Susan Adele Dalton v Ultinel Pty Ltd

[1995] IRCA 242

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA   VI 2263 of 1994
VICTORIAN DISTRICT REGISTRY

B E T W E E N:

SUSAN ADELE DALTON
  Applicant

AND                   
  ULTINEL PTY. LTD.
  Respondent

Reasons for Judgment

6 June 1995  PARKINSON JR

This is an application made pursuant to S170EA of the Industrial Relations Act 1988 made by the Ms Dalton (“the applicant”) and the Shop Distributive and Allied Employees Union of Australia (“the union”).

The applicant was employed as grocery assistant and subsequently as Dairy Freezer Manager,  by Composite Buyers Ltd in its Maxi-foods Division at Ferntree Gully from 1st December, 1993 until the business was sold to the respondent effective 26 October, 1994. From 26 October, 1994 she was employed by the respondent as Grocery Manager. Her letter of appointment and employment agreement (Exhibit B2) (“the employment agreement”) stated that she continued to be employed, with continuity of employment on the same terms and conditions as with her former employer, save for a variation in wage increase arrangements. The offer was expressed as one of continued employment with Maxi Foods, Ultinel Pty.Ltd.

The applicant was one of some 40 former employees of Composite Buyers at Maxi-Foods, who were engaged by the respondent, 49 other employees being retrenched by Composite Buyers.   For all purposes her employment was continuous, there being no payout of any leave entitlements and no notice of termination or redundancy payment made to her at the time of the termination of her employment by Composite buyers. At no time prior to the entering of the employment agreement did she cease working at the premises located at Upper Ferntree Gully. The evidence is that at the time of the sale of the business, payments were made by Composite buyers to the respondent to account for all outstanding entitlements in relation to the applicant’s employment.

As a preliminary point the respondent submitted that the applicant’s employment was terminated pursuant to a term in her employment contract which provided for a probationary period of employment.  In this regard it relied upon the employment agreement signed by the applicant (Exhibit B2) which states “ your terms and conditions of employment will continue to be governed by the SDA/ Composite Buyers Limited Certified Agreement.....” (“the Certified Agreement”).  As a matter of background only it is noted that the Certified Agreement was intended to be certified between the union and the former employer, Composite Buyers Limited. The respondent was not a party or signatory to the Certified Agreement, although this of itself is not determinative of the issue. 

The Certified Agreement (Exhibit B3) contains at Clause 3 (a) a provision recognising a period of probationary employment of one month upon engagement.  However the terms of this “probationary period” were never brought to the attention of the applicant by the respondent. Nor was there any specific mention of such a period until after the termination of the employment had occurred. Further in my view the implication of that term of the Certified Agreement to the employment agreement (Exhibit B2) is inconsistent with the represented terms of engagement set out on the face of the employment agreement.  Those terms included that the document was an offer of  continuing employment with Maxi Foods, Ultinel Pty.Ltd., specifying that terms and conditions of employment will continue to be governed by the agreement and that prior service would be recognised for long service, sick leave and annual leave.  Such recognition of service together with the representation of “continuing employment” is inconsistent with the employment being subject to a probationary period arising out of a document, the certified agreement, which was adopted only as a result of recognised prior service at that workplace.

Further when regard is had to Regulation 30B of the Act it is clear that for the respondent to rely upon an alleged probationary period, such period must have been determined in advance and be reasonable having regard to the nature and circumstances of the employment. I do not understand this requirement to provide that it may be determined in advance in the absence of any knowledge of it in the employee. The respondents submission and oral evidence “ that ignorance of the law is no excuse” ( in this case ignorance in the applicant of the term of the certified agreement) reflects badly upon it and its management.

Having regard to the circumstances of the employment and the applicants past employment history at that location, in my view the imposition of any probationary period was not reasonable. I am not satisfied that there was  a probationary period of employment operating in respect of the applicants employment with the respondent.  I now turn to consider the merits of this application. 

The applicant performed her duties as Grocery Manager, which also included responsibility for the dairy and freezer area for some 3 weeks after the new owners commenced operating the business.  The applicant’s evidence was that a large number of changes to the manner of operating the business, including the ordering and pricing system were implemented during that time.  Her evidence was that there was also a great demand upon employees, having regard to the significant reduction in staff accompanying the sale of the business and the adjustment necessarily occurring as a result of the change of owners and managers. Her evidence was that she raised with the new manager a number of potential difficulties with the proposed system of ordering, particularly in relation to dairy orders, such as milk and creme products, however her views were disregarded. The evidence is clear that at no time during the takeover period was there any clear instruction given to the applicant as to any change in the system of operating.

The evidence was that on 1 November, 1994 a meeting occurred wherein the department managers were informed by the Managing Director, Mr Leo Blake, that they would be required to work on Saturday mornings. There is some dispute about this aspect, but I accept that they were informed that in lieu they were to take either Tuesday or Wednesday afternoon off.   By the time of this meeting the Applicant had worked 10 days straight for the respondent without a break, including the previous Saturday and Sunday.  She then took the next Wednesday afternoon off as her half day in lieu.

On 3 November the applicant was given 2 documents (Exhibit D2) which purported to be written warnings as to her work performance and conduct. One related to her absence on the previous Wednesday afternoon and the other related to her allegedly failing to return the price of a stock item to normal after a temporary price reduction.  These 2  documents were given to the applicant simultaneously by Mr Brendan Blake, the store manager. The applicant refused to accept the warnings, raising a number of issues in her own defence.  No regard was had for her explanations in her own defence and no accommodation made for what on the respondent’s version even if accepted, may have been a misunderstanding between the parties.

In these proceedings I do not accept the respondent’s version of the events.
I accept the applicants account of the circumstances in their entirety.
The evidence of the applicant was precise and she struck me as a frank and truthful witness, not given to exaggeration. In addition, in the course of cross-examination she was prepared to make concessions as to matters put to her. Matters it should be said which had little to do with the expressed reasons for the termination of her employment.

I contrast this with the evidence of  Mr Brendan Blake and the submissions put by him, on behalf of the respondent, that one of the reasons for the termination of the applicant’s employment was that the respondent became aware after 2 weeks, that during the course of her employment with composite buyers her ordering practices and management style alone had accounted for a trading loss in that company of over 1 million dollars.

This is an allegation made in respect of an employee who was initially employed as a casual sales assistant and only promoted to the position of grocery manager on 6 October, 1994, some weeks prior to the respondent taking over the business.  It is one example of the exaggerated nature of the allegations made by the respondent against the applicant in these proceedings.

No evidence was put before the court which would support such an exaggerated allegation against the applicant.  The evidence sought to be relied upon by the respondent as to this allegation included photographs (Exhibit B4) taken of stock positioning after the termination of the applicant’s employment, which photographs on their face did not support the respondent’s allegations as to over-ordering or excessive amounts of out of date stock.

The respondent also obtained, after the termination, various stock information relevant to the period of the applicant’s employment by composite buyers. (Exhibit B5)  This documentation was also sought to be relied upon against the applicant. None of this material was relevant to the employment of the applicant by the respondent and none of it identified that the applicant was  performing or had performed her duties other than in accordance with the instructions and system operated by her former employer. Further none of this material, nor the allegations, other than one about allegedly over-ordering milk supplies, were put to the applicant prior to the termination of her employment. They first surfaced as allegations subsequent to the dismissal and in my view for the purpose of these proceedings. No account was taken by the respondent’s managing director Mr Leo Blake of the applicant’s explanation in relation to the milk supplies issue. This was that it was Mr Brendan Blake and not she who altered the milk ordering arrangements and who over-ordered and no investigation was done in this regard by Mr Leo Blake to attempt to establish the true facts.

I am satisfied the applicant performed her duties both with her former employer and with the respondent in accordance with the instructions she was given by them. Further it is clear having regard to the number of hours the applicant worked that she was a committed and dedicated employee, who would be a valuable asset to any employer.

This is a case where it is apparent the reason for the termination of the employment of the applicant was because she was prepared to stand up for her self against unjust accusations as to her work performance and absence when taking time in lieu.  After receiving the warnings on  3 November, 1994 the applicant contacted her union representative, Mr Parker. This contact, by telephone took place on Friday 4 November, 1994.  On Monday 7 November, 1994, Mr Parker contacted the respondent manager, Mr Brendan Blake as to the applicant’s concerns as to the warnings.  Mr Parker then informed the applicant that he had spoken to the respondent’s manager, on her behalf. It appeared to him that the matter was resolved.  His next contact with the applicant was when she informed him that on Friday 11 November, 1994 her employment had been terminated by the respondent, allegedly on the basis that she had over-ordered milk products resulting in an excess of out of date stock.

In my view it is no co-incidence that despite the “written warnings” having a review date of 10 November, 1994, no review of her performance took place and the applicant’s employment was terminated shortly after the union official raised with management the applicant’s concern as to the warnings she was given.  I am of the view that the reason for the termination of the applicant’s employment was that she refused to accept what she felt was an unfair warning as to her work performance and she complained to her union in this regard.

S170DC ; S170DF (1) (b),(e); S170DE(1); S170DE(2)

The respondent has failed to satisfy the court that it had a valid reason for the termination of the applicant’s employment. I do not accept the respondent’s evidence as to the work performance of the applicant and I do not accept that that there was any reason for the termination of her employment which was based upon her work performance.

The respondent  has further failed to satisfy the court that there was not included in the respondent’s reasons for termination, the reasons that she was a member of the Union and had filed a complaint as to her wages and conditions of employment. The absence of any credible explanation for the termination of the employment, together with the timing of the termination of the employment lead me to conclude that these matters were reasons for the termination of the employment. Having regard to the circumstances of the termination of the employment, I do not accept the evidence of either Mr Brendan Blake or Mr Leo Blake as to the reasons for the termination of the employment.

Having regard to the large number of allegations raised during the course of these proceedings I am satisfied that the respondent failed to give the applicant any opportunity to defend herself against the allegations made as to her work performance, at any time prior to the termination of her employment and therefore failed to meet its obligations pursuant to S170DC of the Act.

I find that the termination of the applicant’s employment by the respondent contravened the provisions of Division 3 Part VIA of the Industrial Relations Act 1988. I now turn to consider the appropriate remedy.

S170EE - Remedy.
The applicant has submitted that an order for re-instatement would be impracticable.  She has obtained alternative full-time employment with a major grocery and fresh produce retailer.  I am satisfied that in those circumstances, having regard to the manner in which the applicant was treated by the respondent and her desire to remain with her present employer, an order for reinstatement would be impracticable.

The applicant worked on a casual basis from 17th November, 1994 and  obtained alternative full time employment in February, 1995 when she was engaged as an assistant manager on a wage of $541.00 per week gross.  Her previous earnings with the respondent were $600.00 per week. There was evidence in the proceedings that the applicant did not receive her outstanding entitlements to annual leave and public holiday payments upon termination of her employment. In this order for compensation I do not deal with any outstanding entitlements which may have existed for payment in that regard.  There was a paucity of evidence as to the actual earnings of the applicant during the period after the termination to February, 1995. However, I am satisfied that she had incurred significant financial loss as a consequence of the termination and that this loss is ongoing having regard to the reduction in her weekly wage and the loss of accrued service entitlements.

The compensation order recognises these ongoing losses over the period between the date of the termination to the date of this decision. The applicant has calculated that loss at an amount of $ 6,316.00. I accept that this is an appropriate amount of compensation to be awarded and is a figure representing approximately 10 weeks pay to February, 1995. The sum awarded is a gross amount. 

The order of the court will be:

1. That the respondent pay to the applicant the sum of $ 6,316.00 in compensation within 14 days of the date of this order.

I certify that this and the preceding 10 (ten) pages
are a true copy of the reasons for judgment of
Judicial Registrar Parkinson.

Associate:  
Dated: 6 June 1995

Advocate for the applicant:     Mr M. Danby of Shop Distributive and
  Allied Employees Association.

Advocate for the respondent:  Mr B. Blake of the respondent.

Date of hearing:  24 May 1995.
Date of judgment:                   6 June 1995.