Lewis v CPS Catering Pty Ltd

[1997] IRCA 155

DECISION NO:155/97

CATCHWORDS

INDUSTRIAL LAW - complaint of UNLAWFUL TERMINATION -
JURISDICTION - whether RESIGNATION of employment - whether termination at the INITIATIVE of the employer - whether VALID REASON for termination - whether proposed transfer OPERATIONAL REQUIREMENT - whether employee given OPPORTUNITY TO RESPOND - whether employer bound by AWARD - whether employee entitled to relevant provisions of AWARD - REMEDY - whether REINSTATEMENT impracticable - COMPENSATION - DAMAGES - failure of employer to give NOTICE or payment in lieu thereof -

Workplace Relations Act 1996 ss170DB, 170DE(1), 170DC, 170EA, 170EE

Catering (Victoria) Award 1995

LEWIS -V- CPS CATERING PTY LTD
VI 2069 of 1996

Before  :          PARKINSON JR
Place              :          MELBOURNE
Date               :          2  MAY  1997

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 2069 of 1996

B E T W E E N:

Sandra Grace LEWIS
Applicant

A N D

CPS CATERING PTY LTD
Respondent

MINUTES OF ORDERS

2  MAY  1997  PARKINSON JR

THE COURT ORDERS THAT:

1. The respondent pay to the applicant compensation in the sum of $4036.00 pursuant to Section 170EE(3) of the Workplace Relations Act, 1996.

1. The respondent pay to the applicant damages in the sum of $243.00 pursuant to Subsection 170EE(5) of the Workplace Relations Act, 1996.

1. Such payments to be made within 21 days of this Order.

NOTE:  Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court            Rules

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 2069 of 1996

B E T W E E N:

Sandra Grace LEWIS
Applicant

A N D

CPS CATERING PTY LTD
Respondent

REASONS FOR DECISION

2  MAY  1997  PARKINSON JR

This is a decision in an application made pursuant to Section 170EA of the Workplace Relations Act 1996.(‘the Act’)  The applicant was employed by the respondent as a canteen supervisor.  The applicant was employed pursuant to the Catering (Victoria) Award 1995, (‘the Award’), an Award of the Australian Industrial Relations Commission. This Award operates, by Subsection 149(1)(d) of the Act, upon successors and assignees or transmittees of the business of a party to the Award.  This is a relevant issue in these proceedings. 

The applicant had commenced employment with a company known as CJ’s Catering Pty Ltd, a named respondent to the Award, as a canteen assistant on 17 July 1995.  At that time and until some time shortly before the termination of the applicant’s employment by the respondent, CJ’s catering held approximately 71 contracts with primary and secondary schools for the provision of canteen services at the school site.  The applicant was initially located at the Monash High School Canteen, however in late 1995, having tendered her resignation on account of her husbands transfer, at the invitation of the then employer CJ’s Catering Pty Ltd, she accepted a position as supervisor at the Werribee Secondary College Campus Canteen.  The applicant commenced her duties at Werribee in January 1996. 

The evidence is that CJ’s Catering Pty Ltd fell into financial difficulty and that as a consequence, negotiations were held between a director of CJ’s Catering Pty Ltd, a Mr Joannides and Mr Poyser, a director of the respondent, for the sale or transfer to the respondent of some of the catering contracts held by CJ’s Catering Pty Ltd.  The transactions which occurred appear to be somewhat circuitous and whilst it is unnecessary for the purposes of this proceeding to identify their exact nature, it is clear that both catering contracts and assets, including staff, were transferred to the benefit of the respondent, CPS Catering Pty Ltd.  The respondent is a company not entirely unassociated with persons who held interests in CJ’s Catering Pty Ltd, including the directors of CJ’s Catering Pty Ltd, Mr and Mrs. Joannides.  CPS Catering Pty Ltd is a trustee company for the Joannides Family Trust. 

Discussions were held with some of the schools and a number of the contract transfers occurred prior to either any receiver and manager being appointed to CJ’s Catering Pty Ltd or any notification of the financial status of the company being made to the relevant authorities or any steps being taken by directors or creditors in that regard.  Notification to creditors occurred in June, 1996.  It is clear from the evidence in these proceedings that CPS Catering commenced to operate at least the Werribee Secondary College site on  24 April, 1996. 

At no time during these negotiations, were any discussions held with the employees of CJ’s Catering as to their ongoing status as employees of that company or as to their views as to ongoing employment with the respondent as a successor of the various contracts.  On 24 April 1996 the applicant was physically located at the Werribee Secondary College Canteen and had been located at that canteen for many months.  She was the canteen supervisor employed by CJ’s Catering. 

On 24 April 1996 the applicant was informed that she was now to be employed by the respondent and would no longer be employed by CJ’s Catering.  She inquired as to her accrued entitlements and was informed that they would be taken over by the respondent.  I accept her evidence that she was told by Mrs. Reilly, the Regional Manager of CJ’s Catering and then of the respondent, not to worry and that it was all part of the one big family of companies.  Save for this advice, there was no other discussion between the parties as to the matter of the employee entitlements. 

At this time the contract at the college remained with CJ’s Catering, although the reality of the arrangement was that the contract was being operated by the respondent and the staff were ‘employed’ by the respondent. 

I accept the applicant’s evidence that on or about 24 April 1996 instructions were given to her that monies received were not to be paid into the banking accounts of CJ’s Catering Pty Ltd, but were to be paid to the account of the respondent.  The applicant’s evidence is however that the ordering and purchasing arrangements with the suppliers of food and grocery products remained in the name of CJ’s Catering Pty Ltd and had not at that time been transferred to the respondent. 

On 24 April 1996 the applicant queried the nature of the transactions she was being asked to undertake.  This was particularly in relation to the making of banking payments into the account of the respondent and ordering supplies in the name of CJ’s Catering. 

On 26 April 1996 the applicant was informed that she was to be transferred from the Werribee site to the Sunshine Secondary College Site.  This advice was initially given verbally and subsequently by letter on CJ’s Catering letterhead dated 19 May, 1996.(Exhibit A1)  That exhibit identifies the reason for the transfer as being a part of the ‘supervisor training scheme’ for the purpose of expanding the applicant’s knowledge of the company and making her a more valuable member of the team.  In that letter there is no reference to any difficulties with the applicant’s work performance.  The letter implies to the contrary. It is notable that the advice as to her transfer came not from the Director of the respondent, Mr Poyser,  but in writing on the letterhead of the former employer CJ’s Catering Pty Ltd.  Further the letter was signed by Ms. Reilly as assitant to the director of CJ’s Catering. The applicant once again declined to transfer. 

The applicant’s evidence, consistent with her replies in writing, was that she refused to transfer, advising that such a transfer would be inconsistent with her domestic responsibilities and with the basis upon which she originally accepted the employment at Werribee.  On 28 May, 1996 the applicant received another letter, again on letterhead of CJ’s Catering Pty Ltd (Exhibit A2),  wherein the writer, Mr Joannides, alleges various complaints as to the applicant’s supervision of the canteen.  In a letter addressed to the respondent, (Exhibit A3), the applicant replied and refuted the allegations made against her and reiterated the objections to the transfer she had previously raised. 

On 12 June, 1996, again on letterhead of CJ’s Catering Pty Ltd, (Exhibit A4), and signed by Mrs. Reilly, who according to the evidence continued in the employ of CJ’s at the same time as managing various aspects of the respondent’s business, the applicant was informed that “ the request for the transfer still stands ” and that she was required to report to the Sunshine Secondary College campus on that day. The applicant did not attend at Sunshine, but instead reported at her usual place of work.  On 13 June, 1996 the applicant was advised, (Exhibit A5), that the position (at Sunshine) was still open and that she was required to report there the next day.  The following day she again reported at the Werribee Campus.  On 14 June, the applicant was advised, (Exhibit A6), that any continued refusal to report to Sunshine Campus would result in the termination of her employment. 

I am satisfied that the reason for the transfer of the applicant from the Werribee Canteen to the Canteen at Sunshine and then alternatively, Bacchus Marsh, was because she queried the manner in which monies were directed to be paid.  I am satisfied that the applicant was not adequately consulted as to the transfer and I am satisfied that there was no true operational requirement for the transfer of the applicant to the other premises.  The evidence is that the respondent took over a substantial part of the assets and contracts owned by CJ’s Catering Pty Ltd.  It also employed persons including the applicant who immediately prior to that employment were employed by CJ’s Catering Pty Ltd.  CJ’s Catering Pty Ltd was a party bound by the Award.  As a successor, assignee and transmittee of the business or part of the business of CJ’s Catering Pty Ltd, the provisions of the Award are binding upon the respondent in respect of its employees.  The applicant was entitled to the benefit of the provisions of the Award.  The respondent was obliged by operation of Clause 43, ‘Introduction of Change’, to discuss with the applicant and other employees the alterations made to their employment, including the alleged costing and staffing issues which it said had arisen.  The alleged need for the applicant to be retrained as a manager and alternatively as it was later put, to receive remedial training in her duties as a supervisor, were also matters contemplated by Clause 43.  None of these matters were discussed with the applicant prior to their purported implementation.  Clause 47 of the Award, ‘Grievance Procedures’, provides a mechanism for the parties to utilise when disputes arise, including disputes as to transfers.  In the present case the respondent failed to utilise the dispute resolution procedures set out in that clause.  In particular no regard was had to the provision which operates to preserve the status quo whilst the matter is referred to the Australian Industrial Relations Commission for resolution.  Some limited discussions were held with the respondent union, however the evidence is that varying reasons were given to the union as to the necessity to transfer the applicant from her existing location.  Mr Trembus, of the Australian Liquor Hospitality and Micellaneous Workers Union, (‘the Union’), gave evidence as to the fact of such conversations with Mr Joannides.  Mr Joannides was not called to give evidence.  It is clear that by 14 June, 1996 no resolution as to the dispute as to the applicant’s work location had been reached.  The respondent elected to ‘treat the applicant as having terminated her own employment’ rather than moving to the next step in the grievance procedure.  I am satisfied that the respondent acted to terminate the applicant’s employment.  I am satisfied that there was a termination of the applicant’s employment at the initiative of the respondent. 

There are a number of reasons why the respondent was not entitled to treat the applicant’s conduct as a resignation or repudiation of her contractual or employment obligations.  First, the applicant had reached firm agreement with the respondent as to the location at which she was to be employed.  This occurred as a consequence of CJ’s Catering Pty Ltd. inducing her to accept employment at Werribee at a time when she had resigned from its employment.  At the time of the transfer of the employment to the respondent, the applicant was assured by Mrs. Reilly that it would make no difference to her conditions or terms of employment.  Second, the dispute or grievance procedure had not been utilised and the applicant had not been accorded the benefit of those provisions prior to the employer ‘treating her as having resigned’.  Third, I am also satisfied that none of the directions in writing given by Mr Joannides constituted lawful directions to the applicant.  According to the evidence, the applicant was  no longer employed by CJ’s Catering Pty Ltd.  Mr Poyser gave evidence in these proceedings wherein he stated that there was no connection between CJ’s Catering Pty Ltd and CPS Catering Pty Ltd.  Whilst his evidence was that Mr Joannides was engage by CPS Catering Pty Ltd as a consultant, this was not information provided to the applicant at the relevant time and she had no evidence of his authority to make the directions purported to be made.  Fourth, there was an actual termination of the applicant’s employment on 12 June 1996, when the applicant was directed to leave the premises by Mrs. Reilly.  On that day at commencement time for work Mrs. Reilly, the applicant’s immediate supervisor, told her she was trespassing on the premises and was not to remain there.  On this date the applicant had not agreed to a transfer to the other location and there had been no utilisation of the dispute resolution process set out in the Award.  Further, if there be any doubt as to the effect on the employment  of Mrs. Reilly’s directions on 12 June 1996, I am satisfied that the contents of the letter from the respondent to the applicant dated 24 June, 1996,  constituted a termination by the respondent of the applicant’s employment on that date. 

One further aspect to this proceeding is the conduct of the respondent in involving the other employees at the site in the disagreement as to the applicant’s transfer.  In the last weeks of the employment at the Werribee Site, Mrs. Reilly gathered all the staff together at the site and informed them that as the applicant had refused to transfer to the Bacchus Marsh site, one of the other staff members would have to lose their job.  As a consequence, the respondent purported, on its evidence ‘by agreement of the employee concerned’, to stand down an employee until such time as the applicant agreed to the transfer.  This conduct resulted in a great deal of antagonism and bitterness directed to the applicant.  The conduct of the respondent in designing a situation where one staff member looks to losing her job or at least being stood down if another declines to accept a transfer elsewhere was designed to place the applicant in an untenable employment position. Whatever tensions, if any, existing between the supervisor and the employees at the canteen, were destined and designed to be increased as a consequence of such conduct on the part of the respondent. I am satisfied that the respondent terminated the applicant’s employment on 12 June 1996, when her immediate supervisor told her she was trespassing on the premises and was not to remain there.  On this date the applicant had not agreed to a transfer to the other location and there had been no utilisation of the dispute resolution process set out in the Award. 

The respondent whilst contending that the applicant was a poor manager and needed retraining for the purposes of improving her supervision skills, did not produce any material to support the claims that the food costing figures were running at a high rate.  When cross examined as to those matters Mrs. Reilly, the regional manager, was unable to give evidence as to the amounts.  The applicant denied that such was the case.  It was within the respondent’s power to produce this material and it did not.  In explanation it was put that the receiver had custody of various of the documents relating to the period when CJ’s Catering operated the business.  However no attempt was made to produce any of the materials relating to the period when the respondent was operating the canteen. 

The respondent’s reasons for the alleged transfer were also various and confused.  The evidence of Mr Trembus was that he was informed the transfer was to provide the applicant with managerial training.  Mrs. Reilly and Mr Poyser said the transfer was because of the applicant’s poor performance.  This evidence is inconsistent with the original letter of transfer (Exhibit A1) and with Mr Trembus  evidence.  I prefer the evidence of the applicant to that of Mrs. Reilly and Mr Poyser in these proceedings.  In particular I found Mr Poyser to be an evasive witness.  I do not accept the respondent’s evidence that the applicant’s work performance was a matter of concern.  The applicant was the victim of a campaign to discredit her in the workplace and to move her to a location which on the evidence before me shortly after the proposed transfer date ceased operating.  The conduct of the respondent in terminating the applicants employment was at least capricious.  I am not satisfied that the respondent had valid reason for the termination of the applicant’s employment on 12 June 1996.  Consequently the respondent had contravened s170DE(1) of the Act.  I turn now to consider the question of remedy.

I am satisfied that in all of the circumstances the applicant is entitled to a remedy.  In view of the uncertain status of the respondent as an operator of various canteens and her own justifiable uncertainty as to the solidity of the respondent, the applicant does not, having now obtained alternative employment, seek reinstatement.  I am satisfied that an order for reinstatement would be impracticable.  In my view a significant factor in this regard is the conduct of the respondent in creating divisiveness and tension in the workplace. The applicant seeks an order for compensation.  The applicant obtained alternative casual employment on 19 August 1996.  This is some 7 & 1/2 weeks after the termination of her employment.  At the time her employment was terminated she was not given appropriate notice and nor was any payment in lieu of such notice made. 

In addition the applicant says her financial losses are continuing.  These include additional child care costs incurred as a result of having to seek employment many kilometres away from home.  It was apparent that the time of work and location of the work at Werribee was attractive to the applicant and was a principle reason why she accepted the employment at that location.  The loss of these conveniences can be liquidated.  I am satisfied that the applicant incurred these increased expenses directly as a consequence of the conduct of the respondent in terminating her employment. 

The applicant is entitled to an order for damages arising from the failure in the respondent to give notice of the termination of the employment. This is an amount of  $243.00. In addition the applicant is entitled to compensation for lost wages prior to achieving her permanent appointment with her new employer. I am satisfied that an amount equivalent to 8 weeks wages is appropriate in this regard. This is an amount of $ 1944.00.  Further on account of lost future entitlements and on account of the additional expenses incurred as discussed earlier. The applicant I am satisfied has incurred and continues to incur $80.00 per week additional expense as a consequence of the respondent terminating the applicant’s employment. I am satisfied that it is appropriate to compensate the applicant in respect of this loss, which after account for then notice period allowed and the lost wages is a period of 19 weeks to the date of the trial. This is an amount of $ 1,520.00.  Further an amount of compensation on account of lost annual leave pro rata $390.00. Wages owing for the last three days of her employment amounted to $182.00 and that amount is also accounted for in the compensation figure.  The amount of compensation to be awarded is the sum of $4,036.00.  The amount of damages ordered will be $243.00.

I certify that this and the preceding nine (9 ) pages
are a true copy of the reasons for decision of
Judicial Registrar Parkinson.

Associate      :          

Dated             :          2  May  1997

APPEARANCES

Counsel appearing for the applicant  :          Mr. J. Brassill &
  Mr. McDermott

Solicitors for the applicant  :          McDonald & Charman

The respondent’s company director in person    :          Mr. M. Poyser

Dates of hearing  :          28  February,
  12 & 13 March 1997