Jansen v Equuscorp Pty Ltd
[1997] IRCA 49
•26 Feb 1997
DECISION NO:49/97
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - VALID REASON - whether termination at the initiative of the respondent - whether the employee agreed to resign - REMEDY - whether performance issues relevant in determining the amount if any of compensation payable
Workplace Relations Act 1996 ss 170EE(2), 170EE(3), 170EE(5)
Rheinberger v Huxley Marketing Pty Ltd (1996) 67 IR 154
Nicolson v Heaven & Earth Gallery Pty Ltd, 1 IRCR 199
PAUL SIMON JANSEN - v - EQUUSCORP PTY LTD
No. VI 2189 of 1996
Before: Judicial Registrar Millane
Place: Melbourne
Date: 26 February 1997
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 2189 of 1996
B E T W E E N :
PAUL SIMON JANSEN
Applicant
A N D
EQUUSCORP PTY LTD
Respondent
MINUTES OF ORDERS
Judicial Registrar Millane 26 February 1997
THE COURT DECLARES THAT:
The termination of the applicant’s employment by the respondent on 26 July 1996 contravened the Workplace Relations Act 1996.
AND THE COURT ORDERS THAT within 21 days of the date of making these orders:
The respondent pay to the applicant the sum of $1,632.66.
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 2189 of 1996
B E T W E E N :
PAUL SIMON JANSEN
Applicant
A N D
EQUUSCORP PTY LTD
Respondent
Before: Judicial Registrar Millane
Place: Melbourne
Date: 26 February 1997
REASONS FOR JUDGMENT
In this case the applicant seeks compensation claiming that on 26 July 1996 the respondent terminated his employment as a senior in-house solicitor in contravention of the Workplace Relations Act 1996 (the Act). So far as the applicant is concerned he alleges that he did not leave voluntarily. On that date, he alleges that there was no valid reason for the termination connected with his conduct or performance and he was not given any, or any proper, opportunity to respond to any performance related allegations.
The respondent defended the proceeding on alternative grounds. First, it said that there was no termination at the initiative of the respondent because the applicant resigned. Alternatively, it argued that if the Court determines that there was termination at its initiative at the date of termination it had a valid reason connected with the applicant’s conduct; namely, the course of the applicant’s conduct in causing it to believe and allowing it to continue to believe that he had agreed to leave of his own accord. In the event that the respondent is unsuccessful on either of these matters and the Court proceeds to grant a remedy, it relies on at least three performance related issues to say that the prospect of the applicant staying for any lengthy period and having his twelve month contract renewed was, at the date of termination, minimal.
WITNESSES
The respondent called the following witnesses:
-Mark Leaker (Leaker), the general manager of the respondent’s legal division from 3 June 1996;
-Leslie Schwarz, barrister at law, who was formerly employed as the respondent’s in-house counsel and manager of its legal division; and
-Laurence Ryton Williams (Williams), an accounts manager with the respondent company.
The applicant gave evidence and called the following witnesses:
-Paul Bingham (Bingham), barrister at law, who appeared for a number of respondents to an application by Equuscorp Pty Ltd referred to as the Seyfang matter;
-Frederick George Albion Beaumont QC (Beaumont), Queen’s Counsel, briefed by the applicant as the solicitor on the record to settle draft offers of compromise;
-Ada Caterina Bombardieri (Bombardieri), a solicitor employed with the respondent since 3 April 1996;
-Dominic Benvenuto (Benvenuto), general counsel employed by the respondent since 1 July 1996; and
-Karlee Renee Fuller (Fuller), a legal secretary employed by the respondent since 12 April 1996.
THE EVIDENCE
The applicant filed his application in the Australian Industrial Relations Commission on 6 August 1996. On 16 August 1996 the respondent filed a notice of employer’s appearance attached to which was a three page document entitled “Reasons for Termination” drafted by Leaker, who is a solicitor and the respondent’s general manager. That document is also dated 16 August 1996. The reasons for termination contain a number of defences including a challenge to the Australian Industrial Relations Commission’s jurisdiction, an argument that proper notice was given, a further argument that the applicant was advised that his performance was unsatisfactory and told to seek alternative employment during a three month probationary period and, lastly, an allegation that the termination was not unlawful because it was based on the applicant’s unsatisfactory work performance in relation to three file matters identified in that document.
Pursuant to orders made by the Industrial Relations Court of Australia, the respondent filed further and better particulars of its reasons for termination on 30 October 1996. A further order was made by this Court and in accordance with that order on 6 February 1997 the respondent filed a document entitled “Outline of Evidence to be Given by the Witnesses of the Respondent”. Mr Burchardt of counsel appeared for the respondent at hearing and informed the Court that it was he who drafted the outline on instructions from the respondent. That outline refers to, amongst other things, the evidence of Schwarz stating that Schwarz would give evidence that “it was agreed between Schwarz and the applicant that the applicant would not be dismissed or otherwise disciplined because he wished to resign. It was agreed that the applicant would resign within a reasonable period.”
The applicant appeared in person. On the first hearing date he informed the Court that he was not aware of any defence alleging that he resigned until the Friday prior to the Monday hearing date after he obtained a copy of the outline document. He claimed that it had never been put to him either during his employment or subsequent to 26 July 1996 that he had agreed to resign. Because of this the applicant had, he said, prepared his case on the basis that the respondent would proceed first to establish the performance matters it initially relied on in its reasons for termination and the particulars provided in relation to those reasons to justify the termination. It was not contested by the respondent that the defence broadly referred to in its outline was not one previously put to the applicant either in its documents or in discussions between the date of the filing of the application and the hearing. Because of these circumstances, the respondent was directed to open its case first and call its evidence.
In its financial services business the respondent has a legal services division employing in-house solicitors and counsel to perform its legal work. This division was set up from approximately February 1996. From 1 February 1996 to 26 July 1996 the applicant was employed as a senior in-house solicitor in the respondent’s legal division performing the duties of the solicitor on the record as well as some appearance work.
It was common ground that when the applicant commenced his employment the working conditions were particularly difficult. Schwarz described the office as being a shambles. This was because of the work required to set up a legal division from scratch, with numerous existing files and a very small number of legal staff and support staff as well as inadequate accommodation and equipment. The legal division at inception was set up at a Collingwood office, however, by March/April 1996 it was moved to a city office and that move caused further disruption to the performance of the work by the staff looking after the files.
Schwarz originally performed some contracting work for the respondent in January 1996 and then accepted employment from February 1996 as the respondent’s in-house counsel and the manager of its legal division. He left his employment with the respondent in late June or early July 1996.
Very early in the piece Schwarz indicated to the Court that he had not been consulted by the respondent about the contents of the outline document purporting to summarise the evidence he would give on behalf of the respondent at hearing. This is a significant matter because the evidence given in Court by Schwarz contradicted the matters set out in the outline. To illustrate this point it is appropriate to set out the relevant extract from the outline as follows:
“Schwarz, the former in-house Counsel of the Respondent, will give evidence as to the engagement of the Applicant by the Respondent in February 1996. He will give evidence that the Applicant was conscientious but lacked experience in the type of litigation he was being employed to perform and could not perform his duties expeditiously. He will give evidence that in about April or May 1996 he spoke to the Applicant about shortcomings in all aspects of the Applicant’s performance. The Applicant responded at the said meeting by indicating that he was unhappy working for the Respondent and wished to resign. It was agreed between Schwarz and the Applicant that the Applicant would not be dismissed or otherwise disciplined because he wished to resign. It was agreed that the Applicant would resign within a reasonable period.
Schwarz will further say that after Mark Leaker joined the Respondent on 3 June 1996 as General Manager of the legal division he communicated the above matters to Leaker.”
As can be seen from the abovementioned extract there is a reference to an alleged agreement between Schwarz and the applicant that he would resign within a reasonable period and this was because he wished to resign rather than be dismissed or disciplined presumably in relation to the performance issues discussed by the men.
If there is no evidence to support such an agreement and, as a result of the evidence given by both the applicant and Schwarz (which evidence I have accepted) there was none, then the respondent’s case rests solely on the evidence of Leaker. In his oral evidence Leaker asserted that Schwarz told him that the applicant was leaving and somehow he made the assumption that the applicant had agreed to resign; rather than having any direct knowledge of any such agreement. I say somehow he made the assumption he says he did make or reached a particular understanding about an agreement by the applicant to resign because at no time in giving his evidence-in-chief or during cross-examination did he suggest that he had been told by Schwarz that the applicant had agreed to resign. Indeed, at one stage he said “... Les Schwartz (sic) had indicated to me that Paul’s performance wasn’t that satisfactory and I wanted to make my own judgment about that but after a period of time I came to a similar view and I came to work one morning and I asked Paul what his intentions were concerning future employment with Equus and he gave me - I can’t remember the answer but it was something like, I’m looking or I’m always looking or I’m - it was a - it was a very odd answer and at the time I - I just didn’t pursue it, I didn’t know quite what to make of it. The next day Paul approached me at my desk. Equus occupies a - the main office occupies a room perhaps a little bit larger than this courtroom, it’s an open plan style office, so our desks were quite close, separated by a head high partition, I suppose. And he approached me and said, that question you asked yesterday, I would just like to clarify that. And he essentially confirmed what Les had relayed to me that - that he was going to be replaced and he was looking for other employment.”
Apart from relying on what Schwarz allegedly told him, Leaker also claims that the applicant’s conduct, such as that described above, during meetings between them prior to the termination, was such that he understood from this conduct that an agreement to resign existed.
Schwarz was called to give evidence by the respondent. He agreed that until Leaker was appointed as general manager from 3 June 1996, he directly supervised the applicant’s performance of his duties and was in charge of the legal department. It was his evidence that the reason Leaker was appointed was that he wished to be relieved of some of his workload and concentrate on meeting the demands of being in-house counsel where there was a large file burden, which the legal officers were then still trying to come to grips with.
Throughout the proceeding the witnesses all referred to the enigmatic Nick Russo (Russo), the respondent’s managing director. Russo did not give evidence yet it is clear that he was in charge of the company and it was his dissatisfaction with the applicant’s performance in relation to three particular matters that led to him instruct Schwarz to speak to the applicant in the latter part of May 1996.
It was Schwarz who interviewed the applicant and two other solicitors before they commenced full time employment with the respondent. By a memorandum dated 15 March 1996, an extract from which was tendered in evidence to the Court, Schwarz reported on the progress of the three staff to Russo. All the staff were engaged on three months probation. By the date of that report one had been terminated during the probationary period and a second one had been given notice. In respect to the applicant Schwarz made the following comment (Exhibit R8):
“Paul is conscientious and easy to get along with but lacks experience in this type of litigation and has difficulty performing tasks expeditiously. He requires supervision and constant reminders. His position should be reviewed before 15 April, 1996.”
It was his evidence that, after providing the abovementioned report, Schwarz’s opinion of the applicant’s performance altered. He pointed out that once more staff were engaged and the difficult conditions under which they all had worked in the setting up phase eased, the applicant’s performance improved. Schwarz told the Court that he had ongoing discussions with Russo about the applicant’s performance. I understood his evidence to mean that he told Russo there had been improvements, however, Russo was a person who was prone to complaining about the staff in the litigation department not getting through enough file work.
It was common ground that although Schwarz could not recall the precise date, on a date late in May 1996 and possibly Friday, 31 May 1996, he had a meeting with the applicant concerning his performance. This meeting came about because Russo, who from time to time gave direct instructions to the applicant on file matters, had complained to Schwarz that the applicant was too slow in drafting some offers of compromise in a particular matter. This complaint was made over a period of up to two weeks. Schwarz informed the Court that Russo told him that the applicant was not “working out” and he then mentioned three matters. One was the delay in completing the offers of compromise, another was the entry of judgment against the respondent in default of the filing of a defence in the Magistrates’ Court in a matter referred to as the Sunraysia matter, and the third was a Federal Court matter known as the Seyfang matter where the applicant allegedly consented to the setting down of the respondent’s application to transfer four proceedings from the Magistrates’ Court when the respondent’s instructions had been to oppose the fixing of a hearing date until the Court handed its decision down in a related matter referred to as the McCracken matter. According to Schwarz Russo told him “... that he thought that Mr Jansen couldn’t even tie up his shoe laces, that was what he said, and that I was to tell Mr Jansen that whilst Mr Russo was not going to give him one month’s notice then, Mr Jansen was to look for another job.”
Schwarz’s evidence was that Russo also instructed him that he “... wasn’t prepared for it to drag out for months either.”
It is clear from the instructions given that Russo was not interested in any explanations and had, by the date of the meeting between the applicant and Schwarz, determined to end the employment relationship before the expiration of the twelve month period provided for in the letter of appointment dated 22 January 1996.
Schwarz followed the instructions given to him and arranged a meeting with the applicant over coffee during which meeting he informed the applicant that Russo was not satisfied with his performance. They discussed the three matters raised by Russo on that occasion as well as on earlier occasions when Schwarz had, on Russo’s prompting, raised these matters and the applicant had provided some explanation to Schwarz in relation to each matter. Schwarz’s evidence is that he also communicated to the applicant Russo’s instruction to tell the applicant to look for another position; recommending at the same time that the applicant try and find another job in the next few months. It was Schwarz’s impression as a result of their discussion that the applicant acknowledged that he would have to look around for another job.
Following that meeting Schwarz reported to Russo the explanations he had received but by then, he says, Russo had made up his mind and could not be dissuaded from the view he took. I understood this evidence to refer to Russo’s requirement that the applicant seek alternative employment. Both Schwarz and the applicant agreed that one of the items canvassed during their meeting was the unlikelihood of Russo changing his mind once it was made up, particularly where Schwarz had tried unsuccessfully to advance the applicant’s reasons for his performance in the three areas of complaint prior to the meeting.
Schwarz denied that after Leaker commenced his employment on 3 June 1996 he had any detailed conversation with Leaker about the discussions with the applicant at their meeting. I accept his evidence on this issue because of the inconsistencies between the oral evidence given by Leaker and the document he drafted and filed with the Court on behalf of the respondent.
In cross-examination the applicant put to Schwarz that the words he used at their meeting were to the effect that if the applicant “... wanted to leave Mr Russo would not stand in my way?”. Schwarz agreed with this statement adding “... but it was said, as I said, in the context of that conversation where Mr Russo had been very clear to me that he should be - these aren’t his words but the substance of it is that you should be encouraged to find another job.”
As can be seen from the summary of the salient parts of Schwarz’s evidence, the evidence given in Court contradicts the outline filed in a number of material ways and certainly provides no basis for saying that in May 1996 the applicant agreed to resign. At that point in time it was the express intention of the employer to bring the applicant’s employment to an end in the foreseeable future and that intention was conveyed to the applicant allowing the applicant time to seek alternative employment and leave without the respondent revealing its part in terminating his employment. On this evidence the applicant was presented with no real choice.
When the applicant was appointed to his position as senior in-house solicitor from 1 February 1996, he received the letter I have already referred to from the respondent confirming his appointment for an initial period of twelve months on a $45,000 salary. This letter sets out the terms and conditions of his appointment, one of which deals with termination and states (Exhibit A1):
“Either party may terminate this work contract and the employment for any reason, giving one month’s notice in writing to the other party. No other penalties or costs shall be claimed by or payable to either party.”
As a result of the written terms and conditions the applicant took the view that at the time of his discussions with Schwarz his employment had not been lawfully terminated and could not be terminated without the giving of the one month’s notice in writing provided for in his letter of appointment.
Following his discussion with Schwarz the applicant took steps to seek alternative employment and in June 1996 made an application for a less well paid position with Victoria Legal Aid; being interviewed in August 1996 and appointed to that position shortly thereafter. However, at the time he made his application for the alternative position, he was acting in the belief that the respondent had signalled its intention to formally end his employment in the near future.
In my view the only sensible way to interpret the evidence given is that there was no agreement to resign entered into on or about 31 May 1996. Notwithstanding the applicant’s belief that his employment could not be lawfully terminated without the appropriate notice in writing, the employer’s conduct at that meeting was such that it gave him oral notice of termination to be effected within a reasonable period.
In his decision in Rheinberger v Huxley Marketing Pty Ltd (1996) 67 IR 154, Justice Moore makes the following observations:
“However it is plain from these passages that it is not sufficient to demonstrate that the employee did not voluntarily leave his or her employment to establish that there had been a termination of the employment at the initiative of the employer. Such a termination must result from some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect. I leave open the question of whether a termination of employment at the initiative of the employer requires the employer to intend by its action that the employment will conclude. I am prepared to assume, for present purposes, that there can be a termination at the initiative of the employer if the cessation of the employment relationship is the probable result of the employer's conduct.”
Obviously it was the respondent’s intention expressed through Schwarz that the applicant leave and by its conduct it set in train a course which had the objective of bringing the employment relationship to an end in the near future. The failure to give written notice at that time does not, in my view, alter the effect and consequences of its conduct.
The only other question is whether the conduct of the applicant subsequent to the meeting with Schwarz and up to termination caused the respondent to believe that the applicant had agreed to resign and if it did whether this conduct somehow provides a valid reason for termination.
I have already noted that Leaker was the solicitor who drafted and filed on behalf of the respondent the reasons for termination. It is plain from that document that at least up until 16 August 1996 Leaker did not view the applicant’s departure as a resignation or one which came about as a result of an agreement to resign. The contents of the reasons for termination are consistent with a termination initiated by the employer based primarily on performance issues.
In its outline of evidence it was said by the respondent that in respect to Leaker’s evidence he would say that:
“Shortly after Leaker joined the Respondent, Leslie Schwarz told Leaker that he had already spoken to the Applicant and that it was agreed that the Applicant had agreed to resign at a date to be determined.
Leaker will further say that on or about 12 July 1996 he spoke to the Applicant, and asked him what his future employment intentions were. On the following day the Applicant came to Leaker and said that he was looking for another job and confirmed to Leaker the essence of the conversations between Schwarz and Leaker referred to above.
Leaker will say that as a result of these matters it was his understanding that the Applicant had already agreed to resign, but that the date was indeterminate and would be given effect either within a reasonable time and/or upon the selection by the Respondent of an officer to replace the Applicant.”
As I have already noted above Leaker’s evidence-in-chief fell far short of the claims made in the outline of evidence about the extent of his conversations with Schwarz. The extract from the oral evidence I have also set out above shows that he formed the view that the applicant’s performance was not satisfactory (without ever telling the Court in what way and in relation to what matters it was unsatisfactory) and after doing so asked the applicant what his intentions were concerning future employment the respondent. Nothing in the extract from the oral evidence-in-chief, which refers to their conversation on or about 12 July 1996, suggests to me that the applicant was then indicating an intention to resign. His behaviour was entirely consistent with his belief that he had been asked to leave.
The respondent, amongst other things, sought to rely on the applicant’s failure to raise any objections at meetings held with Leaker when Leaker discussed the date for finalisation of his employment and the availability of a replacement employee. It was urged by the respondent that the applicant’s conduct both confirmed that he was leaving voluntarily and established in Leaker’s mind that the applicant was in fact resigning. I have some difficulty with the notion that an employee’s conduct in not objecting when an employer takes steps towards replacing her or him with another employee, is capable of providing some sort of estoppel argument against the employee saying that she or he did not leave voluntarily. I have accepted that as a result of the meeting with Schwarz, the respondent initiated a termination of the employment and at no stage thereafter did Schwarz or the applicant tell Leaker that the applicant was resigning.
Even if I accept that Leaker had during July 1996, as a result of the applicant’s behaviour during their discussions, formed the mistaken view that the applicant was resigning or leaving voluntarily; such a view, given the respondent’s actions in initiating the termination in May 1996, could not of itself provide a sound, defensible or well founded reason for termination. By the time Leaker arrived the dye was cast and the applicant clearly understood that his employment would come to an end in the short term. Not surprisingly, the applicant remained in his position whilst he sought alternative employment and waited until he had been given formal written notice before quitting the better paid position. He told the Court that after gaining his employment with the respondent he and his wife incurred significant debts and I accept that because of these matters there was no intention or desire on his part, despite any concerns he may have had with his employment, to give up what he regarded as a well paid position. His evidence on these matters is reinforced by his further evidence that in the four months’ preceding his employment with the respondent he had been unemployed and was very keen to retain his paid employment.
During the meeting on 12 July 1996 it was common ground that Leaker let the applicant know that he had employed a replacement for the applicant yet at that time was uncertain as to when, if at all, she would be available to start. It was this consideration that appear to have stayed the employer’s hand in bringing the applicant’s employment to an end sooner rather than later.
If I had any reservations at all about whether there was termination at the respondent’s initiative and whether Leaker ever laboured under the misapprehension that the applicant had agreed to resign, the memoranda passing between the two men dated 22 July 1996 confirm that this was indeed an employer driven termination. These memoranda are as follows (Exhibits R1):
“TO:Paul Jansen
FROM:Mark Leaker
...
I refer to our discussion of 12 July 1996 and confirm you have been given 4 weeks notice of termination of employment.
I confirm that your last day of employment will be 9 August 1996.
Would you please advise of the items of Equus equipment you have in your possession in the next few days?
A copy of this memo has been sent to Sharon Solomidis to assist her in calculation of pays.”
Exhibit R2:
“TO: Mark Leaker
FROM: Paul Jansen
...I refer to your memo dated 22 July 1996 concerning the above subject and make the following observations.
My clear recollection of the conversation we had on 12 July 1996 was that you told me that I could expect my employment to be terminated but you certainly did not tell me when that was to occur. At no time during the course of our conversation did you tell me that my employment was terminated nor did you tell me that you were giving me 4 weeks notice. You told me it was subject to when Jenny Jarvis would/could start but you made no mention of how the commencement of her employment would effect the termination of mine.
My contract requires one months written notice. Again, clearly one months written notice in anybody’s interpretation means one month notice from the date of the written notice. The provision would be meaning less otherwise. It doesn’t mean back dating the notice to some previous date on which you purportedly terminated by employment.
Therefore until I receive notice of termination of my employment in accordance with the terms of my contract of my employment I do not regard my employment as being terminated.”
As can be seen from the exchange of memoranda the respondent purported to give the applicant four weeks’ oral notice on 12 July 1996 and fixed the date of termination. There is a dispute as to what was said on 12 July 1996. Nevertheless, the applicant’s memorandum in reply clearly seeks to enforce the terms of his written agreement. I accept as logical and reasonable the applicant’s evidence that he did not then want to give up his position until such time as he had been formally and, as he then believed lawfully, terminated in accordance with the terms of his letter of appointment. The respondent acted then to provide the requisite written notice on 26 July 1996 and it came as no surprise to me that that notice makes no reference to any resignation. When Leaker gave the applicant four weeks’ notice on 26 July 1996, his employment was terminated from that date. A second letter was handed to the applicant subsequently on that day in which Leaker states, amongst other things, “I note that you were offered the opportunity of discussing the reasons for your termination with Mr. Russo but you declined.”
By the time the second letter was written and handed to the applicant his employment was terminated without any meaningful opportunity to discuss the status of any performance related concerns.
Having heard the evidence and read the documents before the Court, I formed the view that the defences raised by the respondent shortly prior to hearing, lacked any meaningful foundation in fact and, particularly, on Leaker’s part, were in direct conflict with the reasons for termination drafted by him.
On the preliminary point my finding is that there was termination at the initiative of the employer and I further find that the respondent has failed to discharge the burden it carries of showing that there was a valid reason connected with the applicant’s conduct at termination.
The applicant raised matters to do with section 170DC of the Act, however, in view of the defences relied on by the respondent at hearing, the question of whether or not the applicant was provided with a reasonable opportunity to respond to any allegations of poor performance or conduct issues did not arise. Where the performance related issues become relevant is on the question of remedy.
Following the termination of his employment on 26 July 1996 with four weeks’ pay in lieu of notice, the applicant’s earlier application for employment with Victoria Legal Aid generated an interview and employment as a grants officer on a casual basis from 14 August 1996 to 29 September 1996. From 30 September 1996 he gained permanent employment with the same employer to date and continuing. He alleges that he has suffered a significant drop in salary from the $45,000 per annum paid by the respondent to $36,000 per annum since commencing his permanent position as a grants officer.
The applicant does not seek reinstatement and, in the circumstances that exist, I find that reinstatement is impracticable. He does ask the Court to assess appropriate compensation to the maximum payable in this Court of $22,500.
With regard to the payment of compensation the respondent argues there should be no payment of compensation because the applicant’s performance was such that he did not have a long term future with the respondent. It relies on the three matters I have referred to previously in these reasons for judgment. Additionally, the respondent relies on the fact that the applicant’s contract of employment, given the performance issues, was unlikely to have been renewed from 1 February 1997.
The first file matter relied on by the respondent concerns the offers of compromise and an alleged delay in completing these offers. I am satisfied on the evidence that these offers were completed and sent out by the applicant in late May 1996. There was no evidence given by the respondent to establish any delay which might properly be characterised as conduct demonstrating a want of performance on the part of the applicant. Russo did not give evidence of his alleged complaint concerning this matter or any other matter.
The second matter relates to the alleged failure to file a defence within the prescribed time leading to an entry of judgment against the respondent, which required setting aside. The judgment was set aside in due course. There was a difference of opinion between the applicant and Williams as to who had the responsibility to meet the time limit. The respondent produced to the Court (Exhibit R10) an affidavit drafted by Bombardieri and sworn by the applicant in support of its setting aside application. That affidavit refers to an affidavit of Williams which was not tendered in evidence. Nevertheless it is clear from the reference in the affidavit drafted by the respondent that Williams’ affidavit at least confirmed the applicant’s claim that he at the relevant time was, along with two other solicitors, carrying a very substantial file load. The applicant’s affidavit also points to the fact that at the time he was given the Sunraysia file he was informed by Williams that the matter was likely to settle and because of this the applicant relied on Williams to inform him “prior to the expiration of 21 days after the service of the Complaint whether a Defence should be filed and served”.
The abovementioned matters were relied on by the respondent to set aside the judgment and I too must rely on these matters as the relevant explanation given to the Magistrates’ Court for the oversight which occurred. It is apparent from the explanation given that the applicant must, as a solicitor, accept some responsibility for ensuring that the time limit was complied with. However, the setting aside restored the respondent to its position and had this matter been properly considered as well as the applicant’s explanation for what occurred, I take the view that the circumstances in which this lapse occurred would not of themselves have justified termination. Russo determined to terminate the applicant’s employment well before the setting aside application was dealt with and in circumstances where it is not clear to me whether or not he ever sought or obtained any explanation for what occurred. There was no evidence to indicate what, if any, responsibility was carried by Williams who also played a part in the events which took place.
The third matter which was a basis for complaint against the applicant was the Seyfang application in the Federal Court to transfer four applications from the Magistrates’ Court. The Seyfang application was the subject of a call over on 20 May 1996. A memorandum to the applicant from Schwarz dated 16 May 1996 instructed the applicant to attend the call over. He was also advised by Schwarz that “... direction should not be given until a decision has been handed down in the matter of McCracken ...”. When the applicant attended the call over he was persuaded by Mr Bingham of counsel appearing for a number of the respondents to the application, that it was then appropriate to allow the matter of the application for the transfers to be set down for hearing, although the decision of the Federal Court in the McCracken case was still outstanding. This was because the hearing of the transferred cases, if the respondents’ application was successful, was yet to be fixed.
The respondent gave no evidence to the Court of what reason, if any, it had for opposing the setting down of the application for hearing other than to point to its desire to await the outcome of a related action. Undeniably, the applicant failed to follow the general instruction given. Nevertheless, he says he exercised his judgment as a solicitor in acceding to Mr Bingham’s argument. The respondent called no evidence to indicate that the applicant as the solicitor on the record had no discretion or right to exercise any independent judgment whilst attending Court on behalf of the respondent. Nor did it provide any evidence of what, if any, adverse consequences it suffered by reason of the decision to set down for hearing the interim application.
To limit the compensation payable the respondent principally relies on the reasoning of Chief Justice Wilcox in his decision in Nicolson v Heaven & Earth Gallery Pty Ltd, 1 IRCR 199, where he says:
“...If I had reached the question of compensation, I would have assessed it on the basis that the procedural irregularity deprived Mr Nicolson of a chance of retaining his employment. However, I would not have awarded him a large sum. If the directors had brought his difficulties with the shop staff into the open and ensured that everyone approached them in an open, constructive manner, there would have been a possibility of overcoming that problem. But I think Mr Nicolson had another problem that would have been more difficult to resolve. It is clear that, by the date of his dismissal, Mrs Naughton had formed a strong view that he was not the person for the job. This view was not so much founded on the friction between him and the shop staff but because she thought he was out of tune with the ethos underlying the company's products. As Mrs Naughton put the matter in her evidence, Mr Nicolson "didn't understand the brief I had given him". I think there was substance in her belief, as evidenced by his plans for the cocktail party. Mrs Naughton saw the art works produced by her husband and herself as expressions of Australian culture, being based on Australian values and scenes. Yet, in order to impress potential Japanese clients, Mr Nicolson proposed to dress the staff in kimonos, use Japanese decorations and serve Japanese food. In his position it was essential that he be in tune with the artists, and be capable of conveying the essence of their work to others. If he did not have this capacity, the company, acting regularly, would have been entitled to dispense with his services. I think it would have soon done so.”
The respondent argues that by 26 July 1996 the applicant was six months into a twelve month contract and, because of the views Russo took of his performance, it is unlikely that his period of employment would have extended beyond the time stipulated in the letter of appointment. Insofar as the respondent had the right to end the relationship at the expiration of twelve months without justifying its decision to do so, I accept that any calculation of compensation should be confined to the period to 1 February 1997. Nevertheless, I do not accept that Russo’s dissatisfaction with the applicant’s performance and the matters relied on by the respondent when the respondent told the applicant to seek alternative employment would necessarily justify, separately or cumulatively, a lawful termination of his employment before 1 February 1997.
His Honour’s observations in my view should be construed as referring to the probability that the employment may be lawfully terminated, thereby challenging the notion that the employee had secure employment in the longer term. Undoubtedly Russo has a very poor opinion of the applicant’s performance in regard to at least three matters, however, the holding of such an opinion is not sufficient in itself to justify a performance related termination.
There was some attempt by the respondent to suggest that the applicant was unhappy and dissatisfied in his job because he was at times critical of certain matters to do with the handling of files and the workplace. I have accepted his evidence that he had no intention of giving up his secure position in the short term and any criticisms he voiced were made in the context of him trying to improve the workplace and its operations.
I am satisfied that this is a case where an award of compensation is appropriate. Sections 170EE(2) and (3) of the Act make the following provision for the payment of compensation:
“170EE(2) If the Court thinks, in respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, that the reinstatement of the employee is impracticable, the Court may, if the Court considers it appropriate in all the circumstances of the case, make an order requiring the employer to pay to the employee compensation of such amount as the Court thinks appropriate.
(3) In working out the amount of the compensation for the purposes of subsection (2), the Court is to have regard to the remuneration that the employee would have received, or would have been likely to have received, if the employer had not terminated the employment, but the amount of compensation:
(a)must not exceed, in respect of any employee, the amount of the remuneration that would have been received by the employee in respect of the period of 6 months that immediately followed the day on which the termination took effect if the employer had not terminated the employment and the employee had continued to receive remuneration in respect of the employment at the rate at which he or she received remuneration immediately before the termination took effect; and
(b)must not exceed, in respect of an employee who is not employed under award conditions, the applicable amount on the day on which the termination took effect.”
I have already noted that the maximum compensation the applicant can recover from the Court is $22,500 gross. In addition to this sum, pursuant to section 170EE(5) of the Act, had the respondent not paid four weeks’ pay in lieu of notice, the applicant would also have been entitled to one week’s pay in damages amounting to $865.40. I have accepted that, in the circumstances of this case, the contract of employment was unlikely to extend beyond a period of approximately six months immediately following the termination. During that period the applicant received the following sums:
(i)$3,766.22 gross being four weeks’ pay in lieu of notice paid by the respondent at termination;
(ii)remuneration from his casual employment in the sum of $4,455.48 gross; and
(iii) remuneration from his permanent position as a grants officer in the sum of $11,814.97 to 16 January 1997.
To the end of the six month period after termination I should add the further sum of $830.67 calculated on a pro rata basis and using the gross annual figure of $36,000.
I calculate the total of his receipts to the end of the six month period to be $20,867.34. The statutory limit applicable to compensation payable in this case amounts to $22,500.00. Accordingly, the balance payable is $1,632.66 and I propose to make an order for the payment of this sum by way of compensation.
MINUTES OF ORDERS
THE COURT DECLARES THAT:
The termination of the applicant’s employment by the respondent on 26 July 1996 contravened the Workplace Relations Act 1996.
AND THE COURT ORDERS THAT within 21 days of the date of making these orders:
The respondent pay to the applicant the sum of $1,632.66.
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 twenty-two (22) pages are a true copy of the reasons for judgment of Judicial Registrar Millane.
Associate:
Dated: 26 February 1997
Applicant represented himself.
Solicitors for the Respondent: Davies Maloney
Counsel for the Respondent: Mr P. Burchardt
Date of hearing: 10, 11 & 12 February 1997
Date of judgment: 26 February 1997
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