Kumar v Prima Furniture (NSW) Pty Ltd
[1997] FCA 535
•20 JUNE 1997
CATCHWORDS
INDUSTRIAL LAW - Termination of Employment - whether termination at the initiative of the employer - whether review heard after 25 May 1997 to be heard by Federal Court of Australia or Industrial Relations Court of Australia
Workplace Relations and Other Legislation Amendment Act 1996 Items 63 and 64 of Schedule no 16
Shackley v Australian Croatian Club Ltd (1996) 141 ALR 736
No. NI 3702R of 1995
VIMAL KUMAR v PRIMA FURNITURE (NSW) PTY LTD
MOORE J
SYDNEY
20 JUNE 1997
IN THE FEDERAL COURT OF AUSTRALIA )
) No. NI 3702R of 1995
NEW SOUTH WALES DISTRICT REGISTRY )
BETWEEN: VIMAL KUMAR
Applicant
AND: PRIMA FURNITURE (NSW) PTY LTD
Respondent
JUDGE: Moore J
PLACE: Sydney
DATE: 20 June 1997
ORDER OF THE COURT
THE COURT ORDERS THAT:
Order 1 made by the Judicial Registrar of 4 March 1996 is varied by substituting the sum of $13,831 for the sum of $14,531.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
) No. NI 3702R of 1995
NEW SOUTH WALES DISTRICT REGISTRY )
BETWEEN: VIMAL KUMAR
Applicant
AND: PRIMA FURNITURE (NSW) PTY LTD
Respondent
JUDGE: Moore J
PLACE: Sydney
DATE: 20 June 1997
REASONS FOR JUDGMENT
On 4 March 1996 a Judicial Registrar of the Industrial Relations Court of Australia determined an application by Mr Vimal Kumar brought under s 170EA of what is now entitled the Workplace Relations Act 1996 (“the Act”). Mr Kumar contended that his employment with Prima Furniture (NSW) Pty Ltd (“the employer”) had been terminated in contravention of provisions of the Act. The Judicial Registrar found that the Act had been contravened and ordered the employer to pay Mr Kumar $14,531 compensation.
The employer applied on 7 January 1997 under s 377 for a review of the determination of the Judicial Registrar by a judge. At the commencement of the hearing of the review on 10 June 1997 there was some uncertainty as to how the review would proceed. However in due course counsel for the employer called five witnesses and the applicant gave evidence. This, together with documentary evidence, was the evidence in the review.
The parties made no submissions as to whether the review was to be heard by the Industrial Relations Court of Australia or the Federal Court of Australia. That is understandable given that judges of the former Court are judges of the latter Court and there is no relevant difference in the applicable substantive or procedural law.
Which Court exercises jurisdiction to hear the review is determined by reference to Schedule 16 of the Workplace Relations and Other Legislation Amendment Act 1996. Item 64(2) of that Schedule transfers to the Federal Court proceedings commenced in the Industrial Relations Court but in respect of which the Industrial Relations Court had not begun the substantive hearing before 25 May 1997. In the present case both the application under s 170EA and the application under s 377 were filed before that date though the substantive hearing of the review was scheduled to and did occur after that date.
The question that must be addressed is what are the relevant “proceedings” for the purposes of item 64(1). If they are the proceedings arising from the application for review, then the Industrial Relations Court had not begun the substantive hearing before 25 May 1997. If they are the proceedings arising from the application under s 170EA, the Industrial Relations Court had begun the substantive hearing in the sense that there had been a hearing before, and judgment given by, a Judicial Registrar of the Industrial Relations Court.
“Proceedings” is defined in item 62 in the following way:
“proceeding means a proceeding in a court, whether or not between parties, and includes:
(a)an incidental proceeding in the course of, or in connection with, a proceeding; and
(b)an appeal.”
Item 63 is also relevant. It vests in the Federal Court the jurisdiction and powers of the Industrial Relations Court except, relevantly, in relation to matters for which the Industrial Relations Court had begun the substantive hearing in proceedings in that Court. There is a symmetry between Items 63 and 64 though Item 63 uses the expression “matters” which is presumably a reference to the legal controversy in which the words “matters” or “matter” are used in the sense of ss 75 and 76 of the Constitution.
However the scope of Item 63 is still limited by the expression “substantive hearing in proceedings” that is, in relation to a legal controversy there needs to have commenced a substantive hearing in proceedings. The Industrial Relations Court does not retain jurisdiction and powers in relation to the entire matter but only that part of it which is the subject of proceedings where the Court has begun the substantive hearing. The purpose of Items 63 and 64 is, in my opinion, to permit a Judicial Registrar, a Judge or a Full Court of the Industrial Relations Court to complete what he, she or they had substantially begun. A review is, itself, a proceeding: see Shackley v Australian Croatian Club Ltd (1996) 141 ALR 736 and is undertaken by a judge of the Court. It is consistent with what I view as the purpose of Items 63 and 64 to treat a review arising in circumstances such as the present as a proceedings that had not substantially begun. Accordingly it is to be heard by the Federal Court of Australia.
The principal issue in the review was whether there had been a termination of Mr Kumar’s employment at the initiative of the employer. The employer contended that Mr Kumar had resigned. Mr Kumar contended that he had been dismissed. The resolution of this issue depended, in large measure, on which version of several conversations between Mr Kumar and Mr Peter de Jong should be accepted. I will consider their evidence in more detail shortly.
Mr Kumar commenced employment with the employer on 28 February 1995, which was terminated on 4 September 1995. The employer then conducted a business involving the manufacture and installation of furniture. Mr Kumar was initially employed as a site manager and was involved in overseeing one particular contract, namely the installation of furniture in a building described as “Defence Plaza”. At that time the general manager of the employer was Mr Ray Humphries. It was common ground that when originally employed, Mr Kumar was employed on three months probation. It was also not in issue that after three months, his probationary employment in relation to that position concluded and he received an increase in his salary.
Mr Humphries left the employer in early August 1995. However it had been announced on 18 July 1995 that Mr de Jong would take up the position as general manager. Mr de Jong commenced with the employer on 31 July 1995 though he was in a Melbourne office gaining some understanding of the nature of the company’s business in New South Wales, for the first week. He commenced working as general manager in Sydney on about 8 August 1995.
Mr Kumar accepted that during the period that Mr Humphries was general manager he looked for other work and did so on the basis that his employment with the employer was not secure. He also accepted that in early August he attended a job interview with another company in the same general field of business, namely Batoma Joinery. Mr Kumar gave evidence that he was initially offered the job but the offer was withdrawn two days later.
Some time earlier the nature of Mr Kumar’s employment changed. On 13 June 1995 he commenced working as a production manager and relinquished his duties as a site manager. There was a divergence in the evidence as to whether he satisfactorily discharged his duties as a production manager. Mr Humphries gave evidence that he discussed with Mr Kumar deficiencies in his management of production. This was denied by Mr Kumar. It is difficult to know which account should be accepted though I am inclined to accept the evidence of Mr Kumar. It is relatively clear that Mr Humphries was then in the throws of being dismissed. I do not accept his evidence that he tendered his resignation because he wanted to pursue a different career. His oral description of it being a mutual desire on the employer’s part I also find improbable. Mr Humphries did not impress me as a witness. However Mr Humphries evidence of Mr Kumar’s failings as a production manager, apart from the evidence concerning conversations with Mr Kumar, was supported by the evidence of Mr de Jong I accept, that Mr de Jong decided to take over the role of production manager after he started as general manager. I also accept that thereafter he went about recruiting a production manager to assume the duties that he was then performing. I should add that I am less certain about other aspects of Mr de Jong’s evidence which I consider shortly.
The first critical conversation between Mr de Jong and Mr Kumar took place on either Friday 25 August 1995 or Tuesday 29 August 1995. Mr de Jong gave evidence that “on or about Friday 25 August 1995” he informed Mr Kumar that he would no longer be responsible for production and he was to return to the position of site manager. Mr Kumar’s evidence was that on Tuesday 29 August 1995 he attended a production meeting with, amongst others, Mr de Jong. They spent the entire day discussing how to enhance the profitability on factory based production. During the course of this meeting Mr de Jong told the others that “I will be directing the traffic until further notice”. There is a superficial divergence between these accounts of what occurred and when it occurred. However Mr de Jong’s evidence was vague as to when precisely he told Mr Kumar that he was no longer responsible for production. There is no real inconsistency between Mr de Jong’s evidence that it happened “on or about” the Friday and Mr Kumar’s evidence that it occurred on Tuesday. The clear import of Mr Kumar’s account of what he was told by Mr de Jong was that the latter was assuming responsibility for production. To the extent that there is any difference in their accounts it may flow from either a misunderstanding of what Mr de Jong meant, or arise from the inherent difficulties in recalling precisely what was said and when it was said some two years after the event. In any event, even on Mr de Jong’s account, Mr Kumar till did some work as production manager in the week commencing Monday 28 August 1995.
I find, that by Tuesday 29 August 1995 Mr de Jong had intended to relieve Mr Kumar of his responsibilities as production manager and the placing of the advertisement by Mr de Jong for a production manager in the paper the following Saturday was unexceptionable in those circumstances.
This leads to a consideration of the conversation that occurred by mobile phone on Thursday 31 August 1995. Mr de Jong’s account was that he received a telephone call from a client, the Australian Valuations Office, who wanted to know where workmen were who should be rectifying defects. Mr de Jong rang Mr Kumar and did so because he then believed that Mr Kumar was responsible for organising that part of the business of the employer. Mr de Jong said that he asked Mr Kumar whether he knew where the workmen were. Mr Kumar replied he did not. Mr de Jong then asked where Mr Kumar was and the response was to the effect that he was in his car and driving around. In his affidavit Mr de Jong’s recounted that he then said “I don’t believe that to be a very satisfactory answer for someone in a position in control of men, not knowing where they are or what they are doing”. In his oral testimony Mr de Jong said that in recounting the conversation he had left out expletives and later in that testimony said that he heard Mr Kumar’s response “over (de Jong’s) vehement abuse”.
In his affidavit Mr de Jong said that after making the critical comment to Mr Kumar about control of the men he went on to say “What shall we do about this situation”. Mr de Jong says there was a lengthy pause and Mr Kumar then said “I guess I should resign”. This is the response that Mr de Jong said he heard over his vehement abuse. Mr de Jong said that this came as a suprise and there was a discussion about meeting the next day. This did not occur and there was a meeting on Monday 4 September 1995.
It was common ground that Mr Kumar did not attend work on Friday 1 September 1995 either because he was ill or because his son was ill. On the Friday Mr de Jong prepared Mr Kumar’s termination pay which included a sum of 40 hours pay in lieu of notice.
As to what happened on Monday 4 September 1995, Mr de Jong said that when Mr Kumar attended the office he, Mr de Jong, said, “What happened on Thursday Val?” to which Mr Kumar did not reply. Mr de Jong asked if he wanted to continue with his resignation to which Mr Kumar said “Yes”. Mr de Jong replied “Are you prepared to give me one weeks notice?”, Mr Kumar replied “Yes”. Mr de Jong’s response was “In lieu of you working one week I am prepared to pay out that week in lieu of the notice. Can you leave the premises in a cordial manner”. Mr de Jong said Mr Kumar accepted the resignation payment and requested a separation certificate. The separation certificate was, in some respects, prepared at the Melbourne offices of the employer though parts of it were completed by Mr de Jong. I return to its contents shortly.
Mr Kumar’s account of the events on Thursday 31 August 1995 and Monday 4 September 1995 differed from that of Mr de Jong. First, he denied that the Australian Valuations Office was one of his projects or that he was responsible for men going to work there. He said he was asked by Mr de Jong on the phone “Where are you going to?” to which Mr Kumar replied that he was going to Optus. When asked by Mr de Jong “where?” Mr Kumar said “Optus at Channel 10 studios to look at the boardroom table as you asked me to do”. Mr Kumar said that Mr de Jong then indicated he wanted to see him in his office as soon as possible and Mr Kumar indicated that it would have to be the following morning. Mr de Jong indicated that was satisfactory. Mr Kumar’s account of the meeting on Monday 4 September 1995 was that he was told be Mr de Jong that “This situation can not go on. We have to call it quits. In lieu of you working one week I am prepared to pay out the week in lieu of notice”. Mr Kumar responded by saying “That’s what you want” and then walking out of the meeting.
It is necessary to determine which account of these conversations is to be preferred. Counsel for the employer pointed to evidence given by other witnesses that established Mr Kumar had, for some time prior to late August 1995, been dissatisfied in his job and had made comments indicating he was seeking other employment. That evidence can be coupled with evidence to the effect that on Monday 4 September 1995 he said to one of the witnesses, Mr George Lygdas, words to the following effect; “I’m leaving, I’ve had enough of this, I’m out of here.” Evidence was also given by Mr Vincent Nesci that on the morning of 4 September 1995 Mr Kumar said “I’m leaving, I’ve had enough, things have not worked out.” Mr Kumar denied in his affidavit saying the words attributed to him by Mr Nesci and also the words attributed to him by Mr Lygdas.
As to the evidence about statements made by Mr Kumar prior to the end of August, I do not view this evidence as of great moment. Mr Kumar did not put in issue that at some stage during that month he applied for other employment and, for a brief period, thought he had another job. Nor does he deny that he was looking in the newspaper for other positions. That is entirely consistent with someone who is at least uncertain about his future employment if not dissatisfied with it. Moreover Mr Lygdas’ evidence concerned conversations that he had with Mr Kumar after “a hard day”.
Even if I were to accept the evidence of Mr Lygdas and Mr Nesci about what Mr Kumar said on Monday 4 September 1995, it does not appear to me to be inconsistent with Mr Kumar’s account of what occurred. An employee who was dismissed could well have made those remarks, particularly in circumstances where the employee had been considering leaving in any event. I accept that Mr Kumar’s denial raises a question about his credit. However Mr Lygdas did not impress me as a witness and he remains employed by the employer. I give little weight to his evidence. Mr Nesci also did not impress me as a witness and indeed there was an inconsistency in his oral account concerning the time he discussed with Mr Kumar his unhappiness with his job, “around about 4 September” and the time he said he saw a resume of Mr Kumar’s, namely two or three weeks before 4 September. On the other hand, Mr Kumar impressed me as a witness and I would be inclined to accept his account over that of Mr Lygdas and Mr Nesci.
However it is also necessary to consider the evidence of Mr de Jong in the overall consideration of Mr Kumar’s evidence when assessed with all other evidence given in the proceedings. It can often be difficult to evaluate which of two competing accounts of events should be accepted. Mr de Jong impressed me as someone who had taken over the control of the business of the employer with enthusiasm and dedication with a view to improving the business. He impressed me as a man of energy and dedication. However I have concluded that his account of the various conversations should not be accepted and Mr Kumar’s should. In reaching this conclusion there are two factors that have influenced my approach to the evidence.
The first concerns the preparation of the pay on Friday 1 September 1995. The explanation given by Mr de Jong was that it was necessary to take that step on the Friday because a co-signatory to the cheque account of the employer was leaving. It might, in isolation, be a plausible explanation. However it occurred in circumstances where there had been, on Mr de Jong’s account, nothing more than an intimation by Mr Kumar that he was going to resign in the context of Mr Kumar being abused by Mr de Jong. Making up a person’s termination pay in those circumstances, before ascertaining in a measured way whether the employee really intended to resign, would be an unusual thing to do unless the pay was being made up because there was an intention to bring about a termination of the employment in any event.
However these matters do no more than raise an element of uncertainty concerning the veracity of Mr de Jong’s account. But the manner in which Mr de Jong filled out the separation certificate strengthens the level of uncertainty considerably. Mr de Jong had a range of choices when filling out a section of the certificate concerning the cause of the termination. One option was: “was employment terminated due to: shortage of work”. Mr de Jong ticked a box indicating this was the reason for the termination. In the same section of the form there was another question “did the employee cease work voluntarily?”. Neither an affirmative nor negative answer was given to this question. Nor was a section in the form immediately below this section completed. That second section required that an explanation be given if there had been a voluntary termination of employment.
Mr de Jong’s explanation for completing the form in this way was that his past experience in filling out separation certificates was in circumstances where employees had been terminated because of shortage of work. I simply do not accept that a person of Mr de Jong’s intelligence and diligence would have completed the form in the way it was through habit. The form itself indicated that there were penalties for deliberately giving false or misleading information. I find it difficult to avoid the conclusion that Mr de Jong filled out the form accurately. That is, it reflected the reason for Mr Kumar’s termination. He had not left voluntarily and he had been terminated because of a shortage of work. While there was a limited role in the immediate future for a site manager, the clear impression I gained from his evidence was that the need for a site manager would lessen. Indeed Mr de Jong said that in the week commencing 28 August 1996, the employer “had very few sites physically happening” and that, into the future, the employer would be no longer be accepting contracts for site work.
I am satisfied that Mr Kumar’s employment was terminated at the initiative of the employer. The only residual issue is what compensation Mr Kumar should be awarded. The only issue raised by the employer in resisting the amount awarded by the Judicial Registrar was that Mr Kumar failed to apply for unemployment benefits and thus failed to mitigate his loss. At the time of the termination of his employment Mr Kumar’s wife was working. He may well not have been entitled to unemployment benefits. Whether he was or not is not established by the evidence. Thus, even assuming this is a relevant consideration in assessing compensation, the employer has not demonstrated that Mr Kumar failed to mitigate his loss.
I should lastly mention a claim that appears to have been made by Mr Kumar in the Court’s accrued jurisdiction based on contract. The essence of the claim was that Mr Kumar had been offered and had accepted an arrangement under which he would receive a bonus of $5,000 if he worked for a period of three months from the time the offer was made and accepted. It was said to have been made and accepted in August 1995. It is suggested that the purpose of the payment was to ensure Mr Kumar remained in employment during the period in which Mr de Jong settled in as managing director. The evidence concerning this arrangement is, at best, slight. Even if a collateral contractual arrangement had been entered into by Mr Kumar and the employer, it was conditional on Mr Kumar working for three months. I do not presently see the basis upon which it can be asserted that he had a contractual right to payment. It may well be a matter that could be taken into account in determining compensation as a “lost employment opportunity” broadly analogous to the lost business opportunity considered in Sellars v Adelaide Petroleum NL (1994) 179 CLR 332. However the matter was not put this way and was put only as a contractual claim. I am not satisfied that the claim is made out.
The compensation awarded by the Judicial Registrar included a sum representing overtime. It is not entirely clear to me the basis upon which this sum was added and, in any event, it was not a matter pressed by the solicitor appearing for Mr Kumar. Apart from this amount concerning overtime the remuneration lost by Mr Kumar as a result of the termination of his employment was determined by the Judicial Registrar as $13,831. This figure was not put in issue. No submission was made that compensation should be awarded for anything other than lost remuneration. I propose to vary the order made by the Judicial Registrar by ordering that the sum of $13,831 be paid by way of compensation.
I certify that this and the preceding twelve (12) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.
Associate:
Alexandra George
Dated: 20 June 1997
APPEARANCES
Counsel for the Applicant: Mr R J Burns
Solicitor for the Applicant: Mr A Calvi
Solicitor for the Respondent: Mr D Hayes of Hayes Partners
Dates of Hearing: 10 June 1997
Date of Judgment: 20 June 1997
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