Lee, Davinka v Targaze Pty Ltd

[1998] FCA 1250

FEDERAL COURT OF AUSTRALIA

INDUSTRIAL LAW - alleged UNLAWFUL TERMINATION - whether VALID REASON – CONDUCT – whether employee given opportunity to defend himself – conduct not known to employer at time of termination.

Industrial Relations Act 1988 (now Workplace Relations Act 1996) - s 170EA.

Federal Court Act 1976 s 51A.

DAVINKA LEE -v- TARGAZE PTY LTD

WI 1411 of 1996

RD FARRELL JR

16 SEPTEMBER 1998

PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIADISTRICT REGISTRY	WI 1411 of 1996

BETWEEN:	DAVINKA LEE APPLICANT
AND:	TARGAZE PTY LTD RESPONDENT
COURT:		RD FARRELL JR
DATE OF ORDER:		16 SEPTEMBER 1998
WHERE MADE:		PERTH

THE COURT ORDERS THAT:

1. Targaze Pty Ltd pay to the applicant within 14 days the sums of:

(a)$1,500.00, being an agreed amount to compromise application number WI 1411 of 1996 in this court;

(b)$1,500.00, being an agreed contribution to the applicant's legal costs;

(c)$650.00, being damages for the breach by the second respondent of its obligation pursuant to a compromise agreement to re-employ the applicant, and;

(d)$300.00, being interest accrued on the sums awarded in paragraphs (a), (b) and (c) of this order pursuant to section 51A of the Federal Court Act 1976.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIADISTRICT REGISTRY	WI 1411 of 1996

BETWEEN:	DAVINKA LEE APPLICANT
AND:	TARGAZE PTY LTD RESPONDENT

COURT:	RD FARRELL JR
DATE:	16 SEPTEMBER 1998
PLACE:	PERTH

REASONS FOR JUDGMENT
(Edited from Transcript)

The applicant sought a remedy pursuant to Section 170EA of the Workplace Relations Act 1996 for the alleged unlawful termination of her employment. She contends that, before her substantive application was heard, terms of settlement were agreed and the application proceeded no further. She now seeks to enforce that alleged compromise agreement.

This matter has been adjourned once already. I will proceed to decide this matter on the evidence before me. The evidence is not as complete or direct as ideally it might be but, given the amount in issue, the interests of justice are served by proceeding today and bringing this matter to some decent finality.

On the evidence before me, I find that there was a concluded agreement as to terms of settlement between Mr Andrew Thorpe, solicitor for the applicant, and Mr Tony Smetana, the representative of the respondent. The agreement was reached during a telephone conversation on 5 February 1997.

The court record reveals that the conversation took place in the context of a listed mediation conference that was to take place later that day. After the conversation, that mediation conference did not proceed. While not perhaps a settlement at the doors of court in the classic sense, it does appear that to some limited extent effect was given to the decision to agree to terms of settlement through that conference not proceeding.

The terms of the agreement were that the respondent pay $3,000.00 to the applicant. Of this sum, $1,500.00 was to be characterised as legal costs and the other $1,500.00 was to be at large for the settlement of the matter. The other limb of the agreement was an offer that the respondent would employ the applicant on a casual basis at the Midland Brick factory in Midland to carry out a quality control function on the factory line. The rate of pay was not specified in the course of the telephone conversation. However, I am satisfied that the nature of the position was sufficiently identified that the standard rate applicable to that position could have been ascertained by the applicant if there were some future dispute about that issue.

In the event, the respondent did not provide the applicant with the agreed employment.

For the purposes of any orders made today, therefore, I need to make my best assessment on the basis of the evidence before me of what the rate of that position might have been. The only indication is the reference in the affidavit of Mr Smetana to the fact that the rate of pay was:

"A little bit less than what the applicant had received in her previous position with the respondent."

Other affidavit evidence before the court in relation to the substantive application indicates that the base rate of pay at the respondent for a 38‑hour week in the applicant's previous position was $519.65.

Given that the assessment of damages not being a science, I am content to presume, on the basis of the evidence before me, that the agreed position at Midland Brick would have paid about $475.00 for a 38-hour week.

On the basis of the evidence of both Ms McMahon in her affidavit and of the applicant in the annexure to Mr Thorpe's affidavit, I find that the applicant took on a job cooking in a delicatessen at Bullfinch in return for room and board. I note in passing that I would have given little weight to the annexure in isolation. Ms McMahon places the timing of that decision about two weeks after the original agreement was reached on 5 February; that is, that the applicant had taken up the position in the delicatessen by 19 February 1997.

The applicant had proposed to begin work at the Midland Brick position from 17 February. Had the settlement been implemented, she would have commenced earning income from that date. Instead, she had taken up the other position in the delicatessen on 19 February. It seems to me, therefore, that the assessment of damages should take into account the fact that she was wholly without wages for only two days, so that her loss to that point was limited to about two-fifths of $475.00.

Then there would have been a continuing loss, given the unusually non‑remunerative terms of her position in the delicatessen; she says she had agreed to work for food and board. However, I am satisfied that the continuing loss should only be taken into account until 4 March 1997. On that date, Mr Thorpe advised the respondent's representatives by letter that another position they had offered would not be accepted by the applicant. That position provided close enough to equivalent rates of pay to the Midland Brick position.

It has been submitted by the applicant that the respondent’s failure to pay the $3,000.00 component of the agreement in the interim inhibited the applicant from accepting this position. She submits, therefore, that I should take the continuing loss after that date into account. The only evidence in support of this factual contention is the unsworn annexure to Mr Thorpe's affidavit. I have indicated that I am prepared only to place limited weight on that annexure. I am also struck by the fact that this issue does not arise in any of the correspondence between Mr Thorpe and Mr Smetana in the months following the settlement. The applicant was under no obligation to indicate why the $3000.00 was needed, being entitled to it under the compromise agreement. It still strikes me as surprising, if there was such a direct link between the payment and her capacity to mitigate her losses and if it were a matter central to her thinking at that time, that such a point would not have been made in correspondence.

I propose to award a further amount then as continuing loss between 19 February and 4 March. I will assess the total loss arising from the failure to proceed with the Midland Brick position at $650.00, of which $190.00 is the loss up to the point when Ms Lee commenced work in the delicatessen, with a further $450.00 towards continuing loss in the ensuing two weeks.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of Judicial Registrar RD Farrell

Associate:

Dated:             29 September 1998

Counsel for the Applicant:	Mr C H Edwards
Solicitor for the Applicant:	A C Thorpe
Counsel for the Respondent:	Ms E L Mackey
Solicitor for the Respondent:	Chamber of Commerce & Industry (WA)
Date of Hearing:	16 September 1998
Date of Judgment:	16 September 1998