Muriel Neish v Reynolds Services Pty Ltd

[1996] IRCA 41

DECISION NO:  41/96

C A T C H W O R D S

INDUSTRIAL LAW - UNLAWFUL TERMINATION - whether termination at initiative of the employer - burden of proof on applicant to show that termination at initiative of employer - whether RESIGNATION or ABANDONMENT of employment - whether CASUAL EMPLOYEE - written CONTRACT OF EMPLOYMENT unclear - failure of employee to put matters of evidence to respondent’s witness

Industrial Relations Act 1988 s.170CC
Industrial Relations Regulations    Regulation 30B(1)(d)

CASES:        Ryde-Eastwoods Leagues Club Ltd v Taylor, 56 IR 385
  Muratore v Electron Corporation Pty Ltd (unreported),
  Parkinson JR, VI 1332 of 1994
  Mohazab v Dick Smith Electronics Pty Ltd, (unreported)
  Full Court, NI 2571 of 1995           

MURIEL NEISH  - v -  REYNOLDS SERVICES PTY LTD

No. VI 4162 of 1995

Before:          Judicial Registrar Millane
Place:            Melbourne
Date:              15 February 1996

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 4162 of 1995

B E T W E E N :

MURIEL NEISH
Applicant

AND

REYNOLDS SERVICES PTY LTD
Respondent

MINUTES OF ORDERS

Judicial Registrar Millane        15 February 1996

THE COURT ORDERS THAT:

1. The application is dismissed.

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 4162 of 1995

B E T W E E N :

MURIEL NEISH
Applicant

AND

REYNOLDS SERVICES PTY LTD
Respondent

Before:          Judicial Registrar Millane
Place:            Melbourne
Date:              15 February 1996

REASONS FOR JUDGMENT

By an application filed on 7 August 1995 the applicant alleges that her employment with the respondent as an administrator/receptionist was terminated in contravention of Division 3 Part VIA of the Industrial Relations Act 1988 (the Act).

On its part the respondent company was represented by a director of the company, Dr Victor Selers (Selers), its solicitors having attended Court and sought, and was granted, an unopposed order for leave to withdraw pursuant to Order 45, Rule 7 of the Industrial Relations Court Rules.

Mr Anger of Counsel represented the applicant, there being only two witnesses, Selers and the applicant. 

The respondent defended the application on two bases. The first was that the applicant was precluded by the operation of s.170CC of the Act and Regulation 30B(1)(d) of the Industrial Relations Court Regulations from making her claim because at the relevant time she was employed as a casual employee for less than 6 months. Secondly, on 28 July 1995 the date on which her employment ceased she resigned or abandoned her employment, there being no action or intention on the part of the employer to bring her employment to an end.

As a lay person Selers did not initially draw to the Court’s attention the issue of whether there was a termination at the initiative of the employer under the Act; although relying on the correspondence between the parties and one of their representatives (Exhibits R2, R3 and R4), it is clear that the applicant and her legal representatives were on notice of this issue well prior to the hearing date. 

On the mistaken assumption that the respondent carried the first onus of proof in establishing a valid reason, I directed the respondent to call its evidence first.  It was during this evidence that Selers drew the Court’s attention to the allegation concerning the applicant’s resignation from or abandonment of her employment.

THE FACTS

At the heart of the dispute particularly concerning the alleged resignation or abandonment of employment is the credit of the only two witnesses.  At different times the evidence of either witness appeared inconsistent and implausible.  Accordingly, where possible I have attempted to rely on any documentary evidence available and the interpretation of the contract of employment.  One of the difficulties encountered in the evidence was the failure of the applicant’s Counsel to put significant allegations to Selers and to cross-examine Selers on the receipt of a letter (Exhibit A4) allegedly written by the applicant and accompanying her signed copy of the written contract of employment.  The lastmentioned omission was apparently caused by the applicant’s solicitor failing to include the document in the brief materials, sending it by facsimile to Counsel during the luncheon adjournment.  This omission does not explain the failure of the applicant’s Counsel to at least put to Selers when giving his evidence that there was such a letter and that it contained some concerns raised by the applicant about the accompanying written contract signed by her, allegedly regardless of the apparent failure of the document to accord with what she perceived as being the agreed terms of her contract of employment.

It was conceded by Selers that a position was advertised in the Age newspaper on 22 April 1995 in the following terms (Exhibit A1):

“MANAGER/RECEPTION     Full-time.
           would suit ex teacher or other grad
           capable person reqd  842 1223”

Selers disavowed any knowledge of the reference to “full time” employment in the advertisement contending that it had been prepared and placed by someone else in the company.  If he had seen the reference beforehand he claims he would have corrected it.

Selers is a dental surgeon and the company operates a suburban medical centre with a number of practitioners and staff.  Selers is clearly in charge of the surgery and staff and in April this year saw fit to create a new position for a manager/receptionist or administrator/receptionist to, amongst other things, organise the affairs of the practice and the staff, both arranging for the payment of the staffs’ wages and any disciplinary function.  The job also contemplated that the occupant would relieve on reception, engage in some marketing and promotion of the business and do accounts and filing.  Because of the control he exercised in this and other matters, I find it more likely than not that he was aware of the contents of the advertisement and, in particular, the reference to full time employment and for reasons best known to him changed direction by trying to create a casual position at least by reference to the method of remunerating the employee.

Subsequent to the placing of the advertisement it is agreed that the applicant responded to it in either late April or early May and this led to an interview of somewhere between 15 minutes (Selers evidence) and a good 30 minutes (the applicant’s evidence).

Selers alleges that at interview he told the applicant that it was a casual position because it was a new position and the hours very much depended on what the employee made of the position.  He further alleged that they went through the terms of a written agreement which was not with him at interview, however, a copy was subsequently faxed to the applicant and signed and returned to him.  Selers also conceded discussing a promotional and marketing role for the applicant in the course of the interview. 

The applicant’s recollection of the interview is that they discussed the proposed duties she was to perform and she was asked what she considered to be a fair wage to which question she responded by saying “approximately $30,000 per year”.  She alleges that Selers agreed that this sum was a fair sum and, for a good manager, he would be prepared to pay more in the future.  None of the allegations concerning the wages were put to Selers in cross-examination being as they are at complete odds with the arrangements which eventually took hold and manifested themselves in the payment to the applicant of wages at the rate of $16.00 per hour inclusive of entitlements such as annual leave and sick leave.  If this sum was paid for a 38 hour week it leads to a gross annual income of $31,616.  The applicant impressed me as an intelligent woman capable of appreciating the considerable difference between the terms she alleged were discussed and those which were eventually contained in the written employment agreement.

The applicant agreed that there was discussion about the need to train her and the gradual increase of hours from a few hours per week to 38 hours per week.  Otherwise she denied any reference to casual employment, sick leave or holiday pay claiming that she was told the position would be full time employment.

There was some suggestion that the applicant’s employment commenced on 12 May 1995 however both witnesses were particularly vague when it came to details such as dates and places.  The hours book (Exhibit A2) and the signed employment agreement (Exhibit R1) show a starting date of 17 May 1995.  The applicant’s letter (Exhibit A4) accompanying the signed employment agreement is dated 17 May 1995 and, although there was some attempt by the applicant to show that the agreement was returned to the respondent after she commenced employment, these other matters suggest that the commencement date was in fact 17 May 1995.

The significance of the employment agreement is best understood by reading it in its entirety, spelling errors included:

“EMPLOYMENT AGREEMENT

EMPLOYER              REYNOLDS SERVICES

EMPLOYEE              MURIEL NEISC

POSITION               ADMINISTATOR/RECEPTIONIST

JOB DESCRIPTION    AMINISTATION AND RECEPTION WORK FOR
  THE MEDICAL AND DENTAL PRACTICE

RENUMERATION       A SET HOURLY PAY WILL APPLY WHICH TAKES INTO
  ACCOUNT LOADING IN LIEW OF ANNUAL LEAVE,
  PENALTY RATES FOR PUBLIC HOLIDAYS, SICK LEAVE,
  OVERTIME, MEAL, UNIFORM AND VEHICLE
  ALLOWANCE ETC

HOURS          AS EXPALAINED AT THE INTERVIEW THE HOURS WILL
  VARY WITH THE ABILITY OF THE PERSON.  INITIALLY
  MORNINGS WILL BE WORKED MON-FRI AND THIS WILL
  BUILD TO APPROXIMATELY A 38 HOUR WEEK

PAY  $16.00 PER HOUR (SEE RENUMERATION)

LEAVE  ANNUAL LEAVE AND SICK LEAVE ARE NOT
  APPLICABLE EXCEPT BY SEPARATE NEGOTIATION AT
  THE TIME

NOTICE                   ONE WEEKS NOTICE TO BE GIVEN BY THE EMPLOYER
  OR PAY IN LIEW OF.  ONE DAYS NOTICE IS REQUIRED
  BY THE EMPLOYER FOR CASUAL POISTIONS.

DURATION               THIS AGREEMENT WILL COMMENCE TO OPERATE
  FROM THE 17 MAY 1995 AND SHALL REMAIN IN FORCE
  FOR A PERIOD OF 12 MONTHS

PRECEDENCE           THIS AGREEMENT SHALL SUPERSEED ANY RELEVANT
  AWARD

TRIAL PERIOD          A TRIAL PERIOD OF UP TO FOUR WEEKS WILL APPLY
  AS EXPLAINED AT THE INTERVIEW.  AT ANY TIME IF
  THE EMPLOYER FINDS THE APPLICANT TO BE
  UNSUITABLE FOR ANY REASON THE EMPLOYEE CAN
  BE DISMISSED WITHOU NOTICE OR PENALTY. (sic)”

Selers contended that the abovementioned document was drawn from a prototype prepared by a colleague for use in employing staff.  The document was adapted to meet the requirements of the arrangement between the respondent and the applicant.  It is, the respondent argues, clear from the document that the applicant was employed as a casual.

The applicant is 43 years of age and a trained primary school teacher who taught before she assisted her husband in running a number of businesses including a fuel depot, a light hardware business, an import/export business and a chain of discount stores.  She has also worked in wineries, marketing and bookkeeping.  She argued that she had experience as an employer hiring and firing staff; although she had not dismissed employees covered by the current unlawful termination laws.  She conceded that when she received and read the employment agreement she understood that it did not offer her the same terms as those allegedly discussed with her.  Moreover, she appeared to concede that she understood that the written document referred to a casual rate of pay.  She claims that she signed the document because she wanted the job and felt from the interview that Selers would probably be a reasonable person.  However she provided the Court with no clue as to what she expected him to do other than follow the signed employment agreement.  She also conceded that she understood that she could work 38 hours a week and still be a casual employee, believing that after training she was a full time employee.

Notwithstanding her knowledge and experience in these matters the applicant signed the rather confused and confusing document and alleges that she returned it to Selers with her letter dated 17 May 1995 (Exhibit A4), the contents of which are set out as follows:

“Dear Dr Selers

Please find enclosed my signed employment agreement however before you sign this I think it only fair to point out that as of the 11/5/95 an Amendment to the Employees Relation Act has been passed which over rules existing and new, formal employment agreements.  The Amendment states that any person employed is entitled to four weeks annual leave and one week sick leave accruing on a pro-rata basis.

I trust this matter will not influence your decision to offer me this position and I await your reply.

Yours faithfully
Muriel Neish”

The applicant alleges that she expected a reply to the letter, received none, yet took no steps to clarify the matter.

The employment agreement tendered in evidence is signed by both parties there being no evidence from Selers as to whether he did or did not receive the letter dated 17 May 1995 because of the failure to put this matter to him.  I allowed the applicant to tender the document in evidence, however, because of the omission I am disinclined to place any real weight on the alleged receipt of the document.  The applicant contends that Selers never mentioned it at all after she gave it to him.

It was argued by the applicant that whatever concerns she had about the employment agreement she felt they were properly addressed by her letter and she proceeded with her employment on the basis that it was full time and for 38 hours per week.  Despite this belief she did however pay herself at the rate of $16.00 per hour for the period between 17 May 1995 and 28 July 1995.  Judging from the hours book she does not appear to have been paid on the Queen’s Birthday Holiday on 12 June 1995, and this of course is consistent with casual employment.

Given the evidence I am satisfied that the terms of employment were those set out in the signed employment agreement and that when the applicant signed that document at the very least she understood that she was to be remunerated as a casual employee and was in many ways being treated as a casual employee rather than as a full time employee. The real question to be answered is how the law characterises the employment relationship by reference to the terms of the employment agreement. Just by purporting to call an employee a casual employee does not inevitably make them a casual employee excluded by the combined operation of s.170CC of the Act and Regulation 30B(1)(d) of the Industrial Relations Court Regulation from the benefits of Division 3 Part VIA of the Act (see Ryde-Eastwoods Leagues Club Ltd v Taylor, 56 IR 385 and Muratore v Electron Corporation Pty Ltd (unreported), Parkinson JR, VI 1332 of 1994). 

There are a number of features of the employment agreement militating against characterising the position as a casual one; not to mention the evidence, supporting a conclusion that the employment was regular and continuous employment.

Apart from the first week or two the applicant worked no less than 38 hours per week until 28 July 1995 between Monday and Friday each week.  She commenced at either 8.45am or 9.00am and there was clearly an expectation that she would come to work each day.  The agreement provides for a 12 month period of employment from 17 May 1995 with a trial period of four weeks, again giving rise to an expectation that there was continuity of employment.  Even though payment for annual leave and sick leave were excluded from the agreement, being covered in the hourly rate of payment, the agreement clearly contemplated that the taking of annual leave and sick leave was a matter which could be negotiated and I infer from this that the respondent required notice from the applicant if she was to take this type of leave.

In truth the employment agreement amounts to an unworkable confusion of terms which fails to achieve the desired goal of employing the applicant as a casual employee.  As a prototype for other contracts of employment it is best avoided and consigned to the closest waste paper bin. 

Bearing in mind the abovementioned matters, I find that at all relevant times the applicant was engaged on terms and conditions which made her a full-time employee as at the date her employment ceased.

RESIGNATION OR ABANDONMENT OF EMPLOYMENT

All was not well in the relationship between the applicant and Selers over the nine to ten weeks of her employment.

He claims without saying when he discovered this to be so that the applicant made unauthorised alterations to the hours book (Exhibit A2), increasing the number of hours worked by her on a number of dates.  The applicant concedes that the entries are in her hand writing and in the instances referred to there have been alterations.  She gave no specific explanation for each occasion on which the book was altered, in circumstances where there were numerous alterations, other than to say that she may have altered the finishing times on occasions where, having made the entry, she subsequently worked later and amended the record.  She denied any fraud, noting that it was her responsibility to keep this record and it was not the practice of any of the employees making entries to seek permission before altering an entry.  Without further evidence I am not prepared to conclude that the explanation for the alterations is anything but an innocent one.

Selers expressed a number of performance related complaints such as the applicant’s inability to master the computer system and a failure to deal in the manner instructed with clients coming into the surgery seeking an appointment.

On the whole the impression I gained from both witnesses was that Selers is a demanding and critical employer, who works long hours and does not have a great deal of time to spare to meet and discuss any problems arising.  Indeed the applicant complained of communication problems and it was agreed that that complaint was raised during their last meeting before her employment ended. 

On the evening of Friday, 28 July 1995 shortly before 6.00pm, Selers alleges that he asked the applicant to meet with him in order to discuss the difficulties he was having with her repeating mistakes even though he had; for instance, shown her on a number of occasions how to prepare an accounts spreadsheet on the computer.

His recollection of the meeting amounts to him putting his concerns to her and asking her how the problem could be solved.  He recalls her blaming him for failing to communicate with her which he denied asking her “what are we going to do about it?”.  The lastmentioned question lead to the applicant asking on no less than three occasions whether Selers was going to dismiss her. 

Selers alleges that on each occasion he was asked he said no and was bewildered by her insistence on asking this question.  At some stage he said to her “your trying for an unfair dismissal”; receiving no reply to this direct allegation.  Insofar as the last allegation is concerned the applicant concedes that Selers expressed concern that he was attempting to mount an unfair dismissal claim.  However, on her part because she interpreted his behaviour as being directed at trying to have her resign, she asked the question in order to obtain clarification of her position.

There was apparently some basis for Selers’ belief and his assertion that the applicant was trying to get him to terminate her employment.  This stemmed from discussions earlier in her employment when as office manager she was asked to investigate the issue of dismissal because of the difficulty the practice was having with one particular employee.  The applicant’s husband is allegedly an employee of a small business of Australia organisation and it was to him that the applicant turned to obtain some information, providing Selers with two brochures, one concerning the industrial relations reforms in the workplace and the other concerning the keeping of time and wages records (Exhibit R6).

Notwithstanding some dispute as to how the applicant came to research the matters referred to in the brochures it was agreed that she did provide the brochures and did look into the question of the respondent’s obligations vis-a-vis any termination of another employee’s employment advising Selers of the need to act cautiously in these matters.

It is at least appropriate to infer from the applicant’s employer experience and her activities on behalf of her employer that she was generally aware of the existence of the unlawful termination laws protecting her from unlawful termination of her employment.  It was not however apparent that she understood that the employer must initiate the termination if she is to seek the benefit of the federal legislation.

Because of his refusal to be drawn Selers alleges that the applicant became frustrated during their last meeting and picked up her papers, leaving the room and returning to her work station in reception.  He claims that he left the surgery before her by approximately 6.00pm and saw her at reception when he left.  The applicant disputes this saying that she left before him.  The applicant did not attend work on the following Monday and on the Tuesday her husband left a message at the surgery seeking a cheque for payment of outstanding wages.  This was paid by the respondent amounting to $717.00 net for 55¼ hours worked at the rate of $16.00 per hour.

The application in this Court was filed on 7 August 1995 and it is alleged by Selers that he received a letter from the applicant’s solicitors on that date.  In response the respondent’s representative, the Human Resources Advisory Group, wrote to the applicant’s solicitors on 25 August 1995 denying on behalf of the respondent that the applicant had been terminated and alleging, amongst other things, that she had resigned and, because of her casual status and the minimal notice required for resignation the respondent had not pursued the matter.  The letter invited the applicant to contact the employer immediately if she had not resigned to avoid losing her position.

Because the applicant had not sought termination pay on 28 July 1995 and in Selers’ view behaved as if she did not want the position he treated her as having abandoned the job or in effect having resigned.

The principle area of dispute concerning the exchange and the events after the meeting concluded is that the applicant concedes that on three occasions she asked if Selers was dismissing her and on the third occasion having said no twice, he said “I’m going to have to say yes”, and rose and walked out of the room.

The applicant claims that Selers’ earlier commented that “it hasn’t been pleasant” and raised his hands in a gesture she interpreted as wanting her to leave.  This prompted her to tell him that she liked the job and had no reason to leave.  These matters were not put to Selers in cross-examination.  More importantly, an allegation that she and Selers had had a “heated” argument in the morning, regarding some entry in the appointment book and a further allegation that Selers told her that she was costing him money and was an expensive experiment, were not put to Selers at all.

TERMINATION AT THE INITIATIVE OF THE RESPONDENT

The Full Court of the Industrial Relations Court of Australia has had occasion to consider the question of what amounts to termination at the initiative of the employer for the purposes of the Act and whether a purported resignation on the facts should be construed as a termination of employment at the initiative of the employer (see Mohazab v Dick Smith Electronics Pty Ltd, (unreported) NI 2571 of 1995).

As it was noted by the Full Court in the abovementioned at pages 10 and 11 of its decision it is consistent with the purpose of the Convention Concerning Termination of Employment at the Initiative of the Employer and the Recommendation Concerning Termination of Employment at the Initiative of the Employer (see Schedules 10 and 11 of the Act respectively):

“... to treat the expression “termination at the initiative of the employer” as a reference to a termination that is brought about by an employer and which is not agreed to by the employee.  Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principle contributing factor which leads to the termination of the employment relationship.  We proceed on the basis that the termination of the employment relationship is what is comprehended by the expression termination of employment:  Siagen v Sanel (1994) 122 ALR 333 at 351; (1994) 1 IRCR 1 at 19.  In many, if not most, situations the act of the employer that terminates the employment relationship is not only the act that puts in train the process leading to its termination but is, in substance, the entire process.”

In the Mohazab decision the employee, because there was a suspicion that he was implicated in a theft from the employer, was directed by the employer to resign or it would have the police “called in”.  This was construed by the Full Court as a termination at the initiative of the employer because the employee was left with no effective choice but to resign and, but for the employer’s action, the termination would not have entered the employee’s mind.  In other words the act of the employer resulted directly or consequentially in the termination of the employment and the employment relationship was not left voluntarily by the employee.

As can be seen from the Mohazab decision in deciding whether there was a termination at the initiative of the employer more than the words of the protagonists have to be considered because the absence of an oral dismissal may nonetheless on the facts, still lead to a conclusion that there was a termination at the initiative of the employer.

In the present case the credit of both witnesses is in issue.  Selers told the Court that the purpose of the meeting was to reprimand the applicant and to point out the repetition of the problems in her performance, particularly with regard to matters such as the accounts spreadsheet.  He categorically denied saying anything else other than “no” when pressed by the applicant on the question of whether he was dismissing her.

The applicant points to a heated argument in the morning before her employment ceased.  She told the Court that she was very upset by the argument and needed to be comforted by another staff member on that occasion.  Selers did not have an opportunity to respond to this allegation.  Notwithstanding her distress in the morning and her dislike of Selers alleged habit of leaving notes on her desk criticising various matters of performance, she alleges she told him at their last meeting that she liked her job and did not want to leave.

It is entirely consistent with Selers’ belief that the applicant was trying to get him to tell her she was dismissed that he persisted in responding to her repeated questions in the negative.  So to it is consistent with the applicant’s dissatisfaction with her employer leaving notes for her and there being an alleged “heated” argument in the morning preceding the cessation of her employment that she walked out of the meeting frustrated by his behaviour and made a decision not return to her employment.

When she attended the reception desk after the meeting with Selers the applicant claims to have collected her “things”, conceding that she stopped to complete the hours book showing her finishing time on Friday, 28 July 1995 at 6.00pm.  Having been allegedly terminated she did not seek, nor did she take any steps to obtain payment of wages owed to her on termination until the following Tuesday when her husband rang the surgery on her behalf and left a message seeking payment.  Selers was not cross-examined on his reasons for not trying to ascertain the whereabouts of his employee when she failed to attend work on the following Monday.

The applicant carries the burden of proof in showing that it is more probable than not that the termination occurred at the initiative of the employer.  On the evidence I am not satisfied that she has discharged this burden.

Accordingly the application is dismissed.

MINUTES OF ORDERS

THE COURT ORDERS THAT:

1. The application is dismissed.

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 fifteen (15) pages are a true copy of the reasons for judgment of Judicial Registrar Millane.

Associate:                 
Dated:  15 February 1996

Solicitors for the Applicant:           Maurice Blackburn & Co
Counsel for the Applicant:            Mr Steve Anger

Respondent in Person:                 Dr Victor Selers

Date of hearing:  29 January 1996
Date of judgment:  15 February 1996