Gorman v TAIRA (T and T) Pty Limited
[1996] IRCA 114
•03 April 1996
DRAFT JUDGMENT
DECISION NO: 114/96
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NI 3084 of 1995
BETWEEN:
LISA MARIE GORMAN
Applicant
AND:
TAIRA (T & T) PTY LIMITED (A.C.N. 008 585 359)
Respondent
CORAM: JUDICIAL REGISTRAR LINKENBAGH
PLACE: SYDNEY
DATE: 3 APRIL 1996
REASONS FOR JUDGMENT
This is an application under the provisions of Section 170 EA of the Industrial Relations Act, 1988 which was filed on 1 August 1995 in which the applicant seeks a remedy in respect of the termination of her employment which became effective on 12 May 1995 when she tendered her resignation in writing. The applicant had been employed at the Cannons Supermarket at Batemans Bay since 1 October 1992 and by May 1995 was a Head Supervisor working on the Liquor check-out at the front of the supermarket and generally in charge of the staff who worked on the check-outs.
The letter of resignation is handwritten and reads:
“I Lisa Marie Gorman give my resignation from the position of Fulltime Retail Supervisor effective from today Tuesday 2nd May 1995.
I would like to thank Cannons for their employment for the past 21/2 years but due to stress related problems feel it would be in my best interest healthwise to resign and give two weeks notice from today.
Yours sincerely
Lisa Marie Gorman”
The applicant asks the Court to find that her resignation constituted a constructive dismissal by the respondent in breach of Section 170 DE of the Act, because the conduct of the Store Manager Mr Gray towards her created an intolerable working environment. The respondent replies that the applicant voluntarily tendered her resignation and worked out her period of notice, that it tried to dissuade her from resigning, and that she has rejected offers of employment at another store since she resigned.
I find the following facts:
During late 1993 and 1994 there were several isolated incidents in which
Mr Gray acted towards the applicant or said something to her which she regarded as inappropriate, such as touching her hair and her shoulders, standing close to her, and asking about her private life. The applicant took no issue with his conduct at the time. Without detailed evidence as to the history of the relationships in the workplace at the time it is unsafe to draw adverse conclusions from these incidents except to say that they probably coloured Mrs Gorman’s perception of Mr. Gray.The applicant was happy in her employment for the first twelve months.
The applicant was regarded as an excellent employee and her duties expanded to include the preparation of rosters and training staff in other stores.
From December 1993 to date the applicant has sought medical treatment for symptoms of stress which she told her doctors was work related.
In January 1994 the applicant asked for a reference as she was seeking another job. The reason she gave to the respondent was that she wanted to enrol in a course.
The applicant did not find other employment.
The applicant was spoken to by Mr Gray on several occasions about aspects of her performance of her duties, including difficulties she was having in inducing other staff to comply with her directions.
Generally, Mr Gray’s manner was direct and abrupt, and he used bad language at times.
In October 1994 the applicant and Mr. Gray met in the company of
Mr McGahey. The applicant aired her feelings about Mr. Gray and they discussed a transfer to another part of the store, but no suitable position was available. Mr Gray agreed to modify his behaviour towards the applicant. The applicant’s perception was that after an initial improvement there was no real change for the better.Mr Gray often stood at the front of the store observing the customers and staff at the check-outs. The applicant perceived that he deliberately observed her personally at close range for up to five minutes at a time.
Mr Gray developed a perception that the applicant’s work performance was deteriorating.
In December, 1995 the staff attended a meeting at Head Office in Canberra and thereafter some procedural changes were made at the store. The applicant did not attend the meeting as she was absent on sick leave.
After the meeting the applicant was relieved of her duties to hire casual staff and to prepare the staff rosters, there were changes to the procedure for authorisation of use by staff of stock from the store, and changes to the availability of a key which was used to perform some functions on the cash registers.
These changes were communicated to the applicant by Mr Gray orally, without any conversation as to the reasons for the changes.
The applicant perceived the changes as a deliberate “slow demotion” and indication of a lack of trust in her. She did not make any enquiry to confirm her perceptions.
There was a system in place by which staff could be issued with a formal warning if there were imbalances in the reconciliation of cash register takings. It was the practice that it was open to the respondent to dismiss a staff member who had received three warnings.
On 31 March 1995 Mr Gray issued three formal warnings to the applicant, relating to two imbalances in her cash register reconciliation and an irregular EFTPOS transaction. The applicant had not had a formal warning previously and regarded the giving of three such warnings together as unfair. She argued that the imbalances could not be proved against her as other staff used her cash register from time to time, and that the EFTPOS transaction, albeit not done according to the store practice, involved a regular customer and had not put the store at risk of loss. She perceived the warnings as a threat of dismissal.
The applicant suggested in her evidence that Mr Gray engaged in irregular practices to overcome shortages in cash register floats. There is insufficient evidence to justify that suggestion.
After 31 March the applicant’s perception of the work environment deteriorated further. She did not discuss her feelings with any person in the workplace. She said that she did not seek assistance from others in the management hierarchy of Cannons because others had not been helped when they sought assistance. There is no evidence on which that opinion could be reasonably based.
In April 1995 the applicant arranged a loan from her Bank and Mr Gray complied with her request for evidence of her income and employment, to satisfy the Bank’s requirements. The applicant told the Court that she elected not to resign until after the loan approval had been granted.
After discussions with her husband she resigned on 2 May 1995 and worked out two weeks notice.
At the time the applicant tendered her resignation Mr Gray was surprised and offered her alternative employment, or the chance to take time off.
The applicant gave evidence that her expression of thanks to Cannons in her letter of resignation was a genuine statement.
At about the time she left the employment the applicant told another person that her reason for leaving was that her mother was ill with cancer and that she had to care for her mother. That statement was untrue.
The applicant has been unemployed since termination.
There is no evidence of any significant event in the workplace between
31 March and 2 May.After she left the employment the applicant spoke to another former employee and her perception that Mr Gray had intentionally caused the termination of her employment increased .
The application was filed on 1 August 1995.
The applicant has been offered employment at another store since the application was filed and has not taken up that offer.
Numerous witnesses were called by both parties. The evidence overall suffered from the effects of the passage of time on the memories of some of the witnesses, but all appeared to do their best to recollect the events about which they were asked to give evidence. The evidence of all the witnesses as to events in the workplace over the two and a half years the applicant worked there with Mr Gray was selective and it has been difficult to build an accurate picture of the day to day working environment and relationships. The applicant’s case depends for success upon her satisfying the Court that her perceptions of the work environment and relationships were based in fact and were reasonable, so as to ground her claim that the act of tendering her resignation was done under such a degree of pressure exerted by the employer that it was not an act of her own free will.
It is a prerequisite for entitlement to a remedy under Division 3 of Part VI A of the Act that there be a termination of employment “at the initiative of the employer”. That phrase is imported into the Act by Section 170 CB, from the Convention Concerning Termination of Employment at the Initiative of the Employer, which is Schedule 10, to the Act and its meaning is thoroughly explored in the decision of the Full Court of this Court in Mohazab v. Dick Smith Electronics Pty. Limited (unreported, Judgment No. 625/95, 29 November, 1995, at pp. 7-11).
The applicant’s case is that the termination of her employment should be characterised as constructive dismissal and therefore termination at the initiative of the employer. The concept of constructive dismissal is described by
Professor G McCarry in his paper entitled “Constructive Dismissal of Employees in Australia” which is published in 68 ALJ at 494 at p.495 as:
“a departure from employment which, though formally accomplished by the act of the employee, is to be regarded, in some sense or in some circumstances, as a dismissal by the employer.”
Professor McCarry quotes, at p.502, from a decision of Justice Macken in the NSW Industrial Commission, that:
“just as it is a fundamental requirement for an employment contract to be entered into by the genuine consent of both parties......untainted by any hint of pressure or threat......it must be terminated by a resignation equally untainted by any such threat.”
That concept is confirmed by the full Court of this Court in Gunnedah Shire Council v Grout (unreported, decision no. 661/95, 19 December 1995) with the words “voluntariness is critical” (at p.24 of the judgment). In Mohazab v Dick Smith Electronics Pty Limited to which I have already referred, the full Court said that termination at the initiative of the employer required “a termination in which the action of the employer is the principal contributing factor” and that “an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee.”
Each case must be determined on its own facts although other decided cases can provide assistance as to the circumstances in which constructive dismissal has been made and found to have occurred, and some guidance as to whether a particular set of facts is within the concept.
In APESMA v David Graphics Pty Limited (unreported, Decision No. 410/95
12 July 1995) Chief Justice Wilcox described as a “forced resignation” a decision by the applicant to resign as a matter of pride, rather than be dismissed, where the employer had told him that he should work overtime, or find another job.
In Mohazab v Dick Smith Electronics Pty Limited to which I have referred, the employer told the applicant that unless he resigned, it would ask the Police to charge him with an offence. The Full Court determined that resignation following such a threat was a constructive dismissal.
In Douglas v Tarenberg Pty Limited (unreported, VI 1104 of 1994, 24 November 1994) Judicial Registrar Parkinson found that the applicant had no real choice but to leave his employment because his employer failed to remove a dog, which had attacked the applicant, from the workplace, and that the termination was a constructive dismissal.
A finding that on the facts in this case constructive dismissal is established would involve an extension of the law as it has been applied to date, in that the applicant relies on a course of conduct which endured from as early as October 1994 and possibly earlier, until May 1995, to establish the existence of a threat which gave her no option but to resign, or a course of conduct with the deliberate purpose of forcing her to resign.
In Im Kim Qui v Steyi Nursing Home (1993) 5 VIR 237, a decision of the Employee Relations Commission in Victoria, the facts were similar to those in this case, in that there was a history of grievances, but the employee resigned at a meeting at which aspects of her performance were criticised. The Commission held that those circumstances could not be characterised as a constructive dismissal, and that the termination arose from a genuine decision to resign. The facts in Mrs Gorman’s case are that the resignation was prepared away from the workplace, after she had discussed it with her husband, in the absence of any immediate or recent significant event in the workplace and some five weeks after the three warnings were given. Further, her actions in obtaining the documents necessary to support her loan application after the date of the warnings,
confirms an intention to hold out to to Mr Gray and the Bank, at least, that her employment was ongoing.
Mr McLoughlin submitted that Mrs Gorman was in fear of “termination in a small town, with no reference and no other employment with a new loan approved.” I cannot find any evidence to support that submission, as there was no act or statement by the employer at any stage which generated the termination of her employment. Termination by the overt act of the employer was not on the agenda of the employer.
Mrs Gorman’s perception however was that Mr Gray was deliberately acting so as to bring about her resignation. Mr McLoughlin submits that she was under stress and not acting rationally. There is no evidence to support that submission to the extent that Mr McLoughlin submits. Dr Humphreys gave evidence that she is a person who allows things to build up to a point where something has to give. His description of her medical problems did not satisfy me that her action in tendering her resignation was involuntary, and she did not exhibit any need of medical treatment at the time, as was the case in Gunnedah Shire Council v Grout, to which I have already referred. The full Court found no constructive dismissal in that case, even though the applicant was described as “under severe pressure.”
I find that the applicant’s work history at the supermarket indicates a growing sense of dissatisfaction with her employment, which commenced at least in January of 1994, and culminated in her voluntary act of resignation on 2 May 1995. The workplace had its disadvantages, and Mr Gray was not the perfect manager, but the evidence falls short of establishing the factors which the decided cases indicate are required to ground a finding of constructive dismissal. There was therefore no termination at the initiative of the employer and the application and will be dismissed.
I certify that that this and the preceding nine (9) pages are a true copy of the Reasons for Judgement of Judicial Registrar Linkenbagh.
Associate:
Stephen Williams
Date: 3 April 1996
Representative of the Applicant: Mr D McLoughlin
Shop, Distributive & Allied Employees’ Association
Counsel for the Respondent: Mr R Dubler
Solicitors for the Respondent: Corrs Chambers Westgarth
Dates of Hearing: 14, 15 and 16 February 1996 and 25 March 1996
CATCHWORDS
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - CONSTRUCTIVE DISMISSAL
Industrial Relations Act, 1988 ss 170EA, DE and schedule 10
Gunnedah Shire Council v Gout (unreported, Decision No. 661/95,
19 December 1995)
Mohazab v Dick Smith Electronics Pty Limited (unreported, Decision No. 625/95,
28 November 1995)
APESMA v David Graphics Pty Limited (unreported, Decision No. 410/95,
12 July 1995)
Im Kim Qui v Steyi Nursing Home (1993) 5 VIR237
“Constructive Dismissal of Employees in Australia” Professor G J McCarry vol. 68 The Australian Law Journal, at p.494
LISA MARIE GORMAN -v - TAIRA (T & T) PTY LIMITED
(A.C.N. 008 585 359)
NI 3084 of 1995
CORAM: JUDICIAL REGISTRAR LINKENBAGH
PLACE: SYDNEY
DATE: 3 APRIL 1996
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NI 3084 of 1995
BETWEEN:
LISA MARIE GORMAN
Applicant
AND:
TAIRA (T & T) PTY LIMITED (A.C.N. 008 585 359)
Respondent
CORAM: JUDICIAL REGISTRAR LINKENBAGH
PLACE: SYDNEY
DATE: 3 APRIL 1996
MINUTES OF ORDER
The orders I make are therefore:
1. That the application be dismissed.
Note: Settlement and entry of Orders is dealt with by Order 36 of the Industrial Relations Court Rules
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