Stanley Ketchell v Venture Mould and Engineering Pty Ltd, Venture Industries Australia Pty Ltd, Venture Asia Pacific Pty Ltd
[2008] VMC 2
•3 April 2008
IN THE MAGISTRATES COURT OF VICTORIA
AT MELBOURNE
INDUSTRIAL DIVISION
Case No. W00410516
| Stanley Ketchell | Plaintiff |
| v | |
| Venture Mould and Engineering Pty Ltd | First Defendant |
| Venture Industries Australia Pty Ltd | Second Defendant |
| Venture Asia Pacific Pty Ltd | Third Defendant |
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| MAGISTRATE: | K Hawkins |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 25, 26 & 27 February 2008 |
| DATE OF DECISION: | 3 April 2008 |
CASE MAY BE CITED AS: | Stanley Ketchell v Venture Mould and Engineering Pty Ltd, Venture Industries Australia Pty Ltd, Venture Asia Pacific Pty Ltd |
| REASONS FOR DECISION |
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Catchwords: whether entitled to redundancy – intervening summary dismissal for serious misconduct.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms S Bingham | |
| For the Defendant | Mr R Millar | |
| HER HONOUR: |
| 9. |
1. On 17 November 2005, Stanley Ketchell’s life fell apart. Up until that day he was a confident, outgoing man of 56. He had been employed as a Project Manager by Venture Mould & Engineering Australia Pty Ltd until his employment was terminated. He had been associated with the company for around 20 years. He was subsequently diagnosed with severe post traumatic stress disorder and has suffered serious physical health problems such as high blood pressure, irritable bowel syndrome requiring surgery and significant weight gain.
2. Mr Ketchell was a specialist toolmaking engineer. He possessed significant technical expertise about the making of tools particular for the manufacture of parts used in the automotive industry. After considerable experience and long stints of employment
with other companies, he commenced as an employee with Venture in or about May
1995.3. Initially he was an operations manager at the Defendants Mordialloc factory. Later he a Project Manager.
4. As at November 2005 Venture paid Mr Ketchell a salary of $73,440. He enjoyed the use of a fully maintained company car for personal and private use. He was entitled to 4 weeks paid annual leave.
5. It is an admitted term of Mr Ketchell’s contract of employment that upon termination of employment due to redundancy he was entitled to a redundancy payment of 3 weeks per year of service and payment of all accrued sick leave.
The issue in dispute
6. At around 5:30pm on 16 November 2005 Mr Ketchell was given formal notice of termination on the grounds of redundancy by his manager, Mr Gary Bourne. He was told the termination would take effect the following Friday 18th November 2005. He would be paid in lieu of notice. He received a pay advice setting out the calculations of his `package’. This included $44,147.32 as an eligible termination package.
7. By letter couriered to his home address on 17 November 2005, Mr Ketchell was informed that his employment had been summarily terminated, “effective this morning”. “This means that you will have no notice period entitlements and that the redundancy termination proposed to take effect 18th November 2005 is no longer valid, being replaced by the summary dismissal for serious misconduct (which is effective today).”
8. This Court is asked to determine the events of a meeting between Mr Ketchell, Mr Bourne and Mr Briaccle at around 7am on 17 November 2005, and to then consider whether they are such as to give the employer grounds to summarily terminate the contract of employment.
Events of mid to late 2005
By mid 2005, the Defendant had outsourced a large proportion of their manufacturing potential sites were explored. After consultation with relevant Unions and the employees it was decided to relocate the Venture Mould and Engineering Pty Ltd plant in Mordialloc to the Venture Group’s factory in Campbellfield.
10.The Managing Director of Venture Asia Pacific Pty Ltd, Mr Brett Hanson addressed employees on 7 November 2005 regarding the relocation to Campbellfield. Employees were then given until 14 November 2005 to express an interest in moving to the new site. They were told that they could be assured that any redundancy entitlements would be covered by the Venture Group of companies.
11.After being fairly undecided about whether or not to put in for redeployment to Campbellfield, late on 9 November 2005 Mr Ketchell completed a Metro Relocation Response form stating the words “not to Campbellfield”. He later met with his manager, Gary Bourne. Mr Bourne conceded he informed Mr Ketchell during this conversation that he would not get an engineering position at the Campbellfield site.
12.The next day I accept that Mr Bourne asked Mr Ketchell for his response form. Assuming the first copy lost, Mr Ketchell filled out a second response dated 10 November 2005. He commented, “I was giving it serious consideration but was informed that there would be no position available.” Based on admissions made by
witness Walter Bracciale I accept that Bourne received this later copy.
13.Mr Ketchell assumed that based on projects he had in train he would remain with the company until Christmas time. However on Wednesday 16 November 2005 at around 5:30pm Mr Bourne informed him that the coming Friday would be his final day.
Events of 17 November 2005.
14.Keen to wind up his projects to a state that someone else could take them over, Mr Ketchell came to work the next day at 7am as usual. He stopped for a brief chat on his way in to speak to other staff. He went into his office and reached down to turn on
the computer. Mr Bourne came in and informed him that he need not boot the
computer up, as he was to finish up immediately.15.Until this point, the parties versions are entirely consistent. However, recollections of this emotionally charged meeting have been tempered by time, emotional breakdown and perspective.
Mr Ketchell recounted: “I arrived a few minutes before 7am. Said hello to a couple of people and walked thru to my office. (…) As I went to reach forward to turn on computers to boot up. Gary approached from left, Walter approached from behind to right. It was like a pincer movement. I was standing virtually at my desk, facing the factory shop floor. (…) Gary said “Stan don’t bother turning on computer,” I said, “what’s the problem?” Gary said, “We’re terminating you immediately we’re not going to wait until Friday,” I said “what, why?” He said something to effect of “we don’t need to explain, just pack your stuff, hand in your car keys, card and leave”. I was blown away. Walter was shop floor person, he repeated everything parrot fashion. He said “just pack up and get out.”
Walter disappeared for a second and came back with a couple of boxes and I started packing my stuff. I kept asking them what was going on. I was in total disbelief and was asking where people from HR were. They kept shouting “shut up pack up” Gary disappeared for a while and came back with a piece of paper.
[It was] a letter of termination he tried to give me the night before. I refused to accept
it because it says here that “we have consulted with you” and “offered incentives to
relocate to Campbellfield” which was not true.[…] I said “no you promised you’d
change it”, He said “ok you can strike out that section there”. He was in a rage, he
got piece of paper and scribbled out that bit and handed back to me.In the middle of the argument, they demanded my car keys, phone and card. I said “no I’ve got these for 3 months it had happened with everyone else.” He said in my case that had all changed. I said to Gary “I should keep the keys because I’ll
probably be back tomorrow to pick up the car, after this has been sorted out with
HR.” He said if I did that I’d be charged with theft.During the kafuffle of trying to pack up and get out as quickly as possible Walter was jostling me from one side and was standing just behind me.
All the meanwhile I was asking for an explanation. When I was handed the piece of paper I said” someone needs to sign this and witness it”. Gary grabbed out of my hand, signed it, and gave back to me. I suggested Walter witness it. He refused.[There was a] lot of jostling. I picked up my keyboard and held it (at about head level) between Gary and myself and said, “back off back off” (Witness demonstrated by holding keyboard with two hands vertically at high chest level)
It was like the parting of the waters. Gary turned around and walked away. Walter
went back to his office.
I continued packing up and moved out to the car to pack stuff into boxes. I was
followed by Walter and Gary. I finished packing up. A taxi arrived. I shook hands with
Walter and Gary and said “I’ll see you later so to speak”.16.By contrast Mr Bourne denies provoking Mr Ketchell, and alleges that Stan lifted the keyboard and brought it down in a chopping action towards his head. Prior to this incident, he recalls a discussion about whether or not Ketchell would be entitled to keep his company car for 3 months after termination, and whether the redundancy was voluntary or forced.
“I was standing beside him; Walter was equal spaced, discussing the point that it was and said “ you can have a copy if you want it”. I went and photocopied it and gave him a copy.
a voluntary redundancy. Then Stan said, “Show me the document”. I went to office
and picked up the document dated the 9th. I brought it and held it out to show him.I could see Stan getting furious; he then made a fast and direct lunge towards my head. He picked up (the keyboard) with both hands and made fast deliberate motion towards my head; I saw cord was at full extension and then he put it down again I ducked and retreated to my office. Walter came forward and spoke to him and said “Stan take it easy it’s not worth it”
I did not make physical contact with him, nor did I see Walter make physical contact.
He was there as a support and a witness in case something untoward did happen.
He was there as a support.”17.Mr Bourne denies that Ketchell used the words “back, back, get back” as he raised the keyboard. Ketchell denies making a chopping motion with the keyboard.
18.Mr Bourne immediately made a written note of the incident. Mr Ketchell claimed likewise, but was unable to produce any such document in Court. I infer that if he was able to do so it would not have assisted the Plaintiff’s case.
19.The witness to this exchange was Walter Bracialli. He was formally employed as a production manger at the Defendants’ Mordialloc plant. He had an office, which came off the small room in which Mr Ketchell sat. He recalls, “Morale was down, lot of people upset, was a big company with a good name closing.”
20.After Mr Ketchell was informed that he would not have his position at the Campbellfield site Mr Bracialli reached the conclusion that Mr Ketchell was making unnecessary comments and further affecting morale in the factory. He informed Mr Bourne that he thought it would be better for the company to let Mr Ketchell finish up early.
| 21. |
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| “[The keyboard incident] Came out of nowhere, not in his nature, has been a bit really upset me and I’ve no doubt, that if he hadn’t pulled back would’ve hit Gary.” verbal, heart on his sleeve, but never seen him do anything physical. He grabbed the keyboard and took a swipe at Gary, but the distance was a bit and gave Gary a chance to let the key board go past him. |
“We made no physical contact. I was standing away when the incident happened. It
was like a triangle situation. Room wasn’t that big.
Closest I got was when I stepped in front of him.”22. after this incident. He has spent many sleepless nights going over what happened.
He now takes medication and has received psychological treatment to aid his
recovery. Clearly, the incident took place in a time of great stress for him. I find that
he genuinely felt `cornered’ by Messer’s Bourne and Bracialli, in a very small room.
They were in a hurry to get him to pack his belongings and to leave the premises.
There was a genuine argument about entitlements flowing from the redundancy. ThatMr Ketchell has suffered what is colloquially described as `a nervous breakdown’ `pincer’ movement. Something snapped. Mr Ketchell was known to express his feelings verbally, but he had never been physical before. In the heat of the moment, I conclude he did raise the keyboard (attached to the computer by a lead) and move it forward in the chopping motion described by Messer’s Bourne and Bracialli. To do so, given the length of a standard keyboard cord, Mr Bourne would have had to be extremely close to face any risk of being struck by the motion
23.I conclude Ketchell’s actions, whilst threatening towards Mr Bourne were entirely provoked when Ketchell was cornered by two men in close proximity, in very distressing circumstances, and was further aggravated by their hurry to have him pack up and get out. His action had the desired effect. They `backed off’. He calmed down and there were no further incidents. He completed packing up and left the building, even shaking the two men’s hands before he left in a taxi. The circumstances were extenuating. The relationship of mutual trust was not destroyed by the incident. The men continued the process of discussion and packing up. They shook hands before parting.
Did the Plaintiff’s entitlement to redundancy crystallise before the summary dismissal?
24. The Defendant concedes that if they had not summarily dismissed Mr Ketchell on 17 November 2005 his employment would have been terminated on 19 November 2005 due to redundancy. They concede his entitlement to a redundancy payment and
entitlements calculated as follows:
a. Eligible termination package
(3 weeks per year of service by 10.42 years)$44,147.32 b. Annual leave $12,891.63 (paid) c. Leave loading $2,256.04 (? If paid) d. Sick leave $10,664.44 (not paid) e. Long service leave $15,544.07 (paid) TOTAL $73,286.50
TOTAL NOT PAID DUE TO SUMMARY TERMINATION: $55,295.5025. Did this entitlement crystallise before the purported summary dismissal? The Plaintiff submits that redundancy was accepted and affirmed by the employer at the earliest on either 8 or 9 November during the course of the discussions between Gary Bourne and Mr Ketchell. It was then further affirmed on 16 November in both the verbal discussion between Mr Ketchell and Gary Bourne and the letter of 16 November 2005 and finally communicated to Mr Ketchell on Thursday morning 17 November 2005.
26. The Plaintiff therefore submits that his entitlement to be paid a redundancy in accordance with his contract of employment crystallised at the earliest on either 8 or 9 November and at the latest on 16 November 2005.
27. I do not accept this submission. The circumstances demonstrate that the parties agreed that the employment would terminate due to redundancy on 19 November. It was not until that date that his position “would no longer be required by the company.” The events of 17 November intervened.
Is summary dismissal warranted in the circumstances?
28. His Honour, Gillard J. neatly summarises the relevant law in Rankin v Marine Power International Pty Ltd[1]:
[1] [2001]VSC150 at p.142
“The authorities do establish that the employee’s breach of contract of employment
must be of a serious nature, involving a repudiation of the essential obligations under
the contract or actual conduct which is repugnant to the relationship of employer-
employee, before an employer may terminate the contract summarily. Isolated
conduct usually would not suffice. Each case must be considered in the light of its
particular circumstances, but the seriousness of the act of termination and the effect
of summary dismissal are factors, which place a heavy burden on the employer to
justify dismissal without notice. The circumstances do not have to be exceptional, but
nevertheless, must establish that the breach was of a serious nature.”29. Macken et al’s text[2] discusses when assaults may justify summary dismissal:
“Unjustified assaults upon fellow workers come within the category of misconduct. If
extenuating circumstances exist, the assault may not justify dismissal. Such
circumstances may include whether the employee was provoked and whether she orhe was acting in self-defence. An assault upon a superior would be misconduct.”[3][2] `Law of Employment’, Macken, O’Grady, Sappideen & Warburton. 5th Ed. Lawbook Company 2002 at p.217[3] Citing Quinn v Australian Stevedoring Industrial Authority (1960) 94 CAR 800; The AWU-FIME Amalgamated
30. Whilst clearly in most situations threatening conduct or actual assault towards a superior would justify summary dismissal. That is not the case here. I find that Mr Ketchell was entirely provoked to act as he did. His actions were what were required to get the two men to give him the physical and mental space to pack his desk and leave the building – effectively ending his lengthy career in the industry. He was 56 and had no history of violence. He calmed down immediately. He was not interviewed about the incident by the Defendant. The act of summary dismissal denied Mr Ketchell receipt of a significant financial entitlement.
31. These circumstances were extenuating. I conclude Venture did breach their contract of employment with Ketchell by summarily dismissing him on 17 November 2005.
Reasonable notice claim
32. The Defendant submits that Mr Ketchell cannot be entitled to claim for both the redundancy payment and a reasonable notice claim. Alternatively, Venture submits that if he is entitled to both severance and reasonable notice, an offset should be applied.
33. However the Defendant admits in its’ pleadings, that Mr Ketchell has a right to reasonable notice upon termination of his employment save and except in a circumstance where there is a right to summarily dismiss (see paragraph 3.9 of the Statement of Claim and Defence). There is no disclaimer with respect to the Redundancy payment.
34. The Plaintiff submits that the entitlement to notice stands alone from his entitlement to redundancy. The Court was referred to a key document dated 9 November 2005 – “Stanley Ketchell’s redundancy” and the document dated 17 November 2005. Both
2005 specifies a notice period of 4 weeks. The evidence of Mr Bourne is that Mr
are silent on notice as part of the Redundancy, whereas the letter of 16 November was expressed to be 4 weeks. Further, Mr Bourne gave evidence that Mr Ketchell was entitled to be paid 5 weeks in lieu of notice due to his age. 35. The term “redundancy” has been defined, as “… the concept of redundancy in the context we are discussing seems to be simply this that a job becomes redundant when an employer no longer desires to have it performed by anyone. A dismissal for redundancy seems to be a dismissal, not on account of any personal act or default of the employee dismissed or any consideration peculiar to him, but because the employer no longer wishes the job the employee has been doing to be done by anyone” Bray CJ R v Industrial Commission of South Australia; ex parte Adelaide Milk Supply Co-op Ltd 4
36. An `eligible termination payment’ or `redundancy payment’ is compensation for a position becoming redundant. The employer must still terminate the contract of employment in accordance with law. In the absence of an express notice provision, this must be by the provision of reasonable notice.
37. At the time of his termination Mr Ketchell was 56 years of age, had worked for VME for almost 11 years and as a contractor from March 1986. Tool making is a specialised field. Manufacturing in Victoria was rapidly being outsourced to cheaper labour overseas. Venture was a major player in the industry. Throughout that time, he had held supervisory and managerial positions. At the time of his termination, he held a senior position as an engineer/project manager and had represented VME at an international level.
38. By the hearing of this case, Mr Ketchell had remained unemployed for over two years. The Plaintiff submits that it is unlikely that Mr Ketchell will at his age and in his circumstances be able to find equivalent employment at equivalent remuneration.
39. What is reasonable notice is a matter to be considered in light of the circumstances applying at the date notice of termination is given.[5]
[5] Logan v Otis Elevator Co Pty Ltd [1990] 94 IR 218.
40. Having regard to the matters to be taken into account in determining reasonable notice set out in cases such as Quinn v Jack Chia (Australia) Ltd[6] the plaintiff submits that Mr Ketchell had an entitlement to 6-12 months notice.
[6] [1992] 1 VR 56741. Taking into account all relevant factors, I conclude that a term requiring that a period of three months notice to lawfully terminate the contract of employment is to be implied. A sum equivalent to three months (13 weeks) pay is to be paid to the Plaintiff in addition to the outstanding amounts outlined above.
Any entitlement to use of motor vehicle for a period of 3 months after termination
42. Mr Ketchell asserts it is Venture policy to allow employees who have the use of a company car to maintain that vehicle for a period of 3 months after the termination of their employment. He was unable to produce any documentary confirmation of this assertion.
| 43. |
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44. Mr Bourne conceded in evidence that it is a practice to allow people who have a company car to maintain their vehicle after the termination of their employment.
45. Whilst the Defendant may have permitted others to retain their company cars post termination, I am unable to conclude on the evidence that Mr Ketchell had a contractual right to do so. I therefore dismiss this aspect of his claim.
Damages for psychological injury
46. The plaintiff alleges the employer has breached the contract not in the manner in which the termination took place[7], but because of the conduct engaged in by the employer from 7 November 2005 to 17 November 2005 excluding the summary dismissal. He asserts the conduct engaged in was:
[7] Aldersea v Public Transport Corporation (2001) 3 VR 499
• Providing short notice as to when Mr Ketchell would be required to cease work; • Engaging in intimadatory behaviour on 17 November 2004. Mr Bourne’s evidence in cross examination was that in a meeting the night before Mr Ketchell’s behaviour gave him no cause for concern. • Refusing to allow Mr Ketchell to complete his final days in the workplace. • Refusing to apply the “car policy” to Mr Ketchell; • Refusing to apply its Workplace Relationships Policy[8] [8] (see Dare v Hurley [2005] FMCA 844 at paragraph 121)47. The Plaintiff has satisfactorily proven that agents of the defendant engaged in intimadatory behaviour on 17 November 2004, and also that the defendant failed to give Mr Ketchell an opportunity to be heard prior to his dismissal. I am also satisfied on the evidence of Dr List and the Plaintiff, that these actions caused him to suffer from severe post traumatic stress disorder. Does this however entitle the plaintiff to succeed in his claim for damages? The law is unclear in this regard.
48. Counsel for Mr Ketchell conceded that the weight of present law is largely against her client’s claim for damages for the psychological impact of dismissal. The evidence of psychologist Dr List clearly demonstrates that Mr Ketchell has been devastated by the circumstances of his dismissal. The effects are ongoing. Unfortunately, for him there is clear authority that such damages arising from the termination of employment are not compensable.[9] I am not persuaded that the characterisation urged by the Plaintiff of the pre termination events is sufficiently distinct as to permit this Court to depart from this precedent.
[9]Aldersea v Public Transport Corporation (2001) 3 VR 499
Liability for payment
49. Mr Ketchell asserts that statements were made to him that his entitlements would be paid by one or the other of the Venture Group Companies.
50. On 4 August 2004 Mr Brett Hanson circulated a “letter of comfort” amongst employees of VME. This letter stated that “In Metro’s case, it enjoys the financial protection from the much larger VIA and also VADEA”.
51. Mr Kerford, former Union delegate gave evidence that he recollects placing this letter on notice boards throughout the workplace. Mr Ketchell gives evidence that he recalls seeing the document on a noticeboard in the workplace and that he has read it. He also recalls being present at a meeting where Mr Hanson spoke to employees about redundancies and payment of entitlements.
52. Mr Hanson’s recalls answering a number of questions from individuals and in group meetings about whether redundancy entitlements would be paid. He said that there was keen interest from employees who were made redundant about whether they
would be paid. The Court can infer that Mr Hanson made these statements around
October 2005.53. The Plaintiff submits that Mr Hanson made the offers on behalf of the companies in the Venture Group. The court was directed to the correspondence under Mr Hanson, Mr Bourne and Mr Greenberg’s hand. All correspondence is on either VAP or VIA letterhead. He therefore submits that the letter of 4 August 2004 constituted an offer by the company.[10]
[10] See Ajax Cook Pty Ltd (trading as Ajax Spurway Fasteners) v Nugent, Phillips J, Victorian Supreme Court54. Mr Ketchell then submits that upon reading the notices put up and hearing what Mr Hanson had to say about the underwriting or guaranteeing of the employee entitlements he continued to work for the employer on the basis of those representations.
55. Plaintiff’s counsel contends that at any stage from August 2004 Mr Ketchell could have given notice and left the employ of VME if he felt his entitlements were at risk. This was not borne out by the evidence.
56. The Defendant submits that such statements cannot establish a contract between the Plaintiff and each of the second and/or third defendants. The claim is brought in contract.
57. I conclude that the Defendant is correct. The letter and `statements of comfort’ do not constitute a guarantee. Nor were they made with the intention of creating legal relations. They were an act of appeasement made at a time when industrial action was contemplated. There was no act of offer, acceptance or consideration between the Plaintiff and the second or third defendants.
58. The claims against the second and third defendants are dismissed.
ORDERS:
59. The first Defendant is ordered to pay to the Plaintiff moneys outstanding under the redundancy package together with a sum equivalent to three months wages.
60. The parties are ordered to calculate this sum and file a minute of proposed order, and to address any outstanding issues of interest and costs.
61. Liberty to apply in default of agreement is reserved.
Union v Queensland Aluminia Ltd (1995) 62 IR 385 at 292
4 (1977) 16 SASR 6 at 8.
23, 24 November 1993, 29 November 1993; and Ajax Cooke Pty Ltd v Chee Wong, Supreme Court of Victoria
Court of Appeal, 2 September 1996 18 September 1996.
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