Robert Lisson v Black Rock Yacht Club
[1996] IRCA 82
•19 March 1996
DECISION NO: 82/96
C A T C H W O R D S
INDUSTRIAL LAW - UNLAWFUL TERMINATION - RESIGNATION - extension of time claim - signed release at termination - accord and satisfaction - misconduct - summary dismissal
Industrial Relations Act 1988 ss.170DB, 170EA(3)
CASES:Mohazab v Dick Smith Electronics Pty Ltd, Full Court of the Industrial Relations Court of Australia, (unreported) No. NI 2571 of 1995, 28 November 1995
Gunnedah Shire Council v Raymond Ernest Grout, Full Court of the Industrial Relations Court of Australia, (unreported) No. NI 1903 of 1995, No. NI 950 of 1994, No. NI 1461 of 1995, 19 December 1995
Turner v K & J Trucks Coffs Harbour Pty Ltd, Beazley J, (unreported) No. NI 1246 of 1995, 10 August 1995
Nelson v Scholle Industries, von Doussa J, (unreported) 1234R of 1995, 17 October 1995
ROBERT LISSON - v - BLACK ROCK YACHT CLUB
No. VI 4400 of 1995
Before: Judicial Registrar Millane
Place: Melbourne
Date: 19 March 1996
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 4400 of 1995
B E T W E E N :
ROBERT LISSON
Applicant
AND
BLACK ROCK YACHT CLUB
Respondent
MINUTES OF ORDERS
Judicial Registrar Millane 19 March 1996
THE COURT ORDERS THAT:
The applicant’s 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 4400 of 1995
B E T W E E N :
ROBERT LISSON
Applicant
AND
BLACK ROCK YACHT CLUB
Respondent
Before: Judicial Registrar Millane
Place: Melbourne
Date: 19 March 1996
REASONS FOR JUDGMENT
Until 31 July 1995 the applicant worked for six years and three months as a bar supervisor for the respondent, the Black Rock Yacht Club. The respondent has a club house and bar used by members and their guests and patrons from whom it raises revenue by hiring the club rooms out for social functions. The applicant alleges that his employment was terminated by the respondent in contravention of Division 3 Part VIA of the Industrial Relations Act 1988 (the Act).
On its part the respondent alleges that the applicant resigned from his employment on 31 July 1995 having signed a written resignation (see Exhibit A2) at the same time giving a written undertaking not to take any legal action against the club in consideration of the payment to him of the sum of $3,750.00. This lastmentioned sum was additional to the amount of the applicant’s entitlements to the date of the cessation of his employment plus the payment to him of two weeks’ pay in lieu of notice.
Throughout the hearing the club contended that at the date the applicant’s employment ceased, if the Court was to find that the resignation was not a voluntary one, it was open to the club to summarily dismiss the applicant for serious misconduct on 22 July 1995. It was alleged that at the conclusion of a social function at the club, the applicant deliberately threw beer in the face of a patron trying to help himself to beer from the closed bar and, subsequently, engaged in a fist fight with the enraged patron who confronted him behind the bar.
Even if there was no entitlement to summarily dismiss the applicant, the respondent alleges that it was justified in dismissing him both because of the conduct on 22 July 1995 and the deteriorating performance of his duties over the period between 1993 and the termination causing the respondent to give the applicant various warnings and counselling. Inasmuch as the applicant received a payment on termination in excess of the four weeks minimum notice payable under section 170DB of the Act the respondent needed only to show on the balance of probabilities that there was misconduct or want of performance justifying the termination.
It was also argued by the respondent that the application was out of time, the respondent having formally notified the applicant of this argument less than one week prior to the hearing. The application was filed on 21 August 1995, some three weeks after the agreed date of termination.
THE RESIGNATION
Although the respondent persisted in arguing the resignation point over a period of some two days of hearing, it eventually conceded in its submissions that this issue was not sustainable on the facts because of the decisions of the Full Court of the Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd, (unreported) No. NI 2571 of 1995, 28 November 1995 and Gunnedah Shire Council v Raymond Ernest Grout, (unreported) No. NI 1903 of 1995, No. NI 950 of 1994, No. NI 1461 of 1995, 19 December 1995.
On the facts, the termination was clearly involuntary. The applicant was called into an interview during the course of which he was presented with the option of resigning or being terminated. Apart from the involuntary resignation in the sense that the applicant did not want to resign but was faced with no real alternative, the applicant also claimed that the execution of the agreement not to take legal action in return for the payment of $3,750.00 was made under what he called “duress” because he had wanted and asked to obtain legal advice before executing the documents. He alleges he was told by the respondent that if he obtained legal advice he would not get the two cheques being offered to him ($1492.56 and $3750.00 respectively) together with a written reference the respondent had agreed to give him.
THE EXTENSION OF TIME CLAIM
At hearing faced with the argument that the claim was out of time the applicant, who represented himself, sought an extension of time within which to bring the claim pursuant to section 170EA(3) of the Act.
The applicant’s explanation for the delay involved a number of matters. The first was that he was shocked by the termination of his employment. He did not obtain or seek any legal advice in the period of delay and there was no evidence to show that he had any appreciation of any time limit applicable to him making a claim before this Court. It appears that at termination the applicant was offered a written reference and waited for this until 13 August 1995 following a reminder call to the respondent. There was also some query directed by the applicant to the respondent concerning the payment to the applicant of his full entitlements on termination prompting an explanatory letter dated 17 August 1995 being sent to him (see Exhibit A6). This letter sought to explain how the two cheques were made up; the $1492.56 being for one week’s pay owing at termination and two weeks’ pay in lieu of notice. The second cheque of $3750.00 was then described as a further two weeks’ pay in lieu of notice and a further four weeks’ pay as a gratuitous payment.
The applicant alleged that he received no letter of termination and one of the reasons for not bringing his application within the fourteen day period was that he did not know about the time limit, further, he was keen to obtain his written reference before he attempted to do anything about the termination of his employment. At termination the only written documentation was the resignation, the agreement not to sue and an Employment Separation Certificate completed by the respondent on 31 July 1995 and handed to the applicant on that date. That document indicates that the termination was not a voluntary one by clearly stating that the applicant ceased work “because he was asked to”.
The applicant was not cross-examined on the reasons he gave for failing to bring his application within the time stipulated by the Act. Bearing in mind the detailed discussion of the question of granting in this Court extension of time claims by Beazley J in her decision in Turner v K & J Trucks Coffs Harbour Pty Ltd, (unreported) No. NI 1246 of 1995, 10 August 1995, where Her Honour cited favourable the observations of Chief Justice Bray in Lovatt v LeGall (1975) 10 SASR 479 saying as he did at page 485:
“If the defendant has suffered no prejudice it may well be that the court will not find it difficult to come to the conclusion that it is fair and equitable in the circumstances to grant an extension,”
I have reached the conclusion that this is an appropriate case within which to allow the extension of time for bringing the claim. There were no matters raised by the respondent in any way suggesting that it was prejudiced by the delay. Moreover it is apparent that the respondent did not positively pursue this issue until there was formal notification by letter from its solicitors to the applicant some days before the hearing. There is now a decision in this Court which suggests that the provision of a completed Employment Separation Certificate by the employer to the employee can amount to written notification of termination (see Nelson v Scholle Industries (unreported), von Doussa J, 1234R of 1995, 17 October 1995). Given the circumstances under which the applicant received Exhibit A4, it should constitute written notice for the purpose of the Act. Nevertheless, I have some reservation as to how this is compatible with an allegation of voluntary resignation by the employer who to sustain this allegation must necessarily argue that it gave no written notice of termination in the sense contemplated by the Act.
WITNESSES
The applicant gave evidence and called no further witnesses. On the other hand, the respondent was represented by Counsel and called the following witnesses:
a.Noel Sutcliffe (Sutcliffe), the Yacht Club’s current Commodore and the Commodore at the date of termination;
b.William H.M. Bell (Bell), the Vice Commodore at the date of termination and the person responsible for what the respondent termed house matters, the building the running of the bar;
c. Peter Clancy (Clancy), the Rear Commodore as from June 1995;
d.Kevin Wilson (Wilson), the Commodore for the period between 1989 and mid 1993; and
e.John F. Sammons (Sammons), the Commodore from July 1993 to August 1994.
Each of the respondent’s witnesses were long-term members of the club having served in various committee positions other than those mentioned above during the currency of the applicant’s employment by the club.
Having had the opportunity to observe all the witnesses and hear the evidence my conclusion is that the respondent’s witnesses were reliable historians who gave their evidence without any attempt to embellish on the performance matters they referred to. This was in circumstances where, from at least early 1993, they had all had some part to play in remonstrating with the applicant concerning his drinking on duty and his general behaviour towards members, their guests and patrons of the club. If anything, they appear to have shown considerable forbearance when confronted with difficult and recurring problems with this employee. In contrast, and bearing in mind the difficult task any unrepresented applicant has in putting their case to the Court, the applicant was forgetful when questioned on matters to do with his poor behaviour and quite inconsistent in his evidence. For instance, on numerous occasions he stated that he never drank on duty or was intoxicated before commencing his bar duties, at least after he had received warnings not to do this. However, he also told the Court on a number of occasions that he sometimes had a pot of beer on duty and even referred to his previous habit of putting $20.00 or $50.00 in the till and paying for his drinks with this throughout the evening. Because of this and many other inconsistencies, where there was conflict between the evidence of the respondent’s witnesses and the evidence of the applicant I preferred their evidence.
BACKGROUND
Sadly the applicant seems not to have grasped now or since at least early 1993 that a significant problem in his employment as the supervisor of the club’s bar was his own drinking habits coupled his inability, when admonished for this behaviour, to desist for any lengthy period of time from imbibing after he had been instructed not to, and after he had received various and explicit warnings and counselling (see Exhibits R2, R3, R4 and R5).
Each of the respondent’s witnesses recounted personal knowledge of events during their period of service as Commodore, Vice Commodore or Rear Commodore of the club where they had to instruct the applicant not to drink on duty or not to attend for duty intoxicated; not to mention requests for him to improve his dress and general behaviour towards members, their guests and patrons. For instance, Bell tells of an incident in January 1995 when he was entertaining international visitors at a club barbecue when the applicant came out of the bar area and said to them, without realising that Bell was present, “why don’t you buggers clean up the bloody mess”. The next day he apologised to Bell for his behaviour, however, the behaviour on that occasion was just one illustration of the sort of rude behaviour the applicant displayed from time to time despite warnings to the contrary.
It appears that the applicant was engaged as a full-time employee from 1989 having been a temporary prior to that time. He worked a 40 hour week and was in receipt of $35,000 gross per annum. His duties made him responsible for the bar and casual staff employed in it from time to time. Because the committee members were unpaid volunteers they were not in attendance at the club all the time the bar was open and this meant that the applicant had some considerable responsibility and autonomy in performing his duties. It seems that until early 1993 he was a well regarded and competent employee. However, from at least early 1993 his performance deteriorated to such an extent that successive committee officers needed to warn and counsel him with a “final ultimatum” being issued on 9 February 1995 (see Exhibit R4). This document notified the applicant in very clear terms that his job was in jeopardy. Even he conceded that he understood the warning given. However, the bad behaviour continued with rudeness towards people using the bar, calling them “pussies” if they did not drink beer, coarse language and the inevitable drinking from time to time.
The respondent’s tolerance, and tolerant it must have been, was exhausted by 14 June 1995 when the committee determined that the applicant’s employment would have to be terminated because he had failed to abide by the instructions given and the warnings received (see Exhibits R7 and R8). The decision was not implemented immediately because in June 1995 the applicant’s father was hospitalised and died on 23 June 1995. The respondent resolved not to terminate the applicant’s employment at that time to allow him to deal with his difficult personal circumstances. It is the respondent’s evidence and I accept the veracity of this evidence that during the time of his father’s demise and the period thereafter, the applicant’s behaviour deteriorated further with his drinking on duty resuming, at least in a covert way. Some of the witnesses recounted seeing the applicant take cans into the storeroom and finding half drunk cans in this area. I accept that it is more probable than not that these cans of alcohol were left in the store area by the applicant.
The respondent took no further action against the applicant until 22 July 1995 when he was involved in an altercation with a guest attending a 21st birthday function held at the respondent’s club. This was a private function and the incident alleged was witnessed by Clancy who attended the club from 11.00pm to check on the function.
The circumstances giving rise to the fracas and the outcome were not greatly disputed; save for the allegation by Clancy that he saw the applicant throw beer in the face of the party goer.
It is not contested that the applicant tried to close the bar at 1.00am which, on his evidence, was the end of the trading period in compliance with the respondent’s liquor licence. One of his responsibilities was to ensure the bar was closed on time. An inebriated party goer was seen by the applicant leaning over the bar attempting without permission to fill a pot of beer, after the bar had closed. The applicant interpreted this behaviour as “thieving”, taking the partially filled pot of beer from the man, who he claimed roundly abused him. It is now alleged by the applicant he was attempting to throw the beer out when it accidentally went up in the air and, because the man was leaning forward over the bar, it caught him in the face. This caused the man to rush around to the applicant’s side of the bar and a fist fight ensued eventually being broken up by Clancy who also ejected the party goer from the club.
Clancy’s evidence was that although he was not close enough to hear the exchange he clearly saw the applicant throw the beer in the other man’s face and then raise his fists inviting the fight which followed.
Clancy saw to the applicant’s injuries and rang the Commodore, Sutcliffe, to report the incident. Bell who was the Vice Commodore at the time was responsible for the bar as part of his duties. He attended the club on the following afternoon during which time he asked the applicant for his version of what occurred, being told amongst other things by the applicant that he had said to the party goer, “if you want a beer that badly have this”, at which stage the applicant threw the beer in his face. Bell told the applicant that the respondent treated the assault of staff as a serious matter and that the police may be involved. In response the applicant asked him not to communicate with the police because he was allegedly able to handle his own affairs and also because he knew where the man lived; indicating that he would ring him in the early hours presumably as some form of revenge. Bell was startled by this response and warned the applicant against abusing guests of the club and throwing beer at them. He then asked the applicant to provide him with a written report by the following Thursday when Bell returned from an interstate business trip. On the same day he asked Clancy for a written report detailing his observations.
After receiving a telephone call from Clancy in the early hours of 23 July 1995 Sutcliffe attended the club to speak to the applicant and was told his story by the applicant in a boasting fashion, including the admission that he had thrown the beer at the guest. He too was shocked to be told that the applicant would “get” the other fellow another time.
Sutcliffe was prompted by his experience to discuss the matter further with Bell and they both determined that the problem had advanced beyond the stage of warnings, there being grounds for summary dismissal. They decided that the time had come to terminate the applicant’s employment that decision being made on the evening of 23 July 1995, however, they determined to await the written reports requested for later that week.
The applicant’s report failed to mention that he had deliberately thrown the beer at the patron stating, amongst other things that:
“... I was going to throw the beer out and as I did it accidentally went over him.”
The applicant now vehemently denies any admission contradicting the abovementioned statement. However, his version of the incident given both in Court and in his statement is improbable and implausible. I find that on the evidence the applicant did, in response to the verbal provocation offered by the guest, intentionally throw the beer in the guest’s face leading to a physical altercation.
Unhappily it fell to Bell to terminate the applicant’s employment and he arranged for the letter of resignation and the agreement or release to be typed before interviewing the applicant on 31 July 1995 having received both the applicant’s and Clancy’s reports some days earlier. Interestingly enough, despite the applicant’s actions he was permitted to continue working until 31 July 1995 when Bell was able to attend to conduct the final interview.
THE TERMINATION
Bell told the Court that he had in the days preceding the termination sought advice from the Victorian Employers Chamber of Commerce and Industry and the Licensed Clubs Association of Victoria confirming the respondent’s entitlement to terminate the applicant summarily. Notwithstanding this advice the respondent decided to give the applicant the opportunity to resign and pay him two weeks’ notice as well as the additional sum of $3,750.00. At interview Bell told the applicant he was being terminated as a result of the incident and offered him the release and resignation for signing. He was in the midst of making this offer when the applicant interrupted him stating that he would not sign without legal advice. In response Bell contends he told the applicant that he should hear first what was being offered and if he still wanted legal advice he could obtain it. Bell alleged that he also explained the contents of the documents following which the applicant appeared satisfied saying he did not want any trouble and signed the documents. The applicant also asked for a written reference to which request the respondent acceded (see Exhibit A1).
In contrast, the applicant claimed that Bell had actually told him that if he took legal advice he would get neither of the cheques nor the reference. Because of the pressure applied to him, he reluctantly signed the two documents. Bell agreed in cross-examination that he had given the applicant the option of resigning and receiving the payments offered otherwise he would be summarily dismissed.
MISCONDUCT
On the evidence I am satisfied that the applicant’s actions on 22 June 1995 were intentional ones and a serious breach of his obligations under his contract of service of a kind that would ordinarily entitle the employer to bring his employment to an end without the benefit of the service of or payment for the minimum period of notice usually required by section 170DB of the Act.
The abovementioned finding indicates that the employer in this instance chose to pay not only some limited period of notice but an additional sum for six weeks’ pay representing each year of service no doubt in the hope of avoiding any further claims as well as recognising the applicant’s service to the club.
Taking into account the abovementioned matters the applicant’s claim is best described as misconceived.
It should also be borne in mind that subsequent to the termination the applicant who was and is clearly aggrieved by Bell’s role in the termination process rang Sutcliffe on a number of occasions and in the course of conversations with Sutcliffe made abusive and derogatory remarks about Bell. I accept Sutcliffe’s evidence on these matters.
ACCORD AND SATISFACTION
Because of my findings on the merits of the claim it is not necessary for me to make any conclusive remarks about the respondent’s allegation that at termination the execution of the release and the payment to the applicant of a sum of $3750.00 as consideration amounted to accord and satisfaction. Nevertheless I record my concern about the validity of a proposition that says that where an employee is required at termination to execute a general release in the following terms an employer is entirely relieved of its statutory obligations under the Act:
“31st July, 1995
The Committee
Black Rock Yacht ClubDear Sirs,
In consideration of being paid a gratuitous retirement payment of $3750- I, Robert Lisson undertake that I shall not take any legal or other action against Black Rock Yacht Club for any reason whatsoever.
........ ........ ........ ........ ........ ....
Robert Lisson........ ........ ........ ........ ........ ...
Witness”
In the present case the consideration paid clearly covered the minimum statutory entitlement to notice under section 170DB had there been a lawful claim for same. This was more by coincidence than by design because the respondent quite wrongly believed that insofar as it may have had any obligation to pay a sum of compensation in lieu of notice on termination its obligation only amounted to two weeks pay. In its letter of 17 August 1995 it appeared to try and address this problem by suggesting that part of the $3750.00 sum was for two weeks’ pay in lieu of notice.
The use of the word “duress” by the applicant to describe the circumstances under which he executed the release was not necessarily an attempt to articulate his claim in a technical legal sense. If anything, the matters alleged by the applicant are more consistent with the legal notion of undue influence where the Court may intervene to prevent a party to a contract from taking unconscientious advantage of their position of dominance. Arguably an employer may, in certain circumstances, because of the relationship and the position of power held exercise undue influence in urging an employee to execute a general release for which there is no consideration or no adequate consideration and which document is obtained by misrepresenting to the employee their true legal position.
In the present case there was consideration; although if this was not a case where summary dismissal was justified the applicant would have had an entitlement to a statutory minimum sum of four weeks’ pay in lieu of notice. Arguably, to the extent that the sum paid in return for the release is applied to any statutory minimum requirements it may not amount to real consideration for the promise not to sue. Moreover, if Bell had been incorrect in his representation to the applicant that the respondent was not required to pay the monies because it had a right to summarily dismiss the applicant, I very much doubt that the respondent could rely on an accord and satisfaction argument given the relationship between the parties.
Lastly, Division 3 Part VIA of the Act is enacted to uphold International Conventions protecting employees against unfair dismissals. It was contended by the respondent that the execution of a general release in favour of the employer is analogous with a compromise on settlement occurring in proceedings before the Court. In my view there is not any real parity of reasoning as suggested because the compromise or settlement of a proceeding anticipated or already on foot usually occurs when an employee, aware of his or her rights, elects to compromise to avoid the risk and/or cost of litigation. In proceedings concerning unlawful termination of employment under the Act, I have some reservations about the real effect of a general release relied on by an employer obtained in circumstances where an employee is pressured into what the employer then wishes to characterise as a voluntary resignation without any clear understanding by the employee of the employee’s right to enforce statutory minimum entitlements and seek reinstatement as a result of any unlawful termination.
Because the respondent’s defence to the allegations of contravention of the Act has been successful on its merits, the applicant’s application is dismissed.
MINUTES OF ORDERS
THE COURT ORDERS THAT:
The applicant’s 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 fourteen (14) pages are a true copy of the reasons for judgment of Judicial Registrar Millane.
Associate: ........ ........ ........ ........ ........ ........ ........ ...
Dated: 19 March 1996
Applicant in Person.
Solicitors for the Respondent: Oakley Thompson & Co
Counsel for the Respondent: Mr J. Bailey
Date of hearing: 7 & 8 February 1996
Date of judgment: 19 March 1996
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