Phillip George Angerer v Michelle Louise Farmer and David Ross Farmer trading as Davids Auto Electrics
[1995] IRCA 354
•12 July 1995
CATCHWORDS
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - No VALID REASON - COMPENSATION
Industrial Relations Act 1988 ss 170 DE, 170EA, 170EDA, 170EE
Phillip George ANGERER -v- Michelle Louise FARMER and David Ross FARMER trading as DAVIDS AUTO ELECTRICS
No. NI 1696 of 1995
COURT: PATCH JR
PLACE: SYDNEY
DATE: 12 JULY 1995
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES REGISTRY
No. NI 1696 of 1995
BETWEEN:
Phillip George ANGERER
Applicant
AND:
Michelle Louise FARMER and
David Ross FARMER trading as
Davids Auto Electrics
Respondents
BEFORE: PATCH JR
PLACE: SYDNEY
DATE: 12 JULY 1995
REASONS FOR JUDGMENT
(Delivered ex tempore - revised from transcript)
This is an application under section 170EA of the Industrial Relations Act 1988, ("the Act"). The applicant, Mr Phillip Angerer, claims that the termination of his employer was unlawful, and seeks compensation.
The applicant gave evidence that it would be personally difficult for him if he were to return to work. He said, , "The guys have all gone against me".
This evidence was not contradicted, neither in cross-examination nor in the respondents' case. I therefore find that to order the reinstatement of the applicant would be impractical, as the degree of personal friction in the workplace would be such that the applicant would not be able to work properly and the efficient functioning of the workplace would be disrupted.
Did the applicant resign, or was his employment terminated?
The respondents assert that the applicant resigned his employment. The applicant denies this and says that his employment was terminated by Mr David Farmer, one of the respondents (the respondents are in partnership).
The respondents' case is that the applicant resigned. They say that this occurred sometime, to use Mr Farmer's words, "a couple of weeks" after Mr Farmer filled in a workers compensation form on 4 November 1994. That form, which has the heading, "Employers Report of Injury", is Exhibit 6.
Mr Farmer gave evidence that, "a couple of weeks" after filling in that form, the applicant telephoned him and a conversation to the following effect occurred:
Applicant:I'm right for light duties.
Mr Farmer: You know there are no light duties.
Applicant:Are you sacking me?
Mr Farmer: No.
Applicant:I suppose I better come and get my tools and cheque.
Mr Farmer also gave evidence that he never said to the applicant that he was, "sacking" or " dismissing" the applicant.
The applicant did come and get his tools and he did pick up a cheque. This occurred on 18 November 1994. He was accompanied by Mr Allan Chase, his next door neighbour. The applicant gave evidence that the first conversation he had had with Mr Farmer was on or just after the day upon which he, the applicant, received the first medical certificate saying that he was, "fit for suitable duties", (that is to say, fit for light duties).
That medical certificate was from Dr D.B. Manohar and was dated 8 November 1994. It stated that he was fit for suitable duties from 9 November 1994 until 16 November 1994. Up until that time the medical certificates from the applicant's doctors had said that he was unfit for work.
It was put to the applicant in cross-examination that his evidence as to ringing Mr Farmer on or about 9 November 1994 was incorrect and that he had, in fact, telephoned him on or about Monday 14 November 1994. The applicant gave evidence that, except for possibly one occasion (not including the occasion upon which he received the first such certificate), every time he received a certificate stating that he was fit for suitable duties, (that is to say, light duties), he would ring Mr Farmer and tell him about the certificate on the day he received the certificate or the day after. That is exactly what one would expect him to do.
The applicant also gave evidence about the first conversation between himself and Mr Farmer following the motor vehicle accident. He said that about two weeks after the motor vehicle accident on 24 October 1994, in which he injured his back and neck and was rendered unfit for work, he telephoned Mr Farmer and a telephone conversation to the following effect occurred:
Applicant:I will be off work for another two weeks.
Mr Farmer: It's all a put on. You're just trying to rort the system. You should quit and look for a job somewhere else.
Applicant:Why should I resign. If you want me to quit you should sack me.
Mr Farmer:Okay, you're sacked.
In cross-examination the applicant agreed that Mr Farmer suggested that he look for a job involving light duties. Therefore, the first conversation between them must have occurred on or after the date of Dr Manohar's certificate of 8 November 1994, it being common ground between the applicant and Mr Farmer that the first specific reference to light duties in, one way or another, was made in that document.
The applicant gave evidence that that sort of conversation, in particular, the suggestion that he should resign, the applicant's refusal to resign and Mr Farmer's statement that, "You're sacked", occurred three or four times over the next month or so.
The applicant's version of this first conversation is, to some extent, substantiated by exhibit 6, the Employers Report of Injury, to which I have already referred. That document was filled out and signed by Mr Farmer.
In that document Mr Farmer said:
"The claim requires further investigations. Please arrange for an investigator to attend and take statements. Several conflicting stories re accident."
It is apparent from what Mr Farmer wrote that he did in fact believe that the applicant was trying to "rort the system", to use the words that the applicant claims Mr Farmer used.
It is equally apparent, I should add, that that is not the case. The doctors' reports, including that of a specialist, make that perfectly clear.
The applicant also gave evidence that he had, after being told that he was "sacked" by Mr Farmer, telephoned various people including his solicitor, someone from Work Cover, and someone from the insurance company. He said that he had told these people that he had been "sacked" and that they had responded by telling him that it was not a valid sacking because it was illegal for an employer to dismiss an employee whilst the employee was absent from work receiving workers compensation.
The applicant gave evidence that, for that reason, he did not accept that he had been dismissed and he therefore continued to send a series of medical certificates to his employer (as required, so he believed, under the Workers Compensation legislation), setting out his condition and stating his availability for work and what sort of work he could do.
Counsel for the respondents submit that a person who had been told that he had been dismissed would not behave in such a fashion. I do not accept that submission. It is perfectly natural for a person such as the applicant, not well versed in the law, to accept what those who would know better would say about such a matter.
Furthermore, Mr Farmer gave evidence that the applicant's solicitor had in fact telephoned him about what, according to the applicant's evidence, would have been the right time, and complained about the applicant being "sacked". That solicitor would not have telephoned Mr Farmer unless the applicant had in fact complained to her, the solicitor, that he, the applicant, had been "sacked".
I therefore find that the applicant believed, at least, that he had been "sacked". It is the respondents' case that the applicant intentionally resigned. A belief that the applicant had that he had been "sacked" is inconsistent with an intentional act of resignation - and tends to suggest that he had, indeed, been "sacked".
Mr Farmer gave evidence of a phone call from the applicant about a month after the applicant had picked up his tools. This phone call was almost certainly on 15 or 16 December 1994. A conversation to the following effect occurred:
Applicant: You are sacking me.
Mr Farmer: No, I am not.
Applicant: You sacked me.
Mr Farmer: No, you resigned. You picked up your tools.
Mr Farmer went on to give evidence, in respect of the applicant's assertion that Mr Farmer had "sacked" him, that this was "obviously a misunderstanding on his behalf." Mr Farmer was referring to a misunderstanding by the applicant.
So, even if the Court were to accept that Mr Farmer had not told the applicant that he was "sacked", Mr Farmer himself, on or about 15 or 16 December 1994, believed, and still believes today, that the applicant had misunderstood the situation, in that he, the applicant, incorrectly believed that he had been "sacked". This, once again, tends to suggest that that is indeed what occurred.
Mr Farmer gave evidence that the applicant attended the work place on 18 November 1994 to pick up his pay entitlements and to pick up his tools, both of these being, according to Mr Farmer, consequent upon the applicant's earlier resignation and consistent with them.
The applicant also gave evidence that he came to the work place, that he did pick up his tools on that date and that he did pick up a cheque. However, the applicant denied that these things were done by him because he had resigned. He said that Mr Farmer insisted that he pick up the tools, and that the cheque that the applicant picked up on that day was provided by Mr Farmer to the applicant at the applicant's special request because the applicant had not received any workers compensation payments and was suffering hardship.
Both Mr Farmer's and the applicant's explanations as to why the applicant picked up is tools and the cheque, are, at face value, reasonable. What then is the other evidence which bears on the question?
Exhibit 2, it was common ground, was provided to the applicant by Mr Farmer on 18 November 1994, and was signed by the applicant. Mr Farmer gave evidence that that document was a standard form, prepared by his bookkeeper/secretary, and was used as a matter of expediency to work out the applicant's then entitlements.
I accept that it was a standard form because there are dotted lines and blank spaces obviously to be filled in. This is despite the fact that, apart from the letterhead, the document is handwritten.
The question of whether it was used to work out the applicant's then entitlements is another matter.
Exhibit 5 is a document which was used and available at a meeting between the applicant, Mr Chase, the applicant's wife, and Mr Farmer on 16 December 1994.
That document is obviously a calculation of the entitlements owing to the applicant upon the, to use a neutral phrase, "ending" of his employment.
The first item in that document is a calculation of the pay owing to the applicant for the last day that he worked, Saturday 22 October 1994, in the sum of $95.03.
The second item in that calculation sheet is a calculation of the annual leave owing to the applicant. The money paid to the applicant on 18 November 1994 (see exhibit 2), is deducted from the annual leave owing to the applicant. It is referred to in that part of exhibit 5 where the words "less paid 38 hours" are set out. The calculations in respect of annual leave after deducting the money paid to the applicant on 18 November 1994 come to $587.17.
The third item on the calculation sheet is "one week in lieu notice". That comes to $425.20. The total is $1,107.40.
It is important to note that the heading of that document, which is entirely written in hand, is the words "Phil termination" - Phil being the applicant. It is also important to note that there is one week in lieu of notice paid to the applicant. In my opinion the word "termination" appears on that document because it is a reference to the fact that the applicant's employment had been terminated - as opposed to him having resigned. The one week's pay in lieu of notice was paid to the applicant because he was entitled to it, as his employment had been terminated, and he had not resigned.
It was put to the applicant in cross-examination that the money he received on 16 December 1994 was "two weeks pay" in accord with an agreement between the applicant and Mr Farmer that they would settle the question of whether the applicant's employment had been unlawfully terminated or whether or not the applicant had resigned, by the payment to the applicant of two weeks pay.
Such an assertion by the respondents cannot stand in the face of the nature of exhibit 5 which is a calculation, to the exact cent, of the applicant's entitlements as of the termination of his employment and which is worded in a way entirely consistent with termination, and inconsistent with resignation. To be precise, it is a calculation, to the exact cent, of the applicant's entitlements as of the last day that he worked for the respondents, namely 22 October 1994. It is not a calculation of any sum supposedly owing to the applicant as a result of an agreement to give him "two weeks pay".
The assertion of Mr Farmer that the moneys given to the applicant, as calculated on exhibit 2 on 18 November 1994 were his then "entitlements", following his resignation, (apart from being unable to stand in the face of the nature of exhibit 5), is inconsistent with the "two weeks pay" assertion put to the applicant.
I therefore do not accept Mr Farmer's evidence when he says that the moneys given to the applicant on 18 November 1994 were his entitlements following his resignation.
Taking into account the above matters, I prefer the applicant's evidence that Mr Farmer told him, about two weeks after the motor vehicle accident on 24 October 1994 that he, the applicant, was "sacked". The termination of the applicant's employment happened during that conversation, which must have occurred on or just after 8 November 1994, that being the date of the first medical certificate in which it was said that the applicant was fit to resume some form of employment. The mere fact that the applicant refused to accept that termination of employment, because he had been advised that it was unlawful, does not alter the fact that his employment had, at that point, been terminated by an act of his employer, that is to say, by an act of Mr Farmer.
It follows for all of the above reasons that the respondents' case that the applicant had resigned does not succeed.
Was the termination of the applicant's employment unlawful?
Section 170EDA(1)(a) of the Act says:
"The termination is taken to have contravened section 170DE(1) unless the employer proves that, apart from section 170DE(2), there was a valid reason, or valid reasons, of a kind referred to section 170DE(1)."
The respondent employers in this case have not asserted any reason at all for the termination of the applicant's employment. The respondents assert that the applicant had resigned. As I said above, I do not accept that. It follows that the respondents have not proved that there was a valid reason for the termination of the applicant's employment. It follows that the termination of the applicant's employment was unlawful.
It would be easy to speculate as to the real reason for the termination of the applicant's employment. The applicant was on workers compensation and was not, therefore, at the time, a productive member of the staff of the respondents' business. The applicant also gave evidence that Mr Farmer had accused him of theft. This allegation was specifically disavowed during the hearing of the matter by the respondents. Mr Farmer also denied accusing the applicant of theft. I do not have to make findings in relation to these issues, because I have already found that there was no valid reason for the termination of the applicant's employment, and that it was therefore unlawful. I therefore decline to explore those issues of fact further.
It is important to note, however, that the respondents having specifically disavowed any assertion that the applicant had stolen anything from the respondents, that that allegation (if it had ever been made) must be regarded as having no foundation whatsoever. The applicant, therefore, leaves this Court with his character unblemished by that allegation.
What amount of compensation should be awarded to the applicant?
The applicant gave evidence that he has been on unemployment benefits since his workers compensation payments ceased on 15 December 1994. He gave evidence that he has had some casual employment since that time and has received a total of about $500 after tax in respect of that casual employment. He said that he had informed the Department of Social Security about the employment and that remuneration. The applicant said that he has been looking for full-time work but cannot find a job.
He said that he had told his new employer, who had been giving him the casual work, about his former employment with the respondents, and that after he had given them that information, some time had passed and his new employer had told him that he was only going to be considered for casual employment.
The applicant is receiving unemployment benefits, and it is a condition of the receipt of such benefits that he be available and looking for work. In view of that fact and in view of the applicant's evidence, (which I accept), that he has been looking for work and cannot find a job, it follows that the only reason the applicant is out of work is because his employment was unlawfully terminated by the respondents. In my opinion, the applicant will probably not find work in the near future. It is, of course, not possible to be certain about such things, but, in my opinion, given the history of the last seven months, that is the probability.
Counsel for the respondents submitted that, as the application was only filed in March, and as the matter, therefore, only came before this Court for hearing on 11 July, (as opposed to February or March as would have been the case if the application had been filed promptly in December), the respondents should not be penalised because of the apparent dilatory way in which the applicant has pursued his case. Counsel for the respondents further submitted that, if I were to take into account the long period of unemployment that has now, in fact, eventuated, that would be unfair to the respondents. I do not accept that.
I should make it clear that persons whose employment has been unlawfully terminated cannot simply sit back and wait for time to pass in order to maximise their compensation. They have a duty to seek alternative employment and to mitigate their damages and cannot just wait for a windfall from the Court.
But the applicant is not such a person. All that the passage of time means in the circumstances of this case is that the period from February or March until now is not a period in respect of which the Court has to determine the question of whether or not the applicant would have remained unemployed.
The Court now knows for certain that he has been unemployed all of this year, apart from his casual employment. That degree of certainty is not a "penalty" which the respondents have to suffer. It may well mean that the amount of damages to be paid by the respondents would be higher than otherwise would have been the case, but that, as I have said, is simply a result of the fact that the Court now knows for certain that the applicant has been unemployed all of this year.
The applicant is entitled to compensation commencing from 16 December 1994, the first day in respect of which he was not receiving workers compensation payments.
According to both exhibit 2 and exhibit 5, the applicant's (gross) salary at the time of the termination of his employment was $425.20 per week, for a 38 hour week. In addition to that, the applicant worked Saturdays, for which he was, on the last day he worked, 22 October 1994, entitled to a further $95.03 per week (gross). Thus, the remuneration that the applicant was receiving at the time of the termination of his employment was $520.23 per week (gross).
Section 170EE(3) of the Act is as follows:
"In working out the amount of the compensation for the purposes of subsection (2) the Court is to have regard to the remuneration that the employee would have received, or would have been likely to have received, if the employer had not terminated the employment...."
In my opinion, the remuneration that the applicant would have been likely to have received if the respondents had not terminated his employment would have been $520.23 (gross) per week.
Subsection (a) of section 170EE(3) limits the amount of compensation that can be awarded by the Court as follows:
".....but the amount of compensation:
(a) must not exceed, in respect of any employee, the amount of the remuneration that would have been received by the employee in respect of the period of six months that immediately followed the day on which the termination took effect if the employer had not terminated the employment and the employee had continued to receive remuneration in respect of the employment at the rate of which he or she received remuneration immediately before the termination took effect."
$520.23 per week divided by 7 (to give the daily rate) multiplied by 365 (to give the figure for an entire year) and divided by 2 (to give the figure for six months) comes to the sum of $13,563.13. That is the maximum amount of compensation which the Court can award. It is simply a cutoff point, not the top of a scale reserved for the worst cases.
The applicant has received about $600.00 per fortnight (nett), which comes to - give or take a small amount - $358.00 per week (gross) in unemployment benefits. 209 days have elapsed since 15 December 1994. That is, for practical purposes, 30 weeks. The applicant has, therefore, received in social security payments approximately $10,740. He would have earned in that same period if his employment had not been terminated the total sum of $15,532.58 up until 12 July 1995. I take into account the fact that the applicant has received a significant amount of social security payments as a factor reducing the amount of compensation to which he would otherwise have been entitled.
I also take into account the fact that the applicant has received some money for casual work. In view of my finding that the applicant is unlikely to find work in the near future, and in view of the amount of about - in round figures - $4,500.00 which represents the actual remuneration difference between what the applicant would have earned and the amount that he has received, the applicant is entitled to a substantial amount of damages.
I take into account the fact that the applicant is a skilled worker as a factor tending to increase his chances of finding work, and therefore as a factor tending to reduce the amount of compensation to which he would otherwise be entitled, but I do not ignore the fact that, in my opinion, he is unlikely to find work in the near future.
I also take into account the fact that the applicant will continue to receive social security payments into the future as a factor tending to reduce the remuneration which will be lost by him in the future as a result of the termination of his employment, and therefore as a factor tending to reduce the amount of compensation to which he would otherwise be entitled. I note here that the effect of this is to pass the burden for the unlawful termination of the applicant's employment to a significant extent from the employer, who has acted unlawfully, to the Commonwealth.
I also note here that my initial inclination, before I considered my position overnight, was to award the applicant very close to the maximum amount to which he would be entitled. However, I have considered the matter further and in all the circumstances, taking into account the above factors, in my opinion the amount of $9,000.00 is the appropriate amount to order by way of compensation.
I order the respondents, Michelle Louise Farmer and David Ross Farmer, to pay compensation to the applicant for the unlawful termination of his employment in the sum of $9,000.00, within 28 days of today.
I certify that this and the preceding fifteen pages (15) are a true copy of the Reasons for Judgment of Judicial Registrar Patch.
Associate: Caroline Sternberg
9 August 1995
Appearances:
Applicant: In Person
Counsel for Respondents: Mr G Giagios
Solicitor for Respondents: Mr M Vaughan
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES REGISTRY
No. NI 1696 of 1995
BETWEEN:
Phillip George ANGERER
Applicant
AND:
Michelle Louise FARMER and
David Ross FARMER trading as
Davids Auto Electrics
Respondents
BEFORE: PATCH JR
PLACE: SYDNEY
DATE: 12 JULY 1995
MINUTES OF ORDER
The Court orders that:
The respondents pay the sum of $9,000.00 to the applicant as compensation for the unlawful termination of his employment, with 28 days of today.
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