Sharon Patricia Wallace v New Vogue Blinds and New Vogue Blinds Sydney Pty Limited

[1995] IRCA 550

CATCHWORDS

INDUSTRIAL LAW - UNLAWFUL TERMINATION - No VALID REASON - COMPENSATION - forced RESIGNATION

Industrial Relations Act 1988 ss 170 DB, 170 EA, 170EE

Association of Professional Engineers, Scientists & Managers Australia and Carl Sparre -v- David Graphics Pty Ltd (NI 0174 of 1995, unreported, Wilcox CJ, 12 July 1995)

James Lewis Aitken -v- The Construction, Mining, Timberyards, Sawmills &Woodworkers Union of Aust -WA Branch (WI 328 of 1995, unreported, Lee J, 7 August 1995)

Whelan -v- Waitaki Meats Ltd (1991) 2 NZLR 74

Cox -v- Philips Industries Limited (1976) 1 WLR 638

Heywod -v- Wellers (1976) QB446

Watts -v- Morrow (1991) 1 WLR 1421

Baltic Shipping Company -v- Dillon (1993) 176 CLR 334

SHARON PATRICIA WALLACE -v- NEW VOGUE BLINDS AND NEW VOGUE BLINDS SYDNEY PTY LIMITED

No. NI 1202 of 1995

COURT:       MCILWAINE JR
PLACE:        PERTH (HEARD IN SYDNEY)
DATE:          29 SEPTEMBER 1995

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES REGISTRY

No.  NI 1202 of 1995

BETWEEN:

SHARON PATRICIA WALLACE
Applicant

AND:

NEW VOGUE BLINDS AND NEW   VOGUE BLINDS SYDNEY PTY LTD
Respondent

BEFORE:       McILWAINE JR
PLACE:          PERTH (HEARD IN SYDNEY)
DATE:            29 SEPTEMBER 1995

REASONS FOR JUDGMENT

This is a claim of unlawful termination of employment under Division 3 of Part VIA of the Industrial Relations Act 1988. The claim is made by Sharon Patricia Wallace and her claim is against her former employer, New Vogue Blinds.

I have a certificate from the Industrial Relations Commission issued by Commissioner Harrison that the Commissioner has been unable to settle this case and therefore I am satisfied the matter is properly before me. 

The respondent described on the application is "New Vogue Blinds".  A Notice of Employer's Appearance signed by Michelle Cutmore as Director gives the name of employer as "New Vogue Blinds Sydney Pty Limited". Miss Cutmore, when completing her Notice of Employer's Appearance has made an addition to the form as follows:

"8.   "Are you the true employer?".  The answer "Yes" is crossed out and  "No"             is ticked.   Who is?  Give details"
                  the words "Sharon Wallace was self employed as an agent at the time of
  her resignation" are added to the Notice.

Exhibit 1 in these proceedings, lodged by the applicant, being a statement of issues contains the respondent as "New Vogue Blinds Sydney Pty Limited" and I note the Independent Agent Agreement which is Exhibit 2 in these proceedings describes  "New Vogue (Blinds) Australia Pty Limited" as the company.  I note in giving her evidence Miss Cutmore acknowledges that she is an employee manager of the respondent company.  I find the employer in these proceedings to be "New Vogue Blinds" and "New Vogue Blinds Sydney Pty Limited".

In addition I note that in Exhibit 1 a claim is made in paragraph 2 as follows:

"The applicant claims the following losses:

Wages             14/8/94  -  18/8/94                  =            $225.38
  19/8/94  -  25/8/94                  =         $1,111.00
           Holiday pay - 5 months  =            $380.00
           25/8/94  -  19/11/94   @  $1,000 gross pw     =       $12,280.00
  _________
  Total              $13,896.38 "

On 5 June 1995, the third day of the hearing, counsel for the respondent advised me that the claim in relation to holiday pay had been settled between the parties and therefore it is not necessary for me to deal with that issue.

The applicant, Sharon Patricia Wallace, was at the date of hearing working as a salesperson of children's toys.  The applicant was born on 29 May 1969 and is now 26 years of age.  Miss Wallace gave evidence that she answered an advertisement in the local paper for a position with the company.  The company's business is as a seller of blinds.  It apparently extensively advertises and the responses to advertisements are passed out to various sales representatives including in this case Miss Wallace.  The representative then goes and visits the premises, measures up for the blinds, takes orders and collects money for the work to be done. 

Although the application claimed that the applicant commenced work in April 1994 it appears, and I accept the evidence of Miss Cutmore, that the actual commencement of her employment was on 9 May 1994.  In any event, there is no question between the parties that from the date of her commencement of employment to 9 August 1994 the applicant was an employee of the business, maintained by Miss Cutmore and Mr Leggott.  However, it is alleged by the respondent that a change in her employment occurred on 9 August 1994 with the signing of an independent agent's agreement.  In her evidence Miss Wallace conceded that the document contained her signature although she was not satisfied that all of the pages of the document were there at the time of her signature. 

Apparently the applicant's work was satisfactory until some time around about the late July/early August period when some difficulties occurred with her car. It seems that this coincided with a period when the respondent was reduced to possibly one other salesperson besides the applicant.  Moreover, it appeared that it may have been necessary for Miss Cutmore to go out on the road visiting customers herself. A receipt for work carried out to the applicant's vehicle by the Transmission Physician dated 22 August 1994 was tendered in evidence.

The applicant, of course, had to take time off work to have her car repaired.  It was essential for her job but apparently this caused some distress to Miss Cutmore who raised the issue with Mr Leggott and asked him to speak to the applicant.  The other evidence from the respondent is that they were receiving calls to the effect that Miss Wallace was not meeting her commitments.  In this regard there was no supporting evidence led from the receptionist, Miss Coady, to that effect.  It would seem to me that she would be the person who would normally receive those types of calls so therefore I am not satisfied on that issue. 

The situation was also escalated by the respondent apparently ringing some of the customers of the applicant and this information had been relayed to the applicant by her customers. 

An interview then occurred between the applicant and Mr Leggott.  There is a considerable difference between the evidence of Miss Wallace and Mr Leggott about this interview.  Miss Cutmore states she was there in the office at the time and largely supports his version.  In the opinion of Miss Cutmore this was a soft interview by Mr Leggott.

Evidence was given by Rebecca Jane Coady, who was the receptionist at New Vogue in 1994 between March and September.  Her job was to take the telephone calls and make the appointments for representatives such as the applicant to visit the persons who wanted the blinds erected in their home.  Miss Coady told me that she was studying office administration at the moment and that she had left the company because her grandmother was dying of cancer and needed full time care. 

Overall Rebecca Jane Coady impressed me as a witness, more so I might say than any of the other witnesses in the case and I therefore placed a lot of reliance on the evidence which she has given in support of the applicant's case.  Miss Coady advised the Court that she could not hear raised voices in the office.  She "could not hear unless somebody really screamed at you".  Her evidence about the interview was "Well, she was in with Mark and Michelle and she left and she was driving me home, that's when she was crying".   In this regard it subsequently appeared that the witness on that day was herself ill and was driven home by the applicant for that reason.  Sometime after that day she was visited at her home by the applicant who advised her "that she would finish off the Thursday, the Friday and the Saturday that were already booked for her and that she would drop her things and she then dropped her things for me on the weekend and they were taken into the office on the Monday".   Miss Coady initially confirmed that she took in a number of orders and cheques although she resiled from this position under cross examination.  However, she did see the remainder of the cheques brought into the office by Andrew, the boyfriend of the applicant.  I therefore do not find that there is any question that there was any real delay on the part of the applicant in making material that might have belonged to the company available to it.

Miss Coady under cross-examination denied that she had said words to Michelle to the effect that "I don't know what her problem is, I think she's being silly".  Miss Coady also confirmed that in her assessment Mr Leggott was not as much surprised about the situation as Michelle had been. A key piece of evidence that emerged in cross-examination was as follows:

Q."Now, did at some stage after you brought that message back to the office did Michelle or Mark ask you or tell you that really Sharon had to deliver the message herself?"

A."Yes"

Q."And what did you did do in relation to that request?"

A."Spoke to Sharon and told her that they wanted Sharon to tell them herself or bring them in a letter."

Q."Did you then bring in a letter and give it to Michelle or Mark?"

A."No, Sharon brought it in herself."

Q."Do you recall when that was?"

A."It would have been some time that week after I had handed in her things".

Q."..... so that would be after the weekend when she'd finished working?"

A."Yes".

Based on her evidence I accept that the letter was contained in an envelope and was in the following form:

"New Vogue
           Thornleigh

This letter is to inform Mr Mark Leggit (sic) that I Sharon Wallace wish to cease employment on August 27th 1994"

I find it was delivered after the applicant had finished working for the respondent.

In relation to the termination of employment I am satisfied that the witness, Rebecca Jane Coady, gave reliable and honest evidence.  In her evidence she confirmed that Miss Wallace left the meeting in a very distressed state.  In all the circumstances I reject the evidence given by Mr Leggott and Miss Cutmore as to this being a "soft interview".  It seems to me that anybody who is forced to leave an office for the day in tears would, at the very least, feel that their employment at the office is no longer required.  In these circumstances, I accept that Miss Wallace saw herself as being forced into leaving the company.  A resignation can be either oral or in writing.  It seems to me that it makes no difference that a forced resignation is in writing rather than oral.  I therefore regard her departure from the office together with her undated letter, as a forced resignation and therefore a termination of her employment at the instance of the employer.

In making this finding I have had regard to the remarks of his honour the Chief Justice contained in Association of Professional Engineers, Scientists & Managers Australia and Carl Sparre v David Graphics Pty Ltd reported as Decision No. 410/95.

"Mr Sparre gave evidence to the Judicial Registrar that, as a matter of pride, he preferred to resign rather than be dismissed.  Having regard to that evidence, I think the correct analysis of the position is that he said he would leave, but only because he felt he had no other option.  The proper description is that it was a forced resignation.  It was a termination of employment at the instance of the employer rather than of the employee.  It follows that, from the employee's point of view, there is no problem in relation to categorisation of the conversation.  His problem relates to the date of the conversation.  It took place before the relevant legislation came into effect."

I find this view is reinforced when I take into account the telephone calls which I  accept were made by Mr Leggott.

When Mr Leggott gave his evidence, I formed the view that it seemed to be similar in terms with the evidence given by Miss Cutmore, and may well have been rehearsed.  I also do not accept his denials about the telephone calls.  It seems to me that there could have been reliable evidence obtained from Telecom as to how many calls were made from the office phone to the telephone of the applicant that day.  In all the circumstances, I find Mr Leggott to have been untruthful in his evidence to the Court.

I consider the abusive phone calls which were made to the applicant by the respondent's director to have had an enormous effect on Miss Wallace.

In relation to the so called "independent agent agreement", this is an agreement which purports to be between a company called "New Vogue Blinds Australia Pty Limited" and the applicant. There are immediately some noticeable deficiencies in the document.  There is no ACN number recorded on that document as is required by the Corporations' Law and which was certainly the case to my knowledge as at 9 August 1994.  There are other patently obvious errors on the face of the document for instance in paragraphs 2.1(a), paragraphs 2.1(b), 2.1(d), paragraphs 4.2 and paragraphs 6.2 and paragraphs 10.1 references are made to a male person.  The pronoun "he" or "his" are constantly being used in the document.  It would seem to me if this were to be construed as a proper contract it would at least reflect the fact that it was being entered into with a female agent.  In all the circumstances I am therefore inclined to accept the applicant's explanation that while her signature appears on it she is not sure that everything in the document was there at the time. 

I have given careful consideration to other aspects of the document, particularly to the submission that the applicant could employ other persons.  This should be contrasted with condition 2.1(a) where such employment requires the approval of the company first. 

There was also no evidence led from Miss Coady to the effect that after the signing of this document on 9 August 1994 anything changed in the way in which the work was being carried out by the applicant.  Her work was still controlled in the same manner.  The company continued to receive requests for quotations and for visits by its representatives.  These were recorded and passed on to the applicant.  In fact part of the respondent's case is that the applicant was not keeping up her appointments as required under its direction.  A careful examination of Exhibit 6, being the internal "Call Sheets & Daily Schedules", shows that nothing changed during this period.  In the light of these circumstances I do not find that there was any change in the control which the Respondent exercised over the working activities of the applicant.  I therefore find that the applicant remained an employee of the original business under the control and direction of Miss Cutmore and Mr Leggott.

In view of the manner in which I regard the termination as having happened, there was, of course, no written termination by the employer and therefore no time limit under the provisions of Section 170EA(3), Industrial Relations Act 1988. However, on any view of it there was a delay in taking action in this Court. The delay has been partially explained. Nevertheless, it is a matter which I propose to take into consideration when assessing compensation in this matter.

I find there was no valid reason for the termination.  I am also obliged to consider whether reinstatement is impracticable.  In this case the parties are obviously now completely at loggerheads with each other.  It is a small business operation and no doubt other sales representatives have been employed.  The applicant has herself moved away from the area.  I find that reinstatement is impracticable.

On the issue of compensation Ms Figgis, Counsel for the applicant submitted quite strongly that there should be an award of the maximum amount of compensation.  Mr Coleman, Counsel for the respondent, submits there should be no award of compensation.

I have found that Miss Wallace was subjected to a series of unreasonable, stressful or distressing telephone calls after her employment was terminated.  There is also support for the applicant on this issue in the Medical Report issued by Dr Jon Duffy on 5 March 1995 in which he records his consultation with the applicant on 28 September 1994.  his diagnosis was

"Ms Wallace presented with a reactive anxiety-depressive illness due, in my opinion, entirely to the work related conflict and the subsequent personal losses".

I have carefully considered the remarks of his Honour Mr Justice Lee  in James Lewis Aitken v The Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia Western Australian Branch, reported in Decision No. 352/95 as follows:

"The Court will consider the detriment occasioned to the employee by the employer's contravention of the Act, and the extent to which it is reasonable to compensate the employee for such consequences. Division 3 of the Act provides the context in which s.170EE is to be construed. It includes provisions intended to protect the dignity of an employee, in particular, s.170EA provides an employee with a right to seek redress in respect of a breach of the Act and s.170EE provides the entitlement to receive compensation as the remedy for such a breach, characteristics of a statutory tort. Therefore, in some cases principles relevant to the assessment of damages in tort may provide assistance in assessing the compensation to be paid under s.170EE(2). That is to say it may be appropriate to include in the measure of compensation to be paid pursuant to s.170EE(2) a sum sufficient to compensate an employee for mental distress or injured feelings caused by a harsh, unjust or unreasonable termination of employment (See: Whelan v Waitaki Meats Ltd [1991] 2 NZLR 74 at 90).

If guidance is sought from the measure of damages applied in contract for the breach of an employment contract by wrongful dismissal, damages may be awarded for the breach of an implied term that an employer would not so breach the contract to cause vexation, mental distress, disappointment or frustration to an employee where such an adverse consequence for the employee may be said to have been within the reasonable contemplation of the employer and the employee. (See: Cox v. Philips Industries Limited [1976] 1 WLR 638; Whelan v. Waitaki Meats Ltd; See also: Heywod v. Wellers [1976] QB 446; Watts v. Morrow [1991] 1 WLR 1421 per Bingham LJ at 1445; Baltic Shipping Company v. Dillon (1993) 176 CLR 344 per Mason CJ. at 361-364).

It is also appropriate to keep in mind that the purpose of the Act in providing for compensation to be paid to an employee for an employer's failure to abide by the terms of the Act is not only to redress a wrong done to othe employee but, in the public interest, to instil greater awareness of, and adherence to, the provisions of the Act.  A measure of compensation which addresses the consequences caused by conduct that has breached the Act assists to meet that purpose."

I find that the applicant earnt on average a gross amount of $1,000 per week in the later stages of her employment which would allow a maximum amount of compensation to be awarded of $26,000.  On the evidence before me a period of either 12 weeks was the time taken by the applicant to secure other employment or seven weeks elapsed before the applicant formed her own company.

Notwithstanding the remarks of his Honour Mr Justice Lee with which I respectfully agree, this distress does not overcome some other issues.  There is the clear evidence of the commencement of her own company.  As well as the delay in filing her application and the relatively short period of her employment with the respondent, I find there is insufficient justification for the award of the maximum amount.  In the circumstances the amount of compensation that is appropriate is $7,000.

In making that award I have taken into account the fact that there has been a contravention of Section 170DB in that one week's pay in lieu of notice would normally be required in this case.

I order the respondent to pay to the applicant the sum of $7,000 as compensation within 14 days.

I certify that this and the preceding 11 pages are a true copy of the Reasons for Judgment of Judicial Registrar McIlwaine.

Associate

Date:

Counsel for the applicant:          Ms Figgis
Solicitors for the applicant:      Andrew Fegent and Company

Counsel for the respondent:        Mr Coleman           
Solicitors for the respondent:    D H Dwyer Forbes & Yeo of Sydney
   As City Agents for
   Patey & Murphy of Newcastle

Hearing date:         18 & 19 May and 5 & 28 June 1995
Judgment date:      29 September 1995

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES REGISTRY

No. NI 1202 of 1995

BETWEEN:

Sharon Patricia WALLACE
Applicant

AND:

NEW VOGUE BLINDS
AND NEWVOGUE BLINDS
SYDNEY PTY LTD
Respondent

BEFORE:     MCILWAINE JR
PLACE:        PERTH (HEARD IN SYDNEY)
DATE:           29 SEPTEMBER 1995

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The respondent pay the applicant the sum of $7,000.00  compensation        within 14 days.