Scrivens v Golden Power Electronics Pty Ltd

[1996] IRCA 116

DECISION NO:  116/96

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 5228 of 1995

B E T W E E N :

AMANDA SCRIVENS
Applicant

AND

GOLDEN POWER ELECTRONICS PTY LTD
Respondent

Before: Judicial Registrar Murphy
Place:              Melbourne
Date:               29 March 1996

EX-TEMPORE  REASONS FOR JUDGMENT

In this proceeding the applicant seeks a remedy under Division 3 of Part VIA of the Industrial Relations Act (“the Act”) following the termination of her employment on 9 October 1995.

The applicant commenced employment as a bookkeeper in September 1993.  The applicant's duties involved bookkeeping and receptionist duties in a small office in the eastern suburbs of Melbourne.  Mr Harrison took over as the general manager of the respondent in November 1994.  The applicant alleges that after Mr Harrison commenced his duties as the general manager he proceeded to engage in a number of acts of harassment that led to an incident on 21 July 1995 that she says constituted sexual harassment in that he attempted, against her resistance, to kiss her.  She alleges a number of incidents prior to that.  As a result of the incident on 21 July the applicant was distressed.  She came to work on the following Monday but went home due to illness.  She returned on the Tuesday, stayed for only an hour or so and then went home and she has not worked since.  She further gave evidence that at no stage had Mr Harrison ever raised with her any performance related issues.

Mr Harrison denied all the substantive allegations made against him in relation to unwanted contact, and comments that she said he made about her, including describing her as "gorgeous" and "my little gem".  Mr Harrison also gave evidence that, contrary to the applicant's evidence, he had, on a number of occasions, raised with her issues relating to her performance, her tardiness, her absence from work without reason,  absence from work during working hours, and issues relating to the preparation of various financial reports that were part of her duties. 

There were also substantial matters of conflict in the evidence between the two principal witnesses relating to a $6000 pay rise that was given to the applicant in early 1995.  There was a conflict in the evidence as to whether or not Mr Harrison had offered to the applicant an ergonomic chair that was available to employees of the company.  There was also a substantial conflict in the evidence about whether or not the applicant was performing, without the permission or knowledge of Mr Harrison, a large amount of non-company business in relation to a dog club in which she was involved.  Another area of major conflict was an allegation by the applicant that Mr Harrison had told her that on one weekend he drove past her property and had been thinking about her. 

Why the court prefers the applicant's version. 
In a proceeding like this the Court is reluctantly forced to decide whose version of events is preferable.  In these circumstances the Court always looks, if possible, for corroborating, contemporaneous documents that may assist.  Unfortunately, those corroborating contemporaneous documents are not available in this case. 

The first matter to note is the failure of Mr Harrison to produce any corroborating, contemporaneous documentary records to support his evidence about the deficiencies in the applicant's performance.  Next, there is the evidence corroborating the applicant’s version.  I refer to Ms Bainbridge and to the evidence of Mr Chetcuti who said that Mr Harrison referred to his wife as "a little gem".  This was a term Mr Harrison denied using.  Further, Mr Chetcuti contradicted Mr Harrison's evidence about not praising individual employees when he said that Mr Harrison would make comments like  "top job".   A further matter is that Mr Harrison said that the respondent had only a post office box address for the applicant, yet exhibit R2 provides a residential address for the applicant.  Finally, there is the inherent credibility of the competing versions.  The applicant produced medical certificates from three different medical practitioners to the effect that she had a stress related illness.  Further, she led the evidence of Ms Kidd, a psychologist.  This leads to a likelihood that something happened at the respondent that caused this woman, who had no-one on whom she could rely for financial support, to cease work.  The applicant had, at that point, 21 months service with the respondent.

Having regard to these general considerations, and having regard to a comparison of the demeanour and presentation of the witnesses, I am satisfied that the applicant's version of what happened in the workplace is more likely than that of the respondent.  It follows that the behaviour of Mr Harrison, when the applicant had protested about it to him, and in particular her protest to Mr Porter, constituted a breach of the respondent's duty of co-operation and good faith in the discharge of its contract of employment with the applicant. 

As a result of that breach, which I find was a continuing breach from late July, the applicant was unable to resume her employment.  She was denied any WorkCover payments and ultimately received a letter of termination dated 9 October 1995 (Exhibit R1).  I do not accept that the letter contains the real reason for the termination. 

Application of the Act
I am satisfied that the real reason for the termination was the unwillingness of the respondent to be prepared to address the applicant's allegations about Mr Harrison and thus cease its breach of its duty of co-operation and good faith to her.  The respondent chose to avoid this issue by terminating her employment on the grounds it set out in the letter. 

Having regard to these considerations I am satisfied that the respondent did not have a sound reason under s170DE(1) of the Act to terminate the applicant because she had relevantly done nothing wrong. Further, the letter of 9 October could not constitute a sound reason in these circumstances because all the matters that it sought to rely on had, I find, not been properly put to the applicant in the course of her employment. I prefer the applicant's evidence that performance related issues were not raised with her on any serious basis by Mr Harrison as he alleged.

I further find that the respondent has breached s170DF(1)(a) of the Act by reason of its termination of employment of the applicant. On any view she was presenting certificates showing incapacity for work as a result of matters in the knowledge of the respondent. I reject Mr O'Grady's submissions that the provisions of Regulation 30D(6) have not been complied with. The respondent carries the onus of proof under s170EDA(2) that a reason in s170DF(1) was not a reason for the termination. I am satisfied that it has not discharged its onus of proof in relation to that matter. Having regard to this finding it is unnecessary for me to consider whether the respondent has also breached s170DF(1)(f).

I am further satisfied that to the extent that the reasons of the respondent related to the applicant's performance, s170DC of the Act was not complied with. The applicant was in a position where she was required to produce monthly management accounts. It seems strange that if her performance was so delinquent on a monthly basis this would not have been raised. Further, in relation to her absences from work I accept her evidence that these were not a matter of concern to Mr Harrison.

It follows from this that overall, as I have indicated, I prefer the evidence of the applicant and I am satisfied that her employment has been terminated in circumstances which are in breach of ss170DE, 170DC and 170DF of the Act.

Remedy
It is common ground that reinstatement is impracticable. I am satisfied that it is appropriate that there be an order for compensation for the losses suffered as a result of the breaches of the Act. The losses include loss of remuneration from the date she ceased work on 27 July 1995 to date. Her financial losses are substantial; they exceed the maximum amount of compensation that may be awarded. Here under s170EE(3) of the Act that maximum is six month's remuneration, which is $18,000. The applicant's losses to the present time are eight month's remuneration.

I do not accept that compensating the applicant for her financial loss is compensating her for emotional distress, where she may have remedies in other forums. I am satisfied that her financial losses have resulted from the refusal of the respondent to seek to resolve the matters between her and Mr Harrison and that they thus flow directly from that. I am satisfied that there are no discretionary reasons why an order for compensation should not be made and I propose to order that the respondent pay to the applicant the sum of $18,000 in compensation. I do not propose to make any orders under s170EE(5) of the Act in relation to any breach of s170DB of the Act.

MINUTES OF ORDERS

THE COURT ORDERS:

1. That within 21 days the respondent pay to the applicant the sum of $18,000.

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 four (4) pages are a true copy of the reasons for judgment of Judicial Registrar Murphy.

Associate:  
Dated:  29 March 1996

Solicitors for the Applicant:                  Ryan Carlisle Thomas
Counsel for the Applicant:  Ms Jane Patrick

Representative for the Respondent:      Industrial Law and Employment
  Solutions Pty Ltd
Counsel for the Respondent:                Mr C O’Grady

Date of hearing:  28 & 29 March 1996
Date of judgment:  29 March 1996

C A T C H W O R D S

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - UNFAIR TERMINATION - VALID REASON -whether ILLNESS resulted from BREACH OF CONTRACT - PROCEDURAL FAIRNESS - REMEDY - COMPENSATION - employer failing to respond to allegations of sexual harassment resulting in absence from work - whether breach of duty of co-operation and good faith.

Industrial Relations Act 1988 ss.170DC, 170DE, 170DF, 170EDA.
Industrial Relations Regulations - Regulation 30D

AMANDA SCRIVENS-v- GOLDEN POWER ELECTRONICS PTY LTD

No. VI 5228 of 1995

Before:  Judicial Registrar Murphy
Place:  Melbourne
Date:  29 March 1996

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 5228 of 1995

B E T W E E N :

AMANDA SCRIVENS
Applicant

AND

GOLDEN POWER ELECTRONICS PTY LTD
Respondent

MINUTES OF ORDERS

Judicial Registrar Murphy      29 March 1996

THE COURT ORDERS:

1. That within 21 days the respondent pay to the applicant the sum of $18,000.

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