Mcdougall v Kimberly-Clark Australia Pty Ltd
[1996] IRCA 281
•3 Jul 1996
DECISION NO: 281/96
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - termination at the initiative of the employer - written RESIGNATION - VALID REASON - failure to discharge burden of proof - procedural unfairness - failure to investigate fully and to take into account evidence of independent witness
Industrial Relations Act 1988 ss.170CA(1)(b), 170DB, 170DC, 170DE(1), 170EA, 170EE(5); Schedule 11 clause (8)
Employee Relations Act 1992 (Vic) s.58
Income Tax Assessment Act 1936
CASES: Hayden v Golden Bowl Sports Centre Pty Ltd (unreported, Millane JR,
No. VI 0453 of 1995, 8 May 1995)
Mohazab v Dick Smith Electronics (1995) 62 IR 200
Rheinberger v Huxley Marketing Pty Ltd (unreported, Moore J,
No. NI 2064R of 1995, 16 April 1996
Selvachandran v Peteron Plastics Pty Ltd (1995-1996) 62 IR 371
Johns v Gunns Ltd (1995) 60 IR 258
SUZANNE MAREE MCDOUGALL - v - KIMBERLY-CLARK AUSTRALIA PTY LTD
No. VI 6194 of 1995
Before: Judicial Registrar Millane
Place: Melbourne
Date: 3 July 1996
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 6194 of 1995
B E T W E E N :
SUZANNE MAREE MCDOUGALL
Applicant
AND
KIMBERLY-CLARK AUSTRALIA PTY LTD
Respondent
MINUTES OF ORDERS
Judicial Registrar Millane 3 July 1996
THE COURT DECLARES THAT:
The termination of the applicant’s employment on 30 November 1995 by the respondent contravened Division III Part VIA of the Industrial Relations Act 1988.
AND THE COURT ORDERS THAT:
The respondent reappoint Suzanne Maree McDougall to the position in which she was employed immediately before her termination on 30 November 1995.
The employment of Suzanne Maree McDougall be deemed to have been continuous for all purposes from 30 November 1995 to the date of reinstatement.
The respondent pay to Suzanne Maree McDougall the remuneration lost by her because of the termination.
There be liberty to either party to apply to the Court on reasonable notice in respect to the calculation of the amount of the remuneration lost referred to in the preceding order.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 6194 of 1995
B E T W E E N :
SUZANNE MAREE MCDOUGALL
Applicant
AND
KIMBERLY-CLARK AUSTRALIA PTY LTD
Respondent
Before: Judicial Registrar Millane
Place: Melbourne
Date: 3 July 1996
REASONS FOR JUDGMENT
The applicant seeks compensation and remuneration to the date of reinstatement from the respondent, her former employer, alleging contravention of Division III Part VIA of the Industrial Relations Act 1988 (the Act). It is alleged by the applicant that her employment of some ten years was unlawfully terminated on 30 November 1995.
On its part the respondent relies on letters of resignation denying any termination at its initiative and, further and in the alternative, seeks to justify the termination in the event that the Court determines the preliminary issue against it. It does so by relying on matters relating to the applicant’s conduct and performance as well as matters it says came to its attention subsequent to termination as after acquired evidence.
BACKGROUND
The applicant commenced her employment with the respondent on 25 October 1985 as an administrative assistant to the respondent’s sales manager. That position involved her in working with Jeffrey Gordon Fawcus (Fawcus) who is presently the respondent’s regional manager for Victoria, South Australia and Tasmania, having been employed by the respondent for some twenty three and a half years.
The applicant’s duties as an administrative assistant came to an end in late 1989 when she was appointed to the position of a sales representative. At first the position involved her in sales to independent supermarkets and some pharmacy chain stores, however, from 1991 she worked as a sales representative for some two years for the pharmacy division of the company, which division involved her in selling the respondent’s products such as nappies, toilet tissue, facial tissues, feminine hygiene products, incontinence products and paper towels to pharmacies.
Two field assessment reports tendered in evidence and relating to employer performance assessments of the applicant in October 1991 and October 1992 respectively, whilst pointing to the need to improve in identified work areas were, generally speaking, satisfactory assessments.
In 1993 the applicant shifted from the pharmacy division to the supermarket division apparently as a result of some four separate complaints from pharmacies about her performance and conduct (see Exhibit A3).
There was a letter of warning from the respondent to the applicant dated 7 December 1993 addressing the four client complaints as well as informing the applicant that she would be transferred to another territory. The document was signed by the applicant who told the Court that she had not had the opportunity to provide any proper explanation before being given the warning because some of the complaints arose out of a change in company policy, which was a matter beyond her control. Notwithstanding her view that there was some explanation to be given the applicant accepted the transfer to the supermarkets division, remaining there until November 1995 when her employment ceased.
Broadly speaking, the applicant’s new duties required her to attend supermarket clients and prepare and service displays and promotions of the respondent’s merchandise as well as ensure that stock was available.
The applicant had the use of a company vehicle and a particular territory and list of stores to service. During the day she was involved in moving from store to store checking promotions and stock and if there was a new product being merchandised, she would ensure that there was space on the shelf in the store and attend to laying out the product for display and sale.
On 7 September 1994 the applicant received a further written warning from the respondent which purported to be a “final” warning (see Exhibit A4). One of the respondent’s customers and a client serviced by the applicant in her territory was the Franklin supermarket chain with stores in various suburbs. The chain requires sales representatives to sign in and sign out on leaving their stores. The warning related to the following three allegations:
“1.You did not perform the proper job function in these calls: i.e. Fill the fixtures and displays.
2.You did not follow Franklins store policy by signing in and out of Franklins Hawthorn and out of Franklins Eltham on 12/8/94.
3.You did not visit any other calls on Friday 12th August, 1994 and finished work early.”
In making the abovementioned allegations the respondent relied on the signing in and signing out records of the Franklin stores on 12 August 1994 and the applicant’s own weekly activities summary from that week. The warning document was signed by the applicant on 7 September 1994 above a statement that read, “I have read and agree with the above points”.
It was alleged by the applicant that following the lastmentioned warning and up until August 1995 she was careful to ensure punctuality and compliance with the respondent’s requirements.
Less than two weeks after receiving the warning on 19 September 1994 the applicant received a salary increase (Exhibit A6) and other than a verbal complaint conveyed to her by Gary Alan Billington (Billington), the field sales manager and the applicant’s immediate superior, about the length of her skirts she alleges that she received no other warnings until August 1995. The complaint about the length of her skirts was apparently from Fawcus who requested that she wear her skirts to her knees. The applicant alleges that Billington told her, and this is borne out by his evidence, not to wear short skirts when she was at head office in Mulgrave but otherwise indicated that he was not worried by her attire. It is apparent from the respondent’s own document (Exhibit R5) that the company dress standard only required the applicant to wear “professional business wear”. No evidence was called from the respondent’s witness to satisfy me that by wearing her skirts above knee length the applicant in some way breached the broad company standard or was acting in a manner inconsistent with any appropriate dress code for the position she held.
The respondent challenged any suggestion by the applicant that there were no other complaints between the date of the last warning and August 1995, referring to an alleged encounter between the applicant and a Bi-Lo manager, Warren Ellis (Ellis) in about March 1995.
It seems that the applicant and the former manager of the Chadstone Bi-Lo store were friendly. When he became seriously ill and was replaced by Ellis the applicant had occasion to comment suggesting that it was a “disgrace” or “pathetic” because no one had bothered to send the seriously ill manager a card. The applicant denied addressing her remarks to Ellis, however, he interpreted those remarks as referring to him and took umbrage.
What is apparent is that there was no formal complaint addressed by Ellis to the respondent until Ellis sent a letter in or about December 1995 referring to the incident which he alleged occurred on 13 March 1995. The reason for sending the letter was that Billington requested he do this in about November 1995 in relation to an unfair dismissal claim, presumably this particular claim. In other words, the witness had ignored the incident and the applicant had continued to service the store without comment until Billington directly sought a formal complaint document. The document was only brought to the applicant’s attention after the termination and therefore could not constitute a serious challenge to the veracity of her evidence-in-chief regarding complaints or warnings brought to her attention.
Despite assuring the Court that the contents of the complaint document sent to the respondent in December 1995 were true and correct, Ellis was obliged to concede that the nominated date of 13 March 1995 was not correct because, as it turns out, that was a public holiday when the store was not open for business. Given the inconsistencies in his evidence I am not prepared to accept that the applicant’s remarks, if any, were directly addressed to Ellis or that the incident was of sufficient importance to warrant the status of a complaint. As will be seen from other matters referred to below, Billington went to great lengths to compile evidence of complaints against this employee once there was an apprehension in the employer’s mind that the respondent might be the subject of an unlawful termination claim. However, the gathering of this evidence all occurred after Billington had obtained the applicant’s agreement to resign, the only other choice being termination by the employer.
The evidence of Ellis appears to be the evidence relied on by the respondent as after-acquired evidence of the employee’s alleged misconduct. However, because I am not satisfied there is proof of misconduct it follows that this evidence does not have the status of after-acquired evidence that may be relied on at least in relation to any remedy granted in this case (for general discussion of the after-acquired evidence issue see my decision in Hayden v Golden Bowl Sports Centre Pty Ltd (unreported, Millane JR, No. VI 0453 of 1995, 8 May 1995)).
On 20 September 1994 there appears to have been a further performance appraisal (Exhibits A7 and A9), the upshot of which was that in most categories the applicant either met or exceeded the employer’s requirements, apart from the category of personal factors which included a request to improve her consistency in dress code and the management, performance and development category requesting that she provide written monthly feedback on her territory results. Her overall rating was categorised in that appraisal as “meets requirements”.
The applicant generally asserts that from the date of the appraisal she did provide regular written feedback as required and was careful about complying with the dress requirements remembering that this complaint seems to have been confined to the question of whether she should wear her skirts at knee length or longer.
It appears that a complaint was made concerning the applicant’s conduct on her attendance at the Franklins Ringwood store either on 25 or 31 July 1995. This complaint was notified to the applicant by Billington by telephone on or about 31 July 1995 when she alleges that Billington told her not to worry after she queried whether the complaint was a serious one. On the next night, Tuesday, 1 August 1995, they again spoke when he told her she had been banned from the store and he needed her side of the story; arranging at the same time to meet the applicant on the following morning at Coles supermarket in Caulfield at 8.30am to discuss the complaint. The applicant met Billington as arranged and it is alleged by the applicant that she was told the respondent, “Would have to let (her) go” because of a complaint to Fawcus from Franklins’ manager alleging that the applicant was, “... throwing stock around the store and (she) had taken the stock from the shelf and (she) left the store without saying goodbye”.
Insofar as there was an allegation that she had taken stock from the shelves, the applicant understood this to refer to the removal of the stock from the sales shelves for use in the display she was building that day, leaving the sales shelves empty when she should have used stock either from the storeroom or that stored in cartons above the sales shelves which area is referred to as the capping. This stock was placed above the capping for replenishing those shelves.
The applicant denied throwing stock around the store and leaving without saying goodbye. She conceded that she used shelf stock to fit out the display and did so as this was the only stock available in the store. The applicant claims to have only removed the shelf stock after checking both the store and the area above the capping where she knew additional cartons were usually stored. She also pointed out that at another store in the week preceding the alleged incident she had, together with Billington, removed stock from the shelf to fill a display, presumably because there was insufficient stock in store. This lastmentioned allegation was not put to Billington.
In her conversation at Caulfield with Billington the applicant alleges that he referred to two earlier written warnings, the last of which was on 7 September 1994, saying this was her third warning and the respondent would have to let her go. The applicant claims to have protested at this action which led to Billington giving her the opportunity of resigning or being sacked. The offer was put to the applicant on the basis that if she resigned she could complete her service with the company for ten years thereby becoming entitled to her long service leave payment, sick leave and all her accrued benefits; whereas a sacking would take effect immediately. Although the respondent persisted over a period of some two days hearing in its claim that the termination was not at its initiative, Billington conceded in cross-examination that when he met with the applicant, ostensibly to hear her explanation, he had by then seen the management of the Franklins store concerned and had spoken to Fawcus who gave him authority to dismiss the applicant at his discretion. He attended the meeting with the intention of terminating the applicant’s employment but denied seeking her resignation with the threat that she would loose her opportunity to qualify for her entitlements, such as long service leave, if she did not comply. Given the lengths the respondent appears to have gone to to obtain a written resignation in a form it considered appropriate, it is more likely than not that Billington did use the question of the applicant’s entitlements as a means of obtaining a written resignation.
The applicant alleges that at the meeting she asked to speak to Fawcus however after Billington contacted him by telephone she was informed that Fawcus did not want to speak to her. She next convinced Billington to accompany her to Franklins Ringwood store to verify her allegation that there was no stock available at the time she alleges she was completing the display. The applicant specifically asked Billington to check what she called the load sheets at the Franklins store, which documents are similar to invoices and show whether stock has been delivered for a particular display. As it turned out Billington told the applicant he could not check these sheets, without giving her a reason for not having done so.
It was the applicant’s evidence that the Franklins’ staff were responsible for the ordering of stock from the respondent’s head office after she had previously detailed what was needed for the promotional display. I note that no evidence was called by the respondent to confirm that a delivery of stock occurred in time to erect the promotional display the applicant says she was required to fill from the shelves because of the lack of stock additional to that already on the shelves.
On the question of whether the applicant left the Franklins store without having said goodbye she told the Court that she had in fact said goodbye to the store’s manager, she only knew as Sandy and, in any event, she knew of no policy of her employer requiring her to say goodbye when she left stores she was attending on her rounds.
According to the applicant, before she left the Franklins store Sandy told her that he did not like the way she had displayed the toilet tissue display she erected that afternoon; his preference being for whites to be displayed in one section and prints in the other. The applicant, at Sandy’s request, changed the display however he was still unhappy with it and told her, “don’t worry - we’ll fix it” which was an indication to her that he would arrange the colours in the manner he preferred. The applicant alleges that she did not have any instructions prior to that exchange from the respondent or Franklins requiring her to co-ordinate the colours of the toilet tissue display in any way other than the way she originally did it. The manager was not called to give evidence to contradict the matters the applicant alleges she discussed with him despite it being clear that the respondent communicated with him and obtained his signature to a document purporting to be his statement (Exhibit A13) written in October 1995.
After the applicant and Billington arrived at the Franklins Ringwood store the applicant remained outside the store awaiting Billington’s return. It was then that she encountered Dennis John Kelly (Kelly) who is a merchandiser for another product supplier and who, coincidentally, was also at the Franklins store in late July 1995 removing an end display from the previous week and stacking shelves in another part of the store to that in which the display had been erected. When she saw Kelly the applicant asked him to tell Billington what had happened at the store because she and Kelly were both working in the same area with him removing his stock and end display, and the applicant erecting hers in its stead.
Kelly was an independent witness subpoenaed to give evidence on behalf of the applicant. He impressed me as a straight forward witness who was able to recall and truthfully recount the events that occurred in his presence. It is necessary to make these opening remarks about Kelly as a witness because his testimony directly conflicts with that of Billington. Because of these observations I have accepted his evidence in preference to that given by Billington concerning their meeting in August 1995.
Kelly told the Court that on the afternoon in question he was moving his end display and cartons out of the way when the applicant arrived. To make way for the applicant he had pushed cartons of toilet roll stock out of her way, stacking them in part down the supermarket aisle as well as pushing them along the floor. He thought at the same time, the applicant “might have grabbed a couple of cartons and pushed them along as well”, however, he told the Court that he did not see the applicant throw any of his stock. It was Kelly’s belief that there were only eight or ten cartons being removed and those that were pushed or stacked in the aisle were not interfering in any way with customer traffic.
When Kelly ran into the applicant outside the store in early August 1995 he told the Court that she was upset and commenced to cry when she saw him. When he asked what the problem was she told him “Oh, looks like I’m getting the sack”. He took her to sit down outside a coffee shop and when he again asked her what had happened she said “I look like getting the sack. The manager’s saying that I was damaging the stock and left the store without saying goodbye.” When he asked what stock she was referring to, she replied, “well, your stock” to which he told the Court he replied, “well, you didn’t damage my stock while I was there”.
Whilst they were conversing Billington re-emerged from the store at which time Kelly offered to tell Billington what he had seen. The applicant accepted the offer after which Kelly told Billington, “... I was moving my stock out of the road. Suzanne - she moved some of my cartons as well, I ..., but there was no damage done to my stock while I was there”.
Both the applicant and Kelly told the Court that Billington was not responsive to Kelly’s remarks only saying “okay” and not asking Kelly any questions. It was asserted by Billington, and this was also put to the other two witnesses, that when he joined the applicant and Kelly, all Kelly said was that he did not wish to get involved in the matter. Whilst Kelly conceded making a statement to this effect he was adamant that the conversation went further than that with him attempting to convey to Billington his knowledge of events.
On balance it is more likely than not that Kelly, who has no direct interest in the proceeding, not only expressed his reluctance to get involved, as so many witnesses are wont to, but also offered his recollection in an effort to assist the applicant once he believed she was facing dismissal. There were further matters in Billington’s evidence, discussed in more detail below, also bearing upon his credibility as a witness which lead me to the view that his evidence should not be accepted where it conflicts with that of the applicant and Kelly. By the time Billington met with Kelly he had, on his own evidence, visited the store on at least two occasions to discuss the matter with management and had then already determined to terminate the applicant’s employment. His failure to seriously address Kelly’s evidence, which tended to exculpate the applicant, is consistent with his desire to accept entirely the matters raised in the complaint and proceed with the termination.
After Kelly left, and despite the explanation given to him by Kelly, the applicant alleges that Billington informed her that he had to take the Franklins’ manager’s word for what had occurred. He also told her that because she was “emotional and distressed” she could take the rest of the day off. She did that, subsequently seeking the following day off as well. Exhibit A14 is an employment record card which shows that the applicant had one day’s sick leave on 3 August 1995. The documentary evidence and the applicant’s own evidence contradict the claim of Fawcus and Billington that on the day following her attendance at the Franklins Ringwood store they all met at Mulgrave where Fawcus asked for the applicant’s resignation and she prepared a letter of resignation.
In contrast, the applicant claims to have rung Billington on Thursday or Friday of the same week to indicate that she would be returning to work. On that occasion he arranged to meet her the following day. They met at Franklins in Hawthorn when Billington asked her what decision she had made, whereupon she said, “I don’t have a choice, do I?” and he replied, “No, not really”. In saying these words to Billington the applicant was really saying that she had to resign in order to preserve her benefits and entitlements. She estimated that she was then entitled to something in the order of $14,000 for long service leave, including other entitlements.
The applicant told Billington she would give him what he wanted and it was then that he arranged to follow her to the Franklins store at Eltham where she was to write up her resignation after attending to business in that store. The letter of resignation was drafted by the applicant as follows (Exhibit A5):
“After a very long and happy association with the Kimberly-Clark organisation I hereby request you to accept my resignation to take effect on November 1st, 1995 and to be confidential prior to 1 month Please.
Trusting that with your approval my entitlements should remain entact (sic).”
As can be seen from the letter of resignation the last paragraph is consistent with the applicant’s expressed concern that she preserve what she called her entitlements.
During the meeting with Billington, the applicant alleges that she wrote up a second letter of resignation given to Billington at the same time. Exhibit A5 shows that the resignation was to take effect from 1 November 1995, which date the applicant claims was the date she then believed the ten year period for her to qualify for long service leave would be met. However, she wanted to stay to the end of the year and wrote a second letter containing the date 15 December 1995 as the date on which resignation would take effect. It was her evidence that Billington agreed to speak to Fawcus about extending the time for her departure to 15 December 1995. The applicant claims that the last time she saw the second letter of resignation was on 18 September 1995 when it was shown to her by Fawcus. That document was called for by the applicant’s counsel but not produced by the respondent who denied its existence.
At some stage following 4 August 1995 the applicant recalls that Billington informed her that the termination date would be 30 November 1995. It is consistent with the evidence she gave that yet another letter of resignation was drafted by the applicant (Exhibit A11) in the following terms:
“After a long and happy association with the Kimberly-Clark Association I hereby advise my resignation, and with your approval to be effective on the 30th November, 1995.
Trusting you that all my entitlements will remain intact, and would appreciate that my resignation remain confidential (sic).”
The applicant alleges that she sent this document to Billington with the new date for resignation being 30 November 1995. In September 1995 she attended the Mulgrave office for a work performance appraisal during which time she met with Fawcus who had the letters of resignation with him. The third document (Exhibit A11) Fawcus took to with his biro passing a line through the final paragraph in an attempt to delete it, as is evident from the exhibit tendered to the Court. Apart from seeking the written resignation Billington also agreed to provide the applicant with a written reference expressing the view to her that Fawcus should not know about this reference. He left it to the applicant to compose its contents and arrange to have it typed on company letterhead he provided to her. After reading the typed reference Billington signed it in her presence. Not surprisingly, the reference was an excellent one and states as follows:
“Suzanne McDougall has been employed by Kimberly-Clark Australia Pty Ltd for the past ten years.
She commenced employment as an Administrative Assistant to the State Sales Manager in 1985. Her responsibilities in this position increased over the years. Suzanne was originally performing routine clerical tasks but later took on the function of a personal assistant, and as such, assisted in the preparation of monthly budgets and forecasts. Her analytical capabilities were a tremendous asset in helping her perform these functions in a most satisfactory manner.
Suzanne is a very capable and determined woman who set her sights on becoming a Sales Representative with the Company. This she achieved in 1990. She commenced her representations firstly within the Independent grocery industry where she was able to experience first hand the responsibilities that comes with being a Sales representative.
During 1992 Suzanne was offered the chance to represent the Pharmacy division, servicing a number of major account customers. Since then Suzanne has built up a tremendous rapport with all of her clientele and her results have been consistently excellent, and in all aspects has achieved our high standards of performance. Suzanne has always been willing to take on additional responsibilities and makes herself available, often at short notice, to assist in a variety of tasks.
In 1993 Suzanne accepted additional challenges in representing the major chain supermarkets. This provided her with further opportunities for multi skilling. She has excelled in the area of shelf and store displays. On occasions the Company has used her displays as examples to other representatives nationally.
I have known Suzanne for four and a half years. During that time I have always found her to be both an honest and loyal employee. She is a person of high integrity and sincerity. If necessary I would be happy to elaborate on any matters contained herein. (AH: 9796 2127).”
It was Billington’s evidence that he did not tell Fawcus he had signed the abovementioned document and another identical one dated 21 September 1995. This led to a written warning from Fawcus for giving a written reference (Exhibit A15). He claimed to have signed the reference to help the applicant when he had no belief in the truth of the contents of the document and understood at that time that it would mislead potential employers. What this response does is raise a real doubt in my mind about this man’s credibility. Employers should not be deterred from providing an employee, even one they no longer wish to employ, with a reference highlighting the employee’s positive attributes as an employee without misleading potential employers. Billington provided the letterhead for writing the reference, read it and signed it without then demurring from its contents. To now say that all its contents are untrue reflects his lack of impartiality as a witness and a desire on his part to play down the applicant’s skills as an employee in order to prejudice her claim against his employer.
The applicant continued to work for the respondent and service her existing territory, although it is not clear whether or not she returned to the Franklins Ringwood store between August and late November when she left her employment. According to Billington, the applicant agreed to comply with the company’s work requirements and because of this she was allowed to continue in her position for a further four months or so to the end of November 1995.
On or about 18 September 1995 the applicant was subjected to the a further annual performance appraisal by Billington in which he determined that her overall performance “needed improvement”. The appraisal given after the applicant had already submitted her written notices of resignation as requested by the employer, made the following comments in the various categories (Exhibit A8):
“PERSONAL FACTORS
NEEDS IMPROVEMENT
As mentioned in your previous performance appraisal, you need to improve your consistency in dress code and your company vehicle must always be maintained in neat (sic) and tidy fashion in order for you to perform your daily job function in a professional manner.
COMPETITIVE ACTIVITY
MEETS REQUIREMENTS
You are continuing to develop your knowledge of the grocery industry and are now beginning to regularly communicate competitive and aggressive pricing. However improvement is required in the neatness of your written communication.
TRADE INTELLIGENCE
MEETS REQUIREMENTS
You are now regularly communicating trade intelligence information, but as previously highlighted, you need to improve the neatness of your written communication.
COMMUNICATION
NEEDS IMPROVEMENT
You generally have a good working relationship with you peers and customers. However on occasion you should be more tactful in handling certain work related situations e.g. Franklins Ringwood complaint. As mentioned above your written communication also needs improvement.
TERRITORY ANALYSIS
MEETS REQUIREMENTS
You are continuing to develop your knowledge of the grocery industry and are continuing to improve the shelf management in your chain outlets across your territory.
SALESMANSHIP
NEEDS IMPROVEMENT
You need to be more tactful when dealing with your customers. This is clearly evident with the complaints received from your chain stores and previously from your pharmacy customers.
PRE-PLANNING
NEEDS IMPROVEMENT
With your experience in the total pharmacy and grocery industry, you are fully aware of the importance of strictly adhering to your journey plan for the week. You have changed your calls on occasions without informing your manager.
MANAGEMENT, PERFORMANCE & DEVELOPMENT
NEEDS IMPROVEMENT
It was mutually agreed during your M.P.D. discussion that you would provide regular feedback on results achieved on your territory. This is not happening on a regular basis.
OVERALL SUMMARY
Suzanne is further developing her experience by exposure to the major chain retailers. Whilst there is evidence of improving shelf management across her territory, Suzanne still needs to improve in other areas outlined in this performance appraisal.APPRAISEE’S RESPONSE
I have read your performance appraisal as issued September 1995 and wish to advise that I do not agree with the comments expressed, which have been underlined.Yours faithfully,
Suzanne M. McDougallOVERALL RATING : NEEDS IMPROVEMENT”
It was alleged by the applicant but denied by Billington that the parts of each paragraph underlined in the document were underlined in biro by Billington because the applicant queried the statements made. Whether or not this was so it is apparent from her statement at the bottom of the document that she disagreed with the parts of the document as underlined. The applicant also denied adding the handwritten words “which have been underlined” or ever seeing those words previously.
Because at first the applicant would not sign the final appraisal document she was required to see Fawcus. It should be kept in mind that the salesmanship appraisal category was to the applicant’s mind a reference to the Franklins Ringwood store complaint in late July and the complaints from when she was in pharmacy some years earlier. In other words, the appraisal included matters long since dealt with in earlier appraisals. In cross-examination Billington agreed that the appraisal was prepared with the possibility of proceedings in mind. It is surprising that the respondent felt the need to do a performance appraisal at that time when it then held at least one written letter of resignation. Again, its actions and the content of the appraisal are consistent with a desire to shore-up its case should an unlawful termination claim eventuate as it did and because of this motivation, I am not satisfied that the final appraisal was a bona fide attempt to assess her performance.
Apart from disputing some of the matters contained in the appraisal form the applicant told the Court that at her meeting with Fawcus he required her to rewrite the last paragraph of her written resignation, the one she claimed he crossed out, because he did not believe it sounded “good”. The applicant agreed to “consider” doing this but never did. I am satisfied that the resignation documents were all written with a view to satisfying the respondent’s requirements; it being more likely than not that there were three resignation documents drafted to take into account the applicant’s desire to extend the date upon which her purported resignation was to take effect.
The applicant did leave on 30 November 1995 with all her entitlements, including long service leave, to the date of termination, but as is evidenced by the statement accompanying her payments (Exhibit A12), she did not receive any pay in lieu of notice. This raises the question of whether the applicant was then entitled to receive the statutory minimum for notice pursuant to section 170DB of the Act in addition to her payments. This issue is addressed in more detail in my findings.
The respondent called evidence from Matthew Knights (Knights), the assistant store manager at Franklins Ringwood in July 1995. When he was asked to describe the events which allegedly occurred in July 1995, he told the Court:
“... the event occurred on a Tuesday afternoon, the Tuesday being the day that we change our promotions over. Suzanne, being a representative for Kimberly-Clark, came into the store with the intent to build a Sorbent 4 Pack - sorry, Kleenex 4 Pack display. There was currently a Sorbent 4 Four Pack Display on that gondola. She appeared to be in extreme hurry that day, for reasons unknown. The events that transpired was that we hadn’t had at that point had an opportunity to clear the end for her, so she began to do it herself. When I observed her doing this, she was pushing and, to a degree, throwing stock out of her road. Some of it was going into the customer traffic flow. So that at that point I intervened to assist her to get the stock cleared so it wouldn’t disrupt the traffic flow within the store. Sandy Anderson and myself, Sandy being the store manager, we instructed her - also at this point, sorry, the Sorbent representative came along and assisted as well in clearing his stock from the end, putting it away. Sandy Anderson and myself instructed her specifically on how we wanted the display to be built. ...”
“... I don’t remember specifically who instructed her to build it. I think it was a combined effort between the two of us. There was clear instructions given to her on how the end was to be presented with the stock that was available. Then we left to attend to other functions within the store. On return we found that there wasn’t any - that the instructions we had given weren’t adhered to and the appearance of the end was quite random. Being that it was a new store, I myself was quite adamant on how I wanted my displays built, in specific ways. So after she left the store we were then required to build the display. We came back at another occasion. Down the aisle we found an Extra Care display bin, as it were, that was filled. We hadn’t given permission for this display bin, not that we wouldn’t have, but we weren’t consulted about this display bin which is within our industry as meaning we need to know what the representatives are doing within the store. And then we observed that the display bin had been filled from stock from the fixtures when there was stock sitting up on the capping. Even if there is - like, if there was an occasion where there was no stock to fill a bin, then we just simply don’t allow the bin if it means just stripping the fixtures of the stock. On observation of the fixtures being stripped, I got to the point where I had had enough with Suzanne, because also with the display she had built, Mr Anderson and myself then had to strip it down to the floor again and rebuild it which cost us a lot of time. So by the time I’d encountered the Extra Care bin I decided I would ring Kimberly-Clark and register a formal complaint about her conduct and that I was adamant that I did not want her to return to my store again. And that was where my involvement finished. ...”
“... At the time of noticing that the fixtures had been stripped, I also noticed that there was stock sitting above the fixture on the capping, the stock that the company allocates for that display. ...”
“... There were cartons sitting above the fixture. The quantities that were up there indicated to me that there was stock allocated for the display because there was a new line product. In Franklins stores, when a new line is released, they allocate two cases of each line for the initial anticipated and additional sales and that was the stock that I noticed above, as well as there was stock also within the fixture - sorry, they put stock in the fixture. ...”
“... When I observed Ms McDougall removing the stock it was more an action of pushing it out of the road so that she could clear the space for her stock and to a smaller degree she was picking the stock up and moving it backwards into the customer traffic flow. There wouldn’t have been a great quantity, but enough - most of it would have been going to a safe-considerably safe zone to remove it from the aisle, but some of the stock was moving into - being moved into customer traffic flow. ...”
As a result of the abovementioned behaviour, Knights alleged that he rang Fawcus and gave a brief description of the events that had occurred. It was Knights’ evidence that his complaint was followed up the next day by Billington attending the store on which occasion Knights informed Billington that he did not want the applicant back in the store. There was no indication from Knights’ evidence that Fawcus or Billington at any time put to him the applicant’s version of the events occurring, much less the matters that Kelly addressed in his conversation with Billington. It is perhaps not surprising that Billington only told the Court that he thanked Knights for the information he gave him and offered an apology on the applicant’s behalf, when consideration is given to the respondent’s desire to maintain good relations with the management of that store. In other words, it is more probable than not that Billington was reluctant to challenge Franklins’ management and investigate further, preferring to preserve the respondent’s relationship with that customer if it meant that the applicant suffered some injustice in the process.
At the date of his meeting at the store with Billington, Knights denied being aware of what the respondent intended to do with the applicant’s employment following the complaint. It was his evidence that a month or so after the incident Billington told him that the applicant had, “... been causing trouble within the company for a period of time and that if I would be willing to assist, if there would be any need to substantiate a dismissal (sic).”
In fact, Knights was asked to write a letter referring to the events he had witnessed. At the time Knights was approached by the Billington to do this he had been transferred from the Ringwood store and was no longer in contact with the store manager, Alexander Anderson, the person the applicant and Knights referred to as Sandy. This is the person the applicant said had told her to leave the store after indicating that he would alter the display himself.
Knights alleged that although he discussed the contents of his letter and statement with Billington before completing it, it was composed by him and then both signed at Greensborough and handed to Billington on 27 October 1995. The letter written on Franklins letterhead reads (Exhibit A13):
“On Tuesday 2nd August 1995, Suzanne McDougall entered my store to build a Kleenex 4 pack display. She appeared in a hurry. Sorbent 4 pack was on the end Kleenex was to have. She moved the stock by pushing and throwing it behind her into customer traffic flow.
Mr. Anderson (the store manager) and myself instructed her on how we required the display built. She did not adhere to our instructions which was to feature the more popular selling products and as a result requiring us to strip and rebuild the end.
She erected an Extracare display without first consulting any of our staff or management and stripped our fixture for the display whilst the allocated stock was above on the capping.
After her behaviour on this day I was adamant I did not want her in the store again.”
Although Knights signed the letter as assistant manager for the Ringwood store, his evidence was that he had moved from Ringwood by the time that document was prepared and signed. Because of this it seemed to me somewhat unusual for him to sign the document identifying himself as assistant store manager of a store he no longer worked at, and even more unusual, for him to compose a letter describing himself as assistant store manager. Coincidentally on the same date as Knights signed his document, an identical letter was signed by Alexander Anderson, the former store manager at Ringwood (Exhibit A13). The only difference in Anderson’s letter was the signatories name and title and a statement below the signature saying, “I also confirm the above comments reflect an accurate assessment of the events that occurred (sic) on 2nd August 1995.” As already noted Anderson was not called to give evidence. Further, no explanation was given to the Court for the reference in both statements to the date of the incident being 2 August 1995 (a Wednesday) rather than a Tuesday in late July 1995 as asserted by all the other witnesses. Knights denied any collaboration between himself and Anderson on their statements and was otherwise unable to offer any explanation to the Court for the existence of the identical letters.
What Knights failed to tell the Court when giving his evidence is that according to Billington the statement signed by Knights was typed by the respondent from Knights’ own notes and taken back to Knights in Greensborough for his signature. Billington’s evidence was given after Knights and, therefore, there was no opportunity to put this additional matter to Knights. However, I am satisfied from my observation of the witness and his response to questions put to him in cross-examination that he was evasive in the answers given about the creation of this statement. In context his behaviour is consistent with a desire to assist the respondent in its defence of the dismissal of this employee, rather than maintain his independence as a witness. The contents of the statement to my mind reflect collaboration between Billington and Knights some months after the event attempting to build a case against the applicant to justify the decision to terminate her employment in early August 1995. Indeed, in cross-examination Knights conceded that he had, before giving his evidence, spent an hour and a half waiting with Billington outside the Court during which time they went through Knights’ evidence.
Inasmuch as it was alleged that there was stock above the capping available for the applicant’s use to fill the end bin, Knights told the Court that Billington did not ask to inspect the stock room, however, Knights did show Billington the stock available above the capping. This was done on the day following the alleged incident. However, Billington’s evidence contradicts that given by Knights because when he attended on the next day he alleges that there was no stock above the capping because it was all on the shelves. This Billington explained by saying that he was told by Knights and Anderson that Franklins’ staff had filled the shelves. What Billington saw the following day is consistent with the applicant’s evidence that there was no stock above the capping and, indeed, when Franklins found out that the shelves had been emptied to fill the bin they dismantled the bin and restocked the shelves. What was not explored in the evidence was whether the respondent’s failure to obtain permission to erect the Extracare display may have had some bearing on the availability of any promotional stock on the same day for filling the bin.
Because of the inconsistencies between the evidence of the respondent’s witnesses I have accepted the applicant’s claim concerning the availability of promotional stock at the relevant time.
When Knights was questioned about Kelly’s role in clearing the Sorbent display to make way for the applicant’s display, he was obliged to concede that he did not see Kelly and the applicant commence to dismantle Kelly’s display stock. His evidence-in-chief alleging that the applicant was pushing cartons into the aisle area is consistent with the evidence given by both Kelly and the applicant, however, for reasons best understood by Knights, he gave no evidence of having remonstrated with either Kelly or the applicant about the cartons being pushed into the aisle on that occasion apparently presenting some impediment to customer traffic. Both Kelly and the applicant believed that Knights had not assisted them to unpack the Sorbent display. This observation coupled with his failure to make any comment at the time about the stock being temporarily pushed into the aisle space or make any direct complaint to the applicant about throwing stock suggest to me that the incident, if it occurred at all, was not of sufficient import to deal with immediately. It is more likely than not that the applicant’s failure to co-ordinate the display in the way suggested to her by Sandy and her use of the stock from the shelf to stock the display allegedly causing more work for Knights and Anderson after she left, sufficiently irritated Knights for him to ring Fawcus and complain. The allegation that the respondent had not got permission to erect the display no doubt was a further factor in causing Franklins’ management some concern but this matter was never put to the applicant and was certainly not relied on by the respondent’s witnesses as part of any complaint made against her.
FINDINGS
On the preliminary issue of whether there was termination at the initiative of the respondent the evidence of the respondent’s witnesses, despite the submissions to the contrary, clearly concedes that the respondent wanted and sought the applicant’s resignation having already determined to bring her employment to an end prior to Billington meeting her in the Coles car park at Caulfield. The respondent acted to and intended to bring her employment to an end and, over a period of some four months, brought about that end (see Mohazab v Dick Smith Electronics (1995) 62 IR 200 and Rheinberger v Huxley Marketing Pty Ltd (unreported, Moore J, No. NI 2064R of 1995, 16 April 1996). Further, I am satisfied that the respondent used the applicant’s concern about the preservation of her benefits accumulated through her lengthy period of employment as a lever in obtaining her written resignation. Having obtained a written resignation the respondent then took steps to collect evidence of conduct of the applicant it deemed incompatible with the applicant’s proper discharge of her duties and prepared an appraisal of her performance in the twelve months preceding notification of her termination tailored to justify the termination it knew it had already brought about.
Section 170DE(1) - Valid Reason
In his decision in Selvachandran v Peteron Plastics Pty Ltd (1995-1996) 62 IR 371 at page 373 Justice Northrop had cause to consider the meaning of the words “valid reason” making the following observations:
“Section 170DE(1) refers to "a valid reason, or valid reasons", but the Act does not give a meaning to those phrases or the adjective "valid". A reference to dictionaries shows that the word "valid" has a number of different meanings depending on the context in which it is used. In the Shorter Oxford Dictionary, the relevant meaning given is: "2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value." In the Macquarie Dictionary the relevant meaning is "sound, just, or well founded; a valid reason."
In its context in s 170DE(1), the adjective "valid" should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must "be applied in a practical, commonsense way to ensure that" the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd (1995) 60 IR 1, when considering the construction and application of s 170DC.”
The respondent carries the burden of proving that on the balance of probabilities the applicant’s conduct at the Franklins supermarket in late July 1995 justified its action in pressuring her into resigning from her employment of nearly ten years. Because of the matters already outlined above I am not satisfied on the balance of probabilities that the applicant threw or in any way damaged the stock of the competitor Sorbent on the date alleged.
Anderson was not called by the respondent to give evidence and no explanation was provided for his absence. Because of this the applicant’s evidence concerning his instructions to leave him to alter the display of toilet tissue is uncontradicted. However, because of the matters referred to in the applicant’s evidence it is apparent that the completion of the toilet tissue display was a source of concern for Franklins’ management and despite their request to her to display the colours in a particular fashion she appears not to have complied with that request and that action generated some ill-will towards her. In addition, it is apparent that the management at Franklins held the belief that the respondent had not obtained permission to build the Extracare display on the date the applicant attended to do so and this too was a factor in banning the applicant from attending the store in the future. The lastmentioned matter was not dealt with at all either directly with the applicant or at hearing despite it being part of the complaint levelled against the applicant. This is a significant matter because if it was one of the reasons for precluding the applicant from returning to the store the respondent has not satisfied the Court that the applicant was or should be held responsible for the omission alleged by the store’s management.
The use of the shelf stock to fill the Extracare display no doubt added to Franklins’ frustration because of its alleged policy not to deplete the shelves to stock promotional displays. There was no evidence given that in any way suggests that the applicant acted contrary to any policy known to her or instruction from her employer other than the assumption that she had been lazy in not taking the stock allegedly available above the capping. The conflict in the evidence given by Billington and Knights on the issue of the available stock and Billington’s complete failure to take up the issue of the loading sheets has persuaded me that the respondent’s proofs on this aspect of the claim also fall short of the requisite standard of proof. As I have already observed if the Franklins store was not properly notified of the promotion there is a real probability that the promotional stock had not been supplied and the applicant was faced with a difficult choice of not stocking the display or leaving the shelves under stocked. In saying this I am conscious of the frustration the Franklins’ management no doubt felt when confronted with empty shelves; not to mention the need for the respondent to keep its clients happy.
For a reason to be a valid one it must be something more than some want of performance on the part of an employee especially where the employee is a long standing employee. I am not satisfied that the respondent has sustained its allegations on the various points of complaint arising out of the supermarket incident and those matters that have been shown to have occurred are not of themselves sufficient to provide a sound, defensible or well founded basis for saying that the applicant’s employment should be terminated.
The object of Division III Part VIA of the Act is to give effect or further effect to, amongst other things, the Termination of Employment Recommendation 1982 (see section 170CA(1)(b) and Schedule 11 of the Act). Paragraph 8 of Recommendation No. 166 provides:
“The employment of a worker should not be terminated for unsatisfactory performance, unless the employer has given the worker appropriate instructions and written warning and the worker continues to perform his duties unsatisfactorily after a reasonable period of time for improvement has elapsed.”
The applicant’s employment history shows that it was necessary for the respondent to discipline her in relation to customer complaints on a number of occasions in the past. In 1993 she was transferred from one division of sales to the supermarket division ostensibly because of performance related issues giving rise to customer complaints. In the supermarket division she also drew criticism from a customer, the Franklins chain in approximately August 1994, which complaint led to her receiving a “final” written warning in relation to the three matters set out in the warning dated 7 September 1994. Even though the respondent sought to establish that the salary increment in September 1994 was a modest one, the fact is that following the warning she did receive a salary increment and a performance appraisal variously categorising her performance as having then met or exceeded the respondent’s requirements as a sales representative.
In September 1994 the respondent, by providing the written warning and instructions as well as allowing the applicant time to improve her performance, acted in compliance with the spirit of Recommendation No. 166. Between September 1994 and late July 1995 there were no incidents of performance or conduct the respondent could properly say showed that the applicant’s performance fell below the standard required of her or in any way jeopardised the respondent’s relationship with its customers. In saying this I have not ignored the complaint provided by Ellis in December 1995 however such complaint was not sufficient to prejudice the ongoing relationship between the customer and the respondent and because of the matters I have already referred to I am not satisfied that the conduct alleged was such as to justify the status of being called a complaint.
The incident at the Franklins store in July 1995 required proper investigation and not just an unquestioning acceptance of what the assistant manager at Franklins had to say. In making this observation I am conscience of the dilemma facing all employers who depend on a customer base for their business and who must maintain cordial working relationships between their customers and their employees in order to promote their business interests. However, an employer acting reasonably on any customer complaint should not only investigate the allegation thoroughly and sensitively but it should also take into account the obligation it has to act fairly towards its employee accused of inappropriate behaviour, whilst taking steps to preserve its business interest. In this case there was no proper investigation before the decision to terminate was made. Indeed, the applicant had not even offered her version of events before Billington determined to bring her employment to an end. He did not put her story to the Franklins’ store manager and ignored Kelly’s contribution to the applicant’s defence. In doing so, he closed his mind to the exculpatory factors that may have existed in the applicant’s favour. If the respondent felt that it was not appropriate to challenge or question the version of events offered by the management of the Franklins store, or its decision to ban the applicant’s attendance at that store, then it was incumbent on the respondent to adopt a solution that did not sacrifice the applicant’s interest in her long term employment.
If I am wrong in my conclusion that the respondent has not established a sound, defensible or well founded reason for termination it follows from my observations above that in my view there has been a breach of procedural fairness in the investigative process and the opportunity given to the applicant to defend her actions and provide the evidence of an independent witness to corroborate her on a number of significant matters. Accordingly, had I been satisfied that the respondent had established a valid reason for termination I am otherwise satisfied that the respondent contravened section 170DC and section 170DE(2) of the Act; the termination in all the circumstances being a harsh, unjust or unreasonable one.
REMEDY
The applicant seeks reinstatement. The respondent at hearing had not then permanently filled her position; although it intends to do so in the future. Because of this proceeding it is apparent that at least part of the applicant’s territory is denied to her unless the new management of the Franklins store has a change of heart. The respondent employs different sales representatives in different territories and no doubt when faced with the difficulty of a customer rejecting a sales representative in their store it can take steps to rearrange the territory of the sales representatives to accommodate the customer wishes. However as the respondent pointed out to the Court it has altered the applicant’s sales area from pharmacy to supermarket in 1993 to make such an accommodation. Despite these matters, which are all circumstances relevant to the practicability of reinstatement I am not satisfied that reinstatement is impracticable in this case when the employer has control over the allocation of territory to its sales representatives and has a means available to it to make appropriate changes. Accordingly, an order for reinstatement will be made together with orders relating to the continuity of the applicant’s employment and the payment for loss of remuneration to the date of reinstatement.
The applicant has not been able to obtain full time employment since the termination other than some casual waitressing work in a job she performed part time prior to the termination.
At termination the applicant was paid to 30 November 1995 with accrued annual leave, sick leave and long service leave entitlements also being paid. Because the applicant is to be reinstated it is not necessary for the Court to deal with the additional claim pursuant to section 170DB of the Act however had I been required to consider this matter it is apparent that the applicant had four months’ paid notice prior to the termination date during which period she continued to work and would therefore not be otherwise entitled to compensation in lieu of notice or an award of damages pursuant to section 170DB and section 170EE(5) respectively of the Act.
At the date of termination the applicant’s gross annual salary was $37,905.00. The lost remuneration must, because of the additional payments made, be adjusted to take into account the receipt of these sums as well as any monies payable by the employer to the Commissioner of Taxation pursuant to the Income Tax Assessment Act 1936. The waitressing performed by the applicant since November is a continuation of pre-termination employment on a casual basis and to my mind the receipts for this income earning activity should not be adjusted against the remuneration payable for the period to reinstatement. In determining the amount payable the parties should have regard to the decision of His Honour Justice Northrop in Johns v Gunns Ltd (1995) 60 IR 258 save for any amount received by the applicant by way of unemployment benefits as it is now accepted that these amounts are not to be treated as additional income. I was not addressed on the question of the payment of long service leave entitlements to the applicant after 10 years’ service and how her entitlement to this payment arose apart from the obvious effect of section 58 of the Employee Relations Act 1992 (Vic). In the normal course of events the order relating to continuity of employment means that this payment should also be deducted.
On the evidence before the Court I am not in a position to properly calculate the appropriate sum of remuneration lost. If the parties are unable to agree on the calculation of the appropriate amount they should avail themselves of the opportunity provided by my further order granting liberty to apply to the Court on reasonable notice.
MINUTES OF ORDERS
THE COURT DECLARES THAT:
The termination of the applicant’s employment on 30 November 1995 by the respondent contravened Division III Part VIA of the Industrial Relations Act 1988.
AND THE COURT ORDERS THAT:
The respondent reappoint Suzanne Maree McDougall to the position in which she was employed immediately before her termination on 30 November 1995.
The employment of Suzanne Maree McDougall be deemed to have been continuous for all purposes from 30 November 1995 to the date of reinstatement.
The respondent pay to Suzanne Maree McDougall the remuneration lost by her because of the termination.
There be liberty to either party to apply to the Court on reasonable notice in respect to the calculation of the amount of the remuneration lost referred to in the preceding order.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
I certify that this and the preceding thirty-one (31) pages are a true copy of the reasons for judgment of Judicial Registrar Millane.
Associate:
Dated: 3 July 1996
Solicitors for the Applicant: Testart Robinson & Pitts
Appearing for the Applicant: Mr Martin
Solicitors for the Respondent: Minter Ellison Baker O’Loughlin (Adelaide)
Counsel for the Respondent: Mr N. Strawbridge
Date of hearing: 9 & 10 May 1996
Date of judgment: 3 July 1996
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