Macgregor v Christmas Island Resort Pty Ltd - [1997] IRCA 11

DECISION NO:11/97
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - claim of UNLAWFUL TERMINATION - whether PROCEDURAL FAIRNESS - whether VALID REASON for termination - whether INSTRUCTION was LAWFUL OR REASONABLE - COMPENSATION.
Workplace Relations Act 1996 (Cth) (formerly Industrial Relations Act 1988 (Cth)) Ss 170DC, 170DE(1), 170EA.
Gibson v Bosmac Pty Ltd (1995) 60 IR 1.
Ewan James MacGREGOR -v- CHRISTMAS ISLAND RESORT PTY LTD
WI 1447 of 1996
BEFORE:        R. D. FARRELL JR
PLACE:           PERTH
DATE:              15 January 1997
IN THE INDUSTRIAL RELATIONS      )
COURT OF AUSTRALIA  )
WESTERN AUSTRALIA  )
DISTRICT REGISTRY  )
No. WI 1447 of 1996
BETWEEN:
Ewan James MacGREGOR
  Applicant
AND:
CHRISTMAS ISLAND RESORT PTY LTD
     Respondent
MINUTE OF ORDERS
BEFORE:                 R. D. FARRELL JR
PLACE:  PERTH
DATE:  15 January 1997
THE COURT ORDERS THAT:
1.The respondent, within 14 days:
(a)pay into Court compensation pursuant to Section 170EE of an amount equal to 24 weeks of the applicant’s salary as at the date of the termination of his employment; and
(b)file a notice specifying the amount of tax believed by the respondent to be payable on such payment.

2.Within 7 days of such payment and notification, the District Registrar inform the applicant of the payment and notification.
3.Subject to any further order of the Court, at the expiration of a further 14 days, the Registrar pay to the Australian Taxation Office the amount of the notified tax and pay to the applicant the remainder of the money paid into court.
4.Liberty to apply be reserved in respect of order 3.

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
WESTERN AUSTRALIA DISTRICT REGISTRY
WI 1447 of 1996
BETWEEN:
Ewan James MacGREGOR
Applicant
AND:
CHRISTMAS ISLAND RESORT PTY LTD
Respondent
REASONS FOR DECISION
15 January 1997 R. D. FARRELL JR

This is an application under Section 170EA of the then Industrial Relations Act 1988, now known as the Workplace Relations Act 1996 (“the Act”). The application is for compensation arising from the alleged unlawful termination of the employment of the applicant, Ewan James MacGregor (“Mr MacGregor”), by the respondent, Christmas Island Resort Pty Ltd (“the Company”). There was no claim for reinstatement and it was agreed by the parties that reinstatement was impracticable.
Findings of Fact.
The Company runs a resort on Christmas Island. The resort incorporates a 156 room hotel and casino, employing about 400 staff in all. The resort relies almost entirely on attracting international visitors for its business.
Mr MacGregor was employed by the Company for a one year term as its Special Events Co-ordinator, commencing 28 June 1995.
Mr MacGregor was part of the Company’s Marketing Department. The department was headed by the International Marketing Manager, Mr Nick Koorey, to whom Mr MacGregor reported. Mr Koorey reported to Mr John Farrow, the General Manager, who managed the resort. Mr Farrow was associated with another Company, Casinos Austria International Pty Limited. While the exact nature of the relationship between the companies and Mr Farrow’s exact status within the two companies was not made clear, it was common ground that Casinos Austria International Pty Limited was responsible for the management of the resort, and that Mr Farrow had authority, whether direct or delegated, to dismiss employees of Christmas Island Resort Pty Ltd.
Mr MacGregor continued working for the Company after his one year term expired in June 1996. While I heard evidence of occasions where Mr MacGregor’s behaviour was of concern, it was not contended in these proceedings that there were any shortcomings in the performance of his day to day duties. He took annual leave in August 1996, resuming work on Monday 23 September, 1996.
On his return, Mr MacGregor was instructed by his immediate supervisor, Mr Koorey, to move offices. Mr MacGregor, Mr Farrow and Mr Koorey all worked outside of the “core building” of the resort in a separate “chalet”, similar to a block of motel rooms. The chalet was made up of eleven rooms, some of which had two-storeys. The rooms were numbered from 801 to 811. Mr Koorey instructed Mr MacGregor to move from upstairs in Room 804 to Room 801, a single storey office, because Room 804 was to be converted into a store room. This was the most recent of several moves Mr MacGregor had been required to make in the course of his fifteen months’ employment with the Company; he says there were six or seven moves in all.
In order to vacate Room 804, Mr MacGregor had to move a four-drawer filing cabinet, a desk, archive files, his computer, a television, a video and other audio-visual equipment, other electronic equipment awaiting repair, about fifty video cassettes, desk trays, and various personal effects. He says it took him between four and five hours in all to move, starting at 4:00 pm on Tuesday afternoon. In the course of the move, he shifted a large box up to what was now the storeroom in room 804. The box contained a toy car of the type that a child sits in to pedal.
On either Tuesday afternoon or Wednesday morning - it is not clear - Mr Farrow, the General Manager, noticed that Mr MacGregor was moving in or had moved into room 801. Mr Farrow asked Mr MacGregor what he was doing. Mr MacGregor explained that Mr Koorey had told him to move from room 804 to room 801. Mr Farrow says he had not been aware of this instruction.
Room 801 was allocated to employees involved in Customer Relations for the Company. They reported to Mr Farrow and were part of the General Manager’s Department. Mr Farrow, as General Manager, occupied room 802. Mr MacGregor was part of the Marketing Department.
Mr Farrow enquired as to the whereabouts of the toy car that he had left in room 802. He was worried because, having purchased it for his child in Singapore, it had proved unsuitable. It was therefore his intention to return it, and he was concerned that it not be damaged. On being told by Mr MacGregor that he had moved the toy to room 804, Mr Farrow expressed his annoyance, being of the view that Mr MacGregor had no right to move his personal property without first ascertaining its ownership and requesting permission. Mr Farrow immediately checked room 804 and found the car in its box under some furniture, apparently undamaged.
At about mid-afternoon on Wednesday, 25 September 1996, Mr Farrow called Mr Koorey’s office and spoke to his Personal Assistant, Ms Christiana Dinse. I accept Ms Dinse’ recollection that Mr Koorey was present at work on that Wednesday and the following day. Mr Farrow’s recollection was that Mr Koorey was unavailable on those days. It is possible that Mr Koorey happened not to be available at the time of this call.
In any event, Mr Farrow left a message with Ms Dinse for Mr MacGregor. She was told to tell Mr MacGregor that he was to move his office out of room 801 and into room 803 by 9:00 am the next morning or he would be fired.
Mr Farrow says he issued this instruction because he was concerned that he was personally responsible to the Casino Control Division (C.C.D.) with regard to the location of licensed employees and that Mr MacGregor, who was a licensed employee, was not authorised by the C.C.D. to occupy room 801. I will consider this issue in due course.
I accept Ms Dinse’ recollection that she communicated this message to Mr MacGregor at some time between 3:00 pm and 4:00 pm that Wednesday afternoon. Mr MacGregor reacted by “rolling his eyes”, as might be understandable, but left Ms Dinse with the impression that he would comply with Mr Farrow’s instruction.
Mr MacGregor also had direct contact with Mr Farrow that afternoon. Mr Farrow told him that he was to move out of room 801 by 9:00 am the next day. Mr Farrow added that if it didn’t happen, he would be fired. Mr MacGregor said nothing, but it is agreed that at some point in the meeting, he smiled, leading Mr Farrow to infer that he was not taking the instruction seriously. Mr MacGregor explains that he wasn’t going to argue.

Mr MacGregor’s recollection is that Mr Farrow told him that if he did not move as instructed, he would “suffer the consequences”. I have accepted Mr Farrow’s recollection of what he said to Mr MacGregor, but in any event, it was clear to Mr MacGregor in view of Ms Dinse’ earlier message what the consequences would be. Given that Mr Farrow had already spelled out the consequences in his message to Ms Dinse, it is clear that the ultimatum was not triggered by Mr MacGregor smiling at him.

There was some dispute as to the timing of these communications. Mr MacGregor recalls being advised of the instruction by Ms Dinse at about 4:00 pm and Mr Farrow at between 5:00 pm and 6:00 pm. Mr Farrow places his discussion with Ms Dinse at about 1:00 pm and with Mr MacGregor at between 2:00 pm and 3:00 pm. I accept the evidence of Ms Dinse on this matter, and find that she first advised Mr MacGregor of the instruction at about 3:30 pm and that Mr Farrow spoke to him about it shortly thereafter.
Mr MacGregor was faced with some difficulties in complying with Mr Farrow’s instruction.
The first of these was that the downstairs area of room 803 could only comfortably accommodate two employees. There were, for example, only two desks. The room was already occupied by Mr Owen and Mr Richard Da Silva, the latter having moved into the room a few days previously. It was impractical and unlikely that all three would be required to work from there for any period of time.
It is apparent that the reason Mr Farrow gave an instruction which would have brought about an impractical work situation was that he was unaware that Mr Da Silva had moved into room 803.
It is perhaps surprising that this obvious difficulty was not immediately raised with Mr Farrow. When I asked Mr MacGregor why he did not say anything to Mr Farrow when Mr Farrow spoke to him and personally reiterated the instruction, Mr MacGregor said it was because Mr Farrow wasn’t in a good mood. He believed this was because the toy car had been moved. He says he hoped Mr Koorey and Mr MacGregor would get together and sort it out. He wasn’t going to argue with Mr Farrow.
It is perhaps even more surprising that Mr Koorey did not raise the problem with Mr Farrow. Mr Koorey worked on the top floor of room 803 and therefore would have known that Mr Da Silva worked on the floor below him. He would therefore have been aware of the impractical consequences of Mr Farrow’s instruction.
Mr Farrow was adamant that he had no communication at all with Mr Koorey during the relevant period. Indeed, he thought Mr Koorey was away from his office and unavailable. I accept Ms Dinse’ evidence that Mr Koorey was in attendance on the Wednesday, 25 September 1996. I accept that Mr Koorey, rather than discussing the difficulties with Mr Farrow, instead joined Ms Dinse in reiterating to Mr MacGregor over the course of the afternoon that he should make sure he complied with Mr Farrow’s instruction.
Had Mr MacGregor felt able to communicate with Mr Farrow about the practical difficulties flowing from his instruction, the events leading to these proceedings could have been avoided. One can only speculate as to why Mr Koorey did not advise Mr Farrow of the difficulties. The failure to maintain an adequate culture of open communication between management and employees is a common feature of proceedings in this jurisdiction.
Mr MacGregor says that by the time he left at 7:00 pm on Wednesday night, he had packed up all the files and materials he would need to work productively from room 803 the next day. He left them on the desk in room 801.
He says he did not move all of his furniture and equipment into room 803 that afternoon partly because, while it would have been physically possible to fit it all into room 803, it could not have been done without causing ongoing disruption to the ability of the three of them to work. I accept that this was so.
In addition, Mr MacGregor says that he did not have time to phy[S1]sically move it all on the Wednesday anyway. It was suggested by the Company that Mr MacGregor could have engaged a porter from the resort to assist him. He had had a porter to help him shift the filing cabinet downstairs when he moved from upstairs in room 804. Mr MacGregor says it is not that easy to get a porter. He says there was only one on duty. Presumably the porter would have other responsibilities to the guests which might have priority. I note that Mr MacGregor had two days in which to organise the porter for the previous move, and even then it seems the porter only assisted in that part of the move that Mr MacGregor was physically incapable of performing himself.
Mr MacGregor estimates the full move to room 803 would have taken at least four hours. This estimate was disputed. I have accepted that Mr MacGregor first received the instruction at about 3.30 pm. On Mr MacGregor’s estimate of the time required, the full move could have been completed by 7:30 pm, had it been given priority. I am satisfied, based upon the description of what he had to move, that the full move would have taken at least until 6:00 pm.
Mr MacGregor’s contract provides that “there will be occasions when it will be necessary for you to work additional hours for which no additional payment will be made.” I note that Mr MacGregor was at work until 7:00 pm in any event, presumably to complete other work which he judged to be important.
On Thursday 26 September 1996, Mr MacGregor caught the hourly bus from his residence to the resort which left at 9:00 am and arrived at the resort at 9:20 am. Ms Dinse was on the same bus. There was no suggestion that it was unusual for them to arrive at that time.
Mr Farrow was walking past room 801 at or shortly after 9.00 am. While the door was locked, he noted that Mr MacGregor’s equipment was still there.
When Mr MacGregor arrived at the resort at 9:20 am, he says he went to the “core building” to collect his mail, and then to room 803 to compose and send an answer to an urgent facsimile, working from Mr Da Silva’s desk. He says he then went to room 801 to collect the files and other materials he had packed up, and took them back to room 803 to continue working.
Mr Farrow checked room 801 again at 10.00 am. The door was open. He saw that Mr MacGregor’s equipment was still there.
He spoke to Ms Dinse. He asked her whether she had passed on his message to Mr MacGregor. Ms Dinse confirmed that she had. Mr Farrow then told Ms Dinse to tell Mr MacGregor that he was fired and to make his way to the Human Resources Department.
Ms Dinse went to find Mr MacGregor. He was not downstairs in room 803 and Mr Owen didn’t know where he was. She went looking for him. He was not in room 801. She was away for some time enquiring of people as to his whereabouts, she explained to some of them the reason she was looking for him. By the time she returned to room 803, Mr MacGregor was at Mr Da Silva’s desk working on a stack of files. She does not specifically recall seeing the files on the desk when she had looked for him downstairs earlier. He said to her, “Don’t worry, I already know”. She gave him the message.
Soon after, security officers of the resort arrived to remove Mr MacGregor’s licence and to escort him from the premises.
Mr MacGregor received four weeks pay in lieu of notice and accrued leave entitlements. His salary at the time of his dismissal was between $41,000 and $42,000. He was evicted from the accommodation he had rented from the Company at $50 per week, and then moved to Queensland.
A Department of Social Security Separation Certificate issued by the Company on 2 December 1996 cites “misconduct” as the reason for termination, with the additional detail that Mr MacGregor:
“failed to implement an instruction given to him by the General Manager. In view of the fact that he smiled when the instruction was given, the General Manager warned him that failure to implement the direction would result in his termination of employment.”

Whether Mr MacGregor was Given the Opportunity to Defend Himself against the Allegation

Section 170DC of the Act provides that:
“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.”
The reason given for the termination was Mr MacGregor’s failure to comply with Mr Farrow’s order that Mr MacGregor move his office out of room 801 and into room 803 by 9:00 am the next morning. Counsel for the Company submitted that the requirement that orders be complied with is an operational requirement of the business. This may be so. It is clearly also the case, however, that an allegation of failure to so comply relates to the employee’s conduct. Section 170DC must therefore be complied with.
Counsel for the Company submitted that, despite Mr Farrow’s failure to speak directly to Mr MacGregor at any time after giving him the instruction to move offices, there was no breach of Section 170DC. He submitted that the circumstances of this case were similar to those in Gibson v Bosmac Pty Ltd (1995) 60 IR 1, where Wilcox CJ held there had been no breach.
Gibson v Bosmac Pty Ltd dealt with a failure by Mr Gibson to comply with his employer’s direction to work overtime on Saturdays. The employer had made it clear to Mr Gibson that he must work on Saturdays when required. On a Friday morning some two months later, the employer had two conversations with Mr Gibson about work the following day. When Mr Gibson left work on the Friday, he indicated that he was not coming in. His employer told him that, if he did not come in on the Saturday, he could “pick up his tools”. Mr Gibson understood this to be a threat of dismissal. Mr Gibson did not attend work on the Saturday. His opening words to his employer the following Monday continued Friday’s conversation, asking “Do I pick up my tools or what?” His employer told him to pick up his tools. Mr Gibson left.
Wilcox CJ held that the employer gave Mr Gibson an adequate opportunity to defend himself, and had not failed to comply with Section 170DC. He noted that Section 170DC does not require any particular formality, and should be applied in a practical, commonsense way so as to ensure the affected employee is treated fairly. Wilcox CJ found that Mr Gibson had the opportunity on the Friday afternoon to say anything he wished about the threat that if he did not come in on the Saturday, he could “pick up his tools”. He had another opportunity on the Monday morning. His Honour found that Mr Gibson’s question, “Do I pick up my tools or what?”, showed that Mr Gibson went to work expecting to be dismissed, and knowing that the reason would be his failure to attend on the Saturday; the link between failure to attend and dismissal having been spelled out by the employer on the Friday.
While there are some similarities, there are also material differences between the facts of the present case and that considered by the Chief Justice.
I am not convinced that Mr MacGregor could be said to have had an adequate opportunity to say anything he wished about Mr Farrow’s instruction or the accompanying threat on the Wednesday afternoon. I accept that he was deterred by Mr Farrow’s temperament at the time. I also take into account the fact that, unlike Mr Gibson, who had been involved with an ongoing dispute about working on Saturdays over the previous two months, Mr MacGregor had had little opportunity to consider the instruction to move and the potential difficulties arising from it. There was also no expression by Mr MacGregor on the Wednesday of an intention not to comply.

More clearly, however, there was no contact at all between Mr MacGregor and Mr Farrow after the alleged failure to comply with the instruction, and therefore no opportunity to respond to that allegation. There was no indication that Mr MacGregor went to work expecting to be dismissed; his acknowledgment to Ms Dinse on the Thursday morning that he already knew what she had to tell him was consistent with his having heard it from someone Ms Dinse told when she was looking for Mr MacGregor.
At the time Mr Farrow made his decision, he was not aware:
· that his instruction had the effect of requiring three rather than two people to be accommodated in room 803; and
· of Mr MacGregor’s claim that he had substantially complied with the instruction, having worked in room 803 rather than room 801 that morning, albeit without moving all of his possessions from room 801.
Given that Section 170DC should be applied in a practical, commonsense way so as to ensure the affected employee is treated fairly, it cannot be said that Mr MacGregor was treated fairly where the “opportunity to respond” was such that the employer remained ignorant of such issues.
Accordingly, I find that the Company did not give Mr MacGregor an adequate opportunity to defend himself, and that it therefore failed to comply with Section 170DC.

Whether There was a Valid Reason for Termination

Section 170EDA(1)(a) confers the onus on the employer to prove that there was a valid reason for the termination of the employee’s employment connected with the employee’s capacity or conduct or based on the operational requirements of the undertaking, establishment or service.
The Company contends that Mr MacGregor failed to comply, literally or even substantially, with Mr Farrow’s instruction that he move his office out of room 801 and into room 803 by 9:00 am the next morning. The Company further contends that the instruction was a lawful and reasonable instruction. It contends that Mr MacGregor’s failure to comply with the instruction was a valid reason for the termination of his employment connected with his conduct for the purposes of Section 170DE(1), and that it is an operational requirement of the resort that such instructions be complied with.
I accept that Mr MacGregor failed to literally comply with the instruction. It seemed to me arguable that the instruction was ambiguous as to whether it required Mr MacGregor to move all his equipment, or merely to move his place of work, by the specified time. However, it was clear from Ms Dinse’ evidence that she interpreted the instruction as extending to shifting all of his equipment into room 803, and exhorted Mr MacGregor to comply with it to that extent.
In any event, Mr MacGregor did not even move his current files into room 803 until some time after 9:00 am. There was therefore, on either view, a literal failure to comply.
Mr MacGregor contends, however, that he substantially complied with the instruction, working from room 803 rather than room 801 on the Thursday morning and moving his current files. Counsel for the Company invited me to find that Mr MacGregor took no step to move even his current files into room 803 until he heard that Ms Dinse was looking for him on the Thursday morning. I accept that this is possible. However, there was no evidence before me that he was seen working from room 801 on the Thursday morning. While Ms Dinse does not remember seeing Mr MacGregor’s current files in room 803 when she first looked for him, she did not rule out the possibility that they were there and she merely failed to notice them. The Company bears the onus of proof on this issue. I am not satisfied that it was more probable than not that Mr MacGregor was working from room 801 rather than room 803 on the Thursday morning.
I note that the Company would have been better placed to investigate this claim had Mr MacGregor been given the opportunity to raise it on the Thursday morning prior to his termination.
The Company contends that Mr Farrow’s instruction was a lawful instruction, within the scope of his contract.
I have already noted that Mr MacGregor’s contract provides for occasional unpaid overtime where necessary. I am satisfied that literal compliance with the instruction would have required Mr MacGregor to work overtime, particularly given that he may have had other work-related obligations which he may have judged to be of equal importance and priority, and which appear to have kept him back until 7.00 pm anyway
In order to determine whether the overtime was “necessary” for the purposes of his contract, the question is therefore whether it was “necessary” for Mr MacGregor to have all his possessions moved out of room 803 by 9:00 am on Thursday morning. This question must be answered objectively. It cannot be said to have been necessary to move by 9:00 am merely because Mr Farrow arbitrarily selected that time.
The sole justification offered by Mr Farrow for the urgency of the time limit he imposed on the move was the fact that the C.C.D. had not been notified of Mr MacGregor’s move to room 801. I note in passing that this rationale for the urgency of the instruction was never explained to Mr MacGregor by Mr Farrow.
The casino run by the Company is governed by the Casino Control Ordinance 1988 of the Territory of Christmas Island. My attention was drawn to Section 108 of that Ordinance, which provides:
“(1)The Minister of the Casino Controller may, by notice, give directions to the developer, the casino licensee, the casino operator or the manager, as the case requires, in relation to any aspect of the management, control or operation of the casino ...
(3) The developer, casino licensee, casino operator or manager shall not without reasonable excuse fail to comply with a direction given to him, her or it under subsection (1).”
Of more obvious relevance are Sections 69 and 70, which provide that plans and diagrams of the casino in relation to, among other things, the location of the reception, office and working spaces must be approved by the Casino Controller, and that any variation to those plans must be similarly approved prior to implementation.
A copy of a letter from Mr Farrow to the Deputy Casino Controller dated 14 June 1996 was tendered. It seems that, as at that date, the C.C.D. were advised that the relevant rooms were occupied as follows:
·   room 801 - Finance/Travel Reimbursements
·   room 802 - General Manager
·   room 803 - Marketing
·   room 804 - Uniforms (Top Floor to become Marketing in the near future).
The copy tendered into evidence also bore hand-written amendments, indicating later changes to the occupation of the rooms, as follows:
·   room 801 - C/R [Customer Relations?] Liaison Office
·   room 802 - General Manager
·   room 803 - Marketing
·   room 804 - Store room General
There was nothing to indicate how or whether approval had been sought from the C.C.D. for these changes. The lack of such evidence may be grounds for inferring that approval for day to day changes in the use of offices could be obtained informally.
Whether room 801 had approval for use for Finance/Travel Reimbursements or Customer Relations Liaison at the relevant time, it did not have approval for marketing, which was Mr MacGregor’s function. Only room 803 and, possibly, 804 had approval for that purpose.
It is clear from its terms that the purpose of Section 69 and 70 is to ensure that there is adequate control over entry to the casino. Mr MacGregor’s occupation of room 801 rather than room 803 or 804 was irrelevant to that issue. However, I accept that it may have been a technical breach of Section 70 of the Ordinance, and that it was in the interests of the Company to limit the duration of such a breach.
This could have been achieved by seeking the necessary approval, which it seems may have been an informal proposition. It is clear, however, that Mr Farrow did not want Mr MacGregor in room 801 anyway, whether authorised by the CCD or not. He therefore chose the other solution, and instructed Mr MacGregor to urgently move into room 803.
I accept Counsel for Mr MacGregor’s contention that his client, by working from room 803 on Thursday morning, sufficiently removed any ground for complaint on the part of the C.C.D. so that the Company was no longer in technical breach of Section 70.
I do not accept Mr Farrow’s contention that Mr MacGregor’s failure to literally comply with the instruction could have resulted in the Company losing its casino licence.
It was therefore not objectively necessary for Mr MacGregor to have worked unpaid overtime to move all of his possessions out of room 801 to room 803 before 9:00 am on Thursday morning. The order to do so was therefore not within the scope of the contract and not, in the relevant sense, lawful.
Even had it been a lawful instruction, I am satisfied that it was based upon incorrect information and that practical difficulties would have arisen had Mr MacGregor literally complied with the order by shifting all his possessions into room 803. This, added to the difficulties faced by Mr MacGregor in complying within the specified time, lead me to the conclusion that the instruction was unreasonable, in the sense that it was an instruction a reasonable manager would not have given.
Counsel for Mr MacGregor invited me to find that the terms of Mr Farrow’s instruction were motivated by malice against Mr MacGregor, due to Mr Farrows annoyance at Mr MacGregor for moving the toy car, in circumstances where the move into room 801 had taken place without his knowledge. There are not sufficient grounds for finding that Mr MacGregor was motivated by improper motives in giving the instruction. The instruction and the manner in which it was given suggest, however, that Mr Farrow was unconcerned about any disruption or inconvenience the instruction might cause Mr MacGregor.
I am satisfied that dismissal was, in those circumstances, a disproportionate response to Mr MacGregor’s failure to literally comply with what was an unreasonable instruction.
Accordingly, given that:
·   I am not satisfied that Mr MacGregor did not substantially comply with the instruction;
·   the instruction was not lawful, in that it went beyond the scope of the contract;
·   the instruction was not reasonable; and
·   dismissal was a disproportionate response to Mr MacGregor’s failure to literally comply,

I find that Mr MacGregor’s failure to comply with the literal terms of Mr Farrow’s instruction was not a valid reason for the termination of his employment.

In so finding I have taken into account the Company’s contention that the special circumstances of the Company are such, given the degree to which it is regulated and the security issues arising from its multi-million dollar turnover, that it is an operational requirement that instructions of the General Manager be strictly complied with.
It suffices to say that, at least in relation to Mr MacGregor’s employment, I am not satisfied that the operational requirements of the Company were different in this respect from those of most employers. I note in this context that the Employee Handbook incorporated into Mr MacGregor’s contract of employment requires that “all reasonable instructions given by supervisors should be carried out”. However, it goes on to provide that an employee failing to do so “will be subject to disciplinary action which may include the issuing of a written warning” and that “repeated breaches... will result in subsequent written warnings and the employee will have his employment terminated in the event that three written warnings have been issued for an offence.”

Compensation

In assessing the compensation that is appropriate, the Court will have regard to what is reasonable in the circumstances and will look at what would have been likely to occur had the Act not been contravened.
Mr MacGregor had been employed for fifteen months before his dismissal. In assessing the likelihood that Mr MacGregor would have remained in employment with the Company for at least six months had there been no breach of the Act, I have taken into account several incidents which occurred in the course of that employment.
On about 29 March 1996, Mr MacGregor entered the staff canteen, an area covered by the terms of the C.C.D.’s license, after having been drinking in the bar. This was apparently contrary to the terms of the licence. When the security guards approached Mr MacGregor he, at least initially, refused to leave. Mr MacGregor concedes he was “out of line” on this occasion, and points out that he raised the matter himself with Mr Farrow at the first opportunity the next morning and apologised.
On 1 April 1996, while Mr MacGregor was speaking on the telephone in his office to parties in Jakarta, a colleague, Mr Andrew Owen, threw an eraser at him. Mr MacGregor reacted angrily, throwing the phone at Mr Owen, and in the process tipping over the return of the desk at which he was sitting. He left the office, returning when he had calmed down to put the desk and the phone (which was undamaged) back to rights. Mr MacGregor says it was an isolated incident, and that they both apologised and got on with the job.
It seems that shortly thereafter, Mr MacGregor submitted a letter of resignation to Mr Farrow. Mr MacGregor explains that the resignation was submitted for what he described as “personal reasons”. No detail was given of these reasons. While one might speculate as to whether these reasons, whatever they were, contributed to Mr MacGregor’s behaviour in the days previous, and that that behaviour may have therefore been an aberration, there was no evidence to that effect.
The incidents and the resignation were discussed with Mr Farrow and with Ms Osmond, the Human Resources Manager. It is agreed that Mr MacGregor received a verbal warning over the incident in the canteen.
Mr MacGregor decided to retract his resignation.
In about August 1996, Mr MacGregor was asked to explain a meal of over $300 which he had booked up at the Company’s expense. He says he filed a report on the matter, explaining that there was a children’s circus involved in the “Christmas Island Arts Festival”`. Because of a delay in rehearsals, he agreed to provide the 25 children involved with sandwiches. He had limited authority to book up meals, but had not expected it to cost so much. He says he would not have ordered the food had he known what it would have cost.
Mr MacGregor was also asked to explain an occasion when he took electronic equipment belonging to the Company off the island without permission. He says that in his report on the incident, he explained that it was for the purpose of a farewell party for a longstanding employee of the Company, and that he saw it as conducive to staff morale. As he was responsible for the relevant equipment, he had not understood it to be necessary to seek permission to use it. Following that incident, the Company issued a clear instruction that Mr MacGregor should seek permission in future should he wish to use the equipment for purposes not directly related to the Company’s business activities.
I have considered the possibility that Mr MacGregor’s earlier resignation indicates that he was in some way unsettled in his employment, so that some allowance should be made for the contingency that he might have resigned within six months had he not been terminated. However, his behaviour in the five months after April seems to have been consistent with an intention to stay. There is no evidence that the original reasons for his resignation continued to have any relevance. In any event, it is unlikely that he would resign unless he had another employment opportunity. His experience since termination, even allowing for the added difficulties in finding employment from a status of unemployment, suggests that such opportunities are not plentiful at present.
I note that, while his employment had not been without incident, the policies and procedures in the Company’s Employee Handbook which are expressly incorporated into Mr MacGregor’s employment contract provide for three written warnings to be issued for breaches of the prohibitions contained in the handbook, prior to termination. None of the previous incidents had been treated as warranting a written warning. The contract reserves the right to dismiss without notice where the employee is guilty of serious misconduct or negligence, but there is nothing to suggest such misconduct or negligence would be likely in future.
I have therefore proceeded on the basis that it is very likely that Mr MacGregor would have remained in employment with the Company for at least seven months had he not been unlawfully dismissed. Seven months is the period over which any relevant loss would be incurred by Mr MacGregor, given the six month limit on compensation under Section 170EE of the Act and the fact that four weeks’ salary was paid to him in lieu of notice.
As at the date of hearing, Mr MacGregor had been unemployed for almost 16 weeks. Given the four weeks’ pay in lieu of notice, he has incurred to date a loss equal to 12 weeks’ salary. It is well established that social security payments are not remuneration to be taken into account in assessing loss.
I am satisfied that Mr MacGregor has made reasonable efforts to mitigate his loss. He has relocated to Queensland, where he has previous contacts in the entertainment industry. His “Jobseeker Diary”, tendered in evidence, shows that he has sought employment through advertisements, past employers and acquaintances since his dismissal, without success.
Mr MacGregor seeks compensation of an amount equal to 26 weeks’ of his salary at his time of termination. His loss to date is 12 weeks’ salary. There was no evidence as to the likelihood of his obtaining employment in the next 14 weeks. I must make an assessment as best I can. I have proceeded therefore on the basis that such employment is possible, but not likely, and may not be as well remunerated as his previous employment.

Conclusion

Accordingly, I will order that compensation be paid by the Company for the breach of Sections 170DE(1) and 170DC of the Act of an amount equal to 24 weeks’ of his salary at the time of his termination. I have awarded slightly less than the amount of compensation I am empowered by Section 170EE to order. This is in recognition of the slight contingency that the employment may have ended lawfully within seven months, and the contingency that Mr MacGregor may gain other employment within the next fourteen weeks.
The form of the order reflects the practice adopted in a recent decision of the Chief Justice in recognition of difficulties arising from the probable obligation on employers to deduct taxation payable on such awards of compensation.

I certify that this and the preceding 20 pages
are a true copy of the reasons for decision of
Judicial Registrar R.D. Farrell.
Associate:
Dated:
APPEARANCES
Counsel appearing for the applicant:             Mr Derek Schapper
Solicitors for the applicant:  D. H. Schapper
Counsel appearing for the respondent:  Mr M. McPhee
Solicitors for the respondent:  Michael Sillar McPhee
Date of Hearing:  13 January 1997
Date of Judgment:               15 January 1997