Struthers v Clarklift WA Pty Ltd

[1996] IRCA 272

DECISION NO:   272/96

C A T C H W O R D S

INDUSTRIAL LAW -  TERMINATION OF EMPLOYMENT - alleged UNLAWFUL TERMINATION - ABSENTEEISM - whether VALID REASON - PROCEDURAL FAIRNESS - COMPENSATION.

Industrial Relations Act 1988 Ss 170DB, 170DB(1)(b), 170DC, 170DE, 170EA, 170EE, 170EE(5).

Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 1 IRCR 199, 57 IR 50.
Bean v Milstern Retirement Services Pty Ltd IRCA No. 248 of 1995, Moore J, 2 June 1995, unreported

David Hopewell STRUTHERS -v- CLARKLIFT WA PTY LTD 
WI 2587 of 1995

BEFORE:       R. D. FARRELL JR
PLACE:          PERTH
DATE:            19 April 1996

IN THE INDUSTRIAL RELATIONS    )
COURT OF AUSTRALIA                   )
WESTERN AUSTRALIA                )
DISTRICT REGISTRY  )         No. WI 2587 of 1995

BETWEEN:  David Hopewell STRUTHERS
  -         Applicant

AND:  CLARKLIFT WA PTY LTD
               -         Respondent

MINUTE OF ORDERS

BEFORE:               R. D. FARRELL JR

PLACE:                  PERTH

DATE:  19 April 1996

THE COURT DECLARES AND ORDERS THAT:

1. The termination of the employment of the Applicant contravened Sections 170DB and 170DC of the Industrial Relations Act 1988 (“the Act”).

2. The Respondent shall pay compensation to the Applicant in the sum of $5,417.25 pursuant to Section 170EE(3) of the Act.

3. The Respondent shall pay damages to the Applicant the sum of $1805.75 pursuant to section 170EE(5) of the Act.

4.         The Respondent shall pay to the Applicant in the sum of $650.00, being   unpaid commission, within 14 days of the date of this order.

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

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY

WI2587 of 1995

BETWEEN:

David Hopewell STRUTHERS
Applicant

AND:

Clarklift WA Pty Limited
Respondent

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

19 April 1996  R. D. FARRELL JR

1. This is an application under section 170EA of the Industrial Relations Act 1988 (“the Act”) for compensation arising from the allegedly unlawful termination of the employment of the applicant, Mr David Struthers (“Mr Struthers”) by the respondent, Clarklift WA Pty Ltd (“Clarklift”). I am satisfied that reinstatement is impracticable, and it was not sought.

1. Mr Struthers also claims that he is due payment for notice, no notice having been paid on his termination as is required by section 170DB. Mr Offer, who appeared for Clarklift, says in response that this case falls under section 170DB(1)(b); he alleges the employee was guilty of serious misconduct, such that no notice was payable.

1. In addition, there was a claim for unpaid commission, which the parties were able to agree in the course of the hearing, so I will order that Clarklift pay to Mr Struthers the sum of $650 within 14 days of today, that being the amount of commission which it has been agreed was due to Mr Struthers as a compromise of that claim.

Findings of Fact

1. Mr Struthers was originally employed on 27 June 1994 as Service Manager with Clarklift. Initially, his job involved responsibility for the efficiency and profitability of the service-providing part of the business, as well as liaison with present and prospective clients.

1. In about February 1995, his position was redefined to the new position of Customer Services Representative. His role was reduced relative to that part of the previous role which related to liaison with clients and his salary was reduced from $35,000 to $26,500 per annum. I might note at this point that it is clear that he was also provided with a company car with fuel, the value of which was agreed to be $135 per week, and that he was paid commission, the value of which was agreed by the parties to average $863 a month.

1. There has been no allegation that Mr Struthers was deficient in his performance of his role. Mr Brown, Clarklift’s owner and Managing Director, accepts that Mr Struthers’ performance of the role generated additional business for Clarklift. He says it became increasingly clear to Clarklift over time that the Customer Services Representative position was an important one for the company, and that it was important that that job be properly performed. There was, however, one difficulty with Mr Struthers' performance, and that related to his frequent absences from work and, more particularly, Clarklift's complaint that he failed to notify the company of his absences sufficiently early in the day to enable effective alternative arrangements to be put in place.

1. Detailed evidence was led as to the nature of these absences. I do not propose to go to that evidence in detail. The number of absences and particular occasions of absence were put to Mr Struthers in the course of his evidence and, broadly speaking, he accepted that what Clarklift was claiming about his absences prior to March 1995 was largely correct. In particular, Mr Struthers accepted that he had 12½ sick days before the first written warning was given to him in March 1995.

1. It is apparent from the terms of the warning that Clarklift had some awareness of its responsibilities under the Act, and that was the reason it had issued the first warning. The warning is relevantly expressed in the following terms:

   “Your first warning is to ensure you provide a signed doctor's certificate for each time you are absent from work due to sickness or illness and to advise the company prior to 9 am of your absenteeism. Under the employee legislation an entitlement of three cautions prior to termination is required and this warning should be treated as the first of these.”

1. Mr Struthers signed that warning, and I think his evidence can fairly be summarised as amounting to an acceptance that it was justified. He agrees he indicated to Mr Kapsolas, Clarklift’s Accountant, that he would seek to improve his performance in that area. I think it is clear from the terms of the warning that it was intended to be taken seriously, and I understand Mr Struthers' evidence to be that he did take that first warning seriously.

1. Mr Struthers was absent on occasions after 30 March 1995. There was one absence of about a week in July 1995, which was due to personal reasons. It did not give rise to any additional warnings. There was a further absence in September 1995 following which Mr Struthers was issued with a further written warning. The terms of that warning are as follows:

   “Due to the breach of your first warning in ensuring to advise the company prior to 9 am of your absenteeism, Clarklift is issuing the second warning, as is required by the employee termination legislation. Under the employee legislation an entitlement of three cautions prior to termination is required and this warning should be treated as the second of these.”

1. Mr Struthers disputes that this warning was justified. It is fair to say that the evidence relating to this September absence is unsatisfactory, but Mr Struthers concedes that he failed to contact the company on at least one of the days on which he was absent. The reason he gave to the company and the reason he gave to the Court was that his home telephone was out of order and that he was too ill to make arrangements to make a call outside of the house.

1. At this point I will make some comment as to the manner in which the witnesses gave evidence.

1. It was not until the end of the hearing that the Court heard much evidence at all as to the reasons for Mr Struthers' absence. When I directly put the question to Mr Struthers after dealing with the absence that was due to personal reasons and the absence at the end of these events that was due to him injuring his ribs, he made some reference to irritable bowel syndrome. I noted at the time that he gave that evidence with some discomfort.

1. Subsequent to that Mr Brown, Clarklift’s Managing Director, gave evidence, the accuracy of which Mr Struthers did not dispute, about a meeting between Mr Struthers and Mr Brown following his termination, in which Mr Struthers acknowledged to Mr Brown that he had a drinking problem and in which he advised Mr Brown that he was taking steps to address that problem. I inferred from other evidence that those steps involved having contact with Alcoholics Anonymous.

1. Now, viewing all the evidence as a whole I infer from the evidence that problems with drinking were responsible for at least some of the absences. Certainly, there is no evidence other than that of Mr Struthers as to why the illness he suffered in September would have been so acute on the day that he was not visiting the doctor that he was unable to go to his company car and make use of the mobile phone in the company car in order to contact the company. On the basis of the evidence that I have before me, Clarklift has satisfied me that it was reasonable to expect Mr Struthers to have done that on the occasion of that absence, and so I am satisfied that the second warning was justified and that, on that occasion, Mr Struthers failed to comply with the requirement which the employer had clearly placed on him, which was to notify the company before 9 am of any absence. That leaves the final absence which took place in November.

1. Again the evidence as to the exact time of the absence is unsatisfactory. Mr Struthers says that his first day of absence was Wednesday 23 November 1995. He says that he fell on the evening of 22 November 1995 and injured his ribs, and that was the reason for his absence for the remainder of that week and for a further week commencing 27 November 1995. In support of his evidence, there is also in evidence two certificates from his doctor certifying that Mr Struthers was unfit for work from 22 November, which would be consistent with him having sustained the injury on the 22nd, and another certificate from 27 November.

1. Further, Mr Struthers gave evidence that he called Mr Eddy, who was the “communications hub” for the services department, on the Wednesday to advise him that he’d injured his ribs and that he would be absent from work. Mr Struthers went on to say in evidence that he called the company before 9 am on each ensuing day, up to Friday 1 December, to advise them that he would be absent each day. He says he did that “religiously”, because he was aware he was on his second warning.

1. Mr Struthers was questioned at some length as to who he spoke with on the occasions that he called. He nominated Mr Eddy. He also said that on one occasion he spoke with Mr “Arthur” Kapsolas, and he also gave evidence of leaving a message with the receptionist.

1. Mr Eddy gave evidence. He recalls receiving a call from Mr Struthers. He confirms that Mr Struthers certainly sounded ill, sounding “like death warmed up”. I was comfortable that Mr Eddy was giving evidence to the very best of his recollection and I was satisfied that he was not giving evidence in a way that was intended to further the interests of one party over the other.

1. He conceded that it was possible that Mr Struthers might have called him on other occasions, but his evidence was such that I was satisfied that, if it was Mr Eddy whom Mr Struthers spoke with on other occasions, then it probably was not on many occasions. The only certain evidence of Mr Eddy is that he received a call on one occasion.

1. Mr Kapsolas gave evidence on this issue. His evidence was to the effect that he was not contacted by Mr Struthers during the November absence at any stage. The receptionist to which Mr Struthers referred, Veronica Piotrowski, gave evidence and negatived any suggestion that she took any messages from Mr Struthers or that she put Mr Struthers through to Mr Kapsolas on any occasion. I noted that she said that she did not start work until 9am, which would seem to indicate that she would not have been in a position to put any messages through before 9am, which was the time by which Mr Struthers was required to call. However, Mr Struthers in his evidence, and even after Ms Piotrowski's evidence, was not contending that he spoke with a receptionist other than Ms Piotrowski.

1. Mr Kapsolas gave evidence to the effect that on Monday 21 November and Tuesday 22 November 1995, Mr Struthers was absent from work. That is in contradiction with Mr Struthers evidence. Further, Mr Kapsolas says that, being conscious of the warnings which had been issued to Mr Struthers, he took the step of inquiring of the other staff and satisfying himself that Mr Struthers had not rung in to notify the staff of his absence.

1. Mr Kapsolas was a nervous witness, but there was nothing which led me to doubt the honesty with which he was giving his evidence. While the medical certificates would support the contention that Mr Struthers’ injury to his ribs occurred on 22 November, it is not evidence that he may not have been absent from work on the 21st and 22nd for some other reason. I prefer the evidence of Mr Kapsolas on this point to that of Mr Struthers and I am satisfied, on balance, that he was absent from work on the 21st and 22 November and that he did not notify anybody of that.

1. Even if I were not satisfied of that, I am satisfied on balance that Mr Struthers failed to notify the company on dates after Wednesday 23 November that he would be absent on those days. I base this finding on the fact that Mr Struthers in his evidence nominated the people he says he notified, and that those people, when their evidence is viewed as a whole, do not support his evidence.

1. Having regard to the terms of the second warning, I am therefore satisfied that Mr Struthers did not comply with it.

1. The decision was then taken that Mr Struthers should be dismissed. It is clear that it was Mr Brown who took that decision. I accept the broad thrust of the evidence to the effect that Mr Brown had been inclined to bring Mr Struthers’ employment to an end earlier, and that Mr Kapsolas persuaded him to the contrary.

Whether There was a Valid Reason for Termination

1. I had some doubt about the narrowness with which the reasons for the termination were defined.

1. It is clear that Mr Struthers was absent from work for periods which were in excess of, for example, the amounts of time that are traditionally set aside for sick leave.

1. It is also clear that his absence created problems for the company. Mr Brown gave evidence to the effect that, from time to time, he was personally required to step in to try to save face for the company and placate clients as a result of problems which arose from Mr Struthers’ absence.

1. However, Clarklift has chosen to limit the ambit of the warnings, not simply to absences from work but rather to the issue of notifying the Company of absences. It could be interpreted that what the Company was saying in the warning was that the Company was not complaining that Mr Struthers was absent for so many occasions, but rather that he was not notifying the Company of those absences. This seems to me to be a fairly artificial analysis and expression to Mr Struthers of the thought processes that were going on within the Company, particularly in the light of Mr Brown's evidence.

1. Mr Brown talked about feeling that Mr Struthers was not being honest with them; he talked about the rumours that were flying around the company, and the fact that the company and its management was looking like a laughing stock because they were not doing anything about it. I accept that they were not appearing to do anything because they were concerned about their obligations under the Act and to make sure that they complied with the Act by giving Mr Struthers the opportunity to improve his adherence to Clarklift’s requirements.

1. However, looking at it from the other perspective, had I been satisfied that Mr Struthers had complied with the terms of the warning and had in fact rung in “religiously” as he claimed he had, then the company, because of the way they framed the warnings, could not have relied on the mere extent of his absences or even the reasons for the absence, as a reason for dismissal because it was not directly raised with him that those broader issues were a problem.

1. It seems to me that Clarklift chose to formally rely on the failure to notify as the grounds for Mr Struthers’ dismissal.

1. I accept that when Mr Kapsolas first rang Mr Struthers on the termination day, his sole instruction was to dismiss Mr Struthers. When asked what the reasons for dismissal were, he did not feel in a position to define them. It was not until Mr Struthers got the letter on 14 December 1995 that the reasons for dismissal were finally defined in terms of a failure to notify.

1. Mr Struthers has indicated that he does not dispute that his alleged failure to notify was the reason for termination, and therefore I am prepared to deal with the matter on that basis.

1. In summary I accept that the reason for termination was Mr Struthers’ continued failure to notify the company prior to 9am of absenteeism, and in all the circumstances I am satisfied that it was a valid reason for dismissal.

Whether the Termination was Harsh, Unjust or Unreasonable

1. The next question arising is whether the termination was harsh, unjust or unreasonable. Taking into account the evidence of Mr Eddy, Mr Brown and Mr Kapsolas, but perhaps most importantly that of Mr Brown, I am satisfied that Mr Struthers’ continued failure to notify did have significant practical effects on the company, and I am satisfied that the history of his failure to notify was sufficient to prevent the dismissal from being harsh unjust or unreasonable in the circumstances.

Whether Mr Struthers Was Given the Opportunity to Defend Himself

1. The final matter that arises is the question of the employer's obligation, under section 170DC of the Act, to give Mr Struthers the opportunity to defend himself against the allegations.

1. Given that the allegation was in very narrow terms, effectively what Mr Struthers had to have an opportunity to do was to put his claim that he had in fact notified the company on each occasion of the fact that he was going to be absent.

1. The time of dismissal was the telephone conversation between Mr Kapsolas and Mr Struthers when Mr Kapsolas advised Mr Struthers that he was dismissed.

1. The later discussion between Mr Struthers and Mr Brown therefore happened after the dismissal. While I accept that Mr Brown genuinely reconsidered the matter over that weekend, this was too late for the purposes of section 170DC.

1. Even if the dismissal had taken effect after the conversation between Mr Brown and Mr Struthers, if one looks at what happened during that conversation, there is no evidence that Mr Struthers had actually been told what the specific reason for his dismissal was. Clearly it had something to do with his absenteeism, but there is no evidence that the narrow ground of failure to notify of absences was put to him. Certainly, the matters Mr Struthers raised with Mr Brown, relating to his drinking problem, related more to the reasons for absence and the extent of the absences rather than, in particular, the failure to notify.

1. I am satisfied, therefore, that section 170DC of the Act has been breached, and the question that then arises is what remedies should Mr Struthers receive in all the circumstances.

Notice

1. In relation to the question of notice, while I can accept that a failure to notify of absences in these circumstances is unsatisfactory conduct giving rise to a valid reason for dismissal, I am not satisfied that it amounts to “misconduct” such that no notice was payable.

1. I will therefore order that damages in a sum equal to the value of two weeks’ of Mr Struthers’ salary package be paid pursuant to Section 170EE(5), which I calculate to be $1805.75.

Compensation for Breach of Section 170DC

1. There has been an amendment to Section 170EE of the Act, the effect of which is that it introduces or clarifies an over-riding discretion in relation to the remedies available under the Act, based upon what the Court considers to be appropriate “in all the circumstances of the case”.

1. Even before the amendment was enacted, there was a principle set down by Chief Justice Wilcox in Nicolson v Heaven and Earth (1994) 1 IRCR 199, 57 IR 50, to the effect that in assessing compensation I need to have regard to what would have happened had the Act been complied with.

1. In this case, I have to ask myself what would have happened if, instead of ringing up and merely telling Mr Struthers that he had been dismissed, Mr Kapsolas instead rang up and said, “As far as I can see, having asked everybody in the office, you have not notified anybody that you were going to be away - what do you have to say about that?”

1. Mr Struthers could have made any claims that he wanted to make as to who he spoke to when he rang up. There would have been far less trouble with memory than we’ve experienced at this hearing. It is possible that Mr Struthers might have been able to establish then, though he cannot now because of the frailty of memory, that he had not in fact contravened the warning. I have to make some allowance for that possibility. However, I am not convinced, considering all the evidence, that Mr Struthers would necessarily have been able to establish that he had not contravened the warning. Nor am I convinced that, had he have survived in his employment on this occasion, his employment would not have been properly terminated in due course.

1. That being the case I will award less than the maximum 6 months compensation. As Moore J observed in Bean v Milstern Retirement Services Pty Ltd (IRCA No. 248 of 1995, 2/6/95, unreported), “the determination of an appropriate amount of compensation is not an exact science...”. This is particularly so when making assessments based on the principles set out in Nicolson v Heaven and Earth.

1. In this case, I will fix the compensation payable at what Mr Struthers would have earned in 1½ months, which I calculate to be $5,417.25.

   I certify that this and the preceding 12 pages
   are a true copy of the reasons for decision of
   Judicial Registrar R.D. Farrell.

   Associate:
   Dated:

   APPEARANCES

   The applicant represented himself.    

   Counsel appearing for the respondent:               Mr T. Offer   

   Solicitors for the respondent:                   Bannerman Ziatas

   Date of Hearing:  19 April 1996