
Place: Sydney
Date: 31 July 1996
REASONS FOR JUDGMENT
Delivered ex-tempore and revised from transcript
This is an application pursuant to the provisions of Section 170EA of the Industrial Relations Act,1988 in which the applicant seeks a remedy arising from the termination of her employment with the respondent and also seeks damages under various heads in the accrued jurisdiction of the Court.
I note that there is no appearance for the respondent today. This matter has had several Directions Hearings and I note that on prior occasions the respondent has been represented either by Mr Redford, who is an officer of the company, or by a Solicitor whom the respondent appears to have engaged for the purpose of arguing a Notice of Motion to vacate today's hearing date. The Solicitor ceased to act for the respondent the day following the dismissing of that Notice of Motion.
I have no doubt that the respondent is aware of the proceedings today. It was represented by a Solicitor before the Court on 23 July 1996 and by Mr Redford himself on 26 July 1996 before Judicial Registrar Tomlinson and it sought to have today's hearing vacated and was unsuccessful. There can be no doubt that the respondent was aware of the hearing today and chose not to be represented today. The hearing proceeded in the absence of the respondent.
The applicant was employed by the respondent, according to her application, between December of 1991 and 11 December 1995. Her oral evidence before me today shows that she last worked for the respondent on 15 February 1996. She was employed in the last phase of her employment between September of 1994 and February of 1996 as the Manageress of a fitness centre located in a shopping complex at Blacktown. She was paid $500 per week cash in the hand and her understanding was that her employer made an Income Tax contribution in addition, of $50 per week.
The applicant appears to have been very good at her job,evidenced by her receiving a bonus of a trip to Hawaii in March 1995 and her becoming entitled to a further trip to Bali by way of a bonus in September of 1995. Her evidence is that there was never any complaint about the quality of her performance of her duties and she appears, on the evidence before me, to have been an industrious and loyal employee. The reasons for the termination of her employment are not crystal clear to me. An applicant in proceedings of this kind is always in a position where he or she can only volunteer to the Court his or her own perceptions of the reasons that were in the mind of an employer who effected the termination of employment.
The applicant has, in my view made an honest effort to assist the Court to point to factors which might have been the causes of the termination of her employment and it is my finding that none of the information relayed to me in the evidence of the applicant establishes any valid reason for the termination of her employment. The matters to which she referred included an incident at a Christmas party in early December 1995 when Mr Redford behaved in a manner which was seen by the applicant as being less than acceptable in the circumstances. She said the words, "You owe me an apology and a lot of other people" to him. That incident occurred in circumstances where it was somewhat late in the evening at the Christmas party and on the applicant's own admission, she as well as Mr Redford had consumed some alcohol. I cannot see any reason on the applicant's evidence of the exchange on that occasion, any valid reason for the termination of her employment.
It is suggested in the documents that the respondent was in February of 1996 of the view that the applicant resigned at that Christmas party. There is no evidence before me to support that proposition and I note that it is a proposition which was not advanced, even to the applicant, before the middle of February 1996, some two and a half months or so later. I accept the applicant's very straightforward assertion that she did not resign on that occasion or on any other occasion.
Another series of events related by the applicant which perhaps points to a breakdown in the relationship between the parties was that in the week following the Christmas party the applicant suffered an injury to her Achilles tendon in the course of her employment. She sought to make a Work Cover claim, only to find that the respondent had not fulfilled his obligations under the appropriate legislation in New South Wales to provide Workers Compensation Insurance cover for his employees. The applicant had to take time off work after the injury to her Achilles tendon and her evidence is that the respondent did not pay her her full wages after she was injured. I note that there was no question apparently of the applicant being entitled to any payments for sick leave, let alone fulfilment of the employer's obligations in relation to Workers Compensation for the period for which she was incapacitated for work. The applicant had arranged to take annual leave in the last two weeks of January 1996 and she was paid her usual pay of $550 per week for each of those two weeks. Apart from that period, she was not paid her full pay for any time after her injury although she received pay at an hourly rate for some work performed by her for the respondent at the request of the respondent during that period.
After the applicant returned from annual leave, she took appropriate steps to contact her employer with a view to resuming her normal duties as Manageress and she was completely thwarted in that exercise by Mr Redford on 15 February 1996 when Mr Redford told her to leave the premises and go home, causing the applicant to respond: "What do you mean? Am I sacked?" It was then that Mr Redford for the first time informed the applicant that she had resigned on 8 December 1995.
There is therefore on the evidence before me no valid reason for the termination of this employment. In all of the circumstances, particularly taking into account the injury of the applicant, and the failure of the employer to fulfil his obligations in relation to Workers Compensation Insurance, and also taking into account the general attitude of this employer which is apparent in relation to other matters to which I will refer later, I have no hesitation in finding that this termination of employment was particularly harsh and unjust and absolutely unreasonable.
An employer has an obligation under the Superannuation Guarantee legislation of the Commonwealth Government to make contributions which are in addition to any wages or salary due to the employee. This employer on the evidence before me has not fulfilled its obligations under that legislation, and in addition it has apparently deducted some moneys from wages due to the applicant on account of such contributions.
The respondent has not paid the applicant moneys due to her pursuant to the provisions of Section 170DB of the Act as payment in lieu of notice. The appropriate period of notice which should have been given is strictly two weeks, if the view is taken that the employment which was terminated on 15 February 1996 was employment by Shape Up Fitness Centre Pty Limited. That name is the name the company has borne since the 20th of July 1995. Prior to that date this company was known as Kennco, Holdings Pty Limited which was apparently incorporated on the 26th of June, 1995.
I note that there is before me as Exhibit “N”, a Certificate of Registration on Change of Name from Kennco Holdings Pty Limited to Shape Up Fitness Centre Pty Limited. There is no evidence before me as to the identity of the owner of the business prior to the 26th of June 1995. It is an anomaly which is occasionally illustrated by evidence in proceedings of this kind that an employee can apparently be under the impression that her employment is continuous and unbroken and yet by actions of the employer, and totally within the employer's control, the employer can cause a break in the continuity of the employment relationship. That appears to have happened in this case, and applying the law very strictly I reluctantly I must say, cannot see how I can calculate the period of notice under Section 170DB taking into account the whole of the period of the applicant's employment at the fitness centre when the identity of the employer changed as at 26th of June 1995.
I revise what I said earlier in these reasons about the appropriate period of notice under Section 170DB. The relevant period is the 26th of June 1995 to the 15th of February 1996 and that being a period of less than one year the appropriate amount of damages pursuant to 170EE(5) would have to be the equivalent of one week's wages,or $550. That works unfairly to the applicant and I regret that but I am bound by the strict terms of the legislation in that regard. It may well be that had the Parliament seen fit to make Regulations pursuant to Section 170DB(3) the situation may have been different for this applicant in that regard.
The applicant's claims in the accrued jurisdiction of the Court are several discrete causes of action. The first is for reimbursement of medical expenses incurred as a result of her injury at work on the 11th of December 1995. The employer has not fulfilled his obligations in relation to Workers Compensation Insurance. He has reimbursed the applicant for all but the sum of $73 of moneys incurred by her to date. I note in criticism of this employer and as a factor which I consider relevant in other areas in relation to the decisions that I am making today that the applicant has been placed by the respondent in the position where although she requires continuing treatment for her injury, particularly by way of physiotherapy, she is not in a financial position to be able to seek and obtain all the medical treatment which her condition requires. It is to be hoped that that situation will be remedied when her claim under the Uninsured Liability Scheme of Workcover proceeds and I hope there is not too much further delay in dealing with that claim. In the meantime, however, I do think it is appropriate that she have a judgment for the sum of $73.
The second claim in the accrued jurisdiction is in relation to the annual leave entitlements. I have already referred to those entitlements and I propose to order the respondent to pay to the applicant the amount which she calculates for unpaid annual leave, being 7 days at the rate of $110 per day.
The applicant further seeks damages arising from the respondent’s failure to pay annual leave loading. The evidence is that she was not paid that loading during the course of her employment and I do not believe that it is appropriate in any event for that loading to be paid in respect of moneys which are paid in satisfaction of annual leave entitlements where the leave is not actually taken in the course of the employment. I propose to dismiss that claim.
The applicant also seeks damages in relation to the superannuation contributions and I propose to make an order requiring the respondent to make good the obligations in relation to superannuation contributions which have not been met during the whole of the period of this employment. The remarks that I have made in relation to the identity of the employer and the continuity of employment in respect of Section 170DB entitlements may be relevant and may mean that I am wrong in ordering this respondent to meet those obligations. However, this respondent has taken over a business which has continued at least since the applicant was first employed there in December of 1991 and I have no difficulty in extending the respondent's obligations to the applicant to ensure that, whatever the prior arrangements were in relation to the ownership of the business, the obligations of any owner of the business from time-to-time, which ultimately rest with this current employer, have been met.
The applicant also seeks damages for hurt feelings, stress, humiliation and embarrassment. There are conflicting authorities of the Judges of this Court in relation to claims of that kind. In view of the order that I propose to make in relation to compensation pursuant to Section 170EE(2) and (3), I propose to dismiss that claim and I am not satisfied that that claim can stand on its own or has been proved by the evidence before me.
The applicant also seeks damages arising from the failure to pay the bonus which she earned in September of 1995. Her evidence in relation to that was that the respondent agreed that if she reached a certain target in a promotion which was run at that time, the respondent would provide her with a holiday in Bali on similar lines to a reward which she had received in March of 1995 of a trip to Hawaii. The applicant's claim in that regard is modest, in that she seeks an amount of $940 which is the equivalent of an excursion-type air fare between Sydney and Bali. She does not seek any additional damages to compensate her for any promises that might have been made in relation to, for instance, accommodation or spending money and I think that her modest claim for the amount equivalent to the return air fares should be allowed.
The evidence is that the employment of the applicant came to an end on 15 February 1996. She was entitled up to that time to be paid her wages at the normal rate. She was ready, willing and able to attend for work at all times during that period when she was not incapacitated by reason of the work-related injury. In respect of the period that she was unavailable for work because of that injury, her wages should be met by the employer either as sick leave or as moneys in respect of which Workers Compensation Insurance mechanisms would otherwise operate. The applicant has provided me with a schedule of losses which is exhibit “K”, and she has carefully taken into account the small amounts of money which she actually received from the employer in that time and also the money she received for annual leave for the last two weeks of January 1996. The shortfall is $3762 and I propose to enter judgment in that sum.
There remains the issue of compensation for breach of the provisions of the Industrial Relations Act and in particular the breaches I have found of Sections 170DB(1) and 170DB(2). The maximum that I can award the applicant in these proceedings is the equivalent of six months' pay at the rate that she was being paid immediately prior to the termination of her employment. I have found that her entitlement in that regard was $550 per week and therefore the maximum that the respondent can be ordered to pay is $14,300.
The applicant became re-employed on 14 March 1996 and she is earning $320 per week. That is substantially less than she was earning in her employment with the respondent. I have no doubt that she would have continued in her employment with the respondent indefinitely but for the actions of Mr Redford in bringing the employment to an end. The applicant's loss continues therefore at the rate of at least $230 per week and that loss will continue indefinitely. Applying the reasoning of the Chief Justice of this Court in May v Lilyvale Hotels Pty Limited (unreported Judgment No.628/95) it is open to me to award to the applicant the maximum compensation which is available under the provisions of Section 170EE and I propose to do that.
The orders that I make today are therefore these:
Shape Up Fitness Centre Pty Limited, (A.C.N.069 468 284) is the correct respondent to these proceedings
Judgment for the applicant in the sum of $73 for medical expenses due to her from the respondent
Judgment for the applicant in the sum of $940 being the value of the bonus not provided to the applicant by the respondent in September of 1995
Judgment for the applicant in the sum of $770 for the value of unpaid annual leave entitlements
The claim for annual leave loading is dismissed.
The respondent shall pay to the applicant's Account Number 502830178 with Advance Funds Management Pty Limited all amounts due pursuant to the provisions of the Superannuation Guarantee legislation in respect of the employment of the applicant since December of 1991
The respondent shall pay to the applicant an amount equal to all sums deducted from her wages as superannuation contributions prior to 15 February 1996
The respondent shall pay to the applicant as compensation pursuant to the provisions of Section 170EE(2) and (3) of the Act the sum of $14,300.
The claim for damages in paragraph 5 of the claims of the applicant filed on 11 June 1996 is dismissed
The respondent shall pay damages pursuant to the provisions of Section 170EE(5) of the Act in the sum of $550
Judgment for the applicant in the sum of $3762 for moneys due for unpaid wages.
The respondent is to pay interest according to the Court Rules on all moneys ordered today to be paid to the applicant calculated from 15 February 1996
I grant liberty to both parties to re-list the proceedings before me on 14days' notice.
I certify that this and the preceding 8 pages are a true copy of the Reasons for Judgment of Judicial Registrar Linkenbagh
Associate: Renee Cauchi
Date: 6 August 1996
Solicitor for the Applicant: Ms S Bower
Culter Hughes & Harris
There was no appearance by or for the Respondent
CATCHWORDS
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT -UNLAWFUL TERMINATION - VALID REASON - CONTINUITY OF EMPLOYMENT - ACCRUED JURISDICTION - REMEDY
Industrial Relations Act 1988, SS 170DB(1)and(3), 170EA, 170EE(2)and(5).
May v. Lilyvale Hotel Pty Limited (unreported Judgment No. 628/95)
CAROLYN LOUISE FORBES -v- SHAPE-UP FITNESS CENTRE PTY LTD
(A.C.N. 069 468 284)
No. NI 1433 of 1996
CORAM: LINKENBAGH J.R.
PLACE: SYDNEY
DATE: 31 JULY 1996
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY NI 1433 of 1996
CARLOYN LOUISE FORBES
Applicant
SHAPE-UP FITNESS CENTRE PTY LTD
(A.C.N. 069 468 284)
Respondent
Coram: Judicial Registrar Linkenbagh
Place: Sydney
Date: 31 July 1996
MINUTES OF ORDERS
THE COURT ORDERS:
Shape Up Fitness Centre Pty Limited, (A.C.N.069 468 284) is the correct respondent to these proceedings
Judgment for the applicant in the sum of $73 for medical expenses due to her from the respondent
Judgment for the applicant in the sum of $940 being the value of the bonus not provided to the applicant by the respondent in September of 1995
Judgment for the applicant in the sum of $770 for the value of unpaid annual leave entitlements
The claim for annual leave loading is dismissed.
The respondent shall pay to the applicant's Account Number 502830178 with Advance Funds Management Pty Limited all amounts due pursuant to the provisions of the Superannuation Guarantee legislation in respect of the employment of the applicant since December of 1991
The respondent shall pay to the applicant an amount equal to all sums deducted from her wages as superannuation contributions prior to 15 February 1996
The respondent shall pay to the applicant as compensation pursuant to the provisions of Section 170EE(2) and (3) of the Act the sum of $14,300.
The claim for damages in paragraph 5 of the claims of the applicant filed on 11 June 1996 is dismissed
The respondent shall pay damages pursuant to the provisions of Section 170EE(5) of the Act in the sum of $550
Judgment for the applicant in the sum of $3762 for moneys due for unpaid wages.
The respondent is to pay interest according to the Court Rules on all moneys ordered today to be paid to the applicant calculated from 15 February 1996
Liberty to both parties to re-list the proceedings before Judicial Registrar Linkenbagh on 14 days' notice is granted.
Settlement and entry of Orders is dealt with by Order 36 of the Industrial Relations Court Rules
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