Pamela Walker v Ken Vidler Surfsports
[1995] IRCA 655
•30 Nov 1995
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - claim of UNLAWFUL TERMINATION - whether VALID REASON for termination - HARSH, UNJUST OR UNREASONABLE
INDUSTRIAL RELATIONS ACT 1988 Ss 170DC, 170DE, 170EA, 170EDA
Quality Bakers v Goulding, IRCA No. 285 of 1995, Beazley J, unreported, 23 June 1995
Kenefick & Ors v Australian Submarine Corporation Pty Ltd (1995) 131 ALR 197
Coker Godson v National Dairies Limited, IRCA No. 359 of 1995, Marshall J, unreported, 4 August 1995
Hockey v Multiskip Pty Ltd, IRCA No. 557 of 1995, Marhsall J, unreported, 29 September 1995
Mitchell-Collins v The Latrobe Council, IRCA No. 422 of 1995, Spender J, unreported, 25 August 1995
Aitken v CMETSWUA, IRCA No. 352 of 1995, Lee J, unreported, 7 August 1995
PAMELA WALKER -v- KEN VIDLER SURFSPORTS - WI95/1954
BEFORE: R D FARRELL JR
PLACE: PERTH
DATE: 30 NOVEMBER 1995
IN THE INDUSTRIAL RELATIONS )
COURT OF AUSTRALIA )
WESTERN AUSTRALIA )
DISTRICT REGISTRY ) No. WI 95/1954
BETWEEN: PAMELA WALKER
- Applicant
AND: KEN VIDLER SURFSPORTS
- Respondent
MINUTE OF ORDERS
BEFORE: R D FARRELL JR
PLACE: PERTH
DATE: 30 NOVEMBER 1995
THE COURT ORDERS THAT:
The application is dismissed.
NOTE: Settlement and entry of Orders is dealt with by Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS )
COURT OF AUSTRALIA )
WESTERN AUSTRALIA )
DISTRICT REGISTRY ) No. WI 95/1954
BETWEEN: PAMELA WALKER
- Applicant
AND: KEN VIDLER SURFSPORTS
- Respondent
BEFORE: R D FARRELL JR
PLACE: PERTH
DATE: 30 NOVEMBER 1995
REASONS FOR JUDGMENT
This is an application under Section 170EA of the Industrial Relations Act 1988 for compensation arising from the alleged unlawful termination of the employment of the applicant, Pamela Walker (“Mrs Walker”), by the respondent, Ken Vidler, who trades as Ken Vidler Surfsports (“Ken Vidler Surfsports”). Reinstatement is not sought.
Both the applicant and the respondent represented themselves.
It is Mrs Walker’s contention that Ken Vidler Surfsports breached the provisions of Section 170DE(1) of the Act because she says the termination of her employment did not occur for a valid reason. She also contends that the termination of her employment was in any event harsh, unjust or unreasonable within the meaning of Section 170DE(2) of the Act. Mrs Walker contends that the real reason for her dismissal was an unfair assessment of her performance. She contends that, because the real reason for the termination of her employment was not disclosed to her, she was never given the opportunity to defend herself against this assessment. She would have been entitled to such an opportunity under Section 170DC of the Act.
Ken Vidler Surfsports contends there was a valid reason for the termination, based on the operational requirements of the undertaking, and that the termination of Mrs Walker’s employment was not harsh, unjust or unreasonable within the meaning of Section 170DE(2) of the Act.
Factual Background
Mrs Walker was employed by Ken Vidler Surfsports on 22 February 1995 as a part-time book-keeper. She took over from an existing book-keeper, whom Ken Vidler Surfsports had always found satisfactory. She was provided with a schedule of duties on her engagement (Exhibit W2). These duties included drawing up the monthly staff rosters.
Soon after Mrs Walker started in her employment Mr Vidler spoke with her about her performance. He says he spoke with her because he thought she was having difficulties coping with the job. Mrs Walker did not raise this conversation in her evidence, and this, together with the evidence of Mr and Mrs Vidler on the matter, left me with the impression that anything Mr Vidler said to Mrs Walker was said in a “low key” manner, such that she did not find it confronting.
Then, just prior to Easter - probably on 7 April 1995 - Mrs Rebecca Vidler spoke with Mrs Walker about her performance. Mrs Vidler is Ken Vidler’s wife, draws a salary from the business and performs a managerial role. She has authority to make decisions within the business, though she could be over-ruled by Mr Vidler. Mr Vidler had commitments in the eastern states over Easter, and Mrs Vidler and her children were intending to join him there.
Following this discussion, Mrs Vidler provided Mrs Walker with a letter setting out matters of concern relating to her performance. The letter was dated 7 March, 1995, but it was a matter of consensus between the parties that the letter was contemporaneous with the discussion, and it is likely that the date of the letter should properly have been 7 April 1995.
Before being shown the letter in court, Mrs Vidler recalled the discussion as being primarily concerned with perceived problems in Mrs Walker's communication with the staff, which Mrs Vidler saw as being very important. She had no recollection of other issues raised by the letter, such as the need for Mrs Walker to become more involved in forward planning and budgeting, being discussed at the meeting, but she doesn’t rule out the possibility that they may have been.
The letter ends in the following terms:
“As he has already discussed with you, Ken does not feel that comfortable with your work. He feels that he will need to check certain important procedures.
I hope this has clarified why we are having concerns about your position. We will review it with you again on Ken’s return from the East.”
Mr and Mrs Vidler’s evidence was that on their return after Easter, Mrs Walker’s . performance had improved and was, at least, satisfactory. Mr Vidler noted that she was managing to complete some tasks that her predecessor had not gotten around to completing.
Mrs Walker also asserts that her performance after Easter was satisfactory, and disputes that there were any shortcomings in her performance before Easter.
All three witnesses gave evidence that the volume of sales turnover in shops of Ken Vidler Surfsports’s type is seasonal, with sales increasing in summer and decreasing in winter. However, Mr Vidler contends that sales in the autumn and winter of 1995 were worse than had been anticipated, and that this appeared to be a trend throughout their sector of the retail market.
A meeting was held with staff on a Wednesday - apparently 5 July 1995 - to discuss the role staff could play in assisting the business through these difficulties. Mr Vidler says he asked staff to raise any suggestions which would increase sales or would cut costs. He gave the staff an example of such a suggestion, being where a member of staff had suggested that staffing levels on Sundays be reduced in view of the light trade on that day. That suggestion had resulted in substantial savings to the business, given that wages are paid at double rates on Sundays.
Mrs Walker’s recollection of that meeting is that the emphasis was on sales staff doing everything they could to increase sales. While she did not dispute that Mr Vidler gave the example referred to above, she did not recall any general invitation to suggest cost cutting measures, and said that had there been any such invitation she would not have seen it as being directed to her.
Following the meeting Mr Vidler had a private discussion with Mrs Walker.
He told her that one of the options he was considering to cut the costs of the business was that he might take over the performance of the book-keeping duties from her, and that he would think about it over the weekend. Mr Vidler did not put any other options to Mrs Walker, and did not expressly invite her to suggest any alternatives to him.
It was Mrs Walker’s recollection that this discussion occurred the same day, soon after the staff meeting. Mr Vidler thought it occurred a couple of days later, on Friday 7 July, 1995. On balance, I accept that it was more likely to have occurred on the Friday, which would make more natural Mr Vidler’s reference to the weekend.
Mr Vidler was in the store the following Monday, but nothing was said between he and Mrs Walker as to her continuing employment.
On Wednesday, 12 July, 1995, Mrs Walker approached Mr Vidler and asked him whether he had made a decision. He said that he had made a decision, and that he would be taking over her duties, so there would be no more work for her. She recalls him saying that he had drawn up a letter giving her notice earlier that day. He is not sure whether that was the case, but later conceded that he had probably already drawn up the notice letter.
The letter (Exhibit V6) dated 12 July 1995, which was given to Mrs Walker in due course, reads:
“Dear Pam,
As you are aware we are having to look at ways in which we can cut costs owing to the drastic downturn in our business.
I previously advised you that I was considering taking over your job as bookkeeper. After much consideration I have decided to do so.
Up until a few years ago I had always done all the book work myself and I feel that having a bookkeeper doing work that I can easily do myself is a luxury I cannot afford in the business at this time.
Please take this letter as giving you notice of employment. I am planning to take over all book work at the end of this month and anticipate you finishing work with us on 28th July.
I thank you for all your work and effort.
Yours sincerely,
Ken Vidler”
Mrs Walker worked out her period of notice without incident until the final day of her employment. In that period, she handed over her duties to Mr Vidler. This process included training Mr Vidler in the operation of the new wages system.
On Friday 28 July 1995, the final day of Mrs Walker's employment, a fax was received on the office fax machine. It appears it was marked to Mrs Vidler’s attention. Mrs Vidler gave evidence that the fax was in fact highly confidential, but she conceded that it may not have been marked as such.
Mrs Walker gathered the fax from the machine and read it. She was upset by the contents. The fax was from “The West Australian” - Western Australia’s sole daily newspaper - and it contained the proof of an advertisement, which was in the following terms:
“ACCOUNTANT/STORE MANAGER
Self motivated and ambitious Accountant with outgoing personality required to manage large retail sports store. Wage package $35-$40,000. Please apply with CV and photo to:
The Manager, PO Box 782, Claremont 6010”
Mrs Walker interpreted this advertisement as seeking a replacement for her, and therefore saw the advertisement as inconsistent with the explanation which had been given to her for the termination of her employment.
Mrs Walker took the fax out to Mr and Mrs Vidler in the shop and told them, while giving them the fax, that she didn’t like being lied to. She then returned to the back office. Seeing that Mrs Walker was upset, Mrs Vidler followed her. There were differing accounts of the ensuing conversation.
Mrs Walker’s account is that Mrs Vidler first told her to listen, and then said Mrs Walker could not fill the position because she didn’t know how to operate computers. Mrs Walker disputed this, saying she had dealt with computers in the past, and anyone coming in would need to familarise themselves with whichever software the Vidlers chose to install.
Mrs Vidler’s account is that she explained to Mrs Walker that the fax was confidential, and had nothing to do with Mrs Walker. She says she explained that it was only a proposed advertisement which Mrs Vidler believed was necessary because the business may need someone to take over as manager. This was because “there’s a chance Ken wouldn’t be here”. Mr and Mrs Vidler explained that they were considering a potentially lucrative venture which would have required Mr Vidler to spend much of his time in the United States, so that it was necessary to consider engaging someone to replace him. In fact, this did not eventuate.
The remainder of the discussion, as Mrs Vidler recalls, involved Mrs Walker recounting at some length the reasons why she believed the business was not going well. Mrs Walker is said by Mrs Vidler to have observed that the business could run very well without Mr Vidler. Mrs Vidler recalls that computers came up in the discussion at some stage, but denies that there was any discussion of Mrs Walker being replaced. Indeed, Mrs Vidler’s evidence was that she could not accept that the advertised position could be confused with Mrs Walker’s former part-time role.
Having considered all the evidence, I find that Mrs Walker and Mrs Vidler were speaking at cross-purposes. I accept that each gave evidence reflecting their understanding of the conversation. However, Mrs Vidler approached the conversation on the basis that the advertisement was for someone to replace her husband, in his new expanded managerial role, which included book-keeping duties. Mrs Walker approached the conversation on the basis that the advertisement was for someone to replace her. Mrs Walker therefore interpreted comments made by Mrs Vidler as to why she wasn’t suitable for the advertised managerial job as reasons why she was not suitable for her existing job.
Understood on that basis, and allowing for differences in emphasis and recollection, the accounts of Mrs Walker and Mrs Vidler can be reconciled.
Mrs Walker had no discussion with Mr Vidler following receipt of the fax, and left her employment, as planned, at the end of that day.
Mrs Walker filed her application in this Court on 11 August 1995.
I accept that, since Mrs Walker’s departure, the book-keeping duties formerly performed by Mrs Walker are now performed by Mr Vidler, and that there are no plans for that position to change. I note Mr Vidler’s evidence that he has found that his new “hands-on” role handling the accounts of the business to have assisted him in the management of the business.
Whether There was a Valid Reason for Termination
Section 170EDA(1)(a) confers the onus on the employer to prove that there was a valid reason connected with the employee’s capacity or conduct or based on the operational requirements of the undertaking, establishment or service.
I find that the termination of Mrs Walker’s employment was not related to any earlier allegations concerning her conduct or capacity; I accept Mr and Mrs Vidler’s evidence that they were happy with Mrs Walker’s work since their return after Easter 1995.
I accept that the reason Mrs Walker’s employment was terminated was to cut the costs of Ken Vidler Surfsports as a response to an unanticipated downtown in sales over winter.
I find that the advertisement, which was ultimately run later in August 1995, was seeking an applicant to eventually replace Mr Vidler in his new expanded role, rather than to replace Mrs Walker in her more limited role.
I do not accept Mrs Walker’s contention that, because Ken Vidler Surfsports apparently had the means to pay such an applicant a salary of $35-$40,000, the termination of her employment, given that she drew a salary of only $11,200, could not be justified. The proposal to pay the additional salary of $35-$40,000 was in the context of Mr Vidler being freed to perform a lucrative role elsewhere.
I find, therefore, that Ken Vidler Surfsports has established that Mrs Walker’s employment was terminated for a valid reason related to the operational requirements of the undertaking.
Whether the Termination was Harsh Unjust or Unreasonable
The next matter for determination is whether, having regard to those operational requirements, the termination is harsh, unjust or unreasonable.
Section 170EDA(1)(b) confers the onus on the employee to prove that, because the termination is harsh, unjust or unreasonable, there was not a valid reason.
It is now well established that, even in the case of a genuine redundancy, the termination of employment of a particular employee may be harsh, unjust or unreasonable. Although Section 170DE(2) is commonly regarded as being related to substantive unfairness, a termination may be harsh, unjust or unreasonable because of procedural unfairness. (See Quality Bakers v Goulding IRCA No. 285 of 1995, Beazley J, unreported, 23 June 1995. Also Kenefick & Ors v Australian Submarine Corporation Pty Ltd (1995) 131 ALR 197, Wilcox CJ; Coker Godson v National Dairies Limited IRCA No. 359 of 1995, Marshall J, unreported, 4 August 1995; Hockey v Multiskip Pty Ltd IRCA No. 557 of 1995, Marshall J, unreported, 29 September 1995; Mitchell-Collins v The Latrobe Council IRCA No. 422 of 1995, Spender J, unreported, 25 August 1995).
In Quality Bakers v Goulding (supra), Beazley J quotes with approval a passage from Corkery v General Motors-Holden's Limited (1986) 53 SAIR 531 at 538, where Stanley J set out a number of things an employer should do in cases of redundancy. It is clear that a failure to meet these requirements may lead to the termination being judged to be harsh, unjust or unreasonable.
The indicia to which this court has regard in connection with this issue might fairly be summarised as follows:
The employer should give as much warning as possible to enable the employee affected to take early steps to inform themselves of the facts, to consider possible alternative solutions and, if necessary, to find alternative employment either with the employer or elsewhere.
The employer should seek to see whether instead of dismissal the employee can be offered alternative employment.
The employer should consult with the employee affected, and consider any such possible alternative solutions or possible alternative employment options raised by the employee.
The employer should, with appropriate consultation, establish objective criteria to be applied in selecting the employees to be made redundant, which do not depend solely on the opinion of the person making the selection.
The employer should see that the selection is made fairly in accordance with the established criteria and consider any representations that may be made in respect of the selection.
I note that these cases cited earlier typically concerned large workforces, and these indicia cannot be applied in an unconsidered manner to small workplaces, like Ken Vidler Surfsports.
In this case, Mrs Walker was given over two weeks’ notice of her redundancy, and was given at least five days notice prior to that that Mr Vidler was considering making her redundant, and the rationale behind those considerations. Given the short duration of her employment, I find that was reasonable.
Issues of selection criteria don’t arise in this case. This was not a matter of choosing between employees performing the same function - this was a matter of choosing between different functions of the business in order to cut costs.
There does not appear to have been any capacity for alternative employment, and no such possibilities were raised by Mrs Walker at the hearing.
The area of greatest concern in the process adopted by Ken Vidler Surfsports is the issue of whether Mrs Walker was sufficiently consulted. It is clear that there was a general invitation at the staff meeting for staff to volunteer ways to cut costs and increase sales. This was not, however, specifically directed to Mrs Walker, and was not understood by her to be directed to her at all. Perhaps more pertinently, it was not done in the context of her impending redundancy. It might be said, however, to have indicated a general willingness on the part of Mr Vidler to consider suggestions put forward by staff.
Having advised Mrs Walker that he was considering making her redundant, Mr Vidler did not specifically invite her to propose alternatives. For her part, Mrs Walker did not take it on herself to suggest any.
It would obviously have been preferable for Mr Vidler to have expressly invited such a discussion, but can it be said that his failure to do so, when viewed in the context of what had gone before, is sufficient to render the dismissal harsh, unjust and unreasonable? On balance, I find it is not.
There is a broader approach to the question of whether the dismissal was harsh, unjust or unreasonable, which was adopted by, for example, Justice Lee in Aitken v CMETSWUA IRCA No. 352 of 1995, unreported, 7 August 1995. The court can, as Lee J did, consider whether the dismissal is harsh, unjust or unreasonable in the context of whether “employees whose services are terminated are treated in a fair and reasonable manner enabling them to retain confidence in their self-worth” or, as Marshall J put it in Hockey v Multiskip, whether the employees were “accorded some dignity and not treated as mere numbers on a piece of paper”.
Applying that broad approach to these facts, I am not satisfied that Ken Vidler Surfsports acted harshly, unjustly or unreasonably in all the circumstances.
Conclusion
Accordingly, I will order that this application be dismissed.
I certify that this and the preceding 12 pages are a true copy of the Reasons for Judgment of Judicial Registrar R.D. Farrell.
Associate
Date:
The applicant and the respondent appeared in person
Hearing date: 30 October 1995
Judgment date: 30 November 1995
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