Mobbs v Portseal Pty Ltd
[1996] IRCA 349
•10 July 1996
DECISION NO: 349/96
CATCHWORDS
INDUSTRIAL LAW - Claim of UNLAWFUL TERMINATION OF EMPLOYMENT - Whether serving a period of PROBATION which was determined in advance - Whether employment terminated at the initiative of the employer - Whether REINSTATEMENT was IMPRACTICABLE - COMPENSATION.
Industrial Relations Act 1988 ss: 170CC, 170DB, 170DD, 170EE(1), 170EE(2); Regulation 30B(1)(c).
May -v- Lilyvale Hotel Pty Limited, Industrial Relations Court of Australia, Number NI1963/95, Wilcox CJ, unreported, 1 December 1995.
MOBBS -v- PORTSEAL PTY LTD
NI 1252 of 1996
Before: PATCH JR
Place: SYDNEY
Date/s of hearing: 10 JULY 1996
Date of judgment: 10 JULY 1996
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NI 1252 of 1996
BETWEEN:
LEONARD J MOBBS
Applicant
AND
PORTSEAL PTY LIMITED
Respondent
MINUTES OF ORDERS
10 July 1996 PATCH JR
THE COURT ORDERS THAT:
The respondent pay to the applicant, as compensation for the unlawful termination of his employment, the sum of $11,132.50;
The parties attempt to reach agreement on the amount of tax to be deducted from that sum on the basis that it is an Eligible Termination Payment;
If agreement is reached, consent orders may be filed setting out the amount to be paid directly to the applicant and the amount to be deducted as tax by the respondent;
If agreement is not reached, written submissions are to be filed on the question of the amount of tax to be deducted by the respondent no later than 4 pm Wednesday, 24 July 1996. The submissions of each side are to be served on the other side by that time;
The respondent is to pay to the applicant the sum of $427.00 as damages under section 170DB of the Act within 21 days of today.
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
NEW SOUTH WALES DISTRICT REGISTRY
NI 1252 of 1996
BETWEEN:
LEONARD J MOBBS
Applicant
AND
PORTSEAL PTY LIMITED
Respondent
REASONS FOR DECISION
Delivered ex tempore - revised from the transcript
10 July 1996 PATCH JR
The applicant was initially employed by the respondent on a casual basis for a period of about 5 to 6 months. From 27 September 1995 until a time shortly before Christmas 1995 he was a full-time employee.
His work at the time of the termination of his employment was cleaning used cars and ensuring that they were ready for sale or delivery. A decision had just been made to change his employment so that he would work as a tester of cars, driving them and checking them, and making sure that they were ready for sale. He is over - qualified for that work as he holds a certificate from the Institute of Automotive Engineering and has his mechanics ticket.
Just prior to 27 September 1995, the applicant received a telephone call from someone at the respondent and he was told that there was a full-time position there for him. He attended the respondent's premises on the morning of 27 September 1995 to start work.
According to the evidence of Mr Martin Howard, the General Service Manager of the respondent, the applicant started work at 7.30am. At about 8 am Mr Howard gave a contract of employment to the applicant's direct supervisor (who, coincidentally, was Mr Howard's wife, but nothing turns on that). Mr Howard said that the applicant signed that document shortly after 8 am at a time when Mr Howard was physically present in the room and saw him sign it.
The applicant, on the other hand, says that he did not receive that document until a time about a month after he had started work and he was asked to sign it then. He, the applicant, says that he signed the document without reading it.
It does not matter, as I see it, that the applicant did not read the document. People who sign contractual documents, in the way the applicant says, carelessly, without reading them, bind themselves by that signature to abide by the contract.
The potential importance of the document is that on the cover page it is clearly stated that:
All new employees are to be employed as probationary employees for the first 3 months of their employment.
The respondent's case was, at the commencement of hearing of this matter, that the applicant was excluded by virtue of section 170CC and Regulation 30B of the Industrial Relations Act 1988 (“the Act”), as he was a probationary employee.
Regulation 30B(1)(c) excludes employees from the operations of the relevant subdivisions of the Act if they are:
An employee serving a period of probation or a qualifying period of employment, if the duration of the period or the maximum duration of the period, as the case requires
(i) is determined in advance; and
(ii) is reasonable, having regard to the nature and circumstances of the employment.
In my view, it does not matter whether or not the applicant signed the document a month after he started work, or half an hour after he started work. On the version least favourable to the applicant he signed the contract of employment half an hour after he had already commenced employment in the full-time position with the respondent.
It follows that the duration of the probation period was not "determined in advance", and he is therefore not an employee excluded by virtue of Regulation 30B(1) from the operation of the relevant sections of the Act.
The respondent also argues that, regardless of whether or not the applicant was a probationary employee, the applicant, via the agency of his wife, resigned his employment on 20 December 1995.
The circumstances which led up to this asserted resignation are as follows. On 16 December 1995 there was a Christmas party for the employees of the respondent. The applicant went to Yennora Railway Station and caught a train home. At Granville he was set upon by four people, assaulted and robbed.
The next morning, that is to say, on Saturday 17 December 1995, the applicant went to Mt Druitt Hospital. He was told that there was nothing wrong with him, that he should go home and take some pain killers. He did not accept that diagnosis, as he was later on coughing up blood, and went to see his general practitioner.
His general practitioner referred him to Westmead Hospital, to the Radiography Department, where a CAT scan was done which revealed that his jaw had been broken in four places and that his nose had also been broken.
As a result of that, on Wednesday 20 December, the applicant was admitted to Westmead Hospital for operations to fix those fractures. He was released on Friday 22 December.
Three medical certificates are in evidence.
The first medical certificate is one from Mt Druitt Hospital, dated 17 December 1995, which certifies that the applicant has been unfit for work since 17 December 1995 and will be unable to resume his occupation until 19 December 1995.
The second medical certificate is one from Westmead Hospital. It is dated 22 December 1995 (the date that the applicant was released). It states that the applicant was treated at the hospital as an in-patient from 20 December to 22 December 1995 and states that he has been unfit for work since 20 December 1995 and is unlikely to be able to resume work until 1 January 1996.
The third medical certificate is from the Plumpton Marketplace Medical Centre (where the applicant's GP works). It is dated 2 January 1996 and certifies that the applicant attended the surgery on 2 January 1996 and will be unfit for work from 2 January 1996 until 5 January 1996. It further states that he, the applicant is, "Not able to put on any pressure for 1 month". (sic)
Mrs Helen Mobbs, the applicant's wife, gave evidence that she made two telephone calls to the respondent informing them of the applicant's condition.
She said that the first call was on 18 December 1995 and that she spoke to Mr Bradley Dale. Mr Dale is the finance director of the respondent. She said that she told Mr Dale that her husband had been injured, that he would not be in and that her daughter will be taking in a medical certificate in the afternoon.
The second call that Mrs Mobbs gave evidence about was one that she said occurred on the morning of Wednesday 20 December. She said she rang the switchboard but was unable to speak to Mr Dale. She said that therefore she left a message with the switchboard operator, Jeanne Barker. (Mrs Mobbs called her Jean). She said that she told the switchboard operator that she was Mr Mobbs wife. She said that she told the switchboard operator this:
I was at the hospital and he was having an operation. I said they should get someone to fill in as I didn't know how long he'd be off.
Mrs Mobbs went on to say that she did not tell the switchboard operator that Mr Mobbs was resigning.
Mrs Mobbs said that there had been an earlier attempt, immediately prior to that conversation with the switchboard operator, to speak to Mr Dale, but Mrs Mobbs was unable to get through to him and therefore rang the switchboard operator back virtually immediately.
Mrs Mobbs denied point blank that she had ever spoken to Martin Howard about her husband's injuries or his work prospects.
Jeanne Barker gave evidence of what is clearly the same conversation. However, Ms Barker said that she received that phone call from Mrs Mobbs on Tuesday 19 December, not Wednesday the 20th, as Mrs Mobbs had said in her evidence. She said that Mrs Mobbs left a message for Mr Jim Keepkie, the General Manager of the respondent, and for Martin Howard. The message was to this effect: On the evening of the 16th Lennie had been assaulted and he was in Westmead having facial reconstructive surgery at that time. She (Mrs Mobbs) said that because of the severity of the injuries Lennie would not be coming back to work and could any money owing to him be got together.
Ms Barker also gave evidence that on 20 December she put a call from Mrs Mobbs (whose voice she knew from speaking to her on the telephone on previous occasions) through to Martin Howard.
Martin Howard gave evidence of what he said was a conversation that had occurred between himself and Mrs Mobbs on 20 December 1995. He said that she was put through from the switchboard and the switchboard operator (clearly Ms Barker) said that it was Mrs Mobbs on the phone. Mr Howard said that the caller identified herself as Mrs Mobbs and his evidence continued as follows:
She asked me if I was aware that Lennie had been injured on Saturday night and said that because of those injuries he would not be returning to work and asked if his pay could be made up.
When asked, "How did you respond?" Mr Howard responded by saying, "I said I was already aware of it and that I would organise it."
There are a number of inconsistencies between the various versions of the witnesses as to when these conversations occurred and if they occurred. The first inconsistency is as to when Mrs Mobbs spoke to Jeanne Barker. In my opinion that conversation occurred on Wednesday 20 December, as Mrs Mobbs said, not Tuesday 19 December.
The reason that I resolve the conflict in that way is because Ms Barker said that Mrs Mobbs had said that the applicant was in hospital "at that time", having facial reconstructive surgery.
The evidence establishes that the applicant did not go into hospital to have that facial reconstructive surgery until 20 December 1995.
However, I also accept that there was a conversation between Mrs Mobbs and Mr Martin Howard on 20 December 1995. Mr Howard's evidence is corroborated by Ms Barker's evidence in that Ms Barker said that she passed on to him the message that Mrs Mobbs had left with her prior to the time at which Mrs Mobbs spoke to Mr Howard.
The question then becomes a twofold one: What did Mrs Mobbs say to Ms Barker and to Mr Howard and was that said with the authority of the applicant?
It is difficult for me to resolve the question of whether or not Mr Howard's version of the evidence is to be preferred to Mrs Mobbs's version. It is just as difficult for me to resolve the question of whether Ms Barker's evidence is to be preferred to Mrs Mobbs', or vice versa. If Mrs Mobbs’ version of the evidence were to be accepted, it is possible that what she said was misinterpreted by those to whom she had spoken.
However, it is not necessary for me to resolve those matters. I am satisfied that, even if Mrs Mobbs did say to Mr Howard that the applicant "would not be returning to work" and even if she did say to Ms Barker that the applicant "would not be coming back to work" that those words were not said with the authority of the applicant.
If the applicant is to be bound by the actions of his wife it has to be proven that she was acting with either his actual or his ostensible authority. There is no evidence before me from which I could conclude that the actions of the applicant had given the impression that he had allowed his wife to hold herself out as having the authority to speak for him. In other words, there is no basis upon which I could conclude that she, although lacking his actual authority to say that he had resigned, nonetheless had his ostensible authority.
The question then becomes this: Did Mrs Mobbs have the applicant's actual authority to communicate to the respondent that he would not be coming back to work?
In my opinion, she did not have his authority to do that.
There are four matters which lead me to that conclusion.
The first one is that it is clear that the applicant was happy to have a full-time job after a long period of intermittent casual employment during which time he had been on and off social security. This makes it unlikely that he would resign due to a temporary disability, and unlikely that he would give his wife the authority to do that on his behalf.
Secondly, the applicant denied that his wife had the authority to say any such thing to his employer, the respondent.
Thirdly, the fact that at least one medical certificate was handed in (Exhibit 1), for the initial period, tends to suggest that the applicant was anxious to preserve his position with the respondent.
Fourthly, on or about 2 or 3 January 1996, the applicant, at his initiative, telephoned Mr Howard and, on Mr Howard's evidence, the following conversation took place:
The applicant said, "I understand I've been fired". Mr Howard replied, "You haven't been fired, your wife telephoned and said you were resigning, so we've processed the paperwork". The applicant said, "What can we do about it?". Mr Howard said that there was nothing that could be done about it because, "We've made alternative arrangements and put someone else into that role".
In his evidence, the applicant said that a conversation to much the same effect had occurred and that he, the applicant, said to Mr Howard that he was surprised to hear that and Mr Howard had responded by saying that he had been surprised as well. That additional aspect of the conversation was not challenged in cross-examination and I accept that Mr Howard was told by the applicant that he, the applicant, was "surprised" at having learned that he had resigned.
No such conversation, on either version, would have occurred if the applicant had in fact resigned.
On balance, therefore, in my opinion, whatever it was that Mrs Mobbs said to Ms Barker and to Mr Howard, she did not have, and never had, the authority to inform the applicant's employer that the applicant was not coming back to work, or that he had resigned.
What then are the legal consequences of such a finding of fact?
In my opinion, there was a termination of the applicant's employment at the initiative of the respondent. This is because nothing that the applicant did or caused to be done resulted in his employment coming to an end. It was the actions of the respondent, either because they accepted at face value what Mrs Mobbs had said without authority, or because they misconstrued what Mrs Mobbs had said as a resignation (it matters not what in fact occurred), which led to the termination of the applicant's employment.
I wish to make it clear at this stage of my reasons for judgment that there is no question of improper conduct on behalf of any of the persons working for the respondent. I accept that Mr Howard gave evidence honestly. I accept that either he either honestly misconstrued something that Mrs Mobbs had said, or was in fact told by Mrs Mobbs that the applicant was not coming back to work. But the fact remains, at the end of the day, that it was the actions of the respondent which led to the termination of the applicant's employment.
The Court finds, therefore, that the applicant’s employment was terminated at the initiative of the respondent.
As the actions of the respondent which terminated the applicant’s employment were based on the incorrect belief that he had resigned, it follows that there was no valid reason for the termination of the applicant's employment, and the termination of his employment was unlawful.
REMEDY
I first have to consider whether an order reinstating the applicant is appropriate in all the circumstances of this case - see section 170EE(1).
The case was not run on the basis that the applicant was seeking reinstatement. He did not claim it in his original application. It was only towards the end of the evidence of the second last witness for the respondent (whose case went second) that a question was asked as to the personal relationships in the workplace which put me on alert that reinstatement might in fact be an issue in the case.
The respondent conducted its case as if reinstatement was not sought. In my opinion, therefore, reinstatement is not an appropriate remedy in all the circumstances of this case.
There is a question as to whether or not the reinstatement of applicant is impracticable. I have to determine this question because of the wording of section 170EE(2) of the Act which reads as follows:
If the Court thinks in respect of a contravention of a provision of this Division (other than section 170DB or 170DD constituted by the termination of employment of an employee that the reinstatement of the employee is impracticable, the Court may, if the Court considers it appropriate in all the circumstances of the case, make an order requiring the employer to pay to the employee compensation of such amount as the Court thinks appropriate.
Although I have some difficulty with the question, in my opinion it would now be impracticable to order the reinstatement of the applicant. The reasons for this are: firstly, the applicant does not seek reinstatement and that is a factor relevant to the question of impracticability, although not necessarily determinative of that question. Secondly, it is now July 1996 and the applicant had his employment terminated in December 1995.
The relevance of that is twofold: Namely, (1) the workplace has settled into a working pattern without the applicant being present; (2) the amount of an order for remuneration lost, if I were to order it, would be greater than any amount that I could order for compensation which is relevant to the question of impracticability - in this particular case at least.
A further reason for impracticability is that someone else has been employed in the job to which the applicant was about to be transferred. However, that third reason is a minor one in the scale of things, in the circumstances of this case.
COMPENSATION
No evidence was led as to whether or not the applicant has been offered reinstatement. It was twice asserted from the bar table and I have no regard to that; such matters can only properly be adduced in evidence. The evidence as it stands before me is that the applicant has been unemployed since the termination of his employment, and that he has tried diligently to get employment but has failed to do so. In my opinion, therefore, it is likely that he will remain unemployed for a significant period of time into the future.
Furthermore, the applicant's actual economic loss is in excess of the maximum amount of 6 months remuneration that the Court can award under section 170EE(3), of the Act. When one takes into account his likely future economic loss (May -v- Lilyvale Hotel Pty Limited, Industrial Relations Court of Australia, Number NI1963/95 Wilcox CJ, unreported, 1 December 1995) it is clear that the amount of compensation that is appropriate in the circumstances of this case, as the evidence now stands, can only be the maximum amount of 6 months compensation.
The applicant was receiving, on his evidence, "about $427" per week gross at the time of the termination of his employment. In order to determine what the amount of compensation is, I go through the following mathematical process. I divide 427 by 7 to reach the figure for one day. I multiply that by 365 to reach the figure for an entire year and I divide that by 2 to reach the figure for 6 months. The resulting figure is $11,132.50.
The respondent will be ordered to pay that amount in compensation to the applicant for the unlawful termination of his employment, on the basis that it is an Eligible Termination Payment. Tax is to be deducted by the respondent on that basis.
In addition to that, the applicant received no pay in lieu of notice. He is, therefore, entitled to damages under section 170DB of the Act. The applicant is aged 49, but was employed by the respondent for a period of not more than 1 year. The period of notice or pay in lieu of notice required under section 170DB(2) of the Act is, therefore, one week only. That comes to $427.00 (gross).
The orders that the Court makes are as follows:
That the respondent pay to the applicant, as compensation for the unlawful termination of his employment, the sum of $11,132.50;
That the parties attempt to reach agreement on the amount of tax to be deducted from that sum on the basis that it is an Eligible Termination Payment;
That if agreement is reached, consent orders may be filed setting out the amount to be paid directly to the applicant and the amount to be deducted as tax by the respondent;
That if agreement is not reached, written submissions are to be filed on the question of the amount of tax to be deducted by the respondent no later than 4 pm Wednesday, 24 July 1996. The submissions of each side are to be served on the other side by that time;
The respondent is to pay to the applicant the sum of $427.00 as damages under section 170DB of the Act within 21 days of today.
I certify that this and the preceding thirteen (13) pages
are a true copy of the reasons for decision of
Judicial Registrar Patch as recorded in the transcript
and revised by the Judicial Registrar.
Associate: Renee Cauchi
Dated: 2 August 1996
APPEARANCES
Solicitors for the applicant: Mr G West Industrial Advocate for the respondent: Mr G Harris,
Motor Traders AssociationDate of hearing: 10 July 1996
0
0
0