Lees, Leanne v Australian Rent a Car Pty Ltd
[1997] FCA 568
•30 JUNE 1997
FEDERAL COURT OF AUSTRALIA
INDUSTRIAL LAW - termination of employment - mitigation of loss - recovery of wages
Workplace Relations Act 1996 ss.170DE(1), 170EA, 170EE, 179A
CASES:
Selvachandran v Peteron Plastics (1995) 62 IR 371
Nettlefold v Kym Smoker Limited (1996) 69 IR 370
Thomas v Ralph Lynch trading as Bellingen Grocery (IRCA, unreported, Wilcox J, 20 December 1996)
LEES -v- AUSTRALIAN RENT A CAR PTY LTD
No. VI-1253 of 1997
Ryan JR
Melbourne
30 June 1997
FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI-1253 of 1997
B E T W E E N :
LEANNE LEES
Applicant
AND
AUSTRALIAN RENT A CAR PTY LTD
Respondent
MINUTES OF ORDERS
Judicial Registrar Ryan 30 June 1997
THE COURT ORDERS:
The Respondent pay to the Applicant within seven days the sum of $1484 being:
(a)unpaid wages of $779 for fortnight ending 18 November 1996
(b)unpaid wages of $121 for fortnight ending 2 December 1996
(c) annual leave entitlements of $490
(d)a lump sum of $94 instead of interest calculated in accordance with s179A(1)(b)
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI-1253 of 1997
B E T W E E N :
LEANNE LEES
Applicant
AND
AUSTRALIAN RENT A CAR PTY LTD
Respondent
Before: Ryan JR
Place: Melbourne
Date: 30 June 1997
REASONS FOR JUDGMENT
THE CLAIM
The Applicant seeks compensation in a claim for relief for unlawful termination of employment. She also claims underpayment of wages and leave entitlements under s179 of the Workplace Relations Act 1996 (the Act).
The Respondent denies termination of employment by the employer. The Managing Director, Theo Coppens, appeared for the Respondent. He also completed the Notice of Employer’s Appearance dated 12 December 1996 and stated in that document:
“Employee was not terminated by employer”
Mr Richard Lee, a solicitor with Graham Sievers & Lee, appeared for the Applicant and called evidence from Mark Arnold and the Applicant.
Mr Theo Coppens and his son, James, gave evidence for the Respondent.
THE TERMINATION
The Applicant claims that about 5.05 pm on Monday 2 December 1996 Mr James Coppens telephoned her at her home and told her that he had been instructed to terminate her employment.
She also claims that about 5.10 pm Mr Coppens rang again and told her he was coming to get the keys to the Respondent’s Melbourne Office. She claims that Mr Coppens spoke in a threatening tone and rang her more than once.
THE COLLISION - 14 NOVEMBER 1996
The Applicant was involved in a collision on 14 November at about 4.15 pm in which the front of a company car driven by her collided with the rear of another car. She telephoned Mr James Coppens, reported the accident to him and drove the vehicle NYE-024 to the Respondent’s Melbourne premises.
The Applicant and Mr Arnold and Mr James Coppens gave conflicting evidence as to what occurred after the car was returned but these conflicts are of no moment. It is not in dispute that Mr James Coppens obtained a quotation by telephone for a new front headlight for the vehicle. Mr Arnold states that Mr Coppens told him that the quote was for $295. Mr Coppens cannot recall but stated that amount sounded “about right”.
APPLICANT RETURNS TO WORK - 2 DECEMBER 1996
At about 5 pm on 14 November the Applicant and Mr Arnold left the Melbourne premises and travelled to Queensland, the Applicant having been granted holidays with approval provided by Mr Theo Coppens on 6 October. They returned from Queensland on Sunday 1 December and the Applicant attended work as usual on Monday 2 December. At about 1 pm she received her payslip for the fortnight ending 18 November 1996 (Exhibit A2). The net amount was stated to be $779. The payslip contained the following statement:
“$779 deducted for crash NYE-024: Lee: Balance owing $121.00”
It is clear from the evidence that while the Applicant was on leave in Queensland the Respondent had obtained a quotation to repair the company car for $1535.20. The quotation is dated 18 November 1996 and was issued by Mr “S” Panel Shop, 19 Comley Street, North Sunshine. Invoice 95 dated 18 November 1996 was also issued by Mr “S” Panel Shop in the sum of $900. It appears that the vehicle was repaired on 18 November for a special discounted price.
The Applicant states that she was enormously upset to discover on 2 December that the whole of her net pay for the period ending 18 November had been deducted without any notice to her and without any authorisation from her. She operated a bank account with an overdraft facility and she had expected her net salary to be paid as usual direct into her account.
The evidence of the witnesses diverges significantly as to ensuing events on 2 and 3 December. It is not necessary to give all the detail of the varying versions of events from the time when the Applicant received the payslip and notification that the $779 had been deducted. However, the Court notes that there is no evidence that the Applicant was consulted before the Respondent, in a high handed and unauthorised fashion, deducted all of the Applicant’s net pay for the period ending 18 November.
THE DECISION TO DEDUCT MONEY FROM WAGES
Theo Coppens admits that he made the decision to deduct the cost of the car repairs from the Applicant’s net salary and that he decided that the sum should be deducted as quickly as possible. He also admits that he met the Applicant and Mr Arnold twice while they were holidaying in Queensland, firstly on 15 November and secondly on 30 November. The second occasion was at a company Christmas party and he expressed the view this was not an appropriate time or venue to advise the Applicant that $779, the total net salary for the fortnight ending 18 November, had been deducted and that he had also directed that the balance of $900, be deducted from the wages due for the fortnight ending 2 December. He conceded that it would have appropriate to consult the Applicant prior to the salary deductions had she been contactable at work but he took the view that she was not contactable at work and it was up to her to contact her employer and arrange to pay the cost of the repair of the car.
This attitude takes no account of the following:
when the Applicant went on leave on 14 November the Applicant’s liability to pay for the cost of damage to the car and the amount of the damage had not been determined
the Applicant was given no opportunity to challenge her assumed liability to pay the total cost of repairing the vehicle
the Applicant was given no opportunity to negotiate a reasonable time to pay any sum which might have been determined or settled as her liability in response to a car industry practice described by Mr Theo Coppens as “you bend it you mend it”.
FURTHER DISCUSSIONS 2 DECEMBER
After the Applicant had remonstrated with James Coppens on 2 December she telephoned Theo Coppens. Her version of that telephone conversation was put in detail to Mr Theo Coppens. He has very little recall of the conversation. This is surprising given the nature of the events. He is unable to contest the Applicant’s version and conceded in cross-examination that most of it could be an accurate description of the conversation. In these circumstances I find the conversation to have been as outlined by the Applicant.
The Applicant stated that she told Theo Coppens that she could not believe that he had taken action to deduct $900 from her wages and that he responded that the company car had been damaged and the cost of the repairs had to be paid. She states that she told Mr Coppens that she “understood that” but that payment should not have been arranged in that way (i.e. by immediate deduction from her salary).
The Applicant states that Mr Coppens then asked her how she thought the matter should have been handled and that she suggested that at least two or three quotations should have been obtained. Mr Coppens responded that the repairs could not have been achieved for less than the $900 invoiced by Mr “S” Panel Shop. The Applicant states that she then suggested that the Respondent “could have at least offered a payment plan” and that Mr Coppens made it clear that the repairer had to be paid and stated
“We are both at fault. You should have followed up. I am a very busy person. I get 100 calls a day.”
The Applicant left work after this conversation. She sought advice and was referred to a doctor. It is clear that she was visibly distressed and upset. The doctor issued a certificate certifying that she was unfit for work from 2 to 7 December because of “stress illness”. At about 5.00 pm the Applicant telephoned James Coppens and informed him of her medical certificate. James Coppens gave evidence that during this conversation he and the Applicant argued heatedly because he was getting married on Friday 7 December and the Applicant was telling him that she would be unavailable to work from 2 to 7 December. The Applicant denies there was an argument at this stage and it does not matter whether the argument occurred or not.
The Court notes that if Mr James Coppens terminated the Applicant’s employment because of her absence on sick leave the termination was unlawful pursuant to s170DF(1)(a) which states:
“An employer 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:
(a) temporary absence from work because of illness or injury”
The Applicant’s solicitor, Mr Lee, never alleged termination on such grounds until his final address. In these circumstances I was not prepared to consider or find a termination for prohibited grounds pursuant to s170DF(1)(a), no evidence having been led to that effect, and no assertion made until the final address. It must however be recorded that some aspects of the evidence of James Coppens suggested a termination by him on prohibited grounds. Mr Coppens denies that he told the Applicant by telephone that he was instructed to terminate her employment and he claims that the Applicant made him so angry that he said that “if he had had authority” he “would have sacked her”.
Both the Applicant and James Coppens agree that he telephoned the Applicant within a few minutes of the 5.00 pm telephone conversation initiated by the Applicant. He stated that in this conversation he advised the Applicant that he had misplaced his keys and that he wanted the Applicant to bring in her set of keys. Her evidence is that he never claimed to have lost his keys but did demand that she bring back her keys and did so in a threatening tone.
It is clear that the Applicant refused to bring in her keys and rejected a suggestion from James Coppens that he come and get the keys.
Mr Coppens claims that he had a locksmith change the locks on the Melbourne premises at about 6.15 pm on the evening of 2 December.
TERMINATION OF EMPLOYMENT
I have concluded that the evidence of the Applicant is in general to be preferred to that of James Coppens in respect of the events of 2 December. I have also concluded that James Coppens terminated the Applicant’s employment during an angry exchange by telephone at about 5.00 pm on 2 December and this termination was unlawful and was not for valid reason as defined in Selvachandran v Peteron Plastics (1995) 62 IR 371, Nettlefold v Kym Smoker Limited (1996) 69 IR 370 or Thomas v Ralph Lynch trading as Bellingen Grocery (IRCA, unreported, Wilcox J, 20 December 1996).
OFFER OF REINSTATEMENT 3 DECEMBER 1996
The Applicant admits that on 3 December in a conversation with Theo Coppens he stated that, in his view, her employment had not been terminated and that she was on sick leave and he expected her to return to work on Monday 9 December.
The Applicant categorised this as an offer of re-employment. She admits that she took advice and on 8 December she faxed a letter to Mr Theo Coppens which read:
“Dear Theo Coppens,
Thankyou for your offer of re-employment on Tuesday the 3rd of December 1996.
As a result of the termination on Monday 2nd of December 1996 by Mr James Coppens my immediate manager and the circumstances surrounding that termination, I am unable to accept this offer.
Yours faithfully
Leanne Lees”
The Applicant was evasive as to the circumstances which led her to refuse to mitigate her loss by accepting what was an offer of re-instatement. To be fair to her it is understandable that she did not wish to continue working or go back to work for a company which had taken $900 out of her wages and claimed the document she signed before her employment (Exhibit A7 and A8) amounted to an agreement that she “would be responsible for any damage she caused to company vehicles”.
FAILURE TO MITIGATE LOSS
Whatever liability the Applicant may have to pay in whole or in part the cost of the repairs to the damaged motor car, there is nothing in Exhibits A7 and A8 which allow the Respondent to take unilateral action to deduct money from the Applicant’s wages. The Court has however concluded that the Applicant failed to mitigate her loss. She could have negotiated further with Theo Coppens and could have returned to work on 9 December. The Court has also noted that the Applicant obtained casual employment in Queenscliff before Christmas 1996 and permanent employment from 30 December 1996. In all the circumstances of the case, the Court does not consider that it is appropriate to order compensation under s170EE(2).
RECOVERY OF WAGES
The Applicant’s claim under s179 is made out. Any claim the Respondent may have against the Applicant for payment in respect of the cost of the repair of the car damaged on 14 November 1996 is a claim which must be pursued in another forum.
I propose to order the Respondent pay to the Applicant within seven days the sum of $1484 being:
(a) unpaid wages of $779 for fortnight ending 18 November 1996
(b) unpaid wages of $121 for fortnight ending 2 December 1996
(c) annual leave entitlements of $490
(d)a lump sum of $94 instead of interest calculated in accordance with s179A(1)(a)
MINUTES OF ORDERS
THE COURT ORDERS:
The Respondent pay to the Applicant within seven days the sum of $1484 being:
(a)unpaid wages of $779 for fortnight ending 18 November 1996
(b)unpaid wages of $121 for fortnight ending 2 December 1996
(c) annual leave entitlements of $490
(d)a lump sum of $94 instead of interest calculated in accordance with s179A(1)(b)
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
I certify that this and the preceding 8 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan.
Associate:
Dated: 30 June 1997
Solicitor for the Applicant: Mr Richard Lee
Graham Sievers & Lee
Representative for the Respondent: Mr Theo Coppens
Australian Rent A Car P/L
Date of hearing: 24 June 1997
Date of judgment: 30 June 1997
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