Harold Malcolm Bean v Milstern Retirement Services Pty Ltd
[1995] IRCA 248
•02 June 1995
CATCHWORDS
INDUSTRIAL LAW - termination of employment - alleged contravention of s170DC and s170DE - calculation of compensation
Industrial Relations Act 1988, ss 170DC, DE and EE
No. NI 423 of 1994
HAROLD MALCOLM BEAN and anor v MILSTERN RETIREMENT SERVICES
PTY LTD
MOORE J
SYDNEY
2 JUNE 1995
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. NI 423 of 1994
)
NEW SOUTH WALES DISTRICT REGISTRY )
BETWEEN: HAROLD MALCOLM BEAN
First Applicant
JEAN BEAN
Second Applicant
AND: MILSTERN RETIREMENT SERVICES PTY LTD
Respondent
JUDGE: Moore J
PLACE: Sydney
DATE: 2 June 1995
ORDER OF THE COURT
THE COURT ORDERS:
Declares that the termination of the employment of the applicants contravened ss170DC and 170DE.
The Respondent pay each applicant compensation in the sum of $7,500.00.
The order of the Judicial Registrar of 16 December 1994 be revoked.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. NI 423 of 1994
)
NEW SOUTH WALES DISTRICT REGISTRY )
BETWEEN: HAROLD MALCOLM BEAN
First Applicant
JEAN BEAN
Second Applicant
AND: MILSTERN RETIREMENT SERVICES PTY LTD
Respondent
JUDGE: Moore J
PLACE: Sydney
DATE: 2 June 1995
REASONS FOR JUDGMENT
On 3 January 1995 a notice of motion was filed by Milstern Retirement Services Pty Ltd ("Milstern") seeking the review of a Judicial Registrar's exercise of the power to determine an application under s170EA of the Industrial Relations Act 1988 ("the Act"). That application had been made by Mr Harold Malcolm Bean and Mrs Jean Bean and filed on 21 June 1994. They alleged the termination of their employment with Milstern had contravened Div3 of PtVIA of the Act.
The application under s170EA was determined by a Judicial Registrar on 16 December 1994 and compensation in the sum of $25,000 and $30,000 was awarded to Mr and Mrs Bean respectively as a consequence of the Judicial Registrar's finding that the termination of their employment had contravened Div3. Those amounts exceeded the amounts the Judicial Registrar was empowered to award as a result of amendments made to the Act effective on 30 June 1994. While Milstern raised that as an issue in the review, Mr and Mrs Bean accepted, in due course, that the Act in its amended form precluded compensation of those amounts being awarded. They were right in doing so.
Section 377 confers on a Judge of the Court the power to review a Judicial Registrar's exercise of a power and the review is a hearing de novo: see APESMA v Deniliquin Shire Council, unreported, Moore J, 10 March 1995. In these proceedings it was agreed that the evidence given before the Judicial Registrar could become evidence in the review and exhibits tendered before the Judicial Registrar would be exhibits in the review. However evidence was given in the review to supplement the evidence given before the Judicial Registrar. Evidence before the Judicial Registrar was given by Mrs Bean, Mr Bean, Mr Haberle, Mrs Millie Phillips, Mrs Leonie Rocke and Mr Robert Walker. Mr Bean, Mrs Phillips and Mrs Rocke gave further evidence in the review and evidence was also given by Mr Robert Phillips, Ms Valerie Mongan, Mr John Piper and Mr Gustaaf Tomczyk. The evidence was, in many respects, uncontentious. There were areas where differing accounts were given of some events though, in my opinion, those differences ultimately proved to be of limited significance. The following is a narrative of events leading up to and following the termination of Mr and Mrs Bean's employment and where necessary I will identify differences in the evidence and indicate the findings I make.
The first association Mr and Mrs Bean had with Milstern was in 1991 when they were employed by, according to Mr Bean, Milstern Health Care Ltd to sell units at a retirement village called Oatland Gardens in the Sydney suburb of Dundas. As purchasers of units began to occupy them, the Beans undertook duties associated with managing the village. Milstern Health Care Ltd has been involved in the development of retirement villages. It appears that this is achieved in the following way. The company develops or acquires properties which are converted to or created as a strata plan and the units within the plan, whilst initially owned by Milstern Health Services Pty Ltd, are sold to elderly people wishing to live in the village. Milstern then contracts with the body corporate of the strata plan to manage the village by ensuring that the building or buildings constituting the village are maintained and services such as cleaning and meals are provided to the residents.
Mr and Mrs Bean left their employment with Milstern Health Care Ltd in 1991 because they were dissatisfied with the amount of work they were being called upon to do and they were not being provided with additional assistance from someone who would do cleaning at the village. They left by giving four weeks notice.
Mr Bean recommenced employment at Oatland Gardens in October 1993 as a part-time salesman. In January 1994 a situation arose where the manager of Oatland Gardens had to assume duties as manager at another village. As a result, a temporary vacancy arose for a manager at Oatland Gardens. Mr and Mrs Bean were asked whether they would like to jointly manage Oatland Gardens as relief managers and they agreed. They started on 26 January 1994. At this stage, and perhaps before, they were employed by Milstern.
There was an issue in the proceedings as to when this temporary arrangement became permanent. Mr Bean contended in an affidavit sworn 11 April 1995 they became permanently employed on 26 January 1994 though reference was made by Mr Bean in the hearing to another date shortly after, as the time they became permanent. Milstern contended their status changed to permanent in May 1994 when a salary increase of $2,500 was negotiated. What appeared to be an issue of importance is really a chimera as no attempt was made by either party to elucidate what, in context, they meant by permanent employment other than perhaps an expedition of continuing employment. It is not a concept of fixed meaning. However it was accepted by both that the employment was permanent at the time of the termination. So much is apparent from par7 of the affidavit of Mrs Rocke of 16 March 1995 and conceded by counsel for Milstern. This is so notwithstanding an assertion to the contrary in the final paragraph of a letter, the text of which I set out shortly, from Mrs Phillips of 14 June 1994 dismissing the Beans. At the time of their dismissal the Beans were earning a joint salary of $37,500 per annum.
At issue was the performance of their duties in managing Oatland Gardens. Milstern sought to establish an unacceptable standard of performance on the part of the Beans principally through the evidence of Mrs Rocke who was the employee of Milstern generally responsible for the management of all villages. She gave evidence that the attitude of Mr and Mrs Bean changed at the time she said they became permanent. In her view, they were, in essence, not prepared to accept directions or requests she gave or made about the management of Oatland Gardens she used to communicate, in writing, with the managers. She annexed to her affidavit extracts from her personal diary and what I will call a daybook at Oatland Gardens. Her personal diary contains at least thirteen entries which relate to discussions she had with either Mr Bean or Mrs Bean about complaints she had received or requests she had made of them to do work she considered had to be done and, in some instances, should have been done. Many of the entries relate to April 1994. Similar entries are found in the daybook though fewer in number. In her affidavit, Mrs Rocke makes some general assertions about the failure of the Beans to perform their work to the standard she expected and she repeated them in her oral evidence. She did descend into detail in evidence before me about some matters as she did in her evidence before the Judicial Registrar. However, looking at her evidence as a whole, I was left with a limited understanding of what were, in concrete terms, the acts that constituted a failure of the Beans to perform as expected or directed. Similarly the evidence of Mrs Phillips before the Judicial Registrar referred to some, though a limited number, of matters that were said to be a failure on the Beans part to perform their duties satisfactorily. Further, matters of detail concerning poor performance were not raised with Mr Bean in cross-examination before me and were raised only to a limited extent before the Judicial Registrar. The evidence was, in this respect, in an unsatisfactory state.
Mr Bean alleges in an affidavit sworn 11 April 1995 that many of the entries in the daybook were not written at the time of his employment but were added later. I find this assertion difficult to accept. While Mrs Rocke appeared to be a forceful if not domineering personality and one who would wish to get her way, there was nothing in her demeanour that would suggest she would contrive evidence for the purposes of legal proceedings. Further most of the impugned entries are on pages with entries in other handwriting and all these entries sit comfortably together on the pages as a whole. The denial is made by Mr Bean some twelve months after the time at which the book would have been seen by him at work. In my opinion, his allegation of falsification is not made out. It arises from a combination of faulty memory and a firm belief he has as to the lengths his former employer would go to defeat his claim.
Ultimately, however, the unsatisfactory state of the evidence about the performance of the Beans and the contest about the workbook entries is of limited relevance. I say this because Mrs Phillips gave evidence at two points before the Judicial Registrar which puts this evidence about complaints and the failure of the Beans to satisfactorily discharge their duties into perspective. The first concerned the position to early May 1994 when the Beans sought an increase in their salary and other improvements in their working conditions. Of this Mrs Phillips said the following:
"So, at that point of time, around early May, you consider that they were performing in an acceptable manner?---It wasn't wonderful but it was acceptable, yes."
Of their performance thereafter until the time of their dismissal, Mrs Phillips took the view that the standard of their performance would not lead to their dismissal but warranted counselling. She said in relation to events on Sunday, 12 June 1994:
"Mrs Phillips, when you left the Oatland Retirement Village on Sunday, were you intending to terminate Mr and Mrs Bean at that stage?---No, I was there to counsel.
So when you left on the Sunday after discussions with Mr and Mrs Bean there was no intention on your part to terminate their services?---I hoped that they would come to their senses, that they would realise that Milstern was the employer and not the Strata Act and that they would rethink their position and would go back to being employees."
What the evidence does establish clearly is a divergence of approach between Mrs Rocke and the Beans, and Mr Bean in particular, as to what was required of them as managers. Mrs Rocke was concerned about the physical maintenance of Oatland Gardens and the provision of tangible services and was plainly insisting on high standards. The Beans were not meeting these standards in all respects. Mr Bean, whilst not unconcerned about those matters, was also concerned with the village in a more holistic sense though I gained the clear impression that Mr Bean saw himself and his wife's role as serving the residents directly, and as a consequence, became somewhat dismissive of the supervisory role of Mrs Rocke. I have no doubt that Mr Bean's attitude was a source of irritation to Mrs Rocke. What really developed was a clash of perspectives. A related issue was the extent to which, if at all, the Beans could legitimately be called upon to assist Milstern Health Care Ltd market this and other villages when the Beans were employed by Milstern to manage the village. This divergence of approach and the failure of the Beans to meet the standards demanded by Mrs Rocke led to the events of 10-14 June 1994.
On 10 June 1994 Mr Bean was asked to await a letter from Mrs Phillips which was to be sent to Oatland Gardens by facsimile from the company's head office in Kent Street, Sydney. The letter was received and was in the following terms. (I set out the precise text):
"Malcomb and Jean Bean,
Oatland Gardens,
Dear Malcomb & Jean,
For some time we have been councelling you on the performance of your duties. It seems that whichever matter or issue is raised, another crops up. Some of the more distressing matters that have come to my attention in recent days include;
A resident was emotionally disturbed and refused an additional apple!
A resident was told you did not put drops into eyes of residents in self care units. This is quite amazing. You are not only aware, but advise potential buyers that we include Flex-care in the purchase optopns. The most disturbing aspect of this complaint is that the resident had to pay $30.00 per day to have this minute service carried out for him.
Potential purchasers who rang you from Paramatta Station requesting the bus number to visit the village, were (a) messed about while the required information was found (b) you did not offer to pick them up or discuss this option with either Leonie or Marina who both there. Such cold hospitality will do little for the good-will of the village. It speaks volumes for the care and attention you are prepared to give to residents.
Leonie drew your attention to the fact that the village was acquiring an 'unloved' appearance. Your responce was that you were only interested in the care of residents and not in vallage maintainance and appearance. This level of managerial care is toatlly unacceptable. I do NOT have to remind you that a managemen is responsible for every aspect of village life.
As an example of your indifference, is the way the carpet repair carried out. It was in a different colour than that on the floor. Ample quantities of the required carpet was in storage. It is simply another example of your lack of interest.
Such lack of managerial skill and professionalism is unacceptable. Please advise what you intend to do to improve your performance. In the event that you have totally lost interest in high standards of care, I will have no option but to replace you. I await your reply. To facilitate this you can either ring me at the office, in the event I am out, speak with Robert. During the week-end my telephone numbers are: 045-677165 or 958 0168.
M. Phillips"
Upon receiving this letter Mr Bean discussed it with his wife and they decided to discuss the matter with Mr Mulligan who was the chairman of a group of residents that has been described as the residents' forum. While there was an issue about whether this group had any real status, I accept that it existed within the village and was a means by which at least some of the residents could meet as a group to discuss and deal with matters of common concern.
This group met on Sunday, 12 June 1994 at 1.30pm and Mr Bean was invited to attend which he did. While I accept Mr Bean did not organise the meeting, it is plain he took steps that might have encouraged such a meeting to take place and he was quite prepared to attend it. He addressed the meeting and went through the letter and I am satisfied that what he did was to address each of the matters in the letter seriatim and sought to establish that the criticisms of his management contained in it were not justified. The meeting resolved to communicate with Milstern to indicate their support for Mr and Mrs Bean.
On Saturday, 11 June 1994 Mr Bean rang Mrs Phillips as requested in the letter. The conversation between them was a short one and in it Mr Bean accused Mrs Rocke of lying. In the result Mrs Phillips was sufficiently angered by what Mr Bean was saying that she hung up. On Sunday, 12 June 1994 Mrs Phillips went to Oatlands Gardens and in the company of Mr Bean went to a number of places in the village and identified matters about which she had concerns. At no point did Mr Bean indicate to her that a meeting of residents had taken place that morning, that they had been told of the contents of the letter of 10 June 1994 or that they had voted to support Mr and Mrs Bean and to themselves write to Mrs Phillips. Monday, 13 June 1994 was a public holiday. On the morning of Tuesday, 14 June 1994 Mrs Phillips became aware of the meeting and had received the letter from Mr Mulligan sent on behalf of the residents. This prompted Mrs Phillips to write a letter in the following terms (I set out the precise text) to Mr and Mrs Bean dismissing them:
"Malcolm & Jean Bean,
Oatland Gardens,
DUNDAS.
Dear Malcolm and Jean,
Further our telephone conversation of 11th June and my visit to Oatland Gardens on 12th, I advise:
I am very concerned at the manner you perform your duties. Firstly, in the telephone conversation which you instigated in answer to my letter/fax of 9th June, you were openly hostile and impertinent. You deliberately goaded me so that I hung up.
During your trial management you have proved that you were not suitable as managers of Oatland Gardens. In these few months Oatland has acquired an uncared for look, and the atmosphere has changed from friendly and happy one to terse, depressed, and negative. This must affect residents, and potential buyers alike. The village seems in the grip of disinterested people. There was no evidence of fresh flowers, no brightness.
To comprehensively describe your deficiencies as managers is almost impossible. The worst aspect of your management however, is your inability to accept advice or counselling on the way you should carry out your duties. Instead of discussion your response is to seek excuses and someone to blame. Your relation with me and your immediate supervisor, Leonie Rocke is of extreme antagonism. Notwithstanding that you confirm the truth of matters raised, you nevertheless brand us a 'liars'.
You not only refuse guidance in the carriage of your duties, but insist that your responsibility is only to the residents who you advise are the owners of the village. This is simply wrong. As explained to you the manager of the village is Milstern and you are employed by Milstern. You are responsible to Milstern. Milstern is responsible to the residents. The fact that the village happens to be strata title is not relevant. It should not be necessary to remind you that company loyalty and respect is an expected from staff.
An example of your negativity is your response to my finding dirty tiles in a re sale unit. You said the tiles which were so cheap that they marked with stains that could not be removed. In point of fact these are high quality Italian non slip impervious tiles. Wiping them with water removed the marks. The same attitude was noted in reply to my observation that sections of the pathway in the garden were dangerously uneven. You advised with much sarcasm that this section of the garden was not part of the Strata plan but belonged to properties I owned. It is part of the village which residents enjoy. A highlight point strip to prevent falls is required. I do not believe that you have done anything about seeing the timber bridge rendered slip proof despite Robert asking twice.
Your apathy toward work is remarkable. You commenced another convoluted explanation why you did not supervise the patching of the carpet and ensuring that the colour was the same, by blaming lack of time due to your managerial function. And that instead of working the 8 hours per day you are employed to do, you performed 10 hours of work. Firstly managers do not work on hours. Secondly when I invited you to detail what you did in the 8 hours you rudely replied by asking me WHAT I DID IN MY 8 HOURS A DAY! Your response to the repainting of the marked elevator door was similar. You immediately blamed the elevator maintenance staff.
As to your lack of interest in proper running of the village, there many examples, however I will limit myself to the following. Presentation of the village is woeful. You let expensive and impressively large plants to die on the demonstration units verandahs. You were disinterested and spoke vaguely that the gardener waters constantly. When told to test the soil, it was very dry. Nevertheless you maintain that your time is taken up in supervising the staff. You also blame time loss on showing buyers through the village. Last week one inspection took place, the previous week not many more. The petal strewn path that was highly dangerous to pedestrians was also 'not your responsibility'. It seems it was Bob's job.
Your disinterest about carrying out the normal village procedures was apparent in the disregard for forward village activity programmed. You blamed this on the fact that the Social Committee had not met for some weeks, and you ere not 'going to do the work they are supposed to do'.. In fact it is the manager who is retained to do this work. The same applies to a new monthly menu. You advised that Jean's time is taken up with supervising the kitchen staff, yet she is not able to produce a coherent fresh monthly menu. She was sarcastic about the menu Leonie provided as it inadvertently used bananas in desert on two consecutive days.
Jean spends her time in gossip with (favoured) residents. Jean has so little care for residents welfare that she objected to my concern for happy residents despite the managers (yourself) being unhappy. You stated that unhappy managers cannot do a good job. You are absolutely right. You and Jean will never be happy with the work conditions at Oatlands, when I remarked this, you both smirked and said you were not leaving.
The fact that instead of attempting to resolve matters you chose to escalate them by involving the residents was unprofessional, uncaring and totally unacceptable, I also believe that it was calculated to be provocative. Such action has no place in any retirement village. It upset the residents with no regard for their needs but at the same time could not have resulted in resolution of the problems. And in any event, I spoke to Mr Mulligan as representative of the residents and discovered that not even he had been given the full facts of the situation. How can you honestly expect me to retain you as managers under these circumstances. Do you expect to be the only employees in the company who have no supervision and are answerable to nobody. It is obviously impossible.
In fact your temporary trial employment has never been converted to permanent status. There was some discussion of salary increases, however instead of improving at this prospect, your work has seriously degenerated. I hereby give you notice of your termination effective immediately and ask you to vacate the managers unit within 48 hours.
Yours faithfully,
Millie Phillips,
Chairman"
Thus the termination of the employment of Mr and Mrs Bean was effected. Before turning to the issues I should say that Mrs Phillips appeared, when giving evidence, as a person who is determined and intent on getting her way. Like Mrs Rocke, I am confident that Mrs Phillips found Mr Bean and his attitude a source of irritation.
The issues in these proceedings are firstly whether the termination of Mr and Mrs Bean was in contravention of any provision in Div3 of PtVIA of the Act and if so, what is the appropriate remedy. There is a subsidiary issue as to whether Mr and Mrs Bean are entitled to a week's notice and/or payment equivalent to a day's leave for each public holiday upon which they worked.
Mr Bean submitted that his and his wife's dismissal was in contravention of s170DC of the Act. Section 170DC provides:
"An employer must not terminate an employee's employment for reasons related to the employee's conduct or performance unless:
(a)the employee has been given the opportunity to defend himself or herself against the allegations made; or
(b)the employer could not reasonably be expected to give the employee that opportunity."
It is plain that the principal basis upon which the decision was taken to terminate the employment of Mr and Mrs Bean was their involvement in the meeting of residents that occurred on Sunday, 12 June 1994. It is also plain that they were given no opportunity to defend themselves against "the allegation" as that expression appears in s170DC(a). The real issue is whether Milstern could not reasonably be expected to have given Mr and Mrs Bean that opportunity: see s170DC(b). Counsel for Milstern submitted that, in the circumstances, the employer was entitled to act as it did. I do not accept this submission. At the time the letter of 14 June 1994 was written by Mrs Phillips the only knowledge she had, at least as is apparent either directly or inferentially from the evidence, is that gained from the letter of Mr Mulligan and a limited conversation with Mrs Rocke. The letter was in these terms:
"Dear Mrs. Phillips,
Our Village Managers, Malcolm and Jean, have advised me of the content of the letter which you have sent to them concerning their management of the Village.
After listening to Malcolm and Jean's response to the very serious accusations, I decided to call a meeting of all residents. This letter is a result of decisions made at that meeting.
The residents believe that stable management of the Village is an absolute necessity. We each purchased our Units so that we could have a care free and secure lifestyle. The frequent changes of Management is very distressing to all residents.
The few months that Malcolm and Jean have been here have allowed us to come to know and trust them. They have proved to be Managers who have worked hard to provide the five star services claimed in your advertising literature.
We unanimously agree that Malcolm and Jean's explanations are the true record of the situations.
Malcolm and Jean have stated that they wish to remain in their positions and do not intend to resign. It was the unanimous decision of the meeting that we wish them to continue as our Managers.
In addition, the Residents expressed a wish that each of their signatures appear with this letter.
Yours faithfully,
Ken Mulligan."
From that letter it is clear that Mr and Mrs Bean had advised Mr Mulligan of the contents of the letter they had received on 10 June 1994. It is also apparent that they provided an explanation to both Mr Mulligan and, inferentially, the residents more generally. It is plain from the letter that the residents had a high regard for Mr and Mrs Bean. There was other evidence corroborative of that fact which I need not detail.
The circumstances in which Mr and Mrs Bean could have proffered an explanation to the residents of the criticisms of the letter of 10 June 1994 could have arisen in a variety of ways. The only matter that Mrs Phillips could have comfortably concluded adverse to Mr and Mrs Bean was that they had made the contents of the letter known to Mr Mulligan and given an explanation that was communicated to and accepted by the residents. The admissible evidence of what Mrs Rocke knew about the meeting on the morning of Tuesday, 14 June 1994 which she communicated to Mrs Phillips, adds nothing of substance to the evidence of what Mrs Phillips knew at the time the letter was sent by her dismissing the Beans. While I accept that the letter was a confidential communication between Milstern and an employee, it arose in rather unusual circumstances. Mr and Mrs Bean were being told that in their employer's assessment they were not discharging their duties as managers in the way expected of them. They were, in the circumstances, being told they were not providing a level of service of the requisite standard to the residents of the village. While some of the matters concerned the physical maintenance of the village which could be objectively assessed, some related to the standard of care being provided to the residents. In those circumstances, it was not inappropriate, in my opinion, for Mr Bean to have raised that allegation with a representative of the residents themselves. The residents' perception of the standard of management could well have been a matter Mr Bean could properly have raised with Mrs Phillips in seeking to persuade her that their standard of performance was not as deficient as she was suggesting. Accordingly I do not consider that it was open to Mrs Phillips to adopt the approach of terminating the employment of Mr and Mrs Bean, because they communicated with the residents, without affording the Beans an opportunity to respond. To the extent that Milstern now relies also on the failure of Mr Bean to inform Mrs Phillips of the meeting when they met on Sunday, 12 June 1994, I do not consider that brings the circumstances within the scope of the exclusionary words in s170DC(b). I deal with this matter in more detail shortly. In the circumstances Milstern contravened s170DC of the Act.
The next issue is whether the dismissal of Mr and Mrs Bean was for a valid reason. Section 170DE provides:
"(1)An employer must not terminate an employee's employment unless there is a valid reason, or valid reasons, connected with the employee's capacity or conduct based on the operational requirements of the undertaking, establishment or service.
A reason is not valid if, having regard to the employee's capacity and conduct and those operational requirements, the termination is harsh, unjust or unreasonable. This subsection does not limit the cases where a reason may be taken not to be valid."
Section 170DE has to be read in conjunction with s170EDA which provides:
"(1)If an application under section 170EA alleges that a termination of employment of an employee contravened subsection 170DE(1):
(a)the termination is taken to have contravened subsection 170DE(1) unless the employer proves that, apart from subsection 170DE(2), there was a valid reason, or valid reasons, of a kind referred to in subsection 170DE(1); and
(b)if the employer so proves, the termination is nevertheless taken to have contravened subsection 170DE(1) if the applicant proves that, because of subsection 170DE(2), the reason or reasons proved by the employer were not valid.
....
...."
The combined effect of ss170DE and 170EDA is that it is necessary for the employer to establish that there was a valid reason or reasons connected with the employee's capacity or conduct based on the operational requirements of the undertaking, establishment or service justifying the termination. If it fails to do so the termination is taken to have contravened s170DE(1).
The reasons for the terminations identified by Milstern are principally the conduct of Mr and Mrs Bean on the weekend of 10, 11 and 12 June 1994 as well as the complaints identified in the letter of 10 June 1994 together with the standard of management provided by Mr and Mrs Bean. I have already indicated that Mr and Mrs Bean were, in my opinion, entitled to raise with a representative of the residents the criticisms that had been made of them by Milstern in the letter of 10 June 1994. I accept that one of the duties of Mr and Mrs Bean was to ensure that the village was as harmonious and peaceful as practicable. However that duty cannot be viewed in some abstract way. It is quite clear from the terms of the letter from Mr Mulligan that Mr and Mrs Bean had been successful in bringing a measure of harmony to the village in circumstances where the residents had experienced some dislocation arising from the dismissal of the previous manager, Mr Tomczyk. Had Mr and Mrs Bean's employment not been terminated I have little doubt that the episode on 13 June 1994 would not have been of enduring significance for the residents.
Milstern also rely on the deception of Mrs Phillips perpetrated by Mr Bean who did not tell her of the morning meeting when she attended Oatland Gardens on the afternoon of Sunday, 12 June 1994. I have some sympathy for Milstern's contention but, on balance, I do not view it as quite the transgression Milstern suggests. Mr Bean was then in a comparatively hopeless position. He then believed, with some justification, that both Mrs Rocke and Mrs Phillips were both dissatisfied with his work but, more importantly, were becoming increasingly irritated by his manner and attitude. He wrongly believed, having regard to the evidence of Mrs Phillips, that his dismissal was imminent and a foregone conclusion. He had sought to enlist the support of the residents. Had he, rather than the residents, informed Mrs Phillips of the meeting and their support, it would not have advanced his interests. It was clear, however, that Mr Bean was not intent upon concealing from Mrs Phillips what had happened. He knew it would be made known by Mr Mulligan. Mr Bean just did not want to be the messenger. His explanation in evidence of his behaviour on Sunday, 12 June 1994 was, to an extent, illogical and contradictory. In my opinion, what he really hoped was that the support of the residents would persuade Mrs Phillips that he and his wife were doing their job well and that she should not risk alienating the residents by dismissing them. This proved to be a vain hope. However I am not satisfied that, in these somewhat unusual circumstances, the failure of Mr Bean on Sunday 12 June 1994 to inform Mrs Phillips of the events of the morning, viewed in isolation or with the other matters relied upon, constituted a valid reason for the Beans termination.
Turning then to the standard of management provided by Mr and Mrs Bean, I am not satisfied that, as concerns the standard of their work, Milstern has discharged the onus that s170EDA imposes upon it. I accept that Mr and Mrs Bean did not perform their duties to the satisfaction of Mrs Rocke. Viewed objectively, the evidence is of complaints of both a general and specific nature and some limited evidence of an actual failure on the part of the Beans to do what was requested of them. Moreover whatever were their failings, they do not appear to have been seen by Mrs Phillips as a basis for terminating the employment of the Beans, either having regard to the way they performed their duties until early May and in the later period from then to 10 June 1994. Further, in my opinion, the assessment of the standard of management by the Beans made by Mrs Rocke and Mrs Phillips was influenced by the understandable concern Mrs Rocke and Mrs Phillips had about the marketing and sale of unsold units by Milstern Health Care Ltd and the understandable resistance of the Beans, as managers employed by Milstern under contract to the body corporate to manage the village, to perform duties directed to the marketing and sale of unsold units. In this respect I consider that Mrs Rocke and Mrs Phillips were judging Mr and Mrs Bean more harshly than the circumstances warranted. Milstern has failed to discharge the onus imposed by s170EDA. It follows that the termination is taken to have contravened s170DE and I so find.
This leads to the question of remedy. I have already said that in the proceedings before the Judicial Registrar Mr and Mrs Bean did not seek reinstatement and only sought compensation. They now seek reinstatement. It is plain that they do so because of the limits that now arise in s170EE on the amount of compensation that can be awarded. That is essentially conceded by Mr Bean. Having failed, if only on jurisdictional grounds, to retain the amounts awarded by the Judicial Registrar, Mr and Mrs Bean aspire to be reinstated on the basis that they will then be awarded a sum representing remuneration lost between the date of the termination and the date of the order under s170EE(1)(d)(ii). This would represent almost twelve months salary. While I have some sympathy for the position Mr and Mrs Bean find themselves in having regard to the expectations created by the Judicial Registrar's order, the approach I am being invited to adopt is one that is at odds with the scheme created by s170EE.
The Court is required to first address the question of whether reinstatement is impracticable. If it is not impracticable then reinstatement should be ordered and in those circumstances an order may then be made under s170EE(1)(d)(ii) concerning lost remuneration. However if the Court considers reinstatement is impracticable then the compensation that might be awarded is limited by the provisions of s170EE(3). Thus I must first address the question of whether reinstatement is impracticable.
I have already expressed the view that there was a divergence in the approach adopted by Mr and Mrs Bean to the management of Oatland Gardens and what was being demanded by Mrs Rocke directly and Mrs Phillips indirectly. The relationship between Mrs Phillips and Mrs Rocke is plainly a strong one and they have worked together for over twenty years. I have little doubt that the tensions that emerged between Mrs Rocke and Mr Bean, in particular, would continue and Mrs Phillips would continue to support Mrs Rocke. However the tensions that emerged during the period leading to the dismissal of Mr and Mrs Bean would have been exacerbated considerably by what is now protracted litigation between Mr and Mrs Bean and Milstern. While ordinarily that should play no part in the consideration of the grant of a remedy under s170EE, this case is unusual. It is unusual because Mr Bean has persisted in his contention that Mrs Rocke has lied. He said as much to Mrs Phillips on Saturday, 11 June 1994 and has continued to do so in these proceedings. Whether Mrs Rocke lied is beside the point and I am not, by these remarks, suggesting she did. What is relevant is the persistent claim by Mr Bean that she has.
In many instances personal tensions created by litigation can be expected to lessen if not dissipate entirely with the passage of time. However I am confident that in the present case there is no real prospect of the restoration of a satisfactory working relationship between Mr and Mrs Bean and Mrs Rocke and, in all probability, Mrs Phillips. Having regard to the comparatively sensitive nature of the work Mr and Mrs Bean would be required to do as managers, even if only as relieving managers, such a relationship would be essential. In my opinion the reinstatement of Mr and Mrs Bean to employment with Milstern is impracticable.
This leads to a consideration of whether any compensation should be awarded under s170EE(3) and if so, in what amount. Milstern submitted that the remedy of compensation is a discretionary one and I am prepared to assume, for present purposes, that it is. However this is not a case where no compensation should be awarded. Milstern submitted that if compensation was to be awarded it should be a minimal amount. A submission was made that the limit on compensation of six months was intended to indicate that a range is provided by s170EE(3). A more serious contravention of Div3 would justify an award of compensation at or towards the upper limit of six months and a less serious contravention would justify an amount of compensation towards the lower end of this range. This submission is one I have considered on an earlier occasion and rejected: see David John Perrin v Des Taylor Pty Ltd, unreported, 10 March 1995, Moore J, Industrial Relations Court of Australia. I did so in the following terms:
"Section 170EE(3) requires the Court to have regard to the remuneration the employee would have received or would have been likely to have received if the employer had not terminated the employment. I do not accept the submission of counsel for the respondent that the statutory limits found in s170EE(3) and (4) on the amount that the Court might award by way of compensation indicates a range where the statutory limit is to be seen as the maximum amount to be awarded only in the most grievous or serious contravention of a provision in Div3. The purpose of those provisions is no more than to limit the jurisdiction of the Court so as to preclude awards of compensation in excess of those amounts. That view is consistent with the legislative history of s170EE which was enacted by the Industrial Relations Reform Act 1993 containing no limit on the amount of compensation that might be awarded but was amended to introduce the limits found in s170EE(3) and (4) by the Industrial Relations Amendment Act (No. 2) of 1994."
Counsel for Milstern submitted that the conclusion I reached in Perrin was not correct. I have given consideration to the further arguments put in this matter and I am not persuaded the approach I earlier adopted was wrong. The provisions of s170EE which enable compensation to be ordered are not intended to punish an employer for contravening the Act on the basis that a less serious contravention should attract a small amount of compensation while a more flagrant contravention should attract a greater amount of compensation. The purpose of s170EE(3) is to compensate an employee for the unlawful termination though plainly the subject matter of the statutory provision that is found to have been contravened may be relevant. So much is apparent from the language of s170EE(3) and in particular the requirement that the Court is to have regard to the remuneration that the employee would have received but for the termination.
In my opinion, Mr and Mrs Bean are entitled to compensation in the sum of $7,500 each and I so order. I revoke the orders made by the Judicial Registrar. While the determination of an appropriate amount of compensation is not an exact science, I have taken into account the age of the Beans (they are 60 and 59 years old) and the expectation they had that their employment with Milstern was permanent in the sense that they had an expectation of ongoing employment. I have also taken into account that the divergence of approach between Mr Bean and Mrs Rocke may have resulted in their dismissal in due course though that rather begs the question of whether it would have then been in conformity with the provision of Div3. I accept, as was submitted by counsel for Milstern, that the Beans may have been dismissed by Mrs Phillips on or about 14 June 1994 had the Beans been given the opportunity to answer the allegations but this does not give any effect to the finding I have made that the termination also contravened s170DE. I have also taken into account the comparatively short period to which the Beans were employed by Milstern. While I accept that Mr and Mrs Bean did not perform to the standards expected of them by Mrs Rocke, it is nonetheless apparent as I have earlier indicated that they were generally viewed by the residents as satisfactory managers.
I lastly deal with the claim made by Mr and Mrs Bean for pay in lieu of notice and pay in lieu of public holidays worked. As to pay in lieu of notice, that is comprehended by the award of compensation I have already made. As to pay in lieu of public holidays I am not satisfied that there was any contractual arrangement between Mr and Mrs Bean and Milstern that would entitle the Beans to a payment of that amount. Accordingly I dismiss that aspect of their application.
I certify that this and the preceding twenty-five (25) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore.
Associate:
Date:2 June 1995
Litigants in Person: Mr H.M Bean &
Mrs J. Bean
Counsel for the Respondent: Mr P.C. Coleman
Solicitor for the Respondent: Peter Wise & Co,
Solicitors
Dates of hearing: 28 March,
27 &28 April 1995
Date of judgment: 2 June 1995
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