Stephen Kenneth Smith v F and M Menai Real Estate T/As Century 21 Real Estate
[1996] IRCA 42
•01 February 1996
DECISION NO: 42/96
Catchwords
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - COMPLAINT OF UNLAWFUL TERMINATION -termination at the instigation of the employer - equivocal use of words of termination - PROCEDURAL FAIRNESS - applicant denied opportunity to deal with allegations as outlined in letter of termination - HARSH UNJUST OR UNREASONABLE - applicant failed to demonstrate effects of termination contravened Act - APPROPRIATE COMPENSATION
Industrial Relations Act 1988 (Cth) ss 170 EA, DB, DC, DE
Reine -v- Rumpe T/as Peter R Motors, Decision No 643/95, Madgwick J
1 November 1995
Stephen Kenneth SMITH -V- F & M Menai Real Estate T/as Century 21 Real Estate
Matter No 3288 of 1995
Coram: Tomlinson JR
Place: Sydney
Date: 1 February 1996
IN THE INDUSTRIAL RELATIONS COURT
COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY Matter No 1519 of 1995
Minutes of Order
The court orders that:
The respondent to pay to the applicant the sum of $3,000.00 within 21 days from the date of this hearing.
Note: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relation Court Rules.
In the Industrial Relations
Court of Australia
New South Wales District Registry Matter No: NI 95/3288
Between: Stephen Kenneth SMITH
Applicant
And: F&M Menai Real Estate T/as Century 21
Respondent
Coram: Tomlinson JR
Place: Sydney
Date: 1 February 1996
Reasons for decision delivered Ex-Tempore revised from Transcript
This is an application by Stephen Kenneth Smith under the Industrial Relations Act for compensation. In his evidence in chief, the applicant told the court he began as a salesman on 20 February 1989, and that he had been employed by the respondent for some 6½ years. In his evidence-in-chief, the court heard that the applicant had won awards for his professional diligence and achieved Centurion status within the Century 21 real estate organisation. It was the evidence of the applicant that the respondent employer, Frank Maloney, would send to various international real estate conventions those of his employees who achieved such status.
The circumstances surrounding this dismissal commenced on 28 July 1995 when, according to the applicant, he arrived at work shortly after 9 o’clock and he was summonsed into the office of Frank Maloney. He was asked whether he had an interview with Blythe Real Estate. He responded “Yes.”
According to the applicant, the reply to that information was,
“No salesperson goes looking for a job, that means instant dismissal. Pack your bags and go.”
The applicant responded and said,
“All I want to say Frank is thank you for the last six and a half
years”.
It was the evidence of the applicant that some 40 minutes later he was at home.
The applicant in his evidence agreed that, in fact, he did have a chat about future employment with Blythe Real Estate the day before. It was the evidence of the applicant that when he arrived home on 28 July 1995 he telephoned Mr Frank Maloney to ask the reason for his termination and was told there were no other reasons apart from the interview with Blythe Real Estate. The applicant requested written notice of his termination. Admitted into evidence as exhibit 2 was the letter received by the applicant in response to his request dated 28 July 1995, the second paragraph of which states:
“As discussed with you this morning, your termination concerns a number of issues of conduct in relation to your position with this company. These issues, including punctuality, adherence to office administration systems, and your general conduct within the office, have also been discussed with you on a former occurrence.....
“You will be paid four weeks salary in lieu of notice.”
It was the evidence of the applicant that, at the meeting on 28 July 1995, those topics referred to in the second paragraph of exhibit 2 were, in fact, not discussed. In response to a direct question, it was the evidence of the applicant that prior to 28 July 1995, he was not aware that his job was in danger. In further evidence, the applicant referred to a meeting that was held between himself and the Sales Manager, a Mr Moses, and the respondent, Mr Maloney, on 17 about May 1995.
The applicant told the court that that meeting was held shortly after his being absent on a Centurion convention from the office of the respondent for some 25 days in America as he had achieved a high sales performance. At that meeting, the witness told the court of words to the effect that the respondent, Mr Maloney, “Might have to let him go.” and also the respondent said words to the effect: “Should I get my cheque book, and let you go?” It was the evidence of the applicant that he did not take that seriously, and that was generally the manner of the respondent, Mr Maloney, when giving the applicant a pep talk.
It was the evidence of the applicant that Mr Maloney later apologised for these words, and that the applicant could not recall if Mr Maloney told him that his sales ratio was slow. The applicant specifically denied the question put to him in cross-examination whether he ever used the words to effect on more than one occasion in the public arena of the office:
“I don't give a shit if I am fired or not.”
In cross-examination, the applicant specifically denied the suggestion put to him by Mr Bennett that the respondent, Mr Maloney, said to the applicant at the final meeting on 28 July,
“Steve, maybe it’s time we parted company.”
On behalf of the respondent, the court heard from Mr Frank Maloney, the employer of the applicant. The court heard that it was the policy of Mr Maloney to send employees to international conventions if set targets of contracts exchanged were met. It was the evidence of Mr Maloney, that the applicant, quote,
“Went close enough to the target in order to be sent.”
The respondent to my mind exhibited the belief that it would be good for the applicant and good for business if he were sent. On 17 May 1995, the witness Mr Maloney recalled the meeting with the applicant and Mr Moses.
That meeting was designed to be one of the regular monthly meetings scheduled to be held by the respondent in order to discuss sales and further to cover areas of alleged concern at the applicant’s performance. The witness stated he told the applicant the areas of concern were: punctuality and attitude. According to the witness Mr Maloney, he said words to the effect:
“Well, do I get my cheque book out, as I have to let you go?”
The respondent stated to the court that the meeting was a fairly “cordial” one. The respondent stated he was concerned at the attitude problem of the applicant. The respondent also stated that it was his view that the discussion was, quote, “serious.”
However, from the evidence specifically of the respondent, it cannot be a finding of this court that, at that meeting with the applicant, the applicant would have been clearly aware his job was in jeopardy.
Marked as exhibit B in these proceedings is a two-paged document. Both pages are written in the handwriting of Mr Maloney. The second page of exhibit B was a short note made after that meeting that took place on 17 May 1995. At no place there can I find reference to the fact that the job of the applicant was in jeopardy.
It was the evidence of Mr Maloney that at the meeting on 27 July 1995 he spoke to the applicant about his poor time-keeping. Further, it was communicated to the applicant that staff members were concerned about the lateness of the appearance of the applicant in the morning and his general attitude. On Friday 28 July 1995, early in the morning shortly after 9, Mr Maloney discussed with the applicant the interview with Blythe Real Estate.
It was the evidence of the respondent that he said words to the effect :
“Well, Steve, maybe it's time we parted company.”
According to the respondent the applicant replied:
“Well, that helps me make up my mind.”
to which Mr Maloney said, “Okay.” Mr Maloney said the applicant then cleaned his desk, but that he did not rush the applicant out of the office. The applicant apparently left the office of the respondent at 10 o'clock. Mr Maloney told the Court that after attending conferences overseas on two occasions the applicant returned unsettled in his demeanour and his attitude to his work.
The issue of bad language was put to the applicant, and I have to say for the purposes of these proceedings I am unable to place much weight on the alleged use of bad language by the applicant as that was not one of the reasons shown in the letter of dismissal as a reason for termination nor was bad language ventilated before this Court as a reason for termination.
Having considered all the evidence about the alleged lateness of some five or ten minutes in the mornings before work, I am unable to similarly place much weight on that evidence as being a reason the respondent relied upon for termination.
Exhibit 2, being the letter of 28 July 1995, was shown to the respondent, who confirmed that the applicant specifically requested that letter. When asked why he sought to give the applicant reasons for termination in that letter, the evidence of the respondent was:
“Well, okay. I will give him reasons for his termination.”
It can, therefore, be concluded that the reasons contained in the letter, being exhibit 2, were not specifically given to the applicant at the time of the termination at 9.15 on the day in question.
On behalf of the respondent the court heard from Ms Susan Gai Hyland a former co-worker of the applicant’s. I found Ms Hyland to be a credible and reliable witness. On 9 December 1195 Ms Hyland told the court she spoke to the applicant who stated words to the effect that he was taking the respondent to court
“over two outstanding commissions”.
The unlawful termination proceedings were not mentioned. Most telling was the evidence of Ms Hyland who stated that the applicant often stated during the course of his employment with the respondent words to the effect:
“I don’t give a shit if Frank is happy - I am going to get another job.”
Ms Hyland expressed concern at the thought of the applicant working elsewhere but there was no evidence before the court that the applicant took any confidential information or property of the respondent with him when he left.
On behalf of the respondent the court heard form Mr William Moses, the sales manager of the respondent who was present at the meeting with the applicant and the respondent on 17 May 1995. It was the evidence of Mr Moses that the respondent was a good employer who the applicant often referred to as “a bastard.”
On behalf of the respondent the court heard from Ms Kristy Methan a former fellow employee of the applicant’s employed by the respondent. It was the evidence of Ms Methan that on many occasions the applicant would say in the general office that he
“did not give a shit what happened”.
In essence, I have to say it is the finding of this Court that the applicant has consistently exhibited signs of disloyalty towards his employer, and he was unappreciative of the efforts the respondent made in boosting sales and sending the applicant overseas. Disloyalty warrants dismissal as breach of contractual obligation owed by the applicant to the respondent. It is the finding of this Court that on that basis there was a valid reason, disloyalty, for termination. Accordingly there has been no breach of section 170DE (1).
It was the evidence of the applicant that he was dismissed on a Friday and that on the following Monday morning he commenced work at Blythe Real Estate. It was alleged on behalf of the applicant that a result of the termination the applicant lost commissions he would have earned with the respondent estimated at being $11,000.00. However it was not shown that the applicant would not be able make up for that alleged loss in his new employment. Bearing those two facts in mind the applicant has not shown that the termination was harsh and unjust and unreasonable and so it is a finding of this court that S170 DE(2) has not been breached.
It was submitted on behalf of the applicant that it was he who was approached by Blythe Real Estate but the evidence does not support that as the applicant stated that some time prior to the interview he expressed an interest to the firm of Blythe Real Estate. I agree with the assertion there was no evidence the applicant would accept the offer allegedly made by Blythe Real estate but I certainly find that there was strong evidence that the applicant was not happy with his job with the respondent. I disagree with the submission of the respondent that the termination was not at the initiative of the respondent and that the termination was a mutual parting of the ways. To my mind “a mutual parting of the ways” does nothing to apportion responsibility for a termination or a resignation regarding the onus of proof and so that phrase is of no value in proceedings such as these.
It is a finding of this court that based on the words that were spoken in the office of the respondent on the morning of 28 July 1995 that the termination of the applicant was at the initiative of the respondent. The respondent clearly uttered words to the effect that he wished the applicant to leave his employ.
The applicant has based his claim for a remedy on the fact that the respondent sacked him for having an interview with another firm whilst still employed by the respondent. It is a finding of this court that is not so. I place little weight on the oral evidence of the applicant as to the conversation that allegedly took place in Mr Maloney’s office.
The evidence before the court is that the applicant has received notice payments. There is no breach of section 170DB.
However with regard to procedural fairness, S 170 DC provides:
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’
This is not a case that fall within S 170 DC (b). It is a finding of this court that S 170 DC (a) has been breached and the applicant was not afforded the opportunity to deal with the allegations raised in the letter of dismissal. The applicant was denied procedural fairness.
Section 170 EE (2) states that if the termination of an applicant is found to be unlawful then if re-instatement is impracticable compensation as is appropriate is payable.
Reinstatement in these circumstances is impracticable. In relation to compensation, I have now the difficult task of assessing that amount. Accordingly to my analysis the applicant is now on a far greater salary base than he was with the respondent and secondly I draw the attention of counsel to a recent decision of this court of his Honour Madgwick J in the matter of Reine v Rumpe at page 12. On the basis of that decision and the information before this Court, it is impossible to conclude that the employment of the applicant would have continued.
Having regard to all the circumstances of this case, I order the respondent to pay to the applicant the sum of $3000 within 21 days of the date of this judgment.
Minutes of Order
The court orders that:
the respondent to pay to the applicant the sum of $3000 within 21 days of the date of this judgment.
NOTE:Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules
I certify that this and the five (5) previous pages are a true and accurate record of the reasons for decision delivered ex-tempore, revised from transcript, of Judicial Registrar Tomlinson.
Associate
Date: 15 February 1996
Appearances
Solicitor for the Applicant: Ms J.Jayes
of: Phillips Fox
Counsel for the Respondent: Mr K.G.Bennett
Instructed by: Mr M.Sant of the Employers Federation of New South Wales.
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