Hladni v Broadlex Management Pty Ltd
[1997] IRCA 227
•25 Jul 1997
DECISION NO:227/97
INDUSTRIAL RELATIONS COURT OF AUSTRALIA
INDUSTRIAL LAW - termination of employment - whether resignation or termination at the initiative of the employer - operational difficulties, an assault on an employee and a consequent strike did not create circumstances which converted termination of employment by the employee into termination of the employment by the employer - employer discouragement of uniion membership and a direction to the employee to work during an industrial stoppage did not convert the ending of the employment by the employee into a constructive dismissal at the hands of the employer.
Workplace Relations Act 1996 ss.170DE, 170DF, 170DE
CASES:
Hutt v The Cascade Brewery Co. Ltd (1992) 34 AILR 179
Allison v Bega Valley Council (1995) 63 IR 68
Gunnedah Shire Council v Grout (1995) 62 IR 160
Brookton Holding Pty Ltd v Kara Kar Holding Pty Ltd (1994) 57 IR 288
Mohazab v Dick Smith Electronics (No 2) 62 IR 200
Rheinberger v Huxley Marketing (1996) 67 IR 154.
HLADNI -v- BROADLEX MANAGEMENT PTY LTD
No. VI-1507 of 1996
Ryan JR
Melbourne
25 July 1997
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI-1507 of 1996
B E T W E E N :
FRANKA HLADNI
Applicant
AND
BROADLEX MANAGEMENT PTY LTD
Respondent
MINUTES OF ORDERS
Judicial Registrar Ryan 25 July 1997
THE COURT ORDERS:
That the application be dismissed.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI-1507 of 1996
B E T W E E N :
FRANKA HLADNI
Applicant
AND
BROADLEX MANAGEMENT PTY LTD
Respondent
Ryan JR
Melbourne
25 July 1997
REASONS FOR JUDGMENT
THE CLAIM
The Applicant seeks compensation in the claim of unlawful termination of employment. She initially wanted reinstatement but did not pursue that claim at the hearing.
THE RESPONSE
The Respondent states that the Applicant resigned or abandoned her employment and that the application lacks jurisdiction.
THE WITNESSES
The Applicant gave evidence and called two other employees as witnesses namely Nonda Stavrakis (Nonda), a leading hand cleaner and Scalica Laholat (Laholat), a cleaner.
The Respondent provided evidence through four witnesses: -
Angela Sakellis (Angela) joint Managing Director
Diego Gallo (Diego) Customer Service Manager
John Voulamanos (Voulamanos) Customer Service Officer
Georgia Gialamatzis (Georgia) Supervisor
THE APPLICANT’S EVIDENCE
The Applicant worked as a cleaner at Melbourne Airport for many years. She admits she took a job as supervisor. She states that she was reluctant to act in that capacity but that she agreed to undertake the job at $40,000 a year after she had been asked “three times”. The package was $35,000 salary and a car allowance of $5,000
The evidence of the Applicant and evidence led by the Respondent establishes that the Applicant worked enormously hard as a cleaner but experienced difficulty motivating and directing others to work. There was no doubt that as a supervisor she performed tasks which should have been performed by cleaners under her supervision.
On 19 February 1996 the Applicant was certified unfit for work from 20 to 22 February. She was on recreation leave for about three weeks thereafter returning to work on 19 March. It is common ground that Diego suggested that the Applicant take leave because of the difficulty and stress she was experiencing as a supervisor.
There is a dispute between the Applicant and her witnesses and the witnesses for the Respondent as to whether the three weeks leave was taken as normal recreation leave or was an additional form of “complimentary” paid leave. At the end of the day, the question of whether the leave was normal recreation leave or additional, “complimentary” leave is not crucial to a determination as to whether the Applicant resigned or abandoned her employment or was dismissed by the Respondent and forced out of the employment against her will. However, after assessing the evidence of all witnesses, the Court has concluded that the leave was normal recreation leave to be taken against or in advance of credits due. The leave was recorded as recreation leave and I find it inherently unlikely that Diego would have separately stated to the Applicant and Nonda and Laholat that the Applicant’s leave “would have to be complimentary”. The Applicant and Nonda and Laholat all give evidence to that effect but the evidence does not ring true and is not accepted. Diego denies that he made such statement or ever described the leave as “complimentary”.
The Applicant states that as a result of conversations with Diego and Angela after she returned to work on the morning of the 19 March she met Diego and Angela and Voulamanos at about 7 pm that day at the Respondent’s premises in Collingwood.
The Applicant claimed that Angela “abused” her about her inability to supervise and control staff and that Diego described her staff supervision techniques as follows:
“you spoil them like a mother spoils her kids”
The Applicant was a volatile witness. Her evidence was not easy to follow. She claims the meeting took one and a half hours and that Angela demanded that she (the Applicant) bring in her keys and pass. Her evidence included the following extract. It is not verbatim evidence taken from transcript. It is evidence from notes taken at the time the evidence was given.
Angela said: “Can I have your pass?”
I said:“I do not have a pass or a uniform. I do not believe this. Why do you want my pass? Angela, do you want me to finish?”
Angela said: “Yes”
I said:“Please put me anywhere”
Angela said: “Bring in your pass”
I said:“I will”
Angela said: “Tomorrow at 3 o’clock you bring in your pass”
I said:“Alright”
Angela and Diego said: “That is enough. We have to go. Tomorrow at 3 o’clock you bring in your pass”
I was crying. I went home. I thought I would kill myself I was so upset.
At three o’clock the next day (i.e. Wednesday 20 March 1996) I went to Collingwood. Diego was laughing like nothing had happened. I was crying in the car. Diego said “go and see Angela”.
I gave in my badge and keys. Diego said “we will try and get you a job”. I said “piss off”.
I did not speak to Diego again after that except to say hello. I did not speak to Angela.
In cross-examination the Applicant denied that she was offered a job in the city. She said:
“They never mentioned a job in the city. I said ‘give me any jobs...I am happy to work anywhere’. They did not say or ask me to think about a job in the city...’they did not say nothing’...then I left the Collingwood office and Diego came down to the car because I was crying. I said ‘piss off’. They never mentioned another job to me.”
THE RESPONDENT’S EVIDENCE
Angela’s evidence included the following
she had at least eight discussions about inadequate supervision with the Applicant between October 1995 and January 1996
after “the first couple of occasions” the Applicant responded, on every occasion, by saying that she was going to resign
“in the end I asked her to put it in writing but she did not do that”
about 23 February 1996 the Applicant informed Angela that Diego had suggested that she (the Applicant) go on holidays and that she (Angela) responded that “was a good idea but it is up to you”
on the morning of 18 March Angela and Diego discussed offering the Applicant a less demanding position described by Angela as follows
“we wanted her to learn how to induct and hire and fire...we wanted her to remain in the city in a 9 to 5 settled job...her remuneration would have remained the same”
on Monday 18 March (not Tuesday 19 March as asserted by the Applicant) about midday (not 7 pm as asserted by the Applicant) Angela and Diego and Voulamanos met the Applicant in the boardroom at Collingwood and Angela indicated that she was not happy with the Applicant’s performance as a supervisor and wanted her to have an opportunity to work elsewhere
the Applicant immediately responded that she did not want to work elsewhere and called out “I resign...I resign...I do not want to stay”
both Angela and Diego asked the Applicant to calm down and said they would talk about the proposal again the next day
on Tuesday 19 March about 1 pm
“the Applicant came up...she threw her keys and pass down and she ran out...she said I ‘resign’ and she went”
In cross-examination Angela said
“On 18 March we rang the Applicant to talk about her performance. We wanted her to go to the city for training. We felt the domestic terminal was too busy and the supervisor’s role there was too demanding and that it would be better for her in the city where there was less demand and more training so that she could understand what delegation was.”
Again, in cross-examination, referring to the events of the 19 March Angela said
“I sent Diego to bring her back. The Applicant had resigned on me so many times. We never even thought of sacking her.”
Diego’s evidence in respect of the meeting with the Applicant about midday on Monday 18 March included the following:
“Angela took over the meeting. We thought it was in the best interest of everybody for Franka (the Applicant) to work in one of the other buildings in the city. Angela said that she was not happy with Franka’s performance. She was told she was going to have another job - a position in the city. She said that she did not want another job. She was agitated. Angela said that if that was the case we would have to have her I.D. and keys and Angela asked Franka to bring the keys in the next day and she asked her to please think over what had been said and let us know about the other job”
on 19 March Franka produced the I.D. and the keys and Angela asked her to sit down and discuss the future but Franka said that she did not want any other job and she raced downstairs and out of the building. Angela asked me to go and ask her to come back. I asked Franka to come back but she would not”
The evidence of Voulamanos differs in that, while he was not a participant but merely an observer on 18 March, he attributes the major and most active role to Diego rather than Angela. The Court is inclined to the view that Voulamanos is mistaken in recalling Diego in that role rather than Angela. Even if it was Diego who took the major role (unlikely given Angela’s position as Managing Director) it does not alter the tenor of the evidence given for the Respondent. The evidence of Voulamanos included the following:
“Diego started first and asked Franka about work and she indicated that she was working long hours 7 days a week. They were talking about transferring her to another area. This was Diego. They said it was going to be better to transfer to another area. Franka refused and said that if she was not going to work at the airport she did not want to work”
CONCLUSION - TERMINATION OR RESIGNATION
If, on a balance of probability, the Court was to accept the Applicant’s evidence, and relevant aspects of the evidence of her witnesses Nonda and Laholat, as an accurate description of the events leading up to and resulting in the ending of the employment, her solicitor, Mr Smith would have made out his case. Indeed, on the basis of the Applicant’s evidence and relevant support from Nonda and Laholat, Mr Smith erected a powerful argument for substantial compensation for unlawful termination of employment. However, the case for the Applicant turns on whether the Respondent forced her out of her employment or whether the Applicant, stressed by the difficulties of the supervisory job she had failed to master, refused to contemplate a temporary transfer to another job where training would be provided, and brought the employment to an end at her own initiative.
It seems that the Respondent, in difficulty with the union and in meeting the demands of the cleaning contract, considered that the Applicant was something of a liability as a supervisor at Melbourne Airport. It is possible that the Respondent may have acted soon after 19 March in a way which would have ended the Applicant’s employment and would have required the Respondent to give notice and establish a valid reason for termination. However, on the basis of the evidence before me, I have concluded the Applicant ended the employment relationship and did it in a volatile and perhaps rash manner when she stormed out of the Collingwood premises on 19 March. I have concluded that the Collingwood meetings took place on 18 and 19 March and not, as the Applicant recalls, on 19 and 20 March but nothing turns on that.
I do not consider that the failure to demote the Applicant and return her to Melbourne Airport as a cleaner amounted to constructive dismissal. I do not consider that a proposal to transfer her on a temporary basis for further training in a Melbourne office amounted to constructive dismissal.
In support of the contention of constructive dismissal and unlawful termination of employment Mr Smith cited Hutt v The Cascade Brewery Co. Ltd (1992) 34 AILR 179; Allison v Bega Valley Council (1995) 63 IR 68; Gunnedah Shire Council v Grout (1995) 62 IR 160; Brookton Holding Pty Ltd v Kara Kar Holding Pty Ltd (1994) 57 IR 288 and Mohazab v Dick Smith Electronics (No 2) 62 IR 200.
Mr O’Grady, counsel for the Respondent, also relied on Mohazab and on Rheinberger v Huxley Marketing (1996) 67 IR 154.
Hutt, Allison, Brookton and Gunnedah can all be distinguished. Indeed, in Mohazab at 207 the Full Court said:
“It cannot be assumed that decisions concerning other legislative formulations or cases concerning constructive dismissal are to be applied without qualification when considering the provisions of Division 3.”
In Hutt a position of Group Industrial Officer was made redundant. Wright J found that an attempt to transfer the employee to a completely different job amounted to a dismissal. The case can readily be distinguished. Here, the Applicant’s position was not made redundant and the Applicant was not offered a permanent transfer to a completely different job but rather a temporary transfer for training purposes.
In Allison, as in Mohazab, there was a threat of police action. In Allison a resignation under threat of dismissal was held to be a dismissal but the Full Bench of the Industrial Relations Commission of New South Wales pointed out that consideration must always be on a case by case basis and any attempt to formulate general principles in the absence of particular facts does not assist.
In Brookton, in the Equity Division of the Supreme Court of New South Wales, Young J held that the contract of employment in that case was terminated by the employee’s acceptance of repudiation.
In Grout the Full Court of this Court held the employment was terminated at the initiative of the employee and that the employee’s notice of resignation was a conditional notice capable of acceptance by the employer so as to bring the contract of employment to an end.
“In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship.”: Mohazab at 205.
In this case I have concluded that the act of the employer did not result directly or consequentially in the termination of the employment and that the employment relationship was voluntarily if rashly left by the employee.
The circumstances bear considerable similarity to those in Rheinberger where, at 161, Moore J stated:
“In the present case the applicant relies both on the calling of the meeting on the Saturday morning and the manner in which it was conducted. I have already indicated I do not accept that an inference can be drawn that the meeting was called with a view to bringing about the termination of the applicant’s employment. Unless such an inference can be drawn, the effect of Wilson calling the meeting and conducting it in the way he did was merely to create the environment in which the applicant said what she did. That is, he created an environment in which the applicant came to say things consistent with her intending to resign. However he did not do so intending that result, nor does it appear to me to have been a probable result. Wilson’s conduct does not, in my opinion, constitute an act comprehended by the expression “termination at the initiative of the employer”. Something more would be needed. Mohazab illustrates a case where not only did the employer create the environment in which an employee tendered his resignation but also exerted pressure on the employee to follow the course he did. In this case there is no real basis for suggesting that the Company, through Mr Wilson, exerted any such pressure or took any step which was intended to cause the applicant to say what she did about her resignation or would probably have that result.”
So too in this case I find that, once the evidence of Angela and Diego and Voulamanos is preferred in respect of the final meeting at Collingwood, there is no real basis for suggesting the Respondent through Angela and Diego exerted such pressure or took any step which was intended to cause the Applicant to say what she did and do what she did which was to rush out and end the employment relationship.
OTHER MATTERS
Through evidence in chief and in cross-examination Mr Smith introduced evidence of
operational and contractual difficulties which led to the Respondent losing all of the Qantas contract by April 1996 and the catering aspect as early as 5 March 1996
an assault on Nonda by a manager of the Respondent company which led to a strike
a direction to the Applicant to work during the strike and difficulties with the union because the Applicant complied with the employer’s direction and worked during the strike
discouragement by the Respondent of union membership by supervisors who were regarded as management personnel
the termination of union subscriptions from the Applicant’s salary once she became a supervisor
Mr Smith stopped short of alleging, pursuant to s170DF(1)(b) and (c), that the Respondent terminated the Applicant’s employment for a reason or reasons including union membership or participation in union activities or non-membership of a union. However, he did allege that the Applicant “was ordered out of the union”, lost union membership because deductions in salary were stopped and “became a scab as a consequence...(of complying with an order) to work during the strike”.
Given the conclusion that the Respondent did not terminate the Applicant’s employment, these assertions and allegations, even if established, cannot assist the Applicant. The Respondent’s operational difficulties, the assault on Nonda and the strike cannot convert the termination of the employment by the Applicant into a termination of the Applicant’s employment by the Respondent. The Respondent’s discouragement of union membership by supervisory and management staff and a direction to the Applicant to work during an industrial stoppage did not convert the ending of the employment by the Applicant into a constructive dismissal at the hands of the Respondent.
The conclusion I have reached, which is that the Applicant ended the employment at her own initiative and is thus deprived of jurisdiction and any grounds to succeed in a claim for compensation, has caused me some unease because the reported attitude of the union to the Applicant once she worked during the strike, and the Applicant’s inadequate performance, provided potent motivation for the Respondent to end the employment of the employee at the employer’s initiative. However, I must take the evidence as I find it. I have found that the Applicant not the Respondent ended the employment.
The order of the Court is that the application be dismissed.
MINUTES OF ORDERS
THE COURT ORDERS:
That the application be dismissed.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules
I certify that this and the preceding 7 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan.
Associate:
Dated: 25 July 1997
Solicitor for the Applicant: Mr J Smith
Solicitors for the Respondent: Hannebery, Boyle & Partners
Counsel for the Respondent: Mr C O’Grady
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