Jeakings, Barry Sidney v Mannor Holdings Pty Ltd t/as M D Murphy Plant Hire
[1998] FCA 505
•13 MAY 1998
FEDERAL COURT OF AUSTRALIA
INDUSTRIAL LAW - alleged UNLAWFUL TERMINATION - summary DISMISSAL during notice period - whether termination for prohibited reason - complaint - recourse to competent administrative authority - union - member of parliament - reason RELATING TO CONDUCT OF PERSON OTHER THAN DISMISSAL EMPLOYEE - whether termination for VALID REASON connected with conduct - abuse of manager - accusation that manager a “cheat and liar” - relevant standards of conduct - whether employee given opportunity to defend himself - opportunity to explain or raise matters for consideration - assessment of compensation - calculation on notice period - whether giving of notice lawful - whether summary dismissal likely if Act complied with - calculation of loss.
Industrial Relations Act 1988 (now Workplace Relations Act 1996) ss 170DB, 170DC, 170DE, 170DF, 170EA, 170EDA, 170EE.
APESMA v Skilled Engineering Pty Ltd (1994) 54 IR 236 at 246.
Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371.
Catusanu & ALHMWU v Ray’s Guard Security Services Pty Ltd (unreported, IRCA No. 228 of 1997, Murphy JR, 29 July 1997)
Stojanovic v The Commonwealth Club (unreported, IRCA No. 652 of 1995, Moore J, 8 December 1995).
Cosco Holdings Pty Ltd v Thu Thi Van Do (1997) 150 ALR 127.
Sherman v Peabody Coal Ltd (unreported, Federal Court No. 140 of 1998, Moore J, 27 February 1998).
Mainsbridge v Murdoch University (unreported, IRCA No. 5 of 1998, Madgwick J, 13 February 1998).
John Lysaght (Australia) Pty Ltd v FIA (1973) 15 AILR 323.
Nicolson v Heaven & Earth Gallery (1994) 1 IRCR 199; 57 IR 50.
Wyndham Lodge Nursing Home v Reader (No. 2) (1996) 65 IR 253.
Perrin v Des Taylor Pty Ltd (1995) 58 IR 254.
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16.
Senior v Lower North Metropolitan Health Service Board of Management (unreported, IRCA No. 342 of 1996, Ritter JR, 26 July 1996)
BARRY SIDNEY JEAKINGS -v- MANNOR HOLDINGS PTY LTD trading as M. D. MURPHY PLANT HIRE
WI 1058 OF 1997
R.D. FARRELL JR
13 MAY 1998
PERTH
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
WI 1058 of 1997
BETWEEN:
BARRY SIDNEY JEAKINGS
APPLICANTAND:
MANNOR HOLDINGS PTY LTD
TRADING AS M.D. MURPHY PLANT HIRE
RESPONDENTCOURT:
RD FARRELL JR
DATE OF ORDER:
13 MAY 1998
WHERE MADE:
PERTH
THE COURT ORDERS AND DECLARES THAT:
The respondent terminated the employment of the applicant in contravention of section 170DC of the Workplace Relations Act 1996 (“the Act”).
The respondent pay to the applicant within 21 days an amount equal to two weeks’ earnings as compensation pursuant to Section 170EE of the Act less any amount payable to the Commissioner of Taxation pursuant to the Income Tax Assessment Act 1936 and actually paid.
There be liberty to apply.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
WI 1058 of 1997
BETWEEN:
BARRY SIDNEY JEAKINGS
APPLICANTAND:
MANNOR HOLDINGS PTY LTD
TRADING AS M.D. MURPHY PLANT HIRE
RESPONDENT
COURT:
RD FARRELL JR
DATE:
13 MAY 1998
PLACE:
PERTH
REASONS FOR JUDGMENT
This is an application under Section 170EA of the then Industrial Relations Act 1988, now known as the Workplace Relations Act 1996 (“the Act”). The application is for compensation arising from the alleged unlawful termination of the employment of the applicant, Mr Barry Jeakings (“Mr Jeakings”) by the respondent, Mannor Holdings Pty Ltd trading as M.D. Murphy Plant Hire (“M.P.H.”). By the time of the hearing, Mr Jeakings conceded that reinstatement was impracticable.
M.P.H.’s primary contention is that Mr Jeakings was dismissed for a valid reason connected with his conduct. It further contends that his employment would have ended soon afterwards anyway due to the operational requirements of the business.
Mr Jeakings disputes that his conduct was such as to give rise to a valid reason for dismissal, for the purposes of Section 170DE(1) of the Act. He also contends that his dismissal was in breach of:
Section 170DF(1)(b) and (e) of the Act, because it was for reasons including participation in union activities and the filing of a complaint against M.P.H. involving alleged violation of laws; and
Section 170DC, because he was not given an opportunity to defend himself against M.P.H.’s allegations.
The Parties
M.P.H. conducts a demolition business. It also runs a salvage yard, “Shamrock Salvage”, in Malaga and at the time of the hearing had recently become involved in the construction of sheds.
In the three years prior to the alleged unlawful termination of Mr Jeakings’ employment, M.P.H. had progressed from mostly demolition work in the “cottage” sector of the building industry, involving the demolition of houses, to an increasing proportion of “commercial” demolition work. By 1996, virtually all M.P.H.’s demolition work involved large industrial buildings.
M.P.H. is a family company. Its sole director is Mr Martin Murphy, known as Danny. Mr Murphy adopts a “hands-on” approach to running the company. His wife, Mrs Mary Murphy, known as Melanie, is company secretary and takes responsibility for the paperwork. M.P.H. employs two of Mr Murphy’s sons, Pat Murphy and Dan Murphy, in the business. Pat Murphy apparently exercises some delegated authority on site in his father’s absence. A nephew, Joe Murphy, works separately under a subcontract arrangement to perform house demolition work for M.P.H.
Mr Barry Jeakings is a qualified boilermaker of some thirty years’ experience who had worked for M.P.H. in various capacities since late 1993. For some of that time he was “on the books” as an employee. At other times he worked under what was regarded as a sub-contract arrangement for an “all-in rate”. This arrangement also extended to most of the rest of the workforce. According to Mr Eddie English, a long-standing worker called by M.P.H. to give evidence, workers were generally put “on the books” by M.P.H. when the site for which the demolition contract had been won was unionised. When the work available was not a “union job”, the employees were taken off the books and put back onto an “all-in rate”. At the time of his dismissal, Mr Jeakings had been on the books as an employee since 3 February 1995, and his status as an employee at that time was not in dispute.
While he was classified by M.P.H. as a builder’s labourer on the demolition sites, Mr Jeakings says that his duties also included those of boilermaker/welder, truck driver, and fabricator, and that he also sometimes worked in the salvage yard. The proportion of his time he spent in these various capacities is in dispute.
Background: Mr Murphy and the Jeakings Family
Mr Murphy believes he has looked after Mr Jeakings and his family over the years. He described Mr Jeakings as a friend, “as friends go”. As Mr Murphy saw it, there was more than a mere employment relationship between them.
Mr Murphy had given Mr Jeakings work with M.P.H. since 1993. Then, while engaged with M.P.H. under the subcontracting arrangement in about March 1994, Mr Jeakings had been knocked off a ladder and had injured himself. Mr Murphy put him on wages for about two months after that. For half that time Mr Murphy was away from work injured, and in receipt of workers’ compensation. After the two months, Mr Jeakings’ working arrangements reverted back to the sub-contract arrangement; Mr Murphy told him the company could not afford to keep him on wages. Then in early 1995, Mr Jeakings had a bad fall off some scaffolding. Mr Murphy again put Mr Jeakings back “on the books” as an employee when this occurred and it appears Mr Jeakings received Workers Compensation from 6 February to 15 August 1995.
It seems that one of Mr Jeakings’ sons, Ben, had first been employed with M.P.H. and that Mr Jeakings had originally begun working for M.P.H. as a result of that connection.
Ben started up his own demolition company. Mr Murphy says that business dealings between them resulted in Ben Jeakings’ company incurring a debt to M.P.H. of $4,000, which was never recovered.
Another of Mr Jeakings’ sons, Nicholas, also began working for M.P.H. An incident occurred concerning Nicholas which gave rise to later tensions. While the evidence concerning this incident was sometimes indirect and vague, I will record my understanding of what is said to have occurred. It appears that in about mid-1995, Nicholas and his wife suffered a profound bereavement, losing an infant child. The circumstances were such that Mr Murphy believed Nicholas to be in financial hardship. Mr Murphy insisted on making a gift to him of $500.
Three or four months later that year, shortly before Christmas, Nicholas was laid off by M.P.H. Nicholas Jeakings’ wife had called Mrs Murphy and they had argued, leaving Mrs Murphy upset. Nicholas Jeakings was re-engaged shortly after on a subcontract basis.
Nicholas Jeakings believed that he was “let go” so that M.P.H. would not have to pay him for the public holidays over the Christmas Season. He wanted to be paid holiday pay he believed was due and owing to him. Nicholas Jeakings later claimed that, in this context, Mr Murphy made reference to his earlier generosity.
Background: Mr Murphy, WorkSafe and the Unions
Meanwhile, as M.P.H. progressed to undertaking an increasing proportion of commercial demolition work, Mr Murphy found that the commercial sector of the building industry was more closely regulated and more unionised. M.P.H.’s demolition business was thus coming under greater scrutiny both from WorkSafe W.A. and from the building unions.
In addition to the scrutiny which he might have expected on larger, commercial building sites, there was an additional focus on M.P.H.’s demolition activities. Mr Murphy attributes this to the recent death of a building union official on another demolition site in circumstances which the union contended were unsafe.
Mr Murphy says he became increasingly frustrated by numerous inspections and demands related to safety, which he felt hampered M.P.H.’s ability to get the job done. He complains that WorkSafe were fining him for petty things. Mrs Murphy referred in her evidence to two large fines being levied upon M.P.H.
Then, adding to Mr Murphy’s discomfort, questions were asked in the Western Australian Parliament which gave rise to a suggestion that M.P.H. had tried to bribe a WorkSafe inspector. Eventually, on 3 November 1996, an article appeared in the “Sunday Times” in the following terms:
“‘Worker Details Bubble’ by Jim Kelly
A WorkSafe inspector has confronted a demolition company worker over sensitive information given to Opposition industrial relations spokeswoman Alannah MacTiernan.
Ms MacTiernan asked questions in Parliament about an investigation into allegations of bribery and corruption involving WorkSafe inspectors. The questions related to information given to Ms MacTiernan by an unnamed source. Days after the questions were asked a WorkSafe inspector fronted a Murphy’s Demolition employee, Barry Jeakings, with a copy of the parliamentary questions and WorkSafe’s suggested response to them.
Ms MacTiernan, who had not named any WorkSafe officers, said the inspector’s conduct was unacceptable and she has complained to the Public Sector Standards Commissioner. “This was fundamentally an attempt to heavy someone to stop the supply of information to me,” she said. “In this case the effort was also misguided because I have never spoken to Mr Jeakings.”
In Parliament this week, Labor Relations Minister Graham Kierath said the inspector had spoken to Mr Jeakings to refute personally damaging allegations made by the Opposition spokesman.”
The next day, Monday, 4 November 1996, M.P.H. was due to start work at a new site for Broad Construction Services Pty Ltd (“Broad Constructions”) at Scarborough Beach Road. Mr Murphy, who was distressed by the fact that the newspaper article had identified M.P.H., decided he “had had it”. He resolved to return to house demolitions and to avoid in future any “big jobs”, thus avoiding the accompanying scrutiny. As a result he did not want to proceed with the Broad Constructions job.
Mr Murphy met with the workers who were due to start work that day and told them instead to take a week’s paid leave. The workers at that stage were:
Pat Murphy;
Dan Murphy;
Mr Eddie English (the leading hand);
Mr Barry Jeakings (the applicant);
Mr Nicholas Jeakings (the applicant’s son);
Mr John Giancola (a “subcontractor”); and
Mr Richard Tahartega (also a “subcontractor”).
After discussions between Mr Murphy and Broad Constructions, Mr Murphy was persuaded to proceed with the demolition as agreed. He called the employees back to work mid-week, and demolition work began, continuing throughout that month.
Mr Murphy says that when work began he met with the employees and told them that that job was going to be his last big contract and that he did not intend to get involved in further bigger contracts because of the difficulties he was experiencing. He believes Mr Jeakings was present during this meeting but can’t be sure. I am confident that had Mr Murphy expressed such an intention to his workers, then it would have come to Mr Jeakings’ attention indirectly, even if he were not there at the time.
Mr Murphy says that it was intended that M.P.H. would concentrate on housing work with his family in future. He says that in that sector there was rarely demand for additional employees and that the necessary demolition work could easily be handled by Mr Murphy, his two sons, who were M.P.H. employees, and his nephew, who had been working as a sub-contractor for over twelve months.
Mr Murphy was upset and angry about the allegations of attempted bribery. Mr Murphy said in cross-examination that he believed that Ms MacTiernan’s source of information was either Mr Jeakings or his wife, Mrs Raelene Jeakings. While Mr Murphy concedes that it was Mr Jeakings’ right to report his concerns to a Member of Parliament, he went on to say that their relationship was wearing rather thin as a result of the article.
Mr Murphy spoke to Mr Jeakings on site about the article, and says that Mr Jeakings initially denied it. Mr Murphy denies confronting Mrs Jeakings, but made mention that she rang him. Then, in a later discussion, Mr Jeakings claimed “Yes, it was me”. Mr Jeakings says that in fact he did not speak to Ms MacTiernan; he believes it was the building unions. He says he asserted to Mr Murphy that he had raised the matter with Ms MacTiernan because he was fed up with Mr Murphy rubbishing Mr Jeakings’ wife, who Mr Murphy believed had done it.
Finally, in the course of that job, Nicholas Jeakings complained to the building union about the rates and allowances he was receiving from M.P.H. Mr Murphy agrees that at the time of the dismissal he was aware of the fact that Nicholas Jeakings had made the complaint. Mr Murphy suggests the complaint was made in about mid-November, and that by the time of the dismissal he was no longer concerned about it.
Announcement of Impending Dismissal
Mr Murphy called together the five workers at the Broad Constructions site at 7:00am on Friday, 6 December 1996 to tell them that they would be “finished up” as there was no longer to be sufficient work to employ them. The demolition work had almost been completed, and only “tidying up” of the site was required. Mr Jeakings was surprised to hear that there was insufficient work to continue his employment. He says he assumed it was an excuse for M.P.H. to get rid of him.
Three of the workers were to finish work at the end of the day. They were Nicholas Jeakings, Mr Giancola and Mr Tahartega. Mr English and Mr Jeakings, the two longest-serving workers, were to continue until the end of the next week, finishing off a small amount of work on the site before the job was finally finished.
Work recommenced for the day. Some of those working on the site gave evidence that Nicholas Jeakings seemed angry at the news that morning. It was claimed that, as he went about his work, Nicholas Jeakings was conducting himself in an unsafe manner. I accept that Nicholas Jeakings was angry, but need make no finding as to the safety of his conduct, particularly as he did not give evidence. Mr English, the foreman, complained to Mr Murphy about Nicholas Jeakings’ conduct. Nothing flowed directly from this complaint.
The Altercation
At about 9:30am, the workforce broke for a smoko in the smoko room, which was a shed erected on the site. Present in the room were Mr Murphy, Mr English, Mr Jeakings, Nicholas Jeakings, Mr Giancola, and Mr Tahartega.
The Court heard evidence about the events that followed from all those present, except Nicholas Jeakings. The applicant’s decision not to call Nicholas Jeakings as a witness was adequately explained and I draw no inference form it. There were variations in the evidence, many of which were understandable given the heightened emotions at the time and usual differences in recollection. It became apparent in cross-examination that some of the witnesses called by M.P.H. had discussed their evidence together and had compared their recollections. I am satisfied that this fell short of a deliberate attempt to coach witnesses or interfere with the evidence. Indeed, it is notable that differences remained in their recollections, particularly between the evidence of Mr English and Mr Murphy. The following account represents my findings of fact about what happened that morning, after considering the evidence.
Mr Murphy intended to take the opportunity during smoko to explain to the workers in more detail why they were being finished up, and what prospects there were of future work for them. He called for their attention and announced his intention to discuss the matter further.
Nicholas Jeakings got up to leave the smoko room, saying he was not interested in hearing anything Mr Murphy had to say, that he had heard it all before and that Mr Murphy was a liar. While the accounts of what were said differ, it is clear that Nicholas Jeakings’ parting statement, and much of what was to follow from all three participants, was liberally punctuated by adjectival swearing.
From the totality of the evidence, and not having had the advantage of Nicholas Jeakings’ evidence, I was left with the impression that Nicholas Jeakings’ resentment was founded on a belief that Mr Murphy was seeking to again change his working arrangements from wages to sub-contract, in an effort to avoid Mr Murphy’s obligations to pay award conditions including, relevantly, paid public holidays over the forthcoming Christmas season.
Mr Murphy followed Nicholas outside and they engaged in a verbal altercation, which those inside the smoko room were unable to overhear clearly.
This argument resulted in Mr Murphy telling Nicholas that if he felt that way he should finish up immediately and get off the site because there was no point working any longer; his employment was due to finish that night anyway.
Mr Murphy returned to the smoko room and started to talk to Mr Jeakings when Nicholas Jeakings came back into the smoko room and shouted something to do with his child. Mr Murphy recalls Nicholas Jeakings referring to the death of his son, and asserting that Mr Murphy had brought up the $500 gift and “thrown it in (Nicholas Jeakings’) face”. Mr Murphy initially tried to speak with him about it, and then told him to get his gear and leave the site.
Mr Murphy then turned his attention to Mr Jeakings. He said he didn’t understand what the matter was with Nicholas. Mr Murphy maintained that he hadn’t done anything wrong and had always tried to do his best by Nicholas.
There began an exchange between the two of them which became increasingly heated. The evidence concerning what was said and the order in which topics were raised was confused, as one might expect.
I accept that Mr Jeakings began by asserting that Nicholas was right. He accused Mr Murphy of having finished up his son to avoid having to pay holiday pay over Christmas, and of “slinging into his face” the $500 Mr Murphy had given him earlier. Mr Jeakings says that Mr Murphy denied ever saying such things to Nicholas. Mr Jeakings asserted that he had, when Nicholas had earlier sought holiday pay he believed he was due.
It seems clear that at various points, Mr Murphy shifted from self-justification to at least qualified apology. Mr Murphy and others present recall him saying things like “If I’ve done any harm, it was unintentional”, “If I’ve done anything wrong, I apologise,” “If I’ve offended you or your family I apologise for that,” and “If that is causing upset, then I’m sorry”. Mr Jeakings does not recall Mr Murphy offering any apology, but it is likely that Mr Jeakings was focusing more on what he had to say than on Mr Murphy’s attempts to assuage him.
Mr Jeakings appears to have become increasingly animated as he recounted various perceived wrongs committed by Murphy, the detail of which was not clear in the evidence. He was described by other witnesses as “having a go” at Mr Murphy, “really laying it on”, “swearing and cursing”.
When Mr Murphy suggested that there was “no need for that”, Mr Jeakings responded, “Are you the only one who can shout on this site?”, referring to Mr Murphy’s apparently robust approach to worker relations.
Mr Murphy at various points professed bafflement as to why Mr Jeakings was attacking him, when “I’ve always tried to do the right thing by your family”.
Mr Murphy claimed that he had given Nicholas Jeakings a job with M.P.H. because Mr Jeakings had asked him to. Mr Jeakings said he had never asked that Nicholas be hired, and that he was hired on his merits.
Significantly, Mr Murphy told Mr Jeakings at one point, “Your fucking cunt of a son went to the union - why didn’t he come to me first”. Mr Jeakings responded that it was Nicholas’ prerogative to go to a union.
Mr Giancola recalls Mr Murphy initially trying to remain calm, but says that eventually it got the better of him. He recalls Mr Murphy telling Mr Jeakings “Fuck you, I’ve looked after you”, and “You’ve been working for me for three years, what’s the hassle?” Mr Murphy concedes he became very agitated at the accusations Mr Jeakings was levelling at him.
The exchange came to a climax when Mr Jeakings thumped the table and said:
“I don’t believe anything you’ve got to say. You’re a fucking cheat and a liar”.
Mr Jeakings denies at any point calling Mr Murphy a cheat and a liar. He further says he could think of no reason to call Mr Murphy a liar and a cheat. I do not accept Mr Jeakings’ recollection on this point. Mr English and Mr Tahartega volunteered in their evidence that Mr Jeakings had said this. Mr Giancola did not volunteer the statement in his briefer account, but nor did he dispute that it was made. Mr Jeakings appeared to me to be a volatile person, and I have no difficulty accepting that he was capable of making such statements. Indeed, he had to be stopped from abusing Mr Murphy with barely-whispered expletives while Mr Murphy was giving evidence during the hearing.
Mr Murphy was by this time quite infuriated. Witnesses say he shaking and physically upset. He picked up the table, turned it over and drove it into the ground, saying that if that is the way Mr Jeakings felt about him, after all Mr Murphy had done for him, then Mr Jeakings had better finish up and get off the job too. The up-ending of the table caused a hot cup of tea to spill down Mr Jeakings’ front.
Mr Jeakings responded that “You’ve always got more out of me than I got out of you”, and continued to repeat that Mr Murphy was a cheat and a liar, listing various matters, not now recounted, that Mr Murphy had lied about and claiming that he and Nicholas should have been paid various entitlements.
Nicholas was calling out to Mr Jeakings to go. Mr Murphy told him to “Get the fuck off this site - right here, right now”. Mr English recalls Mr Jeakings saying, as he left, “Fuck you, I’m going. I’ll get even with you.” No one else recalled this. If it were said, it strikes me as something an employee who believed they had been wrongfully dismissed might be expected to say.
As Mr Jeakings was leaving, Mr Murphy told him that he was selling his business at 3:30pm that afternoon, and that but for these events he would have put a good word in for Mr Jeakings. Mr Jeakings and his son left the site soon after 10:00am.
Mr Murphy says that he was very disappointed in the things Mr Jeakings said, particularly calling him a liar and a cheat, and was hurt by his attitude. He had considered Mr Jeakings a friend, “as friends go”. He felt it was impossible to continue to employ Mr Jeakings when he found out how he felt about him. There was no way he could have a man work for him who had called him a liar and a cheat. He added that you can’t work with someone who hates your guts.
The Employment is Ended
M.P.H. issued a Department of Social Security Employment Separation Certificate later that day. It is signed by Mrs Murphy.
The relevant part of the certificate reads as follows:
“Was employment terminated due to:
· shortages of work? Yes ü No · unsuitability for this type of work? Yes üNo -· unsatisfactory work performance? Yes üNo -· misconduct? Yes üNo -Did the employee cease work voluntarily? Yes No -
An examination of the original certificate, which was completed in ink on a blank copy of the certificate faxed through on thermal facsimile paper, shows a single tick for “Yes” next to “shortages of work?”. The other ticks which I have shown as having been struck out were in fact painted out with “Liquid Paper”.
Mrs Murphy explained that she had received a telephone call from Mr Murphy at about 10.45 am telling her that she should get Mr Jeakings’ pay ready because he had abused Mr Murphy who had cleared him from the site.
Mrs Murphy then ticked “misconduct” as the reason for dismissal when filling out the separation certificate. She does not believe she ticked any other boxes.
Later, she visited the site at about 2:00pm. When Mr Murphy learnt that she had nominated “misconduct” as the reason for dismissal, he told her to change it, because Mr Jeakings would otherwise be unable to claim the dole. Mrs Murphy says she tried to persuade Mr Murphy to leave the certificate as it was, but then rang “Sandy”, who assisted her with the accounts, and told her to change the certificate. She nominated “shortage of work”, on the basis that had Mr Jeakings employment ended a week later, as had been planned, it would have been for that reason. Mrs Jeakings went to the office to collect the termination pay and separation certificate while Mrs Murphy was away. “Sandy” did not give evidence.
The position adopted by M.P.H. for the purpose of the hearing was more consistent with the original version of the certificate.
Which Decision to Dismiss?
Mr Murphy made two decisions to terminate Mr Jeakings’ employment. He decided to give notice at 7:00am on Friday 6 December 1996 that Mr Jeakings’ employment would end effective from end of business on Friday 13 December 1996. Then, at about 10:00am on Friday 6 December 1996, he decided to terminate Mr Jeakings’ employment summarily. These decisions were allegedly made for different reasons. Which was the relevant decision for the purpose of the Act?
It seems clear that the decision which actually brought about the dismissal was that made at 10:00am, because the giving of notice does not bring the employment to an end until the notice period expires: eg APESMA v Skilled Engineering Pty Ltd (1994) 54 IR 236 at 246.
It is therefore the reasons for Mr Murphy’s later decision after the altercation which are relevant, because that decision had immediate effect and brought about the termination.
Whether Mr Jeakings Was Dismissed for Reasons Which Included Prohibited Reasons
Section 170DF(1) provides that:
“An employee must not terminate an employee’s employment for any one or more of the following reasons, or for reasons including any one or more of the following reasons:...
(b)union membership or participation in union activities outside working hours or, with the employer’s consent, during working hours;...
(e)the filing of a complaint, or participation in proceedings, against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities...”
Section 170EDA(2) places the onus on M.P.H. to prove that Mr Jeakings’ employment was not terminated for reasons which included either of those reasons.
If it were Nicholas Jeakings who were applying for a remedy in relation to his dismissal, the issue would be simpler, given that he was known by Mr Murphy to have complained to the union about his entitlements. It has been held that such action amounts to “recourse to competent administrative authorities”: Catusanu & ALHMWU v Ray’s Guard Security Services Pty Ltd (unreported, IRCA No. 228 of 1997, Murphy JR, 29 July 1997)
Mr Jeakings’ contention, however, is that he was dismissed for reasons which included the fact that his son had complained to the union, and that he had defended his son’s action.
Alternatively, Mr Jeakings contends that he was dismissed for reasons which included Mr Murphy’s belief that Mr Jeakings had complained to a Member of the Western Australian Parliament about Mr Murphy’s alleged dealings with WorkSafe inspectors.
The second contention gives rise to the same issue in a different context. Mr Murphy may have been mistaken in his belief that the complaint was made by Mr Jeakings, if it was in fact made by someone else.
I am not aware of any decision dealing with Section 170DF of the Act (or its successor, Section 170CK of the amended legislation), where the conduct with which the prohibited reason was claimed to have been connected (eg the complaint) was the conduct of someone other than the person dismissed.
However, the terms of Section 170DF do not specify that it is only participation by the employee in union activities or the recourse by the employee to competent administrative authorities that would be a prohibited reason for dismissing an employee. The relevant verbs are left in the passive voice.
Having regard to the purpose of the provision, I see no reason to restrict its operation by reading such an implied qualification into the provision when the legislature could easily have inserted the qualifying words explicitly had it wished to do so..
Given that the legislature has prohibited the dismissal of an employee because he or she has complained to a union, it is likely that it would also have intended to have prohibited the dismissal of other employees because they defended that employee’s actions or, more arbitrarily, because they were related to that employee.
Similarly, it seems unlikely that the legislature would have intended that an employee who loses his or her employment for reasons which would otherwise be prohibited should be denied a remedy because the employer was in fact mistaken about the applicability of those reasons to the particular employee.
I accept, therefore, that Mr Murphy’s dismissal of Mr Jeakings would be in breach of Section 170DF if it was for reasons including:
Nicholas Jeakings’ participation in union activities;
the recourse by Nicholas Jeakings to the union about an alleged violation of the award; or, subject to other reservations mentioned below,
the recourse by other unknown persons to a Member of Parliament about alleged attempts by the respondent to bribe of government officials.
I have reservations as to whether Mr Murphy’s beliefs concerning the passing of information to Ms MacTiernan would fall within Section 170DF(1)(e). Certainly, the information related to the alleged violation of laws, though of course I cannot make any finding as to the accuracy of that information. However, I doubt that the mere conveying of such information would amount to the “filing of a complaint”, which suggests a more formal step. It is arguable that a Member of the Western Australian Parliament is a “competent administrative authority”, though to hold so would require a broad construction of the adjective “administrative”. In any event, this is not a matter I am required to finally decide given my findings of fact, set out below.
Under the terms of Section 170DF, a prohibited reason need be only one of a number of reasons for the dismissal. It has been held that the consideration of whether a particular matter was a “substantial and operative factor” in the decision to dismiss is a useful guide when deciding whether the termination was for reasons including that matter: Stojanovic v The Commonwealth Club (unreported, IRCA No. 652 of 1995, Moore J, 8 December 1995).
I accept that, in a broad sense, Mr Murphy summarily dismissed Mr Jeakings because he believed that the altercation between them had irretrievably destroyed their capacity to work together. Until that point, he had been planning to employ Mr Jeakings for a further week.
However, during their altercation Mr Murphy specifically raised the fact that Nicholas Jeakings had gone to the union. Mr Jeakings defended his son, saying it was Nicholas’ prerogative to do so. He also appears to have supported his son’s position as to the validity of the matters his son complained about.
Was Nicholas Jeakings’ recourse to the union a reason, or a substantial and operative factor, in Mr Murphy’s decision to dismiss Mr Jeakings?
While the evidence was somewhat indirect on this point, there being no evidence from Nicholas Jeakings nor the Union, it appears that Nicholas Jeakings complained to the union some weeks before the altercation, and there was no evidence contradicting Mr Murphy’s claim to have known about it for weeks.
However, Mr Murphy had not raised the matter with Mr Jeakings until the altercation. The fact that he raised it in that context and the abusive terms in which he referred to Nicholas belies Mr Murphy’s claim that he was no longer concerned about Nicholas having gone to the union. Mr Jeakings’ response was to squarely support his son.
While this exchange clearly played a part in the escalation of the altercation between Mr Murphy and Mr Jeakings, it is a finely balanced assessment on the evidence whether it was a substantial and operative factor in Mr Murphy’s decision to dismiss Mr Jeakings, or whether it was merely part of the background to that decision.
It must be recognised that the reasons for Mr Jeakings’ termination are ultimately solely within the employer’s knowledge. That is why the onus of proof rests on the employer.
In this case, while I cannot rule out the possibility, M.P.H. has satisfied me on the evidence that it is more likely than not that Nicholas Jeakings’ recourse to the union was not a reason for Mr Jeakings’ dismissal. Indeed, I am of the view, that it is more likely than not that the altercation would still have resulted in Mr Jeakings’ summary dismissal even if Mr Murphy had not been aware of Nicholas Jeakings’ recourse to the union.
There is also sufficient evidence to satisfy me that the passing on of information to Ms MacTiernan was not a reason for the dismissal. Mr Murphy’s relationship with Mr and Mrs Jeakings was “wearing thin” after Mr Jeakings claimed responsibility for passing the information to Ms MacTiernan. However, there does not appear to have been any reference to this issue in the course of the altercation. It is difficult to see that any belief held by Mr Murphy with regard to that issue affected his decision to dismiss Mr Jeakings summarily rather than have him work out his weeks’ notice.
I find therefore, on balance, that M.P.H. did not act in breach of Section 170DF.
Whether Mr Jeakings Was Dismissed for a Valid Reason
As I have noted above, I accept that, in a broad sense, Mr Murphy summarily dismissed Mr Jeakings because he believed that the altercation between them had irretrievably destroyed their capacity to work together. Mr Murphy was deeply offended to be called a liar and a cheat, and sees the altercation as the point at which he discovered how Mr Jeakings really felt about him. As he put it, “How can I be expected to work with a man who hates my guts?”
Section 170DE(1) of the Act provides that:
“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 or based on the operational requirements of the undertaking, establishment or service.”
M.P.H. contends that Mr Jeakings was dismissed for a valid reasons connected with his conduct during the altercation.
Section 170DE(1) has been considered recently by the Full Court of this Court, in Cosco Holdings Pty Ltd v Thu Thi Van Do (1997) 150 ALR 127, a decision concerned with terminations for a reason purportedly based upon the operational requirements of the employer.
The construction placed on the provision by the Full Court was narrow in its ambit. A majority of the Full Court held that:
“...a reason for termination ...may be valid even if the termination ...may be regarded as unfair. In other words, fairness, reasonableness or justice, as regards the employee, is not the realm of discourse with which ‘valid’ is concerned... In the statutory context with which we are concerned, the primary work of ‘valid’ is to exclude the reasons listed in s 170DF(1). If there are other reasons for which an employee may not lawfully dismiss an employee, then equally, no doubt, such a reason would not be a ‘valid’ reason. Additionally, perhaps, the word ‘valid’ may serve to emphasise that the reason must be genuinely connected with the employee’s capacity or conduct or genuinely based on operational requirements. In our view... it has no wider operation.”
Northrop J, the other member of the Full Court, gave the term a similarly narrow construction, holding that:
“To be a valid reason, the reason must be lawful in the sense of not being prohibited, and genuinely must be based on those operational requirements [or, presumably, genuinely connected with the employee’s capacity or conduct]. The word ‘valid’ is used as an adjective qualifying the word ‘reason’ and is used in the sense of sound, defensible or well founded with respect to the foundation, namely the operation requirements of the employer [or again, presumably, with respect to the connection with the employee’s capacity or conduct]”
In applying the Full Court’s observations to the facts of the present case, where the termination is for a purported reason connected with Mr Jeakings’ conduct, I have been greatly assisted by reference to the decision of Moore J in Sherman v Peabody Coal Ltd (unreported, Federal Court No. 140 of 1998, Moore J, 27 February 1998).
That case involved facts with some similarity to those in the present case. Mr Sherman was a welder/boiler maker at a mine. He had an argument with his Team Leader. The argument culminated with threats made by Mr Sherman against the Team Leader. After an investigation by the employer company of the incident, Mr Sherman was dismissed.
After noting that he had been referred during the hearing to the Full Court’s decision in Cosco, Justice Moore analysed the Full Court’s decision thus:
“It may be accepted that the matters raised by s 170DE(1) do not call for consideration of notions of fairness, reasonableness or justice. However, the reason for the termination must be a valid one. As Northrop J pointed out in Cosco, in adopting observations he had earlier made in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, the adjective “valid” should be given the meaning of sound defensible or well founded. While it is not entirely clear whether that element was viewed by Lindgren and Lehane JJ as a necessary element in the concept of “valid reason” their Honours did note:
“Additionally, perhaps, the word “valid” may serve to emphasise that the reason must be genuinely connected with the employee’s capacity or conduct or genuinely based on operational requirements”.
after having referred to the need for the existence of a genuine foundation.
Any notion of genuine connection must, in my view, involve notions of proportionality. I say that because it is unlikely that Parliament intended any aspect of the conduct of an employee established on the evidence that was perceived by the employer as warranting termination would demonstrate or establish a valid reason. Such an approach would denude the expression “valid reason” of any meaning. (my emphasis)”
Moore J then went on to quote, with approval, conclusions reached by Madgwick J in Mainsbridge v Murdoch University (unreported, IRCA No. 5 of 1998, Madgwick J, 13 February 1998), arising from similar submissions in another case concerning a termination for a reason purportedly connected with the applicant’s conduct.
Madgwick J made the following observations concerning Cosco.
“The conclusion of Lindgren and Lehane JJ in the major judgment was that:
“[I]n the statutory context with which we are concerned, the primary work of “valid” is to exclude the reasons listed in s 170DF(1). If there are other reasons for which an employer may not lawfully dismiss an employee, then equally no doubt such a reason will not be a “valid” reason. Additionally perhaps the word “valid” may serve to emphasise that the reason must be genuinely connected with the employee’s capacity or conduct or genuinely based on operational requirements.”
However, Lindgren and Lehane JJ had earlier pointed out that:
“To say, as the section does, in addition that the reason must be “valid” is, no doubt, to add further element to that requirement of a genuine foundation...”
Their Honours had also earlier held that the words “based on” (without resort to “valid reason”) required that the foundation of the reason for termination be “real and not specious”. With respect, such a construction is plainly called for. As counsel’s submissions acknowledged, “connected with” must likewise be construed as meaning really and substantially, that is to say (perhaps among other things) genuinely, connected with.”
In Sherman v Peabody Coal Ltd, Moore J was not satisfied that the reason the company terminated the employment of Mr Sherman was a sound defensible or well founded one. It was, in his view, entirely disproportionate to the conduct complained of. He held that Mr Sherman did not engage in the imputed conduct, that is, threatening his team leader with physical harm and his termination was not for a valid reason. He observed that Mr Sherman’s remarks were plainly unfortunate, but were the remarks of a man who was not in a state of emotional equilibrium.
It remains the case that, when assessing the conduct of an employee, regard must be had to the standards which have been set by the employer or which would be understood by a reasonable employee to apply to that conduct.
Where the standards are set by the employer, the Court must first determine whether those standards are within the bounds of what is reasonable, having regard to notions of proportionality, and then determine whether the employee’s conduct was in breach of those standards.
At first glance, it may seem a simple proposition that an employee who abuses their supervisor and accuses them of being a cheat and a liar gives that employer grounds to lawfully dismiss them under the Act.
Abusive language directed at challenging the authority of a supervisor has been held to constitute misconduct, even where, as here, abusive language was common in the work place: eg John Lysaght (Australia) Pty Ltd v FIA (1973) 15 AILR 323. Such behaviour will often be held to interfere with the proper performance of the employment contract. Such a conclusion will tend to be more readily reached in a small workplace.
The situation in this case was, however, more complex. There was not merely an employment relationship between Mr Jeakings and Mr Murphy. The altercation was not merely an exchange between an employer and an employee, but also between friends and, indeed, between fathers. For example, one of the key matters in dispute between them, Mr Murphy’s reference to his earlier gift to Nicholas Jeakings, was of an intensely personal nature and not directly related to the employment. I can also appreciate that Mr Jeakings felt more than usually protective of his son.
In summary, Mr Jeakings’ reaction effectively conveyed to Mr Murphy that Mr Jeakings:
supported his son’s views and actions;
himself held numerous grievances against Mr Murphy;
believed overall that Mr Murphy had exploited him and his family;
believed that Mr Murphy was dishonest; and by implication
did not respect or like Mr Murphy.
However, those views are not necessarily inconsistent with the continued existence of an employment relationship. Were that so, then employers whose conduct clearly justified such views could dismiss their employees with impunity.
What those views were inconsistent with, however, was the maintenance of any relationship of friendship between the two men. I am satisfied that Mr Jeakings’ intent in reacting as he did was, at least partly, to make it clear to Mr Murphy that Mr Murphy should no longer continue to see himself as friend and benefactor to the Jeakings family.
It would not necessarily follow that such a reaction would justify a decision by Mr Murphy to end their employment relationship.
The communication of such views would not be grounds for dismissal, where it is done in an appropriate manner. However, it is questionable whether Mr Jeakings’ reaction, which was abusive and lacking in any restraint, was appropriate, particularly given that it took place in the presence of all his fellow workers.
I referred earlier to the need to have regard to the relevant standards of conduct when assessing the conduct of an employee. I accept that in the circumstances of this case, the standard of conduct to be applied to Mr Jeakings is less clear than usual.
In responding to Mr Jeakings, Mr Murphy initially tried to calm him down. Mr Murphy offered qualified apologies. He told Mr Jeakings there was “no need for that”. However, while he clearly did not accept Mr Jeakings’ views and argued with him about their correctness, he did not make it clear to Mr Jeakings at any stage that his conduct and the way in which he was expressing his views was unacceptable, as an employee.
It was not until Mr Murphy eventually lost his temper, up-ending the table, that he dismissed Mr Jeakings. That dismissal was without warning.
Mr Murphy therefore failed to clearly set the standard of conduct expected of Mr Jeakings as an employee in that situation.
Mr Jeakings was upset by his son’s dismissal and the events and issues surrounding it. He reacted as someone might when announcing the end of a friendship. It is arguable that he might reasonably have believed that he could exercise more latitude in his reaction to those events, reacting as someone with a history of friendship with Mr Murphy, than would be available to him as a mere employee.
However, I cannot in the end accept that Mr Jeakings’ conduct during the altercation, viewed as a whole, were consistent with the standards of conduct a reasonable employee would have understood to be applicable to them, even in those special circumstances. This is not to suggest that Mr Murphy’s conduct was blameless. Even leaving aside Mr Jeakings’ suspicions about Mr Murphy’s decision to give them notice of termination, the manner in which he summarily dismissed Nicholas Jeakings might be seen as a provocation. However, the vehemence and abusiveness of Mr Jeakings’ reaction, despite Mr Murphy’s initial attempts to placate him, were not in my view excused by that provocation. Mr Jeakings initiated the altercation, it was not sought by Mr Murphy.
Further, Mr Jeakings’ reaction immediately after Mr Murphy dismissed him, where Mr Jeakings was continuously repeating the statement that Mr Murphy was a “fucking cheat and a liar”, when it had clearly had the effect of provoking Mr Murphy, suggests to me that it is unlikely that any warning Mr Murphy might have given would have made any difference to Mr Jeakings’ behaviour. Mr Jeakings continued to harangue Mr Murphy until even his son was urging him to leave.
I appreciate that one possible explanation for that behaviour was a belief by Mr Jeakings that he had nothing further to lose, once Mr Murphy told him he was “finished up”. I observe, in passing, it was possible that Mr Murphy’s decision in the heat of the moment to dismiss him might have been withdrawn, had Mr Jeakings reacted differently. In any event, Mr Jeakings’ behaviour after being told he was dismissed reinforces my view based upon his behaviour before he was dismissed that, in reacting as he did in an abusive and unrestrained manner to Mr Murphy, he was indifferent to the standards of behaviour legitimately expected of him in those circumstances.
In conclusion, acknowledging that each of these cases must be decided on their own facts, on the facts of this case I find that:
the termination of Mr Jeakings’ employment was genuinely connected with Mr Jeakings’ conduct in abusing Mr Murphy;
the conduct was a sound, defensible and well-founded reason for the termination; and
the termination was, in all the circumstances, not disproportionate to the conduct.
Accordingly, I find that M.P.H. has not breached Section 170DE(1).
Mr Jeakings’ Opportunity to Defend Himself
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.”
Clearly Mr Jeakings was not given an opportunity to defend himself before his dismissal. The only question remaining is whether M.P.H. could reasonably be expected to give him that opportunity.
It would not have required much to have provided that opportunity. There was no issue as to what Mr Jeakings had done; it had been witnessed by Mr Murphy and the entire work force. All that was required was that Mr Jeakings have an opportunity to explain his conduct,: Wyndham Lodge Nursing Home v Reader (No. 2) (1996) 65 IR 253 at 272. and an opportunity to raise any other matters for consideration before Mr Murphy decided whether or not to dismiss him. One such matter might be an apology, or an undertaking as to future conduct: Perrin v Des Taylor Pty Ltd (1995) 58 IR 254 at 257.
There was no reason why M.P.H. could not have been expected to give Mr Jeakings those opportunities. Indeed, doing so would have had the benefit of giving both men an opportunity to calm down and reconsider their actions.
I find therefore that M.P.H. have breached Section 170DC of the Act.
Compensation
In assessing compensation for a breach of Section 170DC, it is appropriate to consider what would have been likely to occur if that breach had not occurred. It should not be assumed that the employee would have been dismissed anyway; decision makers often change their minds when presented with another side of a case: Nicolson v Heaven & Earth Gallery (1994) 1 IRCR 199 at 212; 57 IR 50 at 62.
In this case, the decision to dismiss Mr Jeakings was made by Mr Murphy in the heat of the moment. Had Mr Murphy complied with Section 170DC, he would have had the opportunity to calm down, and Mr Jeakings may have taken the opportunity to try to retrieve his position. It is possible, therefore, that Mr Jeakings would not have been summarily dismissed.
It is my assessment, however, that it is more probable in the circumstances that Mr Jeakings would not have responded positively to any opportunity Mr Murphy gave him to explain his conduct or to raise other matters for Mr Murphy’s consideration, and that the summary dismissal would have followed in any event.
In order to assess Mr Jeaking’s loss arising from the breach, I will proceed to consider what he is likely to have gone on to earn had he not been dismissed. Any loss of income will be discounted, however, to take account of the probability of summary dismissal in this case had the breach not occurred.
M.P.H. contend that, because Mr Jeakings had already been given notice, he would only have been employed for an additional week had he not been summarily dismissed. It contends that any loss of income incurred through M.P.H.’s breach of the Act is therefore limited to one weeks’ wages.
The first matter to note is that Mr Jeakings had worked for M.P.H. since 1993, had been “on the books’ since February 1995 and was more than 45 years old, being born in 1944. Under Section 170DB of the Act, he was therefore entitled to at least three and probably four weeks’ notice, depending on whether the earlier “sub-contracting” arrangement constituted employment for the purposes of the Act. This notice period to which he was entitled would, with public holidays, have taken him into the New Year.
Mr Jeakings further contends that M.P.H.’s decision to give him notice of termination was in breach of the Act, and should therefore be disregarded altogether when assessing his loss of income. He contends that the decision to give him notice was not due to any operational requirements of the business. Rather, he contends that it was motivated by Mr Murphy’s anger about the Sunday Times article, for which he held Mr Jeakings responsible.
In response, M.P.H. first point out that a slackening off of business is not unusual in the building industry, where lay-offs due to shortage of work are a common occurrence. It is notable however that, notwithstanding that industry norm, Mr Jeakings had been able to continue working for M.P.H. for an unbroken period of more than three years. Why was this occasion different?
According to M.P.H., Mr Murphy was withdrawing from the commercial building industry and was limiting M.P.H.’s future demolition operations to demolition of housing. Indeed, consideration was given to a proposal whereby one of Mr Murphy’s sons would purchase the demolition part of the business from Mr Murphy, leaving Mr Murphy with the salvage yard; the proposal was eventually abandoned due to lack of finance.
Given that the demolition business was to be operating on a smaller scale, it was expected that the operational demands of the demolition business for labour would be reduced. It was envisaged that the need for labour would usually be able to be met by Mr Murphy’s family, though it was conceded that additional labour may need to be engaged for limited periods from time to time.
It was for these reasons, they say, that the employees were given notice as the Broad Constructions job reached it’s conclusion. However, there were also indications in the course of Mr and Mrs Murphy’s evidence that it had originally been their intention to immediately re-engage the employees, including Barry and Nicholas Jeakings, on a “sub-contract” basis, at least until Christmas.
Evidence was led about M.P.H.’s activities in the months after Mr Jeakings was “finished up” on 6 December 1996. While the evidence is somewhat confusing, it appears that:
Of the workers involved in demolitions, Mr Murphy, Daniel Murphy, Patrick Murphy, Mr English, Mr Jeakings and Nicholas Jeakings had been “on the books” as employees. Mr Giancola and Mr Tahartega were “sub-contractors” as was Joe Murphy, who worked separately on housing demolitions.
Mr English, Mr Jeakings and Nicholas Jeakings were given notice, as were Mr Giancola and Mr Tahartega. When Mr Jeakings and Nicholas Jeakings were dismissed summarily, Mr Giancola was asked to stay on site for a week to work with Mr English, in place of Mr Jeakings.
M.P.H. had only small housing demolition jobs and “clean-ups” to perform in December 1996, but engaged Mr English, Mr Giancola and Mr Tahartega until a few days before Christmas as “subcontractors”. They spent part of that time working in the salvage yard cleaning up and building racks. Mr Tahartega was employed for only seven days during this period. Reference was made to two other “casuals”, identified only as “Jason” and “Bobby”.
Mr and Mrs Murphy went on a holiday to Bali after Christmas for ten days. Mrs Murphy says they were usually too busy to be able to go on holidays in January. The holiday was booked in late November.
M.P.H. had a few housing demolition jobs in January 1997, which required only family labour. Mr English, Mr Giancola and Mr Tahartega were not offered any work in January by M.P.H.
M.P.H. undertook the construction of a shed near Bunbury beginning in early February 1997 over about seven weeks. Materials for the shed had been purchased by the client from the salvage yard the previous October. Mr Murphy had been aware that M.P.H. were likely to be constructing the shed, pending the client obtaining finance and building approval. M.P.H. was advised of approval in mid-January 1997. Charles Cameron, a “shed-builder”, was engaged for that job, as were Mr English and Mr Giancola, Jason and Bobby. Mr English worked the full seven weeks. So, it seems, did Jason. Mr Giancola was only engaged for three weeks. Bobby only worked for 3 days. Mr Cameron and Mr Murphy did most of the welding, with another professional welder getting 2 days’ work.
M.P.H. had a bigger demolition job in Highgate which took a week in about mid-March. Additional labour, ie Mr English and possibly Mr Giancola, was only required for two or three days.
Reference was made to a larger demolition job in Cannington for Broad Constructions which took seven to ten days. The timing was unclear, but it seems to have overlapped with the shed-construction in February. Mr Tahartega had two day’s work there. Presumably, the rest of the work-force was comprised of Mr Murphy’s sons and nephews.
It appears the salvage yard business continued relatively unchanged. Tom Hoare, the “yardman”, retained his employment. He had worked as an employee of M.P.H. for eighteen months exclusively in the yard, chiefly engaged in stripping down timber. Roy Broom, the part-time caretaker of the yard, also kept his job; he was not “on the books” as an employee but it seems to have been conceded by M.P.H. that his arrangement with M.P.H. continued. In about mid-February, M.P.H. notified the Commonwealth Employment Service of a vacancy for a “junior” in the salvage yard. A junior employee, Gary Fisher was duly engaged. His hours varied from full-time to one or two days a week.
Mrs Jeakings made a point of checking the activity in the salvage yard each morning on a daily basis in the months following her husband’s dismissal, carefully noting her observations in her diary. Most of what she recorded is consistent with the above account of M.P.H.’s activities. The two additional matters arising from her evidence are that “Charlie” (apparently Mr Cameron), was present at the salvage yard on several days in the second half of January. Also, another person known as “Warwick” was observed to be working there on several days in December and January, and again in April.
Mr Cameron’s attendance may be explicable as preparation for the shed construction. As for “Warwick”, it was explained that he was a friend of Daniel Murphy, who “helped him out”. Mr and Mrs Murphy seemed in difficulty when required to explain Warwick’s motivation for his apparently not inconsiderable work. Mrs Murphy, who looks after these matters, was emphatic that M.P.H. did not pay him anything. She and her husband surmised that Daniel Murphy, who is on the books as an employee, might have paid Warwick. One can only speculate as to the cause of Mr and Mrs Murphy’s apparent discomfort concerning this matter.
Before going on to consider the significance of M.P.H.’s activities after 6 December 1996, I will first focus on some issues arising from the arrangement whereby Mr English was dismissed as an employee and then immediately re-engaged as a “sub-contractor”. Mr Murphy says he had intended to treat Mr Jeakings in a similar manner.
In circumstances such as Mr English’s re-engagement, it is very arguable that the “sub-contract” arrangement was merely the continuation of their existing employment relationship. Mr English conceded that there was no practical difference between those workers who were “on the books” and those who were not with regard to the manner in which they performed their work on the site. The differences appear to have been confined to the paperwork. While some factors within the traditional multi-factorial test: Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, point to a contract for services, in my view a preponderance of factors, including the foremost factor - control - indicate an employment relationship.
Had Mr Jeakings been re-engaged by M.P.H. on an “all-in rate”, as Mr Murphy says he originally planned, then there would have been merely a new contract of employment, with different terms. There would not have been a break in the employment relationship so, for the purposes of the Act, there would be no termination of employment: eg Senior v Lower North Metropolitan Health Service Board of Management (unreported, IRCA No. 342 of 1996, Ritter JR, 26 July 1996). I also note that Mr Jeakings’ entitlement to the terms and conditions prescribed by the relevant award would have remained.
Considering more generally the significance of M.P.H.’s activities after the dismissal, there appears to have been a genuine slackening off of business consistent with an intention to:
scale down its operations by withdrawing from commercial demolition projects and moving into housing demolition and shed construction;
reduce its workforce retaining only members of Mr Murphy’s family in permanent employment; and to
supplement that permanent workforce from time to time, as required, in order to complete occasional larger projects.
There was no longer continuous employment for any of the five who were “finished up.” However, some new workers were engaged to do work Mr Jeakings could have done, albeit intermittently.
For example, Mr Jeaking’s could fairly argue that M.P.H. could have kept him on if an additional employee was required in the salvage yard, instead of employing Mr Fisher.
Mr Jeakings claims that there was work to be done in the salvage yard. I accept that the need for an additional employee in the salvage yard arose because M.P.H. could no longer use the services of Mr Jeakings and other demolition workers to work in the salvage yard during their “down time”.
The new employee clearly did not have Mr Jeakings’ skill and experience. However, at $267.20 gross for a 40 hour week, he was considerably cheaper to employ, particularly under the Jobstart scheme whereby M.P.H. received an initial wage subsidy from the Department of Employment, Education and Training. It was estimated that Mr Jeakings earned about $650 gross per week.
Similarly, Mr Jeaking’s could fairly argue that M.P.H. could have hired him to work from time to time, rather than hire Jason and Bobby, the new “casual” workers. He might also see himself as having a claim to some of the work that was given to Mr Giancola and Mr Tahartega.
Mr Jeakings also points out that he had about seven weeks’ of annual leave owing to him, so that he could have been retained as an employee on paid leave during any slow down over the Christmas period.
It was contended that if M.P.H. had:
permitted Mr Jeakings to take some or all of his paid leave;
used Mr Jeakings to provide additional labour on demolition jobs from time to time rather than Jason and Bobby or, indeed, Warwick;
used Mr Jeakings instead of Mr Cameron or Jason for the shed construction; and
used Mr Jeakings to work in the salvage yard instead of Mr Fisher
then Mr Jeakings would have been able to have remained employed with M.P.H. until at least April 1997.
Does it follow, therefore, that the decision to give him a weeks’ notice on 6 December 1996 was unjustified or motivated by a prohibited reason? Such a proposition relies too greatly on hindsight.
I accept that at the time Mr Murphy gave the employees notice, he hoped to give them reasonably steady work until Christmas but did not expect to have regular work available for them after that time. It was reasonable to employ a less highly paid, unskilled worker to do the work that was previously done by the more skilled workers on their down-time. A more casual means of engagement was seen as appropriate to their anticipated sporadic work patterns. The completion of his “last big job” was an appropriate occasion to make the change. The shed construction job was anticipated, but its timing was not then known.
In retrospect, Mr Murphy could have kept Mr Jeakings gainfully employed or on paid leave for many months, but his decision instead to end Mr Jeaking’s permanent employment, pay out his leave and move to what I would characterise as casual employment was justifiable, given M.P.H.’s perceived operational requirements.
I note that the decision to lay off Mr Jeakings was taken in conjunction with the decision to lay off the rest of the demolition team. Other long-standing employees such as Mr English, with whom Mr Murphy appears to have had no grievance, were also finished up.
In the circumstances, I am satisfied that any belief by Mr Murphy that Mr Jeakings had had recourse to a Member of Parliament was not a reason, or a “substantive and operative factor”, for that decision.
While many of the other former workers were re-engaged from time to time and Mr Jeakings was not, that is not necessarily indicative of Mr Murphy’s motives at the time of giving notice. The altercation, summary dismissal and the commencement of these proceedings occurred in the interim. Had they not Mr Jeakings may well have continued to be intermittently employed, when required.
Given that operational requirements justified a reduction of the workforce, the selection of those to be retained on the basis that they were members of the family is consistent with the requirements of the Act - Cosco appears to suggest that the selection can be at the whim of the employer, so long as it is not for reasons connected with conduct or capacity.
While Mr Jeakings says that he had worked a high proportion of his time in the salvage yard, it does not follow that the decision to retain Mr Hoare and Mr Broom rather than Mr Jeakings is sinister, given that they had worked solely in the yard.
I conclude therefore that the prospective termination of Mr Jeakings’ employment on the expiry of the notice period would not have been in breach of the Act.
Mr Jeakings’ loss is therefore limited to four weeks’ wages. I will discount the compensation somewhat in recognition of the probability that summary dismissal would have occurred in any event, and will award a sum equal to two week’s wages as compensation to Mr Jeakings for the breach by M.P.H. of Section 170DC of the Act.
While there were indications that Mr Jeakings’ average gross weekly earnings were $650, the parties agreed that any award of compensation should be by reference to Mr Jeakings’ earnings within a defined period. If the parties cannot then agree the quantum of compensation, then they can apply for further determination of that issue.
I certify that this and the preceding thirty two (32) pages
are a true copy of the Reasons for Judgment
herein of Judicial Registrar RD FARRELL
Associate:
Dated: 13 May 1998
Counsel for the Applicant: Ms P Giles Solicitor for the Applicant: Dwyer Durack Representative of the Respondent: Mr D M Jones Chamber of Commerce & Industry (WA) Date of Hearing: 11, 15 July 25 & 26 August 1997 Date of Judgment: 13 May 1998
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