Mr H M Bean and Mrs J Bean and Milstern Retirement Services
[1994] IRCA 167
•16 December 1994
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
SYDNEY DISTRICT REGISTRY NO. NI 423 of 1994
Between: MR H.M.BEAN & MRS J.BEAN
Applicants
And: MILSTERN RETIREMENT
SERVICES PTY LTD
Respondent
Before: Judicial Registrar Patch
Place: Sydney
Date: 16 December 1994
MINUTES OF ORDER
That the termination of the employment of each of the applicants by the respondent contravened s. 170DC of the Industrial Relations Act 1988.
That the respondent pay to the applicant, Mr Harold Malcolm Bean, compensation in the sum of $25,000.00.
That the respondent pay to the applicant, Mrs Jean Bean, compensation in the sum of $30,000.00.
That the above compensation be paid within 21 days of 16 December 1994.
Note: Settlement and entry of orders is dealt with in accordance with Order 36 of the Industrial Relations Court Rules.
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
SYDNEY DISTRICT REGISTRY NO. NI 423 of 1994
Between: MR H.M.BEAN & MRS J.BEAN
Applicants
And: MILSTERN RETIREMENT
SERVICES PTY LTD
Respondent
Before: Judicial Registrar Patch
Place: Sydney
Date: 16 December 1994
REASONS FOR JUDGMENT
(DELIVERED EX TEMPORE - REVISED FROM TRANSCRIPT)
This is an application under section 170EA of the Industrial Relations Act 1988. (“The Act”) There are two applicants: Mr Harold Malcolm Bean and Mrs Jean Bean, and the respondent makes no issue in respect of the fact that, although there are two applicants, there is only one proceeding. The respondent is Milstern Retirement Services Pty Ltd.
The applicants, in the application(s), each claim the following orders:
(a)an order declaring the termination of the employer’s employment of the employee to have contravened Division 3 of part VIA of the Industrial Relations Act 1988 (which I will hereafter refer to as “the Act”);
(b) an order requiring the respondent to reinstate the employee in employment; and
(c) an order that the respondent pay compensation to the employee.
They also seek such other order or orders as will put them in the same position, as nearly as can be done, as if their employment by the respondent had not been terminated.
The applicants were employed by the respondent on 26 January 1994. Their employment was terminated on 15 June 1994, by letter dated 14 June 1994. They were initially employed for a period of probation, but in May their employment was made permanent.
The applicants were employed as a couple, and from 5 May 1994 until the termination of their employment their combined salary was $37,500.00 per annum. They were employed as a management couple at a retirement village run by the respondent. This is a common practice in that industry.
The termination of the applicant's employment occurred on 15 June 1994. The application was filed on 21 June 1994.
Therefore, the changes to the Act, whereby an upper limit of $30,000.00, or six months remuneration, was imposed on the amount of compensation which can be awarded, do not have any relevance to the cases of the applicants.
Section 170EE of the Act, as it was on 21 June 1994 is applicable to this case. Sub-section 170EE(1) has the sub-heading, "Employee to be put in pre-terminated position". Then the text is as follows:
After considering the merits of an application under 170EA, the Court, unless satisfied that the termination of the employee’s employment contravened no provision of this Division (other than section 170DD), may make such orders as it thinks appropriate in order to put the employee in the same position (as nearly as can be done) as if the employment had not been terminated.
Sub-section 170EE(2) is as follows:
The orders the Court may make include, for example:
(a)an order declaring the termination to have contravened this Division;
(b)an order requiring the employer to reinstate the employee;
(c)an order that the employer pay compensation to the employee.
Sub-sections 170EE(3) and (4) of section 170EE are not relevant to these proceedings.
Section 170DC of the Act has the heading, "Employee to have opportunity to respond to allegations", and then the text is:
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 letter by which their employment was terminated spelt out the reasons for the termination of their employment. That letter is annexed to an affidavit of Mr Bean, the affidavit sworn 21 June 1994. Paragraph 10 of that letter of termination reads as follows:
The fact that instead of attempting to resolve matters you chose to escalate them by involving the residents was unprofessional, uncaring and totally unacceptable. I also believe that it was calculated to be provocative. Such action has no place in any retirement village. It upset the residents with no regard for their needs but at the same time could not have resulted in resolution of the problems and in any event I spoke to Mr Mulligan as representative of the residents and discovered that not even he had been given the full facts of the situation. How can you honestly expect me to retain you as managers under these circumstances? Do you expect to be the only employees in the company who have no supervision and are answerable to nobody. It is obviously impossible.
Paragraph 11 reads:
In fact your temporary trial employment has never been converted to permanent status. There was some discussion of salary increases. However, instead of improving at this prospect your work has seriously degenerated. I hereby give you notice of your termination effective immediately and ask you to vacate the manager's unit within 48 hours.
( Signed yours faithfully, Millie Phillips, Chairman.)
Mrs Phillips is the chairman of the respondent company.
I note here that the evidence, not only of the applicant but of the respondent, clearly established that the temporary trial employment had in fact been converted to permanent status and that the salary increase had in fact been agreed to by the respondent. There was simply an administrative difficulty within the respondent's office, to do with the paymaster being on holidays, which prevented the salary increase being paid to the applicants before their employment was terminated.
Mrs Phillips gave evidence. She said, when asked about the reasons why she terminated the employment of the applicants, “I determined to terminate their employment based solely on the fact that they had approached the residents.” She was referring to her belief that the applicants had approached the residents and that they had called - they the applicants - had called a general meeting of the residents in order to canvas support from them.
Mrs Phillips agreed in evidence that she at no stage gave either of the applicants the opportunity to respond to her concerns about them involving the residents. In other words, the allegation that the applicants had acted unprofessionally in involving the residents was never put to them before their employment was terminated. Thus, they did not have the opportunity to defend themselves against the allegation which was the basis for the decision to terminate their employment.
There is no reason why the respondent employer could not have reasonably been expected to give them that opportunity.
I find, therefore, that the termination of the employment of each of the applicants was unlawful, in that it contravened section 170DC of the Act.
I note here that the evidence of Mr Mulligan, the chairman of the residents’ association, established that Mrs Phillips was incorrect in her belief that the applicants had called the residents’ meeting - which illustrates the practical rationale behind section 170DC.
The question then becomes: What remedy do I apply in respect of what I have found to be an unlawful termination of the employment of each of the applicants?
Although I have the power to make orders requiring the respondent to reinstate them, I will not make such orders. The applicants inform me that they do not now seek such orders, and it is agreed that the relationship between the management of the company, in particular Mrs Rocke and Mrs Phillips, and each of the applicants, has now deteriorated to such an extent that they could not now reasonably be expected to work together. Furthermore, the position held by the applicants has been filled. In the totality of those circumstances, I do not think it is appropriate to make an order for reinstatement.
I note here that the test I apply is whether it is “appropriate” to make an order for reinstatement - not whether reinstatement is “impractical.”
The question then becomes: Should I make an order of compensation in respect of each of the applicants, and, if so, how much?
In my opinion, the Court being given the power to make such orders as it thinks appropriate, in order to put the employee in the same position as nearly as can be done as if the employment had not been terminated, and the Court being given the specific power to order compensation, the only appropriate remedy is to order compensation.
What then is the level of compensation? Each of the applicants, in addition to being paid a wage, which was a total of $37,500.00 for the two of them together, (ie $18,750.00 each), received other benefits as part of their remuneration package.
Mr Bean gave evidence that the value of the accommodation - that is the total value for himself and Mrs Bean - was $100 per week, the total value of meals was $60 per week, the total value of electricity which they used and which was supplied as part of their package was $20 per week, and that the total value of the telephone which was paid by the respondent was $20 per week. These figures were not disputed by the respondent, and I accept them. This comes to a total, for both of the applicants combined, of $200 per week (ie $100 each) or $5,214.29 per annum each. I reach that figure by multiplying $100 by 365, and then dividing by 7, that being more accurate than simply multiplying by 52.
Each of the applicants therefore had a remuneration package of $23,964.29 per annum.
In determining the appropriate amount of compensation, I note that it is the Court’s duty to put the applicants in the same position, (as nearly as can be done) as if their employment had not been terminated, and I take into account the following factors:
1.Each of the applicants are now entering into their autumn years, in the sense that Mrs Bean is now aged 59, having been born on 30 December 1935 and Mr Bean is now aged 60, having been born on 3 November 1934.
The age of the applicants makes it considerably less likely that they will be able to gain employment in the future. It is a well known fact, of which I take judicial notice, that older persons, particularly in the current economic climate, often have difficulties getting employment, particularly in management positions. Mr Bean also gave evidence of his unsuccessful attempts to find work, both before his employment by the respondent, and after the termination of that employment. There is a very high chance that they will remain unemployed for the rest of their working lives - and it is even more likely that they will not get employment for a long time.
The applicants would not be in this position but for the (unlawful) termination of their employment. In view of the Court’s duty to put the applicants in the same position (as nearly as can be done) as if their employment had not been terminated, I regard this as the single most important factor in determining the amount of compensation.
2.There is some possibility, of course, that either Mr or Mrs Bean could get a job in the future. This is a more significant possibility in respect of Mr Bean, as he is more qualified than Mrs Bean. He is the one who is actively seeking employment. Therefore, the compensation that Mr Bean receives will be less than the compensation that Mrs Bean receives.
3.The age of the applicants is also relevant in another way which reduces, to some extent, the amount of compensation that they will receive. It is possible that, in view of their age, their health could have affected the continuation of their employment, and that is, to a limited extent, a factor by which I reduce the amount of compensation payable to them.
4.Mr Bean is receiving a Jobstart allowance. Mrs Bean is receiving a partner allowance. The receipt of this remuneration operates to reduce the amount of compensation payable to them.
5.There were certainly problems between the applicants and their immediate supervisor in the company, Mrs Leone Rocke. Mrs Rocke had concerns about their ability to perform their jobs, and the way they were performing them, and gave some evidence as to that. There was considerable disagreement with that from the applicants. The fact that there were problems suggests that their employment was not completely secure and there was a possibility that their employment would have been eventually terminated in any case, and that reduces the amount of compensation for which they otherwise would have been entitled.
However, I do not regard this a very significant factor, as, in my opinion, the concerns of Mrs Rocke were to do with matters which were capable of resolution, and the likelihood is that, if the residents’ meeting had never occurred, the applicants would have remained in their jobs.
In all of the circumstances, taking into account those factors, I am of the opinion that, in respect of each applicant, compensation in excess of a years remuneration is appropriate.
I order the respondent to pay compensation to the applicant Mrs Bean in the sum of $30,000.00. I order the respondent to pay compensation to the applicant Mr Bean in the sum of $25,000.00.
Assessing compensation, in a case like this, where assessments have to be made about the likelihood of future events, (here, for example, the health of the applicants, the state of the economy, and the likelihood of them obtaining employment) cannot be a precise exercise. The above “round figures” reflect that reality.
Those sums are gross, that is to say, pre-tax, figures. The compensation to each of the applicants is to be paid within 21 days of today.
I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment of Judicial Registrar Patch.
Associate: Julianne Taverner
Dated: 19 January 1995
___________________________________________________________________________________
APPEARANCES
The applicants in person
Advocate for the Respondent: Lennox, K. (National Assoc. of Private Hospitals & Nursing Homes)
Dates of hearing: 11 November, 16 November 1994
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