Lynette Syme v Tharawal Aboriginal Corporation
[1995] IRCA 507
•27 September 1995
CATCHWORDS
INDUSTRIAL LAW - UNLAWFUL TERMINATION - VALID REASON - HARSH UNJUST AND UNREASONABLE as no warnings given, and reasons for termination were largely a continuation of practices previously condoned and encouraged by Board of Directors - LOST REMUNERATION - Orders are to take into account employer's obligation to deduct PAYE Tax
Industrial Relations Act 1988 ss 170DE, 170EA, 170EE
Aboriginal Councils & Associations Act 1976Jason Scott Johns -v- Gunns Limited (TI 148R of 1994 - unreported, Northrop J, 18 May 1995)
Graham Foxcroft v The Ink Group Pty Ltd (1994) 57 IR 65
Ian Samuel McGregor Nicolson v Heaven and Earth Gallery Pty Ltd (1994) 126 ALR 233
Jamie Klingenberg & Transport Workers' Union of Australia -v- I.R. Cootes Pty Limited (VI 2421R of 1994 - unreported, Marshall J, 24 August 1995)LYNETTE SYME -v- THARAWAL ABORIGINAL CORPORATION
No. NI 1467 of 1995
COURT: PATCH JR
PLACE: SYDNEY
DATE: 27 SEPTEMBER 1995INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES REGISTRYNo. NI 1467 of 1995
BETWEEN:
Lynette SYME
ApplicantAND:
THARAWAL ABORIGINAL
CORPORATION
RespondentREASONS FOR JUDGMENT
27 September 1995 PATCH JR
This is an application under section 170EA of the Industrial Relations Act 1988 ("the Act"). The applicant, Ms Lyn Syme, seeks reinstatement and consequent orders. If the Court were to determine that her reinstatement is impracticable, she seeks compensation.
I have been considerably assisted by careful written submissions supplied by the representatives of both the applicant and the respondent.
BACKGROUND FACTS
The respondent is an "Incorporated Aboriginal Association" established under specific legislation in respect of the incorporation of aboriginal associations, the Aboriginal Councils and Associations Act 1976.
The objects of the respondent are set out in Rule 6 of the Tharawal Aboriginal Corporation (the Rules) (exhibit 22) as:
"The objects for which the Association is established are:
(a)improve community conditions and general welfare of aboriginal people;
(b)achievement of following particular priorities:-
establish an information and referral centre in Campbelltown;
establish a medical centre in Campbelltown;
make legal assistance more readily available; and
education programs including a pre-school and adult literacy programs.
The Tharawal Aboriginal Corporation ("TAC") operates for the benefit of aboriginal people within the boundaries of the Campbelltown City Council, the Liverpool City Council, and the Wollondilly Shire.
The TAC provides a multi-disciplinary range of primary health care and social development services to the aboriginal community, including dental, medical, maternal/childhood health, AIDS and communicable diseases education, children's services (MACS) program, family and community support programs, including emergency food relief, counselling, legal assistance, foster placement for Aboriginal children, liaison between Police and community, etc. The TAC is funded in the main by Government bodies, including the Aboriginal and Torres Strait Island Commission (ATSIC), the NSW Department of Health and the Commonwealth Department of Human Services and Health. It has an annual budget of close to $1.5 million.
Rule 9(10) of the Rules provides that the Governing Committee of the association "shall manage and control the affairs of the Association in accordance with these rules and with the Act and for that purpose may exercise the powers of the Association as if they had been expressly conferred on the Committee by a general meeting of the Association."
The "Governing Committee" is normally referred to within the community as the "Board of Directors", and I will adopt that terminology.
Rule 15 is as follows:
"The Committee may employ such staff as is necessary for the performance of its function.
(a) the Committee shall appoint an Administrator;
(b) the Administrator shall be an employee;
(c) the Administrator shall be answerable to the Committee;
(d) the Administrator shall be responsible for the day to day running of the Association; and
(e)the employees of the Association shall be answerable to the Administrator in relation to their day to day duties.
The "Administrator" is commonly referred to as the Chief Executive Officer (CEO), and I will adopt that terminology.
The applicant commenced employment with the respondent in April 1992. She was first employed as a Senior Administrative Officer, and in November 1992 she was appointed to the position of Deputy Chief Executive Officer. In February 1993, she was appointed acting Chief Executive Officer, and was appointed to that position permanently on 8 November 1993.
The decision to terminate her employment was communicated to her by way of a letter dated 21 February 1995 (exhibit 9), and took effect on 22 February 1995.
That letter set out the reasons for the termination of her employment. In pursuance of an order of the Court that particulars be provided to the applicant by the respondent as to the reasons for termination of her employment, the respondent relied upon the reasons set out in that letter. They were as follows:
"1) Failing to be responsible to the Tharawal Aboriginal Corporation Board of Directors.
2) Failure for the overall management of Tharawal Aboriginal Corporation.
3) Failure to oversee administrative and legal responsibilities of Tharawal Aboriginal Corporation, including accountability to funding bodies.
4) Failing to continually monitor assess the financial status of Tharawal Aboriginal corporation and its financial viability."
Prior to the termination of the applicant's employment, she had, on 18 January 1995, been suspended.
The circumstances leading up to that suspension were as follows:
On 12 December 1994, the Annual General Meeting of the respondent occurred. A new Board of Directors was elected. The first meeting of the new Board occurred on 19 December 1994.
On 20 December 1994 the applicant went on 4 weeks annual leave, returning to work on 18 January 1995, to find herself suspended from duty and locked out of the offices of the respondent.
After several requests for the reasons for her suspension, the applicant, on 28 January 1995, received a letter of that date. That letter became exhibit 6. That letter set out 20 reasons for the suspension of the applicant, which were relied upon during the course of the trial of the matter as providing more detail concerning the four reasons for the termination of the applicant's employment, set out in exhibit 9.
Those reasons are as follows:
1. Failure to comply with A.T.S.I.C. Grant Conditions on behalf of the Board of Directors for the period 1-07-93 to 30-06-94. That quarterly balance sheets for Medical and Social Support Grants forwarded to A.T.S.I.C. on the 11-12-94 (Sunday) for the period 1-07-93 to 30-06-94. We are obliged by ATSIC grant conditions to submit within a two month period after each quarter, a quarterly expenditure sheet for approved grants.
2. Still to confirm with the Department of Health which monthly expenditures for approved grants are outstanding and what quarterly advances are due.
3. Failure to notify Treasurer and Board of Directors of Debit at the bank 9-12-94 of the amount of approximately $12,000.00?
4. No authorisation to over spend in the Emergency Relief Grant of $20,875.00. Expenditure was $48,628.46.00 (sic) for financial year 1993-1994 deficit showing $27,753.46 (unauthorised to spend).
5. Failure to notify the Auditor for the Financial period of July 1993 to June 1994, of the provisions of Long Service Leave due at the time of accruals for current liabilities.
6. No authorisation to spend vacant A.T.S.I.C approved position grants elsewhere within Tharawal expenditure.
7. No authorisation to spend approved grant moneys re air conditioning totalling approximately $40,000.00 and kitchen repairs totalling approximately $8,000.00.
8. Failure to maintain appropriate income ledgers.
9. Allowing Christine Carriage as Senior Admin Officer to transfer to her new position of Medical Programme Co-Ordinator at the time ledgers required up dating of income received.
10. Failure to supply to Administration full documentation on approved budgets and grants received, to maintain appropriate records in regards to expenditure of Tharawal Aboriginal Corporation.
11. Failure to table a letter from the Registrar Office regarding financial membership at a Board meeting on the 16-11-94.
12. A signed letter from yourself for Michelle Nean verifying starting date as 15th October 1988. Employee's record state starting date 15th October 1990.
13. Aids Funding-
As at the 18th February 1994, failure to furbish Dept of Health with audited statements as required for future funds to be released.14. Failure to act responsibility (sic) to the Board of Directors in regards to Jenny Brown's Long Service leave application and investigate Tharawal Aboriginal corporation records, and obtain legal advice in regards to matter.
15. No mandate to approve Long Service Leave. Approving Jenny Brown's Long Service Leave, cheque was drawn and signed by yourself being an authorise signatory. No mandate to approve over $2000.00.
16. Authorising on the 14th December 1994 cheques totalling to the amount $15,324.60. They where (sic) signed by previous directors, Gary Green and Cliff Foley.
17. Failure to let Tharawal Aboriginal Corporation know the where about of assets of the Corporation
eg: lap top
pre-school printer
furniture (tables, filing cabinets)
asset register
C.D.E.P. equipment18. Not keeping appropriate records of Tharawal Aboriginal corporation in proper order.
19. Failure to notify Board of Directors that the previous Chairperson had a mobile phone and that Tharawal Aboriginal corporation was paying the bill.
20. No consulting with Deputy CEO, in regards to the overall financial status of Tharawal Aboriginal Corporation.
WAS THE TERMINATION OF THE APPLICANT'S EMPLOYMENT UNLAWFUL?
Was there a "valid reason" for the termination of the applicant's employment?
The chairperson of the board at the time of the suspension of, and termination of, the applicant's employment was Ms Karen Craigie. In her evidence she stated that, apart from "reasons", "2", "13", "19", the matters set out above were also reasons for the termination of the applicant's employment.
It is apparent that many of those "reasons" set out in exhibit "9" are in respect of relatively unimportant matters - certainly of not sufficient moment to warrant the termination of the applicant's employment, even if they were proven to be true.
However, as a "valid reason" for the termination of a persons employment may be the accumulation of several factors, it is necessary to examine each one of the criticisms relied upon by the respondent in order to see whether or not it has been proven, and, if so, whether it can be a valid reason, or part of a valid reason, justifying the termination of the applicant's employment.
In so doing, I note that,, merely because one or more of these matters might be established, in some way, as being a justifiable criticism of the applicant's performance, does not necessarily mean that it has been established as being "valid reason" or part of a "valid reason" justifying the termination of her employment.
I will refer, by way of sub heading, to the 20 reasons for the suspension of the applicant (apart from the three upon which the respondent did not rely).
1. Failure to comply with ATSIC grant conditions on behalf of the Board of Directors for the period 1/7/93 to 30/6/94 (etc).
The respondent's witnesses regarded this as the single most important failing/criticism of the applicant.
In order to be able to continue to receive funding from ATSIC, ATSIC required the TAC (in common, as I understand it, with other recipients of funds) to submit quarterly balance sheets within two months after the end of each quarter. For example, in order to receive recurrent funding for the period beginning 1 July 1994, ATSIC required the quarterly balance sheets for the period ending 31 March 1995 by the end of May.
The quarterly returns for the four quarters beginning 1 July 1993 and ending 30 June 1994 were not sent to ATSIC until 11 December 1994. (See exhibits 42 and 55). This was in breach of the ATSIC requirements.
As the Chief Executive Officer, the applicant must, at least, share the responsibility for the failure to comply with the ATSIC requirements in this respect.
However, the requirement was one of the corporation. The responsibility for ensuring that the quarterly accounts were sent to ATSIC when required, rests, at least partly, with the board.
Furthermore, the evidence has established to my clear satisfaction that it had been the practice of the TAC to make ad hoc arrangements with ATSIC over a period of some years, to ensure that funding was not withheld if, as routinely occurred, the quarterly accounts were submitted late.
In these circumstances, the degree to which the applicant can be criticised is significantly lessened.
The respondents position can be fairly characterised by quoting from its written submissions "..... the applicant allowed the respondent to continually breach its grant conditions". (emphasis added)
That is not what happened. The respondent did breach its grant conditions, but the accusation that this was done principally because the applicant "allowed" it to happen is a distortion of the facts. In fact, the Board was responsible for the running of the corporation. If there were any adverse consequences (and it is important to note, on the question of whether or not there was a "valid reason" for the termination of the applicant's employment, that there were no serious adverse consequences for the respondent) then those consequences would be much more the responsibility of previous Boards than of the applicant.
When ATSIC offered a grant to the TAC, that offer was in written form. It had to be signed by Board members to be accepted. There can, therefore, be no doubt that the Board were aware of the conditions applying to ATSIC grants. To try and blame the applicant for the corporation's failure to abide by grant conditions, which were in writing and signed by members of the Board, is, in my opinion, unfair. It is "harsh, unjust and unreasonable" (See further comments in this respect below).
This is illustrated by the evidence of Karen Craigie, the chairperson of the Board at the time of the termination of the applicant's employment. She was shown some ATSIC documents, including grant conditions, which she herself had signed. She simply could not remember signing them, and maintained that she was unaware of the conditions set out by ATSIC in those documents (see exhibit 47).
In this respect, it is also illustrative to note that Ms Margaret Anderson was a member of the Board during some of the time of the applicant's period as Chief Executive Officer. Ms Andersen had been a former ATSIC counsellor herself, and she was well aware of the need for the TAC, as a recipient of ATSIC grants, to abide by various conditions, including quarterly return of accounts and separate bank accounts for each grant. Ms Andersen had not ensured that the corporation abided by these rules, and the corporation continued to act in the way it always had. Yet the respondent says that the applicant "allowed" this to happen.
I add here that this is not to be taken as a criticism of Ms Anderson - it merely illustrates the true nature of the situation within the respondent.
3. Failure to notify treasurer and Board of Directors of debit at the bank 9/12/94 of the amount of approximately $12,000.00.
As a result of the lateness in which the quarterly accounts (see above) were submitted, for a very short period of time, on and about 9 December 1994, the account of the respondent was in debit. The applicant did not notify the Treasurer and Board of Directors of this situation.
However, the applicant knew that it was a purely temporary situation, and had made arrangements with the bank so that nothing adverse would occur. She had had discussions with the necessary persons in ATSIC, had the preparation of the (late) quarterly account in hand, and had ensured that funding would arrive in the very near future to cover the debit. In these circumstances, there was no crisis, the situation was under control, and it was not, in my opinion, necessary to notify the Board of what was a purely short term situation, which was not capable of resulting in any harm to the respondent. This sort of situation had occurred in the past, yet the Board had never directed the applicant to report to them.
4. No authorisation to overspend in the Emergency Relief Grant of $20,875.00. Expenditure was $48,628.46.00 (sic) for financial year 1993-1994 deficit showing $27,753.46 (unauthorised to spend).
The emergency relief was over spent in the amount of $20,875.00. However, it cannot be said that the applicant was solely responsible for this. She was not the sole signatory to cheques. The evidence establishes to my satisfaction that that Board members, at the relevant times, were aware of, and condoned, the continuation of a previous practice - namely, the deliberate overspending of that particular budgetary item. The applicant in her evidence emphasised that this was a practice condoned by previous Boards because of the necessity to safeguard the welfare of the aboriginal people in the local community, in times of particular needs. All cheques for expenditure in this account had to be countersigned by members of the Board.
5. Failure to notify the Auditor for the Financial period of July 1993 to June 1994, of the provisions of Long Service Leave due at the time of accruals for current liabilities.
There is no substance in this criticism. In my opinion, the levelling of this criticism at the applicant was akin to "clutching at straws".
6. No authorisation to spend vacant A.T.S.I.C approved position grants elsewhere within Tharawal expenditure.
The respondent has not established that this in fact occurred. What happened, in respect of this and other ATSIC grants, was that the money was received, and went into the one bank account. When money comes in, and goes into a general bank account, it does not necessarily mean that that money, when spent, has been spent for an improper purpose. This is particularly the case when recurrent funds are overdue. Normal accounting techniques are quite capable of distinguishing those funds from other funds - and this, in fact, occurred during the annual audit.
7. No authorisation to spend approved grant moneys re air conditioning totalling approximately $40,000.00 and kitchen repairs totalling approximately $8,000.00.
Once more, the respondent has not established that this money was spent improperly - or that it was spent at all.
8. Failure to maintain appropriate income ledgers.
I accept the evidence of the applicant that this problem was caused by under - resourcing in the administration. In my opinion, the Board of the respondent corporation had made a decision about financial priorities - namely, priority was to be given to services to the local community, rather than the efficient administration of the corporation. This decision as to priorities was reflected, not only in an inability within the office to keep records completely up-to-date, but also in respect of some other administrative failings which the respondent now tries to sheet home solely to the applicant.
9. Allowing Christine Carriage as Senior Admin Officer to transfer to her new position of Medical Programme Co-Ordinator at the time ledgers required up dating of income received.
There is no substance in this criticism. The Board had given permission for her transfer when the audit requirements were complete. I accept the applicant's evidence that that had occurred.
10. Failure to supply to Administration full documentation on approved budgets and grants received, to maintain appropriate records in regards to expenditure of Tharawal Aboriginal Corporation.
Once more, in my opinion, the somewhat disorganised state of the financial records of the corporation was due to a priority decision being made to concentrate expenditure on the welfare of the local community. There is no evidence to suggest that the applicant deliberately withheld information from the Board - in fact, the evidence suggests that, prior to the election of the new Board in December 1994, she had had a close and harmonious working relationship with previous Boards, providing them with regular information as to the financial situation of the corporation. True it is that the Board was sometimes not "up to date" as to the exact financial status of the corporation, but this was another result of priorities being directed elsewhere.
11. Failure to table a letter from the Registrar Office regarding financial membership at a Board meeting on the 16-11-94.
This letter was a letter, which could perhaps be described as a letter of advice, from the Registrar of Aboriginal Corporations. It was not addressed to the applicant and there is no evidence that the applicant ever received it. Nor is there any evidence that the applicant failed to tender it at a Board meeting.
Furthermore, the matters addressed in that letter (whether or not the corporation was entitled to charge a membership fee as a condition of voting rights at the annual general meeting) has already been dealt with at a previous Board meeting.
There is no substance at all in this criticism.
12. A signed letter from yourself for Michelle Nean verifying starting date as 15th October 1988. Employee's record state starting date 15th October 1990.
The applicant denied signing this letter and there was no evidence that it was her signature. This criticism is therefore without substance.
14. Failure to act responsibility (sic) to the Board of Directors in regards to Jenny Brown's Long Service leave application and investigate Tharawal Aboriginal corporation records, and obtain legal advice in regards to matter.
When the applicant reported to the Board of Directors in respect of Jenny Brown's long service leave, she made it perfectly clear, in writing, that there was a discrepancy in the records of the corporation. She had contacted the relevant union to seek their advice as to how to properly proceed.
She reported to the Board and did not act arbitrarily at all. This criticism is without substance.
15. No mandate to approve Long Service Leave. Approving Jenny Brown's Long Service Leave, cheque was drawn and signed by yourself being an authorise signatory. No mandate to approve over $2000.00.
The cheque, when presented to the Board, was accompanied by a report setting out the discrepancies in the records of the corporation. The applicant did not "approve" this expenditure - she merely signed a cheque and presented it to the Board for the necessary counter signatures. She did not "approve" the long service leave herself.
All of this was known to the respondent corporation. The criticism is without substance - and the corporation should have known that from the start.
16. Authorising on the 14th December 1994 cheques totalling to the amount $15,324.60. They where (sic) signed by previous directors, Gary Green and Cliff Foley.
The new board, elected on 12 December 1994, did not, according to the rules of the association, take office until their first meeting. That first meeting occurred on 19 December 1994.
It follows that Gary Green and Cliff Foley were still Directors of the corporation, and were authorised to sign cheques. It would have been wrong for the applicant to have members of the new Board sign cheques, in a situation where they had not yet taken office.
17. Failure to let Tharawal Aboriginal Corporation know the whereabouts of assets of the Corporation
eg: lap top
pre-school printer
furniture (tables, filing cabinets)
asset register
C.D.E.P. equipmentThe applicant went on leave just before the new Board took office. She returned, and was suspended from duty. There was, therefore, no "failure" of the type set out in the above criticism.
Furthermore, this criticism is, in my opinion, another attempt to "clutch at straws", and could never constitute a valid reason for the termination of the applicant's employment.
18. Not keeping appropriate records of Tharawal Aboriginal corporation in proper order.
This is a repeat of previous criticisms, and for the reasons set out above, there is no substance in it.
20. No consulting with Deputy CEO, in regards to the overall financial status of Tharawal Aboriginal Corporation.
In my opinion, the applicant was not obliged to do this. The Chief Executive Officer and the Deputy Chief Executive Officer had different roles to perform.
Furthermore, the former Deputy CEO (now the acting CEO) Mr Mark Hill, is a person of very little experience. In my opinion, there would have been little benefit to the corporation if the applicant had consulted with him "in regards to the overall financial status of the Tharawal Aboriginal Corporation".
Furthermore, such a criticism is virtually meaningless. What does "consulting in regards to the overall financial state" mean, I ask rhetorically?
Finally, the Deputy CEO was responsible to the CEO - not vice versa.
Conclusion re: section 170DE(1) - no "valid reason".
In my opinion, none of the reasons advanced by the respondent in the letter dated 28 January 1995 (which were the reasons for the suspension of her employment and which were subsequently said to be, substantially, the reasons for the termination of her employment) have been proven to be a "valid reason" for the termination of the applicant's employment. Those "reasons" cover the four "reasons" relied on by the respondent as particulars.
It follows that the termination of her employment was a breach of section 170DE(1) of the Act, and unlawful.
Was the termination of the applicant's employment "harsh unjust or unreasonable", within the meaning of section 170DE(2) of the Act?
Strictly speaking, it is not necessary to traverse this question, (as well as matters to do with section 170DC), as there was no valid reason for the termination of the applicant's employment. See Jason Scott Johns -v- Gunns Limited (TI 148R of 1994 - unreported, Northrop J, 18 May 1995).
However, as there has been considerable argument addressed to the matter, and as I feel that, for the future, it is necessary that the Court say something about it, I will make some brief observations.
Generally speaking, many of the matters in respect of which criticism was directed to the applicant, and which subsequently formed the basis for her suspension and for the termination of her employment, were practices which had long been instituted in the working of the respondent corporation. Previous Boards had allowed the corporation to operate in a particular way, and the applicant had merely continued to act in accordance with established practices.
This is important, because the incoming Board never gave the applicant the chance to change what were well established practices. They abruptly suspended her and then terminated her employment. There was no warning, no counselling process, and no opportunity at all to change to meet the requirements of the incoming Board of Directors. She was never told that her job might be in jeopardy if she continued the (then) current practices.
The respondent, in its written submissions, contends that "the actions of the applicant in ignoring breaches by the respondent of its obligations pursuant to grant conditions and allowing these breaches to continue and the attitude she showed in relation to her responsibilities to the Directors were in fundamental breach of the terms of employment, were fundamentally inconsistent with the terms of employment so that it was not an appropriate case for a warning to be made."
I do not accept that submission. Even if the criticisms of the applicant were justified, there was no reason why a warning could not have been given. If the Board were so concerned about the situation, they could have remedied it by appropriate warnings to the applicant. In the circumstances of this case those warnings should have been in writing. But the applicant received neither oral nor written warnings. She was simply called to account, and her employment was terminated.
In my opinion, even if the respondent corporation had established that there was a "valid reason" for the termination of the applicant's employment (which it has not), the fact that that "valid reason" would largely have been constituted by the continuation of practices well known by previous Boards - condoned, and even encouraged, by them - would mean that the termination of her employment would have been all of "harsh" "unjust" and "unreasonable" within the meaning of section 170DE(2) of the Act.
To use terminology well known throughout all parts of Australian society, she was not given "a fair go".
In respect of the failure to abide by ATSIC grant conditions, it should be noted that it was Board members who signed the agreements with ATSIC which included these conditions. The Board(s) are therefore to be taken to have been aware of those conditions. It is manifestly unfair to blame the applicant for the TAC's persistent failure to abide by them.
It follows that, even if there had been a "valid reason" for the termination of the applicant's employment within the meaning of section 170DE(1), that termination of employment would be deemed to be not for a valid reason, by virtue of the operation of section 170DE(2).
Was there a breach of section 170DC of the Act?
Section 170DC of the Act reads as follows:
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.
In my opinion, the respondent did not breach section 170DC of the Act. The respondent's concerns (although not, in my opinion, amounting to a "valid reason" or "valid reasons" for the termination of the applicant's employment) were put to her in time for her to respond. She had ample opportunity to respond both in writing and at meetings.
REMEDIES
Is reinstatement impracticable?
Section 170EE(1) and (2) of the Act are as follows:
170EE(1) [Orders]
“In respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, the Court may make the following orders:
A.an order requiring the employer to reinstate the employee by:
(i)reappointing the employee to the position in which the employee was employed immediately before the termination; or
(ii)appointing the employee to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination; and.
B.If the Court makes an order under paragraph (a)
(i)any order that it thinks necessary to maintain the continuity of the employee’s employment; and
(ii)an order requiring the employer to pay to the employee the remuneration lost by the employee because of the termination.
170EE(2) [Reinstatement impractical]
If the Court thinks, in respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, that the reinstatement of the employee is impracticable, the Court may make an order requiring the employer to pay to the employee compensation of such amount as the Court thinks appropriate.”
The Applicant seeks reinstatement.
Section 170EE (as now amended) requires the Court to first consider whether reinstatement is “impracticable”.
There is a distinction between compensation in lieu of reinstatement, which may be awarded under sub-section (2) of section 170EE, and an order requiring the employer to pay to the employee remuneration lost by the employee because of the termination, which may be awarded under sub-section (1) of section 170EE.
Compensation under sub-section (2) may only be ordered if the Court finds that the reinstatement of the employee is impracticable.
In the case of Ian Samuel McGregor Nicolson v Heaven and Earth Gallery Pty Ltd (1994) 126 ALR 233 his Honour, Wilcox CJ said, at page 244:
“It is important to note that Parliament stopped short of requiring that, for general compensation to be available, reinstatement be impossible. The word “impracticable” requires and permits the Court to take into account all the circumstances of the case, relating to both the employer and employee, and to evaluate the practicability of a reinstatement order in a commonsense way. If a reinstatement order is likely to impose unacceptable problems or embarrassments, or seriously affect productivity, or harmony within the employer’s business, it may be “impracticable” to order reinstatement, notwithstanding that the job remains available.”
I approach the facts of this case bearing in mind what his Honour said in that case.
In Graham Foxcroft v The Ink Group Pty Ltd (1994) 57 IR 65, his Honour, Wilcox CJ, said, at page 67:
“Especially since the June 1994 amendments to Part VIA of the Act, which substituted a new s. 170EE, the legislative emphasis has been on reinstatement of unlawfully terminated employees.”
It follows that the primary remedy for an unlawful termination of employment is reinstatement, but that the Court should not order reinstatement if it is “impracticable”.
In my opinion, the reinstatement of the applicant is not impracticable.
There will, I am sure, be some difficulties with the applicant working together with some of the current Board members and some of the current employees of the respondent corporation.
However, in my opinion, those difficulties are not insurmountable. The applicant has been the Chief Executive Officer of the TAC for quite some time. In that capacity, she has worked harmoniously with a large number of people, and with previous Boards. She has therefore demonstrated that she is a person capable of working harmoniously with a diverse range of people.
The evidence establishes that there is a dispute within the community about the aboriginality of the applicant. It is not necessary (and, indeed, in the circumstances of this case, perhaps undesirable) for me to make a finding of fact in respect of that matter. It is a matter particularly for the community to discuss and resolve, through its own processes.
However, I accept that, as a result of that dispute, there will be a certain degree of disharmony within the TAC and the community, following the reinstatement of the applicant. On the other hand, there would be a certain degree of disharmony within the TAC and the community if someone else were to be employed in the position which the applicant formerly held.
I am satisfied that there are divisions within the community. In my opinion, the evidence establishes that those divisions are principally to do with political matters, concerning the direction that aboriginal affairs should go in, and empowerment of aboriginal people. I accept the evidence of the applicant in this respect.
I do not ignore the fact the question of the applicant's aboriginality is a focus for division within the community. Nonetheless, in my opinion, that is a secondary matter when compared to the other reasons for division. In any community, which has divisions on a personal and political level, one can expect that sometimes those divisions will focus on particular individuals. As the applicant was the Chief Executive Officer of the TAC, to some extent the divisions have focused upon her. The evidence also establishes to my satisfaction that the personal and political divisions to which I have just referred are divisions that, to a certain extent, have resulted in particular families "taking sides" in respect of the applicant's position and other matters upon which the community is divided.
It will frequently be the case that a certain degree of disharmony and interpersonal tensions will be created as a result of the unlawful termination of a person's employment. The Court cannot give undue prominence to such, almost inevitable, results. To do so would be to displace reinstatement as the primary remedy for the unlawful termination of employment as intended by the Parliament. That consideration is particularly important in this case.
Lost remuneration
The termination of the applicant's employment took effect on 22 February 1995. She has, therefore, been unemployed for exactly 31 weeks.
At the time of the termination of her employment, according to the respondent's wages book (exhibit 56) the applicant was earning the gross amount of $786.60 per week as wages.
On 15 March 1995 the award under which the applicant was employed was varied. Her gross wages increased to $906.20. (See exhibit 12).
The applicant was paid three weeks pay in lieu of notice, at the rate of $786.60 per week. I will deduct that from any order for lost remuneration.
The applicant was also successful in mitigating her loss by way of obtaining some casual work since the termination of her employment. Her earnings since that event are as follows:
1. The sum of $2,432.07 (gross) earnt from work with the Human Rights Commission, which came to $1,937.07 (nett - ie after the deduction of $479.00 as PAYE tax). (See Exhibit 13).
2. The sum of $5,338.00 (gross) earnt working on a temporary basis at the Daen Ooyella Aboriginal Corporation, which came to $4,058.00 (nett - ie after the deduction of $1,280.00 as PAYE tax). (See Exhibit 14).
As 15 March 1995 (the commencement date of the new award rate) is three weeks after the termination of the applicant's employment, I will deduct the pay received by the applicant in lieu of notice by calculating lost remuneration only for the 28 week period since 15 March 1995. The figure resulting from multiplying $906.20 by 28 is $25,373.60.
The figure resulting from the deduction from $25,373.60 of the gross amount earnt by the applicant by way of casual employment is $17,603.53. This is the gross (ie: pre-tax) amount of her direct economic loss.
In Jason Scott Johns -v- Gunns Limited (TI 148R of 1994, Northrop J, 18 May 1995, unreported), his Honour Northrop J said, at page 33:
"Both counsel contended that the amount to be to be paid should be based on the gross wage lost by Mr Johns.
In my opinion that is not the correct approach. The amount ordered to be paid is the remuneration lost in circumstances where the employment is deemed to have been continued as if there had been no termination. On this basis of deeming continuity of employment, the appropriate approach is to determine what wages, excluding any overtime, Mr Johns would have received between 2 August 1994 and the date of reinstatement."
In Jamie Klingenberg & Transport Workers' Union of Australia -v- I.R. Cootes Pty Limited (VI 2421R of 1994 - unreported, Marshall J, 24 August 1995), Marshall J followed Johns.
In accordance with the decisions in Johns and Klingenberg the starting point for the determination of the orders to be made in respect of for lost remuneration is the gross amount lost by the applicant as a result of the termination of her employment.
If the applicant had simply remained unemployed during the period following the termination of her employment, it would have been a simple matter to calculate the amount of PAYE tax that would have been deducted.
The complication in this case comes from the fact that the applicant has already had PAYE tax deducted from the gross amounts earnt in respect of her two periods of casual employment.
As, applying Johns and Klingenberg, the order for remuneration lost is an order which is designed to put the applicant into the position that she would have been, in respect of remuneration, as if her employment had not been terminated, in the circumstances of this case the fairest way to arrive at the final orders in respect of lost remuneration is as follows:
1. Deduct, from the gross amount that the applicant would have earnt if her employment had not been terminated and if she had not found casual employment, the amount earnt by the applicant by way of casual employment. That leaves a gross sum of $17,603.53. I will order the respondent to pay that amount - but some has to be paid directly to the applicant, and some to the Commissioner for Taxation.
2. Divide $17,603.53 by 28 - the number of weeks (except for the period in which the applicant received pay in lieu of notice) between the date of the termination of her employment and the making of these orders. The resulting figure is $628.70.
3. Calculate the amount of PAYE tax that would have been deductable from a gross weekly wage of $628.70.
4. Multiply that figure by 28 (the number of weeks following the three weeks in respect of which the applicant was paid in lieu of notice up until the making of these orders).
5. Deduct that resulting figure from the figure for gross wages lost ($17,603.53).
The resulting figure is the amount to be paid directly to the applicant by the respondent for lost remuneration under section 170EE(1) of the Act.
The total amount of PAYE tax deducted is to be paid by the respondent to the Commissioner for Taxation.
The applicant is entitled to be put back into the position she would have been in if her employment had not been (unlawfully) terminated. Without limiting the generality of the order I will make, the order for continuity (order 2 below) is intended to cover long service leave, sick leave entitlements, annual leave (or holiday pay), and superannuation payments which the respondent would have been obliged to make to third parties, in accordance with any industrial award or statute.
The orders that the Court makes are as follows:
1. That the applicant be reinstated by the respondent forthwith in the position in which she was employed immediately before the termination of her employment.
2. That the period from the termination of the applicant's employment until now be treated, for all purposes, as a period of continuous employment of the applicant by the respondent in the position in which she was employed immediately prior to the termination of her employment.
3. The respondent is to pay the applicant the sum of $17,603.53 by way of lost remuneration.
4. Order 3 is stayed until 9.30am, Friday, 29 September 1995.
5. The matter is adjourned to 9.30am on Friday, 29 September 1995, to enable the parties to calculate the amount of lost remuneration actually payable to the applicant after the deduction of PAYE taxation at the appropriate rate, and the amount payable to the Commissioner for Taxation.
I certify that this and the preceding thirty (30) pages are a true copy of the Reasons for Judgment of Judicial Registrar Patch.
Associate: Caroline Sternberg
Date: 27 September 1995APPEARANCES:
Advocate for applicant: Ms J Hankinson
Solicitor for respondent: Mr E NeumanINDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES REGISTRYNo. NI 1467 of 1995
BETWEEN:
Lynette SYME
ApplicantAND:
THARAWAL ABORIGINAL
CORPORATION
RespondentCOURT: PATCH JR
PLACE: SYDNEY
DATE: 27 SEPTEMBER 1995MINUTES OF ORDER
THE COURT ORDERS THAT:
1.The applicant be reinstated by the respondent forthwith in the position in which she was employed immediately before the termination of her employment.
2.The period from the termination of the applicant's employment until now be treated, for all purposes, as a period of continuous employment of the applicant by the respondent in the position in which she was employed immediately prior to the termination of her employment.
3.The respondent is to pay the applicant the sum of $17,603.53 by way of lost remuneration.
4. Order 3 is stayed until 9.30am, Friday, 29 September 1995.
5.The matter is adjourned to 9.30am on Friday, 29 September 1995 to enable the parties to calculate the amount of lost remuneration actually payable to the applicant after the deduction of PAYE taxation at the appropriate rate, and the amount payable to the Commissioner for Taxation.
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