Hammer v Banovich and Hillman Real Estate

[1996] IRCA 247

DECISION NO:  247/96

C A T C H W O R D S

INDUSTRIAL LAW -  TERMINATION OF EMPLOYMENT - alleged unlawful termination - whether termination at the initiative of the employer - compensation.

INDUSTRIAL RELATIONS ACT 1988 Ss 170DE, 170EA.

Nicolson v Heaven & Earth Gallery Pty Ltd (1994)  126 ALR 233, 57 IR 50

Helen Ruth HAMMER -v- BANOVICH and HILLMAN Real Estate   -  WI 2346 of 1995

BEFORE:       R. D. FARRELL JR
PLACE:          PERTH
DATE:            13 May 1996

IN THE INDUSTRIAL RELATIONS    )
COURT OF AUSTRALIA                   )
WESTERN AUSTRALIA  )
DISTRICT REGISTRY  )         No. WI 2346 of 1995

BETWEEN:  Helen Ruth HAMMER
  -         Applicant

AND:  BANOVICH and HILLMAN Real                  Estate
  -         Respondent

MINUTE OF ORDERS

BEFORE:               R. D. FARRELL JR

PLACE:                  PERTH

DATE:  13 May 1996

THE COURT DECLARES AND ORDERS THAT:

1.The termination of the applicant’s employment by the respondent was in contravention of S170DE of the Industrial Relations Act 1988.

2.The respondent pay to the applicant compensation in the sum of $5950.00   within 14 days of the date of this order.

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
WESTERN AUSTRALIA DISTRICT REGISTRY

WI 2346 of 1995

BETWEEN:

Helen Ruth HAMMER
Applicant

AND:

BANOVICH and HILLMAN Real Estate
Respondent

REASONS FOR DECISION
Delivered Ex Tempore and Revised from Draft Transcript

13 May 1996  R. D. FARRELL JR

1. This is an application under Section 170EA of the Industrial Relations Act 1988 for compensation arising from the alleged unlawful termination of the employment of the applicant, Ms Helen Ruth Hammer (“Ms Hammer”), by the respondent, a partnership comprising Mr Gregory Hillman and Mr David Banovich trading as Banovich and Hillman Real Estate Agents (“the Partnership”).

1. As is indicated by their trading name, the Partnership conducts a real estate business. Ms Hammer was employed by the Partnership from 11 September 1995 as a property manager. Her last day of work was 26 October, 1995.

1. There was some evidence from the respondents that Ms Hammer had been employed for a trial period of 6 months. It might follow, though it was not fully argued, that Ms Hammer was a probationary employee such that the Act did not apply to her. However, even if I were to have accepted that she was employed for a probationary period, I am satisfied that a 6-month trial period is longer than would be reasonable given the nature of Ms Hammer’s job. In so finding, I am applying the principles for determining what is a reasonable period set out by Wilcox CJ in Nicolson v Heaven and Earth Galleries (1994) 126 ALR 233. I am therefore satisfied that the claim that Ms Hammer was a probationary employee would not remove her from the protection of the Act.

Whether Termination at the Initiative of the Employer

1. The chief matter in contention was whether or not the termination of Ms Hammer’s employment was a termination at the initiative of the employer.

1. The evidence was that Ms Hammer was a satisfactory employee and was regarded as satisfactory in almost all respects by the Partnership during her short period of employment.

1. There was a meeting held with Mr Hillman and Ms Hammer in the week in which her employment came to an end. There is some dispute as to the timing of that meeting but I do not think the timing is important.

1. At that meeting there was no indication that her continued employment was in jeopardy and, indeed, the previous Friday she had been instructed to order additional business cards in her name. This was an indication that her employment was seen as being reasonably secure.

1. On Wednesday, 25 October 1995, at about 2.00pm, Ms Hammer received a phone call. I accept that this was a phone call from her older son advising her that her youngest son had been injured in the course of his employment. This was apparently the most recent of a number of injuries. This history of injuries had led to some ill-feeling between Ms Hammer and her son's employer. Ms Hammer says that in response to the news she said something to the effect of "Enough is enough", after she hung up the phone. This is broadly consistent with the evidence of Mrs Miles, the secretary, who put that phone call through to Ms Hammer. She recalls Ms Hammer saying words to the effect of "I cannot hack this any more."

1. It is agreed that Ms Hammer gathered up her things and went from the office. While I accept that she was upset to hear of her son's injury, it is agreed that she gave no explanation as to why she was leaving the respondent’s office at that time.

1. There is some dispute as to whether Mr Banovich indicated his consent to her leaving the office early. Ms Hammer says that she told Mr Banovich she needed to leave early and that he said "Okay." Mrs Miles’ evidence was slightly different. She recalls Mr Banovich asking what the problem was and Ms Hammer not telling him. She does not recall Mr Banovich saying anything to indicate it was okay to leave the office but neither did he say anything to the effect that she should not. Based on this evidence, I am satisfied that Ms Hammer would have been justified in thinking that Mr Banovich had at least acquiesced to her leaving at that time. Mrs Miles confirms that Ms Hammer arrived early for work the next morning at 8.30am; Ms Hammer’s regular hours of work were 9.00am to 5.30pm. Mrs Miles says “It was as if nothing had happened."

1. Mr Hillman, who had not been present the previous afternoon, had been advised by Mrs Miles that Ms Hammer had left early. It is clear on the evidence that no one at the office had any idea why she had left early. Mr Hillman called Ms Hammer in to the interview room and closed the door behind him. Mrs Miles, who was in a position to overhear, heard him say words to the effect of "Ruth, why did you leave early?" That was the last Mrs Miles heard of what was said in the interview room.

1. The only people in the interview room were Ms Hammer and Mr Hillman.

1. Ms Hammer's recollection is that Mr Hillman asked her whether her reason for leaving early the previous day was personal, to which her response was "Yes". Her recollection is that he then said, "Then we will have to let you go, because we cannot have personal problems in the office."

1. Mr Hillman denies this and says that in fact he asked her whether she had an explanation for leaving early, because if it was going to continue then they would have to part company.

1. Following whatever was said, Ms Hammer immediately got up and strode down the corridor to her desk to gather her things.

1. Ms Hammer bears the onus of proof in this matter and I need to be satisfied whether it is more probable than not that Ms Hammer’s employment was terminated by the Partnership. While my finding as to what was actually said during the interview between Mr Hillman and Ms Hammer is not the sole relevant factor in determining the broader question of who terminated Ms Hammer’s employment, it is a significant factor.

1. The strength of Ms Hammer's reaction is such that, on balance, I am inclined to think that it is more probable than not that what was said by Mr Hillman was "We will have to part company." While I accept there is a real possibility that Ms Hammer misunderstood what was said to her,  she appears to have been calm and collected that morning up to the point of the interview. I am of the view that it is more probable that Mr Hillman commenced the interview on the premise that it would be necessary for them to “part company”, while perhaps always expecting that there would be an ensuing discussion during which he was ready to be persuaded to move from this initial position.

1. I am prepared to accept that the statement by Mr Hillman of this initial position was not intended by him to be the end of the conversation, and that he was prepared to be talked out of that possibility.

1. However, rather than continuing with the interview Ms Hammer left - she immediately got up and strode down the corridor to her desk to gather her things. Mrs Miles confirms that Ms Hammer was clearly upset. She started packing up her things, and transferring information from her diaries to enable her work to be continued by whoever replaced her. It is also clear that Mr Hillman chased after her. Ms Hammer recalls him asking her what had happened. Mr Hillman and Mrs Miles recall him telling Ms Hammer "We have to discuss this". It is also clear that Ms Hammer would not discuss it.

1. Ms Hammer says that she told Mr Hillman that there was no point in discussing it because she had already been dismissed. While I accept that this may have been what Ms Hammer was thinking, I am satisfied that she did not convey this sentiment to Mr Hillman, accepting as I do the evidence on the matter of Mrs Miles and Mr Hillman. Mr Hillman’s belief was that she was simply too upset to discuss it. He denies she said anything about having been dismissed.

1. In any event, Ms Hammer left the office without it ever having become apparent to the employer why it was that she had left work early the afternoon before. She left her employment on the basis that she believed she had been dismissed. I have found, on balance, that she had some basis for that belief. I accept that Mr Hillman was unsatisfied with the way the interview had gone, because he wanted to know more about the circumstances of Ms Hammer’s absence, and would have preferred to have had a longer discussion with her.

1. There was then some interaction, through Mrs Miles, between the respondent and Ms Hammer after her employment had ended. However, on the evidence before me, there was never any further direct discussion between them, which was perhaps unfortunate. Mr Hillman pointed out from the bar table that they were “left in the lurch” and it took them some four months to find another property manager to take Ms Hammer's place. I note that without placing any weight on it. Mr Hillman also said in his submissions that it was usual for any decision that the Partnership made to be fully discussed between he and Mr Bannerman. Mr Hillman pointed to that fact as another indication that it had not been the intention of the Partnership to dismiss Ms Hammer.

1. The evidence which makes the issue of whether there was a termination initiated by the employer less difficult to determine than it otherwise would have been, given the fine balance of the oral evidence with which I have already dealt, is the letter that was issued to the applicant by the respondent dated 27 October 1995.

1. Mr Hillman says that this letter was written after consultation with Mr Banovich. The terms of the letter are:

“To whom it may concern re: Ruth Hammer

Please be advised that Ms Ruth Hammer was employed as a Property Manager with this firm and was terminated as at close of business on 26 October 1995.

Ruth was unable to cope with the work standards and efficiency of this office.

Yours faithfully,

Banovich and Hillman”

1. Mr Hillman gave evidence that in his view the letter could be read as meaning that Ms Hammer had terminated her own employment.

1. I am satisfied, however, that the letter is not really ambiguous. Any third party receiving this letter would certainly form the conclusion that Ms Hammer’s employment had been terminated by the same persons as had employed her.

1. That letter is a strong indication that, viewing the events as a whole, as at 27 October 1995 the Partnership regarded Ms Hammer’s employment as having been terminated by them, rather than Ms Hammer having terminated her own employment.

1. It may be that the Partnership saw the position as it having terminated Ms Hammer’s employment because she walked out on them, without discussing it. Mrs Miles recalls Mr Hillman saying to Ms Hammer as she was packing up, "If we can't sit down and talk about this, then we'll have to part company". This indicates to me that he saw the decision as to whether they would part company as a decision within his control and a decision he would make. Even if there had been a misunderstanding between them about what Mr Hillman had said during the interview, Mr Hillman seems to be saying: if you walk out without talking about this, then we'll have to part company, that is, I will decide we'll part company.

1. So however it happened during the interview, viewing all the circumstances as a whole, I am satisfied that the respondents viewed it as a termination at their initiative, though perhaps one that was unsatisfactory in the way it was brought about, so far as they were concerned, because clearly Mr Hillman had wanted to discuss it further.

1. If there was a misunderstanding by Ms Hammer as to Mr Hillman’s original intentions, then it is one that has persevered over a considerable period of time. It happens surprisingly frequently that applicants come to this court saying they believed throughout that they were being dismissed, but did not say anything about it to the respondent, while the respondents say they believed throughout that it was a resignation but didn’t say anything about it to the applicant.

1. Had the letter been worded differently, for example, to say clearly that Ms Hammer had resigned or that she had left of her own free will, then that would have triggered in Ms Hammer’s mind the thought that there was a misunderstanding, given that it had not been her intention to resign. However, the letter did not say that and, as I have found, is not even ambiguous.

1. In conclusion, I am satisfied on balance by the evidence, and particularly having regard to the letter, that this was a termination at the initiative of the employer.

Whether the Termination was in Breach of the Act

1. That being the case, it was conceded by the respondent that if I were to find it was a termination at the initiative of the employer, then in the circumstances there was no valid reason for the termination.

1. Had that concession not been made, I might have been persuaded that leaving work early might have been a valid reason for termination, but I would have found that the termination was harsh, unjust and unreasonable in the circumstances, and was unlawful for that reason.

Remedy

1. It falls to me then to consider what remedy ought to be granted in all the circumstances.

1. Mr Schapper has submitted that compensation ought to be assessed on the basis of half of Ms Hammer's agreed annual salary of $27,000, that is $13,500, less the $7,550 earned by Ms Hammer during the 6 month period after termination  from subsequent employment with P&O Cleaning.

2. That Ms Hammer was prepared to go to Paraburdoo to find work satisfies me that she made reasonable attempts to mitigate her loss - if such attempts are necessary - and so I am satisfied that the balance of $5950 should be awarded as compensation. The orders I make are a declaration that Ms Hammer was unlawfully terminated in breach of section 170DE of the Act, and that the respondent is to pay Ms Hammer $5950 within 14 days of today's date.

   I certify that this and the preceding 9 pages
   are a true copy of the reasons for decision of
   Judicial Registrar R.D. Farrell.

   Associate:
   Dated:

   APPEARANCES

   Counsel appearing for the applicant:  Mr D. Schapper

   Solicitors for the applicant:                 D.H. Schapper

   The Respondent represented itself.

   Date of Hearing:  13 May 1996

   Judgment Date:  13 May 1996