Rheinberger v Huxley Marketing Pty Ltd
[1996] IRCA 138
•16 April 1996
DECISION NO: 138/96
CATCHWORDS
INDUSTRIAL LAW - claim of unlawful termination of employment - review of decision of Judicial Registrar - whether employee resigned - whether employment terminated at the initiative of the employer.
Industrial Relations Act 1988 - ss 170CB, 170EA and 377.
APESMA v Deniliquin Council (1995) 129 ALR 418
Gibson v Bosmac Pty Ltd (1995) 60 IR 1
Mohazab v Dick Smith Electronics Pty Ltd, 28 November 1995, Lee, Moore & Marshall JJ, unreported
Grout v Gunnedah Shire Council (1994) 1 IRCR 143
Siagin v Sanel Pty Limited (1994) 1 IRCR 1
Strachan v Liquorland (Australia) Pty Limited, 6 February 1996, Moore J, unreported
APESMA & Ors v Skilled Engineering Pty Limited & Ors (1994) 122 ALR 471
No. NI 2064R of 1995
ANNE RHEINBERGER v HUXLEY MARKETING PTY LTD
MOORE J
SYDNEY
16 April 1996
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. NI 2064R of 1995
)
NEW SOUTH WALES DISTRICT REGISTRY )
BETWEEN: ANNE RHEINBERGER
Applicant
AND: HUXLEY MARKETING PTY LTD
Respondent
JUDGE: Moore J
PLACE: Sydney
DATE: 16 April 1996
ORDER OF THE COURT
THE COURT ORDERS THAT:
The application for review is dismissed.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. NI 2064R of 1995
)
NEW SOUTH WALES DISTRICT REGISTRY )
BETWEEN: ANNE RHEINBERGER
Applicant
AND: HUXLEY MARKETING PTY LTD
Respondent
JUDGE: Moore J
PLACE: Sydney
DATE: 16 April 1996
REASONS FOR JUDGMENT
On 4 May 1995 an application was filed by Anne Rheinberger ("the applicant") under s170EA of the Industrial Relations Act 1988 ("the Act"). The applicant contended that there had been a termination of her employment by Huxley Marketing Pty Ltd ("the Company") in contravention of provisions of Division 3 of Part VIA of the Act.
The application was heard by a Judicial Registrar on 30, 31 August and 20 September 1995. On 3 October 1995 an order was made dismissing the application. There was some uncertainty amongst the parties as to whether the Judicial Registrar published reasons for judgment though it is clear from a record of the proceedings of 3 October 1995 found in the Court's file that she did so orally. The transcript of that day has not been prepared.
Having regard to the nature of the case presented to the Judicial Registrar it is relatively clear that she made the order dismissing the application because she was not satisfied there had been a termination of the applicant's employment as that expression is used in s170EA of the Act.
The applicant has applied under s377 for a review of the determination of the Judicial Registrar. It is a hearing de novo: see APESMA v Deniliquin Council (1995) 129 ALR 418 and Gibson v Bosmac Pty Ltd (1995) 60 IR 1 though the parties agreed that the review should be conducted by reference to the transcript of the evidence given before the Judicial Registrar together with the statements or affidavits of witnesses who were called. The relevant events occurred in late April 1995. While witnesses gave differing accounts of some of the critical events, nothing, in my opinion, turns on the differences. A relatively clear picture emerges from the evidence as to what occurred.
The applicant commenced employment with the Company on 4 April 1994. Her principal function was selling homes on behalf of the Company from a display village on the Central Coast. There was no issue that generally she was successful in this role and was a valued employee. However in the six months prior to the termination of her employment, her sales figures were low. She was employed as part of a sales team. The other members of the team were her brother Mr Paul Rheinberger ("Rheinberger") and Ms Inez Sutton. The applicant lived in a house with her brother and his wife. The applicant has a 3 year old child. Her relationship with her brother is an extremely close one.
On 20 April 1995 Rheinberger was given a written performance review which was highly critical of his performance. It had been prepared by Mr Paul Wilson who was the Regional Manager of the Company and supervised the sales team which included the applicant. The performance review contained a number of contentions about the performance of Rheinberger including that he had failed to meet budgeted number of sales, left file preparation and paperwork to the last minute, did not take directions given to him in relation to matters concerning his areas of responsibility, made unnecessary phone calls and engaged in the unnecessary duplication of work. The review identified five steps to be taken by Rheinberger to improve his performance. The report went on to indicate that his performance would be reviewed in one month's time and that unless it had improved it would result in his dismissal. This report upset and angered Rheinberger and as a consequence he resigned from his employment with the Company on 21 April 1995 to take effect on Thursday 27 April 1995.
The applicant was aware of these matters when she attended work on Saturday 22 April 1995 at the display village. She arrived at work at about 9.00am. She noticed her brother packing papers and files. He told her he had been terminated from his employment there and then. Shortly after, she was approached by Wilson and he asked to see her in his office which was located in another building in the display village. There was an issue about whether a conversation occurred between Wilson and the applicant as they walked to his office. Wilson does not recall such a conversation but the applicant says there was. Her account was as follows:-
"Wilson:"With your relationship with Paul do you think you will be able to continue working here?"
Applicant:"That is not the issue. Whether or not I really want to stay working here after this is the issue so how about you tell me what you're thinking of and I'll tell you what's on my mind.""
The applicant's account of what was then said in Wilson's office is as follows:
"Wilson:"Can you tell me if you're happy with what you've been earning lately?"
Applicant:"Well no, although I take some responsibility for that but I do think management should also accept responsibility considering we have not had a display village."
I went on to make comments critical of Paul Wilson's management style and interpersonal relations.
The conversation then continued in terms to the following effect:
Wilson:"I'm not going to get in a screaming match with you. What are you going to do?"
Applicant:"Paul, if it's my resignation you want I'll give you a week's notice."
Wilson:"No, you can finish up now. I'll come up with you and go through your diary."
Applicant:"Paul, I can't believe this. I have worked really hard on these sales that are about to come in, and I've been working with you on them. If I hear one untruth about me from any one of my clients, I'm warning you, Paul, there will be trouble. I'd also like to have a meeting with Graham to let him know exactly what has been going on here." By "Graham" I meant Graham Huxley, the managing director.
Wilson:"It wouldn't be in my interests to talk to your clients. Why would I do that?"
Applicant:"We also need to discuss the issue of sexual harassment."
Wilson:(standing up) "What do you mean by that?"
Applicant:"Paul, offering a female subordinate your motel room is hardly kosher behaviour."
Wilson:"I was only joking."
Applicant:"Well, it wasn't taken as a joke."
The account given by Wilson of the critical part of the conversation is as follows:
"Wilson:"I'm not going to get in a screaming match with you. What are you going to do?".
Applicant:"I'll resign but I will not loose (sic) a weeks pay."
Wilson:"O.K. I will accept your resignation but you won't loose (sic) a weeks pay. You can finish up today and we will be pay (sic) a week in lieu"."
It was common ground that when the meeting commenced Wilson had in front of him a folder containing information concerning the sales records of the applicant. It is also common ground that during the meeting the atmosphere was tense and the applicant, before any question of resignation arose, forcefully voiced her views about Wilson as a manager which were highly critical of him.
It is unnecessary to resolve which version of the conversation, when resignation was discussed, should be accepted. It is plain that on either account the applicant said words that indicated a preparedness to resign and that Wilson responded by indicating that her employment could terminate immediately.
The applicant said in evidence that when she left the meeting she believed she had been sacked. Indeed she says that she had a conversation with Sutton in which she told Sutton that:
"Applicant:"He told me to finish up now, and he'd come up and (sic) through my diary but I really let him have it."
This conversation was not put in issue and I accept that the applicant then believed that she had been sacked. She then packed her personal effects and left to go home and as she did she gave Wilson keys she had in her possession.
In the hearing before the Judicial Registrar, Wilson was cross-examined by counsel for the applicant about the reason why he asked to meet with her on Saturday morning. It is clear that by Saturday morning he had commenced to consider who he might employ to replace sales staff he had lost. Not only had Rheinberger resigned on 21 April 1995 but Sutton had resigned two days earlier. In cross-examination Wilson accepted that at least by the time he asked the applicant what she was going to do, he knew there was the possibility that she might say she would leave. He denied, however, that he had given consideration to what he would say in the event of her indicating she was going to leave as he then was hoping she would stay. He denied that when he called the meeting he intended to bring about the termination of her employment.
Counsel for the applicant submits that an inference can be drawn that had been his intention in calling the meeting. He points not only to the fact that Wilson was giving consideration to replacement employees on the Saturday morning but also to evidence Wilson gave concerning the understanding he then had of the legal position. The cross-examination relied on was as follows:
"The real position - when you started talking to Anne Rheinberger on Saturday morning you told us that one of the options she had was to leave the company and you knew of course about the industrial relations laws that apply to unfair terminations; you had read stories about them in the papers, had you not?---That's correct.
Having read those stories in the papers about the unfair dismissal laws, industrial relations laws, you did not want to do anything that would fall foul of this court or give you any problems with unfair dismissal claims?
MR DAVIDSON: I object.
MR NEWALL: I will put it another way. You wanted to be rid of the Rheinbergers but you wanted to do it in such a way that you would not get in trouble under the industrial laws, that is right, is it not?---That's not correct. I did not - we did not give Anne performance review. We had no intention of handing Anne a performance review or questioning her performance.
The real position is you wanted to be rid of at least Paul Rheinberger and Anne Rheinberger as well and you thought that if you got one or both of them to say the magic "resign" then that would free you of any difficulty with these industrial laws. That is the position, is it not?
MR DAVIDSON: I object. It is a multiple question, it contains a number of propositions.
THE J. REGISTRAR: Just put the proposition one by one, would you please, Mr Newall?
MR NEWALL: I will break them up, yes, Madam Judicial Registrar.
You told the court you knew about the laws, unfair dismissal laws. You thought if an employee said "I resign", that would avoid you having any difficulty with the unfair dismissal laws, did you not?---That's correct.
You particularly thought that about your dealings with Anne and Paul Rheinberger, did you not? That's correct."
And later:
"You believed that is what she would do, that she would say "I resign" or words to that effect, did you not?---No, that's not true.
You had just done it with Paul Rheinberger. You gave him this assessment and he said words to the effect of "I resign" and that was only the day before that had happened, had it not?---Paul's resignation was in written form, it wasn't in verbal.
Yes, but he had used the words, whether written or verbal, resignation or resign, had he not?---That's correct.
In response to an action initiated by you?---That's correct.
And you believed that the same thing would happen on the Saturday morning, that in response to an action initiated by you, Anne Rheinberger would or would probably say "I resign" or words to that effect. That is what you believed would happen, is it not?---No, it's not. It's not what I hoped for.
Never mind hope, that is what you thought was going to happen though, is it not?---It's not true.
Counsel for the applicant submits that this evidence establishes that at the time the meeting on Saturday morning was suggested and during the meeting, Wilson was conscious of industrial laws concerning unfair dismissals and they influenced both the way he conducted the meeting and what he said. In my opinion, that does not emerge from this cross-examination.
The cross-examination of Wilson does not establish, as a matter of fact, that he had in mind the dismissal laws when calling and conducting the meeting on the morning of Saturday, 22 April 1995. At best for the applicant the evidence emerging from the cross-examination is equivocal. It cannot be assumed that the concession made by Wilson that he knew, at the time of the meeting, of the industrial laws, involved a concession that he was drawing upon that knowledge, and thus thinking about them, at the time. There is the concession that Wilson thought about the significance of the employee saying "I resign" in his dealings with the applicant and her brother. However what the question and answer itself does not do, even viewed in context, is establish that this was something Wilson thought about prior to the meeting or during the meeting at least prior to the applicant saying she might resign.
In my opinion one would have expected for Wilson to call the meeting with a view to determining what the applicant's position was in the circumstances and to ascertain her attitude to continuing to work for the Company. Thus the fact that he called for the meeting does not advance the applicant's case. Wilson accepted that he opened the conversation with an enquiry as to whether the applicant was happy with what she had been earning. He then had before him on his desk a folder containing the applicant's sales figures. The applicant submits that this is consistent with Wilson having intended that the meeting would result in the termination of the applicant's employment. For my part I find Wilson's commencing of the meeting with a question about the applicant's earnings a rather blunt and probably insensitive way in the circumstances of opening, a discussion with an employee who was a satisfactory one and Wilson says he wished to retain though it is a matter that could reasonably be expected to be discussed. It must be borne in mind, however, that at least the applicant and her brother took the view that Wilson's management skills were deficient. If that be so, then the fact that the conversation was opened this way does not, in my opinion, sustain an inference that the meeting was called with a view to bringing about the termination of the applicant's employment. It simply evidences Wilson's managerial ineptitude.
The conduct of the meeting thereafter is really neutral on this issue of why it was called. The applicant points to the fact that Wilson immediately accepted during the meeting the intimation by the applicant that she might resign. However this is readily explicable having regard to the fairly heated discussion that preceded this event. It is to be remembered that the applicant had been highly critical of Wilson in the earlier part of the meeting and one could readily understand him taking the view that if the applicant was going to resign he was not going to stand in her way whatever he thought about her skills as a salesperson. A file note made by Wilson shortly after the meeting in which he records that the applicant "was given a choice and chose to resign" does not add anything to the applicant's case as to why Wilson called the meeting.
In my opinion the evidence concerning the meeting leads only to the conclusion that it was a strained and heated one in which, without any real thought, the applicant said words consistent with her volunteering her resignation and equally, without any real thought, it was accepted by Wilson when he indicated she could leave immediately.
This leads to what I view as a critical event, namely a telephone conversation that occurred on Monday, 24 April 1995 between the applicant and Mr Kevin Medlin who was the company secretary of the Company. There was no real issue about the substance of the conversation. The applicant's account was as follows:
"Medlin:"Anne, we still don't have your resignation in writing. In order for me to make up your pay I need your resignation in writing."
Applicant:"OK, I'll get it to you. I don't have access to a fax but I'll get Anne to fax it to you.""
Medlin's account is slightly different and is as follows:
"Medlin:"Anne, it's Kevin Medlin here. I understand that you resigned."
Applicant:"Yes".
Medlin:"In order to complete your file would you please give us a note confirming the resignation."
Applicant:"I'm not able to fax it to you today but I will get it to you in the next couple of days."
Medlin"Thank you very much.""
There was an issue about the tone in which Medlin conducted the conversation but whatever tone was adopted by him the plain import of either version of the conversation was that he was enquiring about the consequences of the events of Saturday morning. Of critical importance is that the applicant did nothing to disabuse him of his belief that she either had or may have tendered her resignation. Indeed the clear import of both accounts of what she said is that she had resigned and she would forward to him a letter of resignation. The applicant says that she felt constrained to respond in the way she did. However the significance of the conversation is that the Company, acting through its company secretary, was led to believe that the events of Saturday morning had indeed involved the applicant resigning from her employment with the Company.
The applicant did not attend at work on Monday 24 April 1995 or at any time during the following week. The next event of significance occurred on Thursday 27 April 1995. There was another telephone conversation between the applicant and Medlin. The applicant's account of the conversation is as follows:
"Medlin:"Anne, it's Kevin Medlin. We still haven't received your resignation."
Applicant:"Well Kevin I'm not so sure that that's what actually took place."
Medlin:"What do you mean? You confirmed your resignation the other day and said I would have it on Wednesday."
Applicant:"Kevin I really didn't have any choice in the matter. I believe you had already appointed other staff."
Medlin hesitated, then replied in words to the following effect:
Medlin:"We are putting on additional staff."
Applicant:"Kevin you're talking to me now. Don't take me for being stupid because I'm not."
Medlin:"Well, what are you doing?"
Applicant:"Well Kevin you tell me what I should do."
Medlin:"Anne you've already resigned."
Applicant:"Well I'm revoking my resignation."
Medlin:"You can't do that."
Applicant:"Speak to Industrial Relations. You know, I can't believe the way Huxley's treat their staff."
Medlin:We have many long-standing employees who are very happy. Well what are you doing. You haven't turned up for work."
Applicant:"Kevin, once again maybe you can tell me what I should do. I wasn't given any alternative."
Medlin:"Anne you resigned."
Applicant:"Thank you Kevin.""
Medlin either agrees with this account or does not deny it. The only point of difference as to what was said was that Medlin says the words "You can't do that" were not spoken by him and he said "Your resignation has been accepted". However, on either view of this conversation it is clear that the applicant was telling Medlin, and thus the Company, that she did not intend, and had not intended, to resign.
On the same day the applicant received a letter, dated 27 April 1995, from the Company informing her that money had been banked into her account by way of termination pay and the letter enclosed a document, which was not in evidence, setting out the manner in which that termination pay had been calculated. There is no evidence as to whether the letter was received before or after the conversation between the applicant and Medlin.
The issue that emerges from these facts is whether the applicant has demonstrated there had been a termination of her employment at the initiative of the Company. The applicant relied on several passages from a recent judgment of a Full Court in Mohazab v Dick Smith Electronics Pty Ltd, 28 November 1995, Lee, Moore and Marshall JJ, unreported. Particular reliance was placed on the following passage:
"It accords with the purpose of the Convention 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."
These observations had been preceded by a discussion by the Full Court of the relationship between the Convention concerning Termination of the Employment at the Initiative of the Employer, which is schedule 10 to the Act, and the importation into the Act of the meaning of expressions in it by operation of s170CB. The applicant further relied on a later passage in which the Full Court said:
"In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship."
However it is plain from these passages that it is not sufficient to demonstrate that the employee did not voluntarily leave his or her employment to establish that there had been a termination of the employment at the initiative of the employer. Such a termination must result from some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect. I leave open the question of whether a termination of employment at the initiative of the employer requires the employer to intend by its action that the employment will conclude. I am prepared to assume, for present purposes, that there can be a termination at the initiative of the employer if the cessation of the employment relationship is the probable result of the employer's conduct.
In the present case the applicant relies both on the calling of the meeting on the Saturday morning and the manner in which it was conducted. I have already indicated I do not accept that an inference can be drawn that the meeting was called with a view to bringing about the termination of the applicant's employment. Unless such an inference can be drawn, the effect of Wilson calling the meeting and conducting it in the way he did was merely to create the environment in which the applicant said what she did. That is, he created an environment in which the applicant came to say things consistent with her intending to resign. However he did not do so intending that result, nor does it appear to me to have been a probable result. Wilson's conduct does not, in my opinion, constitute an act comprehended by the expression "termination at the initiative of the employer". Something more would be needed. Mohazab (supra) illustrates a case where not only did the employer create the environment in which an employee tendered his resignation but also exerted pressure on the employee to follow the course he did. In this case there is no real basis for suggesting that the Company, through Mr Wilson, exerted any such pressure or took any step which was intended to cause the applicant to say what she did about her resignation or would probably have that result.
Moreover, in the conversation between Medlin and the applicant on Monday 24 April 1995, the applicant did not take the opportunity to make clear to the Company that she did not wish to resign. Indeed she created the opposite impression. Nothing the Company did in contacting her and asking for a written record of the resignation could reasonably be viewed as an act intended to bring about the termination of her employment.
I have not, to this point, dealt with when the employment relationship between the applicant and the Company came to an end. The provisions of Division 3 of Part VIA are beneficial legislation that should be liberally construed: see Grout v Gunnedah Shire Council (1994) 1 IRCR 143 at 160. The expression termination of employment relates to the cessation of the employment relationship which is not dependent upon the status of the contractual relationship between the employer or the employee: see Siagin v Sanel Pty Limited (1994) 1 IRCR 1, Strachan v Liquorland (Australia) Pty Limited 6 February 1996, Moore J, unreported and APESMA & Ors v Skilled Engineering Pty Limited & Ors (1994) 122 ALR 471. In my opinion the apparent confirmation by the applicant, on Monday 24 April 1995, of her intention to resign effectively brought to an end the employment relationship.
It may be accepted that by Thursday 27 April 1995 the applicant made known to the Company her desire to remain in employment but I am not satisfied on the evidence that the Company was in a position in which it could be reasonably expected to respond to that intimation by indicating it would treat her as having remained in employment notwithstanding what was said on that Monday. The applicant has not established that there was a termination of her employment at the initiative of the Company.
I order that the application for review be dismissed.
I certify that this and the preceding sixteen (16) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore.
Associate: ........ ........ ......
Dated: ..../..../....
APPEARANCES
Counsel for the Applicant: Mr P Newall
Solicitor for the Applicant: Blattman White & Associates
Counsel for the Respondent: Mr J Davidson
Solicitor for the Respondent: Schrader & Associates
Date of hearing: 20 February 1996
Date of Judgment: 16 April 1996
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