Halls v NRMA Ltd
[1997] IRCA 300
•05 December 1997
INDUSTRIAL RELATIONS COURT OF AUSTRALIA
INDUSTRIAL LAW - termination of employment - position of the employee re-classified by employer - employee offered new position - dispute as to whether new position was a demotion - Insurance Officer (Clerical Indoor staff) Consolidated Award 1985 - purported resignation of applicant signed by respondent - denial of procedural fairness - compensation
Workplace Relations Act 1996 (Cth) ss 170 DE (1), 170 DC, 170 DB, 170 EE (2)
BP Refinery (Westernport) Pty Limited v Shire of Hastings (1977) 180 CLR 266;
Brackenridge v Toyota Motor Corporation Australia Limited (1996) 142 ALR 99;
Hawkins v Clayton (1988) 164 CLR 539;
Mohazab v Dick Smith Electronics (1995) 62 IR 200 at 206;
Nettlefold v Kym Smoker Pty Ltd (unreported) IRCA 469/96;
Nicolson v Heaven and Earth Gallery Pty Ltd (1994) 1 IRCR 199;
Re: Clerks (State) Award (1987) 21 IR 29;
Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371;
Walton v Mermaid Drycleaners Pty Limited (1996) 142 ALR 681;
HALLS v NRMA LIMITED
NI 1003 of 1996
TOMLINSON JR
SYDNEY
5 DECEMBER 1997
IN THE INDUSTRIAL RELATIONS ) ) COURT OF AUSTRALIA ) NI 1003 of 1996 ) NSW DISTRICT REGISTRY )
BETWEEN: Belinda Jean HALLS
ApplicantAND:
NRMA LIMITED
Respondent
JUDICIAL
REGISTRAR:TOMLINSON
PLACE: SYDNEY DATED: 5 DECEMBER 1997
MINUTES OF ORDER
THE COURT ORDERS THAT:
Subject to any payment due to the Commissioner of Taxation, the respondent is to pay to the applicant the sum of $14,200.00 pursuant to section 170 EE(2) together with the additional sum of $2,200.00 pursuant to section 170 DB.
The amounts in Order 1 are to be paid within 21 days of today’s date.
Note: Settlement and entry of orders is delt with in Order 36 of the Federal Court Rules.
IN THE INDUSTRIAL RELATIONS ) ) COURT OF AUSTRALIA ) NI 1003 of 1996 ) NSW DISTRICT REGISTRY )
BETWEEN: Belinda Jean HALLS
ApplicantAND:
NRMA LIMITED
Respondent
JUDICIAL
REGISTRAR:TOMLINSON
PLACE: SYDNEY DATED: 5 DECEMBER 1997
REASONS FOR JUDGMENT
This is an application brought under the Workplace Relations Act 1996 (formerly the Industrial Relations Act 1988) for reinstatement and compensation. In her evidence in chief the applicant stated that she commenced work as a clerk with the respondent in October of 1980 and that she transferred to its Hornsby office in 1982. In about April 1982 the applicant took maternity leave and then resigned on or about 16 February 1983. The applicant re-commenced employment with the respondent in early 1984 at Hornsby. At that time she started back to work as an assessor’s clerk, grade 2. In 1985 the applicant was promoted to the position of assessor’s supervisor. The grading went from grade 2 to grade 3. Marked as exhibit 2 is a business record of the respondent headed “Staff Variation Detail” dated 7 December 1988. This exhibit noted that the applicant’s title was to change from assessing supervisor to assessing co-ordinator, however that change actually occurred in 1986.
The agreed evidence was that the applicant had no pay reviews from 1990 until 1994, and accordingly no pay increases, as the respondent was of the opinion that she was paid well in excess of other claims staff. At a pay review conducted by Ms Linda Anderson in 1994, the applicant discovered a discrepancy between the position she thought she occupied and the classification assigned to her by the respondent.The document recorded the applicant as band 2, whereas she was of the view at the time she was band or grade 3. The applicant took the matter of the incorrect grading up with the then claims manager, Mr Michael Kenny, but nothing eventuated. The applicant said the union representative at Hornsby Ms Linda Anderson spoke to Mr Kenny on her behalf but again nothing eventuated.
On 16 May 1995 a meeting took place attended by John Carey the Hornsby office claims manager, Samantha Fisk the assistant claims manager and Ron Kennedy, the branch assessing manager. At that meeting position changes were discussed and the applicant said she brought up the question of her grading. John Carey said he would get back to her. The applicant said she was formally advised that she would have to give up the position she was in, and that her position of assessing co-ordinator was obsolete, as it no longer existed. Mr Carey went on to advise the applicant that her work was to be amalgamated into a claims officer role and that she would be asked to take up that role. It was the view of the applicant that changing from assessing co-ordinator to claims officer was a demotion because the proposed claims officer position was a grade 2 category.
Exhibit J was a letter dated 16 June 1995 from Ms Angie Vatiliotis of Employer Relations to the applicant’s union organiser Mr Lance Dale. The letter pointed out that a position becomes redundant where the duties are no longer to be performed, and that that did not apply to the assessing co-ordinator’s position. Further, that redundancy was at the instigation of the organisation only and that the agreement between the FSU and the respondent stated that:
“employees shall not be made redundant until the organisation has assessed all reasonable alternatives for continuing employment, and there is no suitable alternative employment available.”
Exhibit K was a memo dated 29 June 1995 from Angie Vatiliotis to the applicant that advised the applicant that the assessing co-ordinators position at the Hornsby Branch had changed, that the position was not redundant as its duties were still to be performed in the claims officer role and that her title and position would be “Claims Officer”. The applicant, and others, were still to perform the duties of assessing co-ordinator. Exhibit N was a letter dated 13 July 1995 from the Finance Sector Union (Lance Dale) to Ms Angie Vatiliotis replying to her letter of 13 July 1995 advising the applicant was willing to consider any other offer of suitable employment or a claims officer position with NRMA Hornsby Branch at Band 3 level, but that she considered the offer from the respondent to be a demotion.
A meeting took place on 24 August 1995 and exhibit 13 was a letter dated 25 August 1995 from Doug Wilson the manager of employee relations to the FSU setting out the agreed outcomes of that meeting. That letter noted:
“A number of issues were addressed during the meeting and the following outcomes have been agreed to:
1. Angie Vatiliotis will organise a meeting between Belinda and a consultant from the Performance Management Department to discuss the banding and the evaluations of positions and salary / market rates. This meeting will be organised at a time convenient to Belinda.
2. Angie Vatiliotis will organise a meeting between Belinda and a consultant from Recruiting and Career Services to discuss alternative employment options available in the NRMA through “Job Spot”. Recruiting and Career Services will also assist Belinda to formulate a resume and application letter and assist her to improve her interviewing skills. This meeting will be organised at a time convenient to Belinda.
3. John Carey ...and Samantha Fisk ...will assist Belinda to achieve her Claims Consultancy through the provision of study notes and general assistance to revise her knowledge...”
It was the evidence of the applicant that item one of exhibit 13 never eventuated, and that she was on stress leave on a number of occasions after 16 May 1995 for about 4 1/2 weeks and a claim for workers compensation was lodged and liability accepted. The applicant was treated by Dr Wai-Shing, whose various medical certificates were tendered as exhibits.
In 1995 the applicant consulted Messrs Steele & Walker in relation to her employment problems. Exhibit 11 is a copy of a letter dated 29 November 1995 from Messrs Steele & Walker to the respondent that stated inter alia that first the applicant was “demoted” from grade 3 in October 1987 when her position was taken over by the Claims Department, and secondly the applicant had suffered a loss of wages, being the comparable wages which she would have been expected to earn as a grade 3 based on her performance reviews.
Exhibit O was a letter dated 17 July 1995 from Angie Vatiliotis to Lance Dale at the applicant’s union acknowledging the letter of 13 July 1995 advising that as John Carey, the Manager at Hornsby, and Samantha Fisk ,the assistant claims manager had requested to make the change for the applicant to claims officer effective from Monday 31 July 1995, the matter should be resolved immediately. Again, it was stated as the situation was not one of redundancy there was no obligation to offer re-deployment alternatives, but the applicant was entitled to seek alternate employment through “Jobspot”. Further, in order for the applicant to become a Band 3 she would have to comply with the respondent’s policy and sit for the appropriate exams.
An active role in the negotiations was taken by Mr Len Madigan, the applicants partner. Exhibit E was a letter dated 11 September 1995 from the FSU to the applicant’s partner stating the union was not prepared to take the issue any further as all avenues were exhausted.
By letter dated 29 November 1995 the applicant’s solicitors Messrs Steele & Walker wrote to the respondent indicating they acted on behalf of the applicant seeking to clarify a number of issues and further seeking to rectify, by mediation or arbitration, “obvious injustices to which she has been subjected”. The letter was admitted to evidence as exhibit 11 and stated that the applicant re-commenced with the NRMA back in 1984 after having worked for the NRMA in the early 1980’s and that she rose to the role of Assessing Supervisor by August, 1985, being a Grade 3 position. It was alleged that her job description was altered in 1986 for Assessing Supervisor to Assessing Co-ordinator during a restructure. The letter continued:
“ Her duties remained the same and, apart from an inter office memo, there was no other evidence of this “variation...It ...appears the following facts are irrefutable:
1. Belinda was “demoted” from a grade 3 (Band 3) to a Grade 2 (Band 2) in or around October 1987, when her position was taken over by the Claims Department.
2. Belinda has suffered a loss of wages, being the comparable wages which she would have been expected to earn as a Grade 3 (Band 3) with salary reviews based on performance, from October, 1987, to date.
3. Her position of Assessing Co-ordinator has now become obsolete i.e. no longer exists, and, as such, redundancy provisions should be applied.
As a result, it would appear that NRMA should consider either:
1. Redundancy with the package to include compensation for the “demotion” back in October 1987.
2. Reclassification of Belinda’s role to that of a Band 3, once again with compensation for the “demotion” in October 1987.
We would be more than willing to discuss the above and invite your early response.”
Exhibit 20 was a facsimile dated 20 November 1995 discussion various issues from the applicant’s partner, Mr Les Madigan, to the then CEO of the respondent, Mr Peter Corrigan that stated:
“...not that she is unprepared to fill her duties as co-ordinator until we arbitrate on this matter...”
and at page 2;
“Please sir, inform us what the position is handled (sic) and assure me that Belinda will be left to work until this matter is sorted out by arbitration, as this is the course I
shall follow...”.
Exhibit 10 was a letter dated 8 December 1995 from the Respondent’s employer relations manager Mr Doug Wilson to the applicant’s solicitors commenting on exhibit 11 stating that the change of July 1985 from Assessors Clerk (Grade 2 to Supervising Assessor’s Clerk Grade 3) was not a reference to Insurance Award Grades and that the term ‘grade’ was a reference to internal NRMA grades. The letter pointed out that it was incorrect to state that the applicant was “demoted from a Grade 3 to a Grade 2 position” as in 1988 as a result of an internal classification review the ‘grade’ structure was replaced with a system of broad job bands. The new banding system changed the applicant’s title to assessing co-ordinator in 1988. There was no evidence from the applicant that she made enquiry as to this change at the time that it occurred, nor that she complained about her change in title. The letter (exhibit 10) continued that the applicant had suffered no loss of wages from October 1987 as:
“during this time her salary has been reviewed and maintained in line with both the minimum rates set-out in the Insurance Award for a Grade 2 position and the salary range recommended for NRMA band 2”.
The letter goes on to state:
“Whilst I am happy to provide the support offered to Belinda in my letter to Maggie Ferguson of 25 August 1995 (see attached) and subsequently communicated to Belinda by the FSU, the NRMA believes that the arrangement offered to Belinda constitutes a lawful and reasonable directive by her employer. As such the NRMA would therefore view her continued refusal to co-operate with this arrangement as a breach of her contract of employment.
In the circumstances the Company will treat this as a recision of Belinda’s contract of employment and will treat the employment relationship as at an end. A letter to this affect (sic) will be provided to Belinda in the next few days...please address any further questions you may have ...to me...”
Exhibit 8 was a letter dated 21 December 1995 from Messrs Steele & Walker to the NRMA that acknowledged the letter of 8 December 1995 and said that the applicant only provided instructions out of frustration arising from her inability to obtain a satisfactory solution to the ongoing problem of her employment situation. The letter continued:
“The crux of the problem is that she has held a supervisory position for the last 10 years and is now being asked to move to a position where she will be carrying out the duties which she previously supervised. Whilst it may be argued that her salary package remains the same, her chances of advancement both in position and salary, have been affected...Belinda will maintain her level of work until this matter can be resolved by correspondence, discussion, mediation or arbitration.”
The applicant attended for work on Monday 18 December. A disagreement arose with Samantha Fisk and Vidette Elliott and the applicant said she left work upset. Exhibit 9 was a facsimile dated 21 December 1995 from Mr Wilson to the applicant’s solicitors that noted for some time the applicant had had no direct supervisory role, that the proposed changes to the applicant’s current duties would not affect her current NRMA Band, and that the respondent did not believe the applicant was redundant. Further, that the arrangement offered to the applicant via the FSU set out in the letter to Mr Wilson to Maggie Ferguson of 25 August 1995 offered a resolution in the best interests of all parties.
A meeting took place on 27 December 1995 at the office of the respondent involving John Carey, Samantha Fisk and Ms Anderson, the union representative. The applicant’s solicitor was not available, nor was any other assistance. At that meeting the applicant was asked to take up the position of claims officer. The applicant said she informed them the matter was still in dispute and requested an adjournment until she could obtain legal representation.
The applicant said she was then advised that if she did not take up the claims officer role she was deemed to have handed in her resignation. The applicant said she was not resigning and that she was more than prepared to continue in her job until the matter was resolved. The applicant was asked to complete a resignation form. She refused to do so. John Carey then asked the applicant to leave the office and she did. At that meeting there was no reference to the letter of 21 December from the solicitors of the applicant seeking to resolve the matter by conciliation or mediation.
In her evidence in chief the applicant said she attended for work on 28 December 1996 and stated she had reported for work to perform her duties as an assessing co-ordinator. The applicant spoke to John Carey who gave her exhibit 22, a memo dated 15 December 1995 to the applicant from John Carey. It was the evidence of Mr Carey that the document had been prepared by the employer relations branch but that he explained the document to the applicant. The memo provided:
“As you are aware from our discussions since June this year, the duties performed by you in the position of Assessing Co-ordinator will change and the job functions that remain will be integrated into the general customer service functions of the Claims department of Hornsby branch... as a result your position and title will be Claims Officer... training will be provided... In light of the above I have confirmed with Doug Wilson, Manager Employee Relations, that the support offered to you via Doug’s letter to Maggie Ferguson form the FSU (see attached) continues to be available to you... I would like to point out to you that it is the NRMA’s position that this change constitutes a lawful and reasonable directive by your employer. As such I would view any further refusal on your behalf to co-operate with this arrangement as a breach of your contract of employment. In the circumstances the NRMA will treat your refusal as a recision of your contract of employment and will treat the employment relationship as at an end.”
The applicant stated she did not understand the letter and took it to her solicitors for explanation.
Exhibit T was a brochure entitled “Everything You Ever Wanted To Know About BANDING But Didn’t Know Who to Ask” explaining the final stage of the respondent’s internal re-structuring that would effect the applicant. The applicant stated she did not recall having seen the exhibit nor could she recall a visit by human resources officers to the Hornsby branch at the end of 1988. In 1988 the applicant said she spoke to the then claims Manager, who allegedly advised her “there would be no change” to her.
The applicant said that she did look for other work, but that poor health prevented her from working. From 18 until 27 December 1996 the applicant was absent on a further period of stress leave and the sick leave payments she received were then transferred to be workers compensation payments. The symptoms of the applicant included nausea, sleeplessness, heavy perspiration, palpitations and poor concentration.
On behalf of the respondent the court heard from Mr Douglas Wilson the employer relations manager with the respondent since 1992 and an industrial relations specialist. Mr Wilson told the court that before 1988 there were 3 grades of insurance officer under the relevant award, having 3 different rates of pay. In 1991 the insurance industry award changed and 7 grades were created. It was the evidence of Mr Wilson that there was no direct relationship between the banding of the NRMA and the grading of the insurance industry award.
Mr Wilson said that a nexus was established in 1995 with the respondent and the Finance Sector Union, prompted by the 7 gradings of the Insurance Officers Award. The final conclusion between the FSU and the NRMA was effected in 1996 and that every staff member was given a copy of the certified agreement. However the award applied up until 8 January 1996. Clauses 23(a) and 23(b) of the Insurance Officers’ Clerical Award (exhibit 14) dealing with Settlement of Disputes, provide for the matter to be discussed and clause 23(c) provides:
“(b) If not settled, the matter shall be submitted by either the Union or the employer (concerned) to a Board of Reference as set out in clause 24”
Boards of Reference are referred to in clause 24 of the Award and were to be appointed by the Registrar for the States of Victoria and NSW (24(a)). The functions of the Board of Reference were to settle disputes as to matters under the award (24(f)). Further, if the Board of Reference was unable to solve any matter it may be reviewed on application by either party to the Award to the Australian Industrial Relations Commission (24(g)). Mr Wilson said he did not know if clause 23(c) had been complied with and said that “the FSU was not going to take the matter further and so I did not see a need for the NRMA to take the matter further.” I made no attempt to contact Kevin Davern the joint national secretary. “I knew in 1995 that clause 23(c) was still a requirement and I still did not do it.”
In 1995 Mr Wilson had discussions with the FSU, Messrs Steele & Walker and Mr Les Madigan concerning the applicant and that he familiarised himself with the history of the applicant’s matter. He had discussions with Mr Carey to try and resolve the matter after he was aware the FSU was no longer involved. In relation to exhibit 9, the letter written by him to the applicant’s solicitors explaining the position of the respondent, Mr Wilson said the respondent was prepared to continue discussion on the matter only on the basis that the applicant complied with the lawful and reasonable directive of the employer.
Mr Wilson said on 27 December 1995 he was “probably in the office” and denied the suggestion that he did not want the applicant’s solicitors, Messrs Steele & Walker to be present at the meeting at Hornsby. Mr Wilson said the union delegate was available, and that the applicant had “union assistance at the time”. Mr Wilson said “It may have assisted the situation if Steele & Walker had been there” and that further this was the only occasion when the applicant was told that if she did not do something (sign the resignation form) she would be sacked. Mr Wilson agreed that he had been seeking advice from the respondent’s solicitors, who also knew of the meeting on 27 December 1995. Mr Wilson said “Mr Carey told her that it was a reasonable request” (for the employer to make).
Mr Wilson was shown exhibit 13 (also marked exhibit L infra being a letter dated 25 August 1995 to Maggie Ferguson from the respondent confirming the meeting on 24 August) and confirmed that he attended the meeting and that the meeting referred to in point 1 did not take place as the reply from the FSU was that the applicant did not want to pursue the matter. Nor did point 2 or 3 take place. Mr Wilson agreed that had the program in exhibit L been adhered to the matter could have been resolved, and further that once the applicant ceased to be an assessing co-ordinator that step was irreversible.
Mr Wilson said all the functions performed by the applicant still did exist but in a different structure and told the court “I can understand that she was upset at what was done to her” and agreed that “supervisory duties” meant the assessing co-ordinators job was more senior, but also said that at no time was she told that her supervisory duties had come to an end.
On behalf of the respondent the court heard from Mr John Carey the claims manager at Hornsby. Mr Carey was shown exhibit M, an undated memorandum from the applicant from Samantha Fisk dealing with the training of staff, regarding the Change of Assessing Co-ordinator’s role. Clear from the document is the understanding that the applicant would be training staff when she moved to the new position in the claims department. Mr Carey acknowledged that the program as agreed in exhibit L never eventuated, and further stated that at the date of the respondent’s planned position change, 4 September 1995, the applicant was on sick leave. The agreed program as set out in exhibit 13 was never discussed with the applicant.
Mr Carey was aware the applicant had retained solicitors to act for her, he was not aware of the result of those meetings nor was he aware of the enterprise bargaining agreement. There was no evidence of discussions he had with management to make him aware of those situations. Mr Carey said at that the time of the meeting of 27 December he was not aware the union office was closed, and also said that he had asked the applicant to leave the building after she had refused to sign exhibit 27.
Exhibit 27 was the applicant’s completed resignation form signed by Mr Carey. In cross examination Mr Carey agreed that someone taken off a supervisory role could feel there had been a demotion, further that the respondent’s employee relations department had “no regard” for the new award and that he took direction from that department as to what he should do. Mr Carey was given explicit instructions to sign the document on behalf of the applicant, and agreed that it was his understanding that the employment of the applicant “could terminate” and that the decision had been made that the applicant was not going to do her old job after 27 December. Mr Carey was aware that the applicant had asked for arbitration in order to sort the matter out.
CONCLUSION
In determining if there had been a termination at the initiative of the employer, Mr Phillips on behalf of the applicant submitted the employer, by its conduct, destroyed the employment relationship between it and the applicant, and that this conduct terminated the contract of employment. Mr Scott on behalf of the respondent in his primary submission stated that first the nature of the applicant’s work was that she performed routine and repetitive clerical functions and that the systems and methods of work required to be performed by the applicant had changed during the course of her employment. The respondent also said it was clear the evidence supported that submission. Also Mr Scott submitted on the basis of Brackenridge v Toyota Motor Corporation Australia Limited (1996) 142 ALR 99 at 106, where the Full Court of the Industrial Relations Court of Australia referred to the implication of the power of an employer to reclassify employees, that there well could have been an implied term in Ms Halls contract of employment similar to that as formulated by Dean J in Hawkins v Clayton (1988) 164 CLR 539 at 573 where it was stated:
“most that can be said consistently with the need for some degree of flexibility is that,
in a case where it is apparent that the parties have not attempted to spell out the full terms of the contract, a Court should imply a term by reference to the imputed intention of the parties if, and only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract
of that nature in the circumstances of the case.”
By way of conclusion, the respondent submitted the applicant, by her continual refusal to undertake the duties and role required of her by the organisation demonstrated that she no longer considered her contract of employment to be ongoing. In Re: Clerks (State) Award (1987) 21 IR 29, the Industrial Commission of New South Wales in Court Session stated:
“We consider that there is a positive obligation upon an employee to not unreasonably refuse to accept transfer, re-classification, relocation and the obligation to re-train in the interests of continuing employment.”
Further, BP Refinery (Westernport) Pty Limited v Shire of Hastings (1977) 180 CLR 266 was relied upon in that there was an implied term in the applicant’s contract of employment to the effect that the applicant would undertake those duties that were within her skill and competence and also, that she would undertake training so as to perform tasks and duties that may reasonably be required of her by her employer.
However prior to the point of the signing of the resignation by Mr Carey the state of the respondent’s knowledge is important. The issue of the grade of the applicant was known to be unresolved, the applicant asserting she occupied a grade 3 position, and that if she accepted the claims position it would be a demotion. Secondly the respondent knew the applicant had instructed solicitors to act for her in the matter and no attempt was made to determine if those solicitors were aware of exhibit 22 or that the meeting was taking place. Also there had been no mediation or arbitration, despite formal requests from Mr Madigan (exhibit 20) and a request from Messrs Steele & Walker (exhibit 8). As submitted by Mr Phillips, the action by the respondent was taken contrary to the covering Award in that the issue of the applicant’s grade was not settled and was not submitted to a Board of Reference as set out in clause 24.
The Full Court of the Industrial Relations Court in Mohazab v Dick Smith Electronics (1995) 62 IR 200 at 206, without being exhaustive, indicated that a termination of employment at the initiative of the employer may be treated as a termination if the action of the employer is the principle contributing factor which leads to the termination of the employment relationship. It is clear the applicant was placed at a disadvantage by the respondent and that the document signed by Mr Carey as being a resignation is not to be relied upon, in that regard it is therefore a conclusion that in the case of Ms Halls the termination was at the initiative of the respondent employer. In the case of Ms Halls the signing of the resignation by Mr Carey was the factor that caused the termination. The refusal of the applicant should not be looked at in isolation, but in the context of the preceding events. Those events were unresolved, and against that background, it has to be that the respondent caused the termination of the applicant. If the respondent had not taken the action that it did, the applicant would have remained in the employment relationship; Mohazab (infra).
The respondent submitted that on the basis that there was a termination at the initiative of the employer, it was for a valid reason. The applicant submitted she was not dismissed for a valid reason as she was entitled to have her dispute arbitrated by a Board of Reference and there was no compliance with the method of resolution as contained in the Award or that contained in the enterprise agreement. Against that it was submitted by the respondent that the evidence revealed that the respondent had entered into discussions with the applicant as to her duties because it was going through a process of restructuring the work being performed with regard to the processing of claims. The respondent submitted that Moore J in Walton v Mermaid Drycleaners Pty Limited (1996) 142 ALR 681 at 685 stated:
“I should, however, make plain - and this has been made plain in many cases decided by this Court - that it is not the Court’s function to stand in the shoes of the employer and determine whether or not the decision made by the employer was a decision that would be made by the Court but rather it is for the Court to assess whether the employer had a valid reason connected with the employees capacity or conduct, and in these proceedings I have concluded it did.”
In determining the validity of the reason for the termination, again Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373 is relevant, where Northrop J said that the adjective “valid” should be given the meaning of “sound, defensible or well-founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of section 170 DE(1)”. In considering whether a reason is valid, it should be remembered that the requirement applies in the practical sphere of the employment relationship where both employer and employee have rights and privileges, duties and obligations conferred and imposed upon them. In the case of Ms Halls the respondent wished to deal with the matter finally and in its haste to bring somewhat protracted negotiations to a conclusion and to implement its re-organisation of the workplace disregarded the rights of the applicant and also its duties and obligations. Such actions are not within the compass of a ‘valid reason’. Lee J, stated in Nettlefold v Kym Smoker Pty Ltd (unreported) 4 October 1996, IRCA 469/96, that the expression “valid reason” in the context of the previous legislation could impose a requirement that in all the circumstances a termination at the initiative of the employer not be unjust or unfair. Wilcox CJ in Nicolson v Heaven and Earth Gallery Pty Ltd (1994) 1 IRCR 199 at pages 209/210, stated that:
“The principle is, I believe, well understood in the community. It represents part of what Australians call a ‘fair go’.”
The comments of Wilcox CJ, made in relation to the former section 170 DC carried into Australian labour law a fundamental component of the concept know to lawyers as natural justice or procedural fairness. The relevant principle being that a person should not exercise legal power over another, to that person’s disadvantage and for a reason personal to them, without first giving the effected person an opportunity to be heard.
In addition to the foregoing, it is a finding that the applicant was denied procedural fairness and that a remedy is due. Reinstatement is not sought by the applicant. Since the termination the applicant has not earned money out of paid employment and it is appropriate in all the circumstances that maximum compensation be awarded to her for the various breaches of the act revealed by the evidence. Accordingly the following Orders are made:
ORDERS
Subject to any payment due to the Commissioner of Taxation, the respondent is to pay to the applicant the sum of $14,200.00 pursuant to section 170 EE(2) together with the additional sum of $2,200.00 pursuant to section 170 DB.
The amounts in Order 1 are to be paid within 21 days of today’s date.
I certify that this and the preceding
nine (9) pages are a true copy of the reasons
for judgment herein of Judicial Registrar Tomlinson
Associate:
Dated: 5 December 1997
Counsel for the Applicant: Mr G Phillips
Solicitors for the Applicant: Ferrys Law Firm
Counsel for the Respondent: Mr M Scott
Solicit ors for the Respondent: Abbott Tout
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