Ryan v Furneys Stockfeed

[1995] IRCA 250

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES REGISTRY

No. NI 1120 of 1994

BETWEEN:

RYAN
Applicant

AND:

FURNEYS STOCKFEED LTD
Respondent

BEFORE:     PATCH JR
PLACE:       DUBBO
DATE:          15 MAY 1995

REASONS FOR JUDGMENT
(Delivered ex tempore - revised from transcript)

This is an application under Part VIA of the Industrial Relations Act 1988. (“The Act”)

The applicant, Mr James Ryan, alleges that his employment was unlawfully terminated by the respondent and seeks compensation for that alleged unlawful termination.  He does not seek reinstatement and gave evidence that he thought that the personal relationships at his former workplace had broken down to such an extent that it would not be practical for him to return to work with the respondent.  I accept that evidence, and therefore find that it would be impractical to order his reinstatement.

The two main issues, or the only real issues before the Court, are, firstly, was the applicant employed as a probationary employee within the meaning of Regulation 30B(1)(c) of the Act; and, if so, what amount of compensation should be awarded for the unlawful termination of his employment?

It was conceded in argument, quite properly, that if I were to find that the applicant was not a probationary employee within the meaning of the Act and the Regulation, then the termination of his employment, because of its summary nature and the failure of the respondent to give the applicant an opportunity to respond to the criticisms of his work performance, would have been unlawful.

The first question is: Was the applicant a probationary employee?

The respondent submits that the applicant was a probationary employee because the applicant was employed under the Milling Industry Award (1990).   Clause 20 of that award, under the heading "Conditions of Employment", the sub-heading "Engagement", and then the further sub-heading "Probationary Period of Employment", says this:

"All new weekly employees (which includes part time employees) shall be employed under a probationary period of three months commencing from the date of engagement.  During this period a new employee will be properly instructed on the tasks and requirements of the position to be filled.  During the probationary period employment shall be on a day to day basis and the employee’s employment may be terminated by either the employer or the employee at the end of any day or shift without notice."

If the award was part of the contract of employment between the applicant and the respondent, then it is clear that the applicant would have been a probationary employee within the meaning of Regulation 30B.  By virtue of the award, the period of the probation would have been determined in advance and in my opinion three months is a reasonable period having regard to the nature and circumstances of the employment.

So the question that has to be addressed is this.  Was the award part of the contract of employment?  In my opinion the award was not part of the contract of employment between the applicant and the respondent.  In Byrne and Frew v Australian Airlines Limited (1994) 52 IR 10, a bench of five Justices of the Federal Court considered the question of whether awards become part of the contract of employment.

The Court decided that the terms of an award do not automatically become part of the contract of employment.  This is despite the fact that the award no doubt binds respondent employers to carry out the conditions of the award.

I am bound by that decision of the Federal Court, which was made by a bench especially convened to reconsider that very question.  So, the mere fact that the award has in it the above-mentioned clauses does not necessarily decide the case in favour of the respondent.

I therefore turn to the evidence of what was said to the applicant before he commenced his employment.

It was common ground between the applicant and the only witness called by the respondent, Mr Shultz, (that is, they each gave evidence to the same effect) that nothing was said to the applicant before he commenced his employment to the effect that he was on probation or that he was to work for a trial period.  Mr Shultz did say that on the first day that the applicant was at work, at sometime during the day, after the applicant had already commenced employment, that he, Mr Shultz, told the applicant that he was on a "trial period".

Mr Shultz, however, also said that he did not tell the applicant what the duration of that period was to be. 

So, on any version of the evidence, the applicant was not told, before he commenced employment, that he was to be on probation, and he was not told, at any time, before or during his employment, that he was employed on probation for a specific period.  Nor was there any evidence from which I could conclude that the applicant had the relevant parts of the award drawn to his attention. It follows that, on the evidence,  the only conclusion I can draw is that the applicant was not a probationary employee within the meaning of Regulation 30B.

The next question then is: Was the termination of the applicant's employment unlawful?

In my opinion that is clearly the case.  The applicant was never informed of the criticisms that his employer apparently had of him.  He was simply summarily dismissed, without warning. 

Section 170DC reads:

"An employer must not terminate an employee’s employment for reasons related to the employee’s conduct or performance unless:

(a)      the employee has been given the opportunity to defend   himself or herself against the allegations made; or

(b)      the employer could not reasonably be expected to give the                employee that opportunity."

Here, there was no opportunity whatsoever given to the applicant to respond to any criticisms his employer had of him, and it was perfectly reasonable for the employer to have given him such an opportunity. It follows that the termination of the applicant’s employment was done in breach of section 170DC of the Act.

Section 170DE(2) of the Act is to the effect that a dismissal is to be deemed not to be for a valid reason if the dismissal is harsh, unjust or unreasonable.

In my opinion, the failure of the employer to give the employee in this case the opportunity to respond to the criticisms, and to simply summarily dismiss him, rendered the dismissal “unjust” within the meaning of section 170DE(2) of the Act.  The termination of his employment is therefore deemed to be not for a valid reason, and unlawful for that reason as well.

In any case, in my opinion, the employer has not proven, (and the onus is on the employer to prove this), that the termination of the applicant’s employment was for a valid reason. 

The only criticisms that were made of the applicant were his failure on two occasions to notify in advance that he was not going to attend work.  The first occasion was on 29 July 1994, following a work injury in which he received quite debilitating injuries to his ankle.  The second occasion was some time a bit later when the applicant had been assaulted in his home town, (a matter which, according to the applicant’s uncontested evidence, is now being dealt with by the police), and received injuries to the knee of the other leg, thus rendering him unable to work.

True it is that the applicant did not notify his employer in advance that he was to be absent.  I accept that he was obliged to do that.  It was certainly a transgression that he did not do that but there is a distinction to be drawn, in my opinion, between simply taking time off for no good reason and being unable to work because of injury, injury which was no fault of his.  I do not seek to excuse the applicant's failure to notify his employer that he was not going to come to work and I am at pains to say that.

However, these transgressions were not serious enough to warrant dismissal. I find that the termination of the applicant's employment was not for a valid reason,  a breach of section 170DE(1) of the Act, and unlawful.

What level of compensation should be awarded?

The applicant has been out of work from 14 August 1994 (the date of the termination of his employment by the respondent) until 23 April 1995, when he got a job with Narromine Council.  He has since been dismissed from that job, but the consequences of him being dismissed from his job by the respondent flowed until 23 April 1995.  I am satisfied that the applicant diligently tried to find work in the meantime, that he is not a slacker, and it was through no fault of his own that he was unable to find alternative employment.  He suffered a very significant financial loss because of the termination of his employment.

When he was dismissed he was receiving $325.10 per week by way of salary. When one divides $325.10 by 7 to reach the daily rate, and then multiplies it by 251, (which is the number of days that the applicant was out of work), the resulting figure is $11,657.16.  That is the amount of pay that the applicant would have received if he had remained in employment from  14 August 1994 until 23 April 1995.

However, the applicant started receiving unemployment benefits about 10 weeks after the termination of his employment, that is to say at approximately, give or take a day or so, on 23 October 1995.  The applicant received $356 per fortnight (nett). That, according to his evidence, would be about $366 (gross) per fortnight.  I accept that that is a fairly accurate figure.

From 23 October until 23 April 1995 is 181 days.  When one divides $366 by 14 to reach the daily rate, and then multiplies that figure by 181, the amount of Social Security benefits that the applicant received was $4,731.86.  That is not completely accurate to the exact cent or the exact dollar, but it is pretty close and the best the Court can do.  So, the applicant’s loss is $11,657.16 less $4,731.86, namely, $6,925.30.

The respondent is to pay that amount in compensation to the applicant within 21 days of today.

I certify that this and the preceding seven (7) pages is a true copy of the Reasons for Judgment of Judicial Registrar Patch.

Associate:     C Sternberg
Date:              14 June 1995

APPEARANCES

The applicant appeared in person.
An officer of the respondent company appeared for the respondent.

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES REGISTRY

No. NI 1120 of 1994

BETWEEN:

RYAN
Applicant

AND:

FURNEYS STOCKFEED LTD
Respondent

COURT:       PATCH JR
PLACE:       DUBBO

DATE:          15 MAY 1995

MINUTES OF ORDER

1. That the respondent pay the applicant compensation in the sum of    $6,925.30, within 21 days of 15 May 1995.

Note:  Settlement and entry of orders is dealt with in Order 36 of the Industrial     Relations Court Rules.

CATCHWORDS

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - CONTRACT OF EMPLOYMENT - Whether provisions of Award imported into contract if they are not drawn to the employee’s attention.

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - PROCEDURAL FAIRNESS - OPPORTUNITY TO RESPOND - Employer’s obligation to give an employee the opportunity to respond to allegations of misconduct.

Industrial Relations Act 1988 ss 170DC, 170 DE(1), 170 DE(2)

Byrne & Frew v. Australian Airlines Ltd (1994) 52 IR 10

RYAN v FURNEYS STOCKFEED LTD

No. NI 1120 of 1994

COURT:       PATCH JR
PLACE:       DUBBO

DATE:          15 MAY 1995