Suzanna Stefanovski v Whiskisoda Pty Ltd

[1994] IRCA 177

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 312 of 1994

B E T W E E N :

SUZANNA STEFANOVSKI
Applicant

AND

WHISKISODA PTY LTD
Respondent

Before:       Judicial Registrar Millane
Place:         Melbourne
Date:           

REASONS FOR JUDGMENT

By an application made pursuant to Section 170 EA of the Industrial Relations Act 1988 (the Act) the Applicant contends that, on 22 April 1994, her employment as a supervisor of female performers at the Respondent’s club was unlawfully terminated.

During the two day hearing it was contended by the Respondent that the issue for determination was whether the actions of the Respondent on 22 April 1994 could be characterised as a termination of the Applicant’s employment at the initiative of the Respondent (see Section 170 CB of the Act and Article 3 of the Termination of Employment Convention). The Respondent did not seek to argue in the alternative that any termination was justified.

In this Court two approaches to the determining the abovementioned issue have emerged.  The first is that adopted by Wilcox C.J. in Siagian v Sanel Pty Ltd (1994) 122 ALR 333 where the question was whether the employer terminated the employment relationship. The second approach is found in Gray J’s decision in Skilled Association of Professional Engineers, Scientists and Managers Australia (APESMA) v Skilled Engineering Pty Ltd (1994) 122 ALR 471 where the broader question posed was whether the employer had done some act to terminate or had purported to terminate the employment.

As can be seen from the decision of His Honour Moore J in Grout v Gunnedah Shire Council (1994) 125 ALR 355 at page 32 in order to decide, on the facts of any case whether there has been a termination of employment at the initiative of the employer it is not necessary for the Court prefer one approach to the other. What is abundantly clear from the enactment of this legislation is that:-

Division 3 is intended to provide employees with a statutory remedy in the event of termination.  It constitutes, in this respect, beneficial legislation that should be construed liberally much in the same way as worker’s compensation legislation has been construed...

The starting point is that Division 3 of the Act is concerned with termination of employment at the initiative of the employer in circumstances where the employee did not voluntarily leave the employment.

In giving effect to or further effect to the Termination of Employment Convention (see Schedule 10 of the Act), Part VIA Division 3 of the Act, by Section 170 EDA(1)(a) and (2), creates a rebuttable presumption that there has been a contravention of Section 170 DE(1) and Section 170 DF(1) respectively of the Act where the application filed alleges that the termination of employment contravened either of these sections.

Article 9 of the Convention explains the rationale behind the shift in the burden of proof at least in respect to an application under Section 170 DE(1) by observing that the worker should not have to bear alone the burden of proving that the termination was not justified. The Act goes further in giving effect to the Convention by providing for a shift in the onus of proof to the Respondent where there is an alleged termination of employment contravening Section 170 DF(1).

Section 170 EDA was enacted and came into effect from 30 June 1994. At the same time Section 170 EE was substituted by a redrafted Section 170 EE. After considering the merits of a Section 170 EA Application in its pre-June 1994 context Section 170 EE(1) allowed the Court to grant a remedy “unless satisfied that the termination of the employee’s employment contravened no provision of this Division (other than Section 170 DD)...”.  In Siagian’s case Wilcox C.J. observed at page 340:-

“It seems that the drafter of the section adopted the double negative (“unless ... no contravention”) in order to reverse the onus of proof.  In a case where the Court is left uncertain whether there was a contravention of the Division or not it has power to grant relief.  However, the onus of proof does not matter if the facts are clear.  If the Court is satisfied that there was no contravention, it has no power to grant relief”.

The jurisdiction of this Court to entertain an application under Section 170 EA of the Act only arises where there has been a termination of employment at the initiative of the Respondent. Whilst there was evidence called by both parties on matters relating to the Applicant’s performance and, in particular, a complaint by the Applicant of sexual harassment by a fellow employee during the currency of her employment, the rebuttable presumptions contained in Section 170 EDA as to contravention of the Act by the Respondent did not arise for consideration. This was because the Respondent agreed that, if the Court found that there was a termination of employment at the initiative of the employer, it did not call evidence to justify the termination or for that matter disprove any other allegation such as the allegation of sexual harassment. This concession did not mean that the Respondent accepted this allegation. However, the evidence of the complaint and other evidence called was essentially circumstantial evidence relied upon by each party as evidence from which the Court was asked to draw certain inferences in favour of conflicting versions of the events of 22 April 1994 in order to decide whether an act of the employer had brought the Applicant’s employment to an end.

Counsel for the Respondent quite correctly submitted that whether the Court can draw a particular inference from the facts is a question of law and before an inference is drawn it is necessary for the Court to ask whether the evidence reasonably admits of different conclusions (see Australian Broadcasting Tribunal v Bond & Ors (1990) 170 CLR 321 at page 355). However, it must always be kept in mind that all the evidence should be weighed according to the proof which it was in the power of one side to produce and in the power of the other to have contradicted. As a general rule the employer is the party with power to access witnesses and records.

Both the amended Act and the Convention are silent on the question of any reversal of the onus of proving that a termination was made at the initiative of the employer rather than by the voluntary act of the employee. Section 170 DE(1) of the Act places the burden of proof on the employer to show that there was a valid reason for termination of the employment but the employer does not bear this burden of proof until the employee has made out a prima facie case that there was a termination of employment within the meaning ascribed to that phrase by the combination of the Act and the Convention.

The following witnesses were called:-
(a)     By the Applicant -

(i)     the Applicant;

(ii)     Erin Frances Armstrong, a former employee of the                    Respondent.

(b)     By the Respondent:-

(i)     David Fearnley Massey, a manager employed by the   Respondent;

(ii)     John Agostinello, the Respondent’s general manager.

The Background

The Respondent operates two establishments, the Santa Fe Gold Club and the Men’s Gallery, both of which are table top dancing venues.  The clubs sell drinks to customers as well as a currency variously referred to as pretend or imitation money with which currency the customers purchase performance time from topless female table top dancers seven days per week over two shifts, 11.30 am to 6.00 pm and 6.00 pm to closing time.  The time sheets tendered in evidence by the Respondent (Exhibit R1) show that closing time could be as late at 5.30 am.

Prior to September 1993 the Applicant had not worked because she was travelling overseas.  She had only limited waitressing experience of some 8 months in her parent’s restaurant.  In response to an advertisement for a casual waitress and bar staff the Applicant was interviewed by the Respondent’s general manager, John Agostinello (Agostinello), specifically for a job performing waitressing duties such as serving drinks, washing glasses and wiping tables.  An additional waitressing duty was to sell the imitation currency to the customers.  At interview there was no discussion of any other duties, such as supervising the female performers.  The Applicant commenced work at the Santa Fe Club as a waitress on the day following the interview, 1 September 1993.  The Applicant was employed under the Food and Beverage Award - Grade 2 as a casual employee working a six day per week shift.  On the facts no argument was raised suggesting that this casual employment was anything other than continuing employment (see Regulation 30 B(3) Industrial Relations Regulations).

The hierarchy of staffing and instruction at the club included the owners, the general manager, the managers, George Altruski who allegedly hired and trained the performers and at least two supervisors of the performers who worked on either shift as well as the waitressing and drink staff.

After some weeks of casual drinks waitressing one of the managers, Phillip Penn (Penn), asked the Applicant to supervise the performers because the club was short staffed on a particular Saturday evening.  The supervisory duties were quite distinct from those performed by a waitress in that they included the allocation of the performers to the tables for a performance period of 20 minutes or so, the recording of the names of the performers against the table numbers once the performers had been allocated to a table and the counting and receipting of the imitation money collected by the performers during their performances.  The job also required enforcement of the Respondent’s dress and conduct code with the performers in the sense that if the performers misbehaved the supervisor could discipline them by cancelling their performance for the rest of the shift.  The performers used the receipts given by the supervisors to collect their earnings at the end of the evening.  At this juncture it would be fair to say that, on the evidence, the performers were notoriously difficult to please in that they complained about the allocation of the tables, the length of their performances and a host of other matters.  Apart from dealing with the performer’s temperamental outbursts it was also necessary for a supervisor to ensure that they were properly policed during their performances to; for instance, avoid unauthorised physical contact with the customers during the performances.

In undertaking supervisory duties the Applicant received no variation in the rate of pay paid to her.  However, within a few weeks of her commencing the supervisory duties on an ad hoc basis she ceased any waitressing duties and commenced full time supervision of the female performers from at least November 1993.  She continued an average of  six shifts per week at the same rate of pay.  These shifts were predominantly evening shifts.  It was part of the Respondent’s case and contended by the Respondent’s counsel that the duties undertaken by the Applicant in the supervision of performers should be characterised as duties associated with her waitressing duties.  If the Court accepted the Respondent’s version of events; namely that on 22 April 1994 it only sought to return the Applicant to her waitressing duties, it was axiomatic to the Respondent’s case that the Court also conclude the change back to duties as a waitress from that date was contemplated by her contract of employment.  In other words, the Respondent sought to avoid any suggested repudiation of the Applicant’s contract of employment.  Notwithstanding this argument, on the evidence I am satisfied that the duties of a supervisor were distinct and different from those duties performed by a waitress and could hardly be said to be associated duties.  This of course is not by itself decisive of the issue of whether the contract of employment was terminated at the initiative of the Respondent.

The number of performers working on any one evening varied from ten to forty depending on the amount of custom.  Each shift was looked after by one supervisor and from when the Applicant commenced her full time supervisory duties until February 1994 the other supervisor was a person named Brad Bennett.  He was replaced by Erin Frances Armstrong (Armstrong) who also performed supervisory duties from February 1994 mainly during the day shift until early May 1994 when she returned from sick leave and commenced supervisory duties replacing the Applicant on the evening shift.

The alleged termination

The direct events giving rise to the cessation of the Applicant’s employment occurred on 22 April 1994.  The Applicant contends that on the evening of 21 April 1994 Penn asked her to telephone Agostinello the following day.  She complied with this request and in the course of a telephone conversation with Agostinello was informed:-

...he had some news for me and that I was no longer with them and then I kept quiet for a while and he asked me if I was alright and I said “yes” and I couldn’t speak to him much but I asked him why and he said “because of complaints from the girls” and wearing my leather pants and other small things.

According to the Applicant Agostinello gave no further explanation of what “other small things were” although he did mention that the decision had been made by him and one of the owners, Ross Kennedy (Kennedy).  Kennedy was not called to give evidence even though he was the person who ultimately made the decision about the Applicant’s employment and who allegedly gave the instruction to Agostinello to implement that decision.

Agostinello’s account of the telephone conversation on 22 April 1994 directly conflicted with the evidence given by the Applicant.  He recalled saying to the Applicant:-

that unfortunately the position that she held as supervisor of the girls would no longer exist, and she had to understand that there was - the managers were going to be taking over that role and I felt that Erin would be better suited for that position to take on the extra few shifts of an evening.  But at least she had the opportunity to be doing waitressing and can make up as many hours as she liked in waitressing.

Agostinello alleges that he was pressed by the Applicant for reasons as to why Armstrong had been preferred for the supervisory position and, in response, he referred to an occasion upon which the Applicant had not worn suitable attire to work; namely black leather pants and “some few problems in the past and you haven’t been as fair to the girls as you probably should have”.  Somewhat inconsistently Agostinello further alleged that, despite his criticism of the Applicant’s “more strong-handed approach with the girls”, that being a reason for precluding the Applicant from continuing as supervisor at the Santa Fe Club, he informed her that, if a supervisor’s position became available at the Men’s Gallery Club he would happily consider her for such position.

The Applicant according to Agostinello refused to return to waitressing duties stating “no way that I’ll be doing any waitressing”.  In cross examination the Applicant was adamant she had not received any offer of alternative duties as a waitress.  Because she had never been, as she put it, “sacked before” she was struck by the import of Agostinello’s opening statement to her.  She conceded that Agostinello had referred to the Men’s Gallery Club but only to offer to contact her when some waitressing duties became available at that club.

As already noted the Applicant’s work experience prior to commencing employment with the Respondent had been limited to some waitressing.  The evidence is that since the alleged termination of her employment by the Respondent the Applicant has applied for waitressing jobs at other clubs, with a brief period of waitressing at the Platinum Club prior to it closing in 1994.

Her employment background and her continuing efforts to obtain waitressing employment since April 1994 were relied upon by the Applicant to demonstrate to the court that it was more likely than not that she had not been offered waitressing duties as alleged by the Respondent and had not voluntarily forgone her employment.

Armstrong, the Respondent’s former employee and the person referred to in Agostinello’s evidence as “Erin” who replaced the Applicant as a supervisor at the Santa Fe Club for some of the evening shift, was called by the Applicant to give evidence.  Amongst other things Armstrong informed the Court that from 8 April 1994 to early May 1994 she was suffering from hepatitis and absent from her employment with the Respondent.  From February, 1994 she had been engaged in supervisory duties during the day shift and on her return in May 1994 she resumed the supervisory duties on the night shift.  Whilst she was not told why the Applicant had left the Respondent’s employment Armstrong alleged that David Fearnley Massey (Massey), a manager employed by the Respondent had informed her the day after her return to employment in May 1994 that the Applicant had been dismissed.  In cross examination Armstrong agreed that she could not recall the precise words used by Massey however she understood from her discussion with him that the Applicant had been dismissed: “I mean to me she had been fired”.  Massey did not deny the conversation, rather he could not recall it.  He suggested that at most he may have told Armstrong that the Applicant had left.

Armstrong’s evidence of the alleged admission made by Massey is not conclusive of the issue however it must be said that there was nothing in her demeanour and her relationship with either of the parties to suggest that her recollection of the conversation should not be afforded full weight as evidence.  In contrast Massey’s evidence requires closer scrutiny because of a complaint of sexual harassment made against him by the Applicant to the Respondent in February 1994 and further because of his demeanour in the witness box.  More about which will be said in due course.

Having regard to the Respondent’s allegation that it in fact withdrew the Applicant from supervisory duties and instead offered her waitressing duties, the Applicant’s case was argued on alternative bases.  The first was that her employment was terminated without any offer of immediate duties as a waitress.  Further it was argued that if waitressing duties were offered there was no mere variation of the original contract of employment but a new contract of employment offered amounting to a termination of the existing contract of employment.

Findings

On balance I have accepted the Applicant’s version of the conversation between her and Agostinello on 22 April 1994 and it is therefore not necessary for me to consider in any detail the alternative proposition that the Respondent only sought to return the Applicant to her original duties as a waitress without, in so doing terminating her contract of employment.

In arriving at the conclusion that the Applicant’s employment was terminated at the initiative of the Respondent I have taken into account a number of relevant matters summarised in the succeeding paragraphs:-

(a)I found the Applicant to be a credible and straight forward witness on her own behalf.  In contrast I observed Massey to be less than straightforward in his answers and on occasions evasive as a witness.  Furthermore, Agostinello’s evidence contained numerous inconsistencies;

(b)The absence of any plausible explanation for a woman with an employment background almost exclusively in waitressing foregoing paid employment as a waitress with the Respondent to seek waitresssing employment elsewhere;

(c)The evidence of Armstrong concerning her conversation with Massey in May 1994;

(d)The evidence of a complaint of sexual harassment and the changes made to the Applicant’s hours of work and shifts shortly thereafter.  In February 1994 in the week following Valentine’s Day on 14 February the Applicant complained to an owner of the Respondent club, Peter Iwaniuk (Iwaniuk) that she was being sexually harassed by Massey who worked on the night shift as a manager.  It was the Applicant’s contention that from approximately October 1993 Massey had repeatedly invited her to go out with him, to move in with him and to leave her boyfriend.  During work shifts she also alleged he had a habit of holding her hand and pulling her down to sit in his lap and rubbing and squeezing her sides and back with his hands.  There was also an allegation that he had put pressure on the Applicant to join a health club of which he was a member.  The Applicant alleged that she asked Massey to desist.  He did not initially and she did not take the matter any further because she feared he might terminate her employment.

Insofar as the abovementioned allegations related to events pre-dating Valentine’s Day Massey denied those events explaining, for instance, that the Applicant had a habit of coming and sitting on his lap and whilst he had tried to convince the Applicant to join a health club to which he belonged, he had done so with her simply because he obtained a commission on the joinder of new members.  In cross examination the Applicant conceded she knew that Massey obtained a commission in these circumstances.  The event precipitating the Applicant’s complaint of sexual harassment took place on Valentine’s Day.  According to the Applicant on that morning she received a telephone call from Massey who was located in a telephone box across the street from her apartment.  That call was to ask her to join him for lunch at the Windsor Hotel.  She informed Massey that her boyfriend was at home “just to get him away from my house”.  In cross examination the Applicant further recalled that Massey had rung her several times on the same day trying to get her to agree to see him but without success.  On the Sunday before Valentine’s Day the Applicant received flowers at work from an anonymous admirer which flowers only bore what she called a “love heart”.  She made enquiries with the florist and satisfied herself that these flowers had been sent by Massey.  This was admitted by Massey, as was the arrangement to have lunch.  Massey’s version of events was that prior to Valentine’s Day the Applicant said she had never been invited out on Valentine’s Day.  In the week preceding Valentine’s Day Massey booked lunch at the Windsor Hotel for that date and made arrangements with the Applicant to meet her to go out to lunch.  He alleges that he telephoned the Applicant from a telephone box because he did not know her apartment number.  This is curious as the Applicant points out that her employment application contained her full address including her apartment number.  In any event Massey denied repeatedly telephoning the Applicant on Valentine’s Day and denied having invited her out prior to this occasion.

After refusing Massey’s invitation on Valentine’s Day and recording her complaint of sexual harassment the Applicant alleges that there was a change in his behaviour towards her in that “...he was in a bad mood and would not talk to me”.  Her shifts were reduced and changed from mainly night shift to day shifts and Massey required her to undertake duties she had not been required to perform as a supervisor; namely to clear glasses, wipe tables and empty ash trays.  These were tasks usually performed by the waitresses and had not been performed by the Applicant whilst she was working as a supervisor.

The Applicant’s decision to telephone Iwaniuk was taken because Massey was senior to the other managers to whom she had also complained.  She described Iwaniuk as “the biggest one”.  Interestingly enough the Respondent did not call evidence from any of the other managers employed by the Respondent and more particularly from any of the owners even though it was agreed that at a meeting of the managers and owners in April 1994, Kennedy, one of the owners, made the decision to alter the Applicant’s employment duties and delegated to Agostinello the task of imparting that decision to the Applicant.

After making her complaint to Iwaniuk the Applicant was informed by him that he would do something about the problem.  It was not contested that shortly after her complaint to Iwaniuk made within a day or so of Valentine’s Day the Applicant received a telephone call from Agostinello who had been informed of the complaint by Iwaniuk and asked to deal with the complaint.  In cross examination the Applicant agreed that she told Agostinello about the sending of the flowers, the luncheon invitation on Valentine’s Day and further that Massey had told her that he had booked a room at the Windsor Hotel for them both on Valentine’s Day.  Agostinello agreed to investigate the matter and, according to the Applicant, did return to her informing her that he had spoken to Massey and asked her whether the sexual harassment had ceased.  By that I understood her to be referring to the invitations and the physical contact.  She agreed that it had and further agreed that Agostinello had asked her to contact him if she had any further trouble.  He also telephoned her at a later stage enquiring whether there were any further sexual harassment problems with Massey.  The Applicant was not informed of the results of any of Agostinello’s enquiries and certainly not told by Agostinello whether or not the Respondent accepted her complaint as a genuine one and as having been proved entirely or, at least, in part by his enquiries.

The Respondent relied heavily on the prompt response of Agostinello to the complaint, on the steps he took to investigate the complaint to confirm the substance of the complaint and his follow up enquiry with the Applicant to ensure that she was not experiencing any further difficulties as showing that there was no basis for inferring that the complaint gave the Respondent more reason for ending the Applicant’s employment than for offering her a return to the duties she had originally been employed to perform.

Agostinello gave evidence that he spoke to Massey to obtain his version of what took place and, on the following day, telephoned the Windsor Hotel confirming that there was a booking for lunch which had not been kept or cancelled.  However, the Hotel did not have a booking for a room in the name of either party.  It was not alleged by Agostinello that he ever transmitted this information to the Applicant yet, as a result of his limited enquiry, Agostinello formed the view that the Applicant’s complaint was not justified and the allegations were substantively untrue.  Cross examination of Agostinello revealed the following view:-

And what that showed, did it not, was that Ms Stefanovski, from your point of view, was a bit sensitive about these things?  ...No, I wouldn’t say that, no.

Well, you had just come to the view, had not you, that she had made an unfounded complaint about a co-worker?         ...Sensitive in that respect yes.  Yes, yes.

So you thought she was a bit sensitive about the issue of sexual harassment?  ...Perhaps, yes, yes. 

Well, more than perhaps because you had formed the view that this complaint was just wrong?  ...Well, not totally, no.

No, but you had formed the view that substantively it was untrue?  ...Yes, that’s correct.

Yes, so that it was a bit more than perhaps.  You had come to the view that she was overly sensitive about these sorts of issues?  ...To an extent, yes.

If anything this evidence demonstrates that without ever putting Massey’s version of events to the Applicant Agostinello decided that the Applicant’s complaint was substantially untrue presumably on the say so of Massey and because Agostinello was unable to confirm a booking for a room at the Windsor Hotel.

It was argued by the Respondent in its submissions that to the extent that the Applicant seeks to have any inference drawn from the facts surrounding the complaint of alleged sexual harassment she must prove a causal nexus between that fact and the later events of 22 April 1994.

It was alleged by the Applicant that after her complaint to management the hours she worked and the shifts allocated to her were altered and reduced.  Up until her complaint was made the Applicant alleged that she averaged six shifts per week, one of which was a day time shift.  It was contended by Agostinello that in about February, 1994 at one of the Respondent’s fortnightly manager’s meetings there was a decision as he put it, to “condense the Respondent’s wages by having more of the managers take on the supervisor’s role...and perhaps have one or two of the girls looking after the evening shifts”.  This decision was implemented at some stage in February with Geoff Hollows (Hollows), one of the managers, doing the Friday and Saturday evening shifts, Armstrong working one evening and the Applicant working what Agostinello described as “one lunch”.

It was the Applicant’s contention that as a supervisor she worked shift hours averaging between 50 and 60 hours per week and to that end she produced copy pay slips (Exhibit A1); for instance for the week ending 19 December 1993 for 61¼ hours with gross earnings of $788.04 and for the week ending 23 January 1994 for 55¼ hours with gross earnings of $717.22.  The pay slips produced also included the week ending 2 January 1994, a holiday week, where the Applicant worked only 42 hours but earned $728.75 gross.

The only documentary evidence the Respondent tendered to the Court was time sheets for the period from the week ending 26 December 1993 to the last day worked on 21 April 1994 (Exhibit R1).  Those time sheets did not contain details of the amounts paid to the Applicant in respect of each of the times covered, rather they focused on the shifts worked and the hours worked in each shift.

A number of matters are evident from the time sheets.  The first is that until the week ending 27 February 1994 the Applicant worked mainly six shifts on six days per week with Fridays free; there being only two weeks in that period where the Applicant worked a five shift week.  The shifts were predominantly evening shifts.

By referring to both the pay slips and the time sheets between the week ending 19 December 1993 and the week ending 27 February 1994 the Applicant worked 593¼ hrs:  an average of approximately 54 hours per week over 11 weeks inclusive of a Christmas week shift with late starting times.

The week ending 6 March 1994 shows a sharp decline in the hours worked to the week ending 3 April 1994; namely an average of approximately 39 hours per week with three of the five weeks containing only four shifts.

The Applicant asks the court to infer from the abovementioned evidence that the reason for the decline in her hours and the income earned was because of her complaint of sexual harassment.  In the weeks ending 20 February 1994 and 27 February 1994 the Applicant worked 61 hours and 59 hours respectively.  This the Respondent said demonstrated that there was no link between the complaint and any down grading of the Applicant’s hours worked.  However, on analysis the Respondent’s contention lacks substance.  The week ending 20 February 1994 was the Valentine’s Day week and on the evidence given it was during this week that the complaint of sexual harassment was made and investigated, according to the Respondent, within a week of the complaint being received.  It is also alleged by the Applicant and this was not contested by the Respondent that in the weeks ending 20 February 1994 and 27 February 1994 Hollows gave the Applicant his evening shifts on the Friday and Saturday evenings even though she was not rostered for those nights.  Moreover, in the period following her complaint Hollows from time to time called the Applicant to work from 11.00 pm and midnight to complete supervisory shifts for him in circumstances where an evening shift would not ordinarily commence at those hours.  The time sheets tend to support the Applicant’s testimony generally in these matters and certainly demonstrate a dramatic change in her hours worked from at least mid to late February onwards.

Armstrong was working as a day supervisor with some evening shifts up until her absence from 8 April 1994.  In the weeks ending 10 April 1994 and 16 April 1994 the Applicant’s hours increased to 50¾ and 56 hours respectively.  She explains this increase and again this was not contested by pointing to the extra shifts worked by her to cover Armstrong’s absence.  Again, the time sheets show that from Saturday 9 April 1994 the Applicant worked 8 consecutive shifts.  The last week worked was limited to 4 shifts between Monday 18 April 1994 and Thursday 21 April 1994, the last shift the Applicant worked before the conversation with Agostinello on 22 April 1994 which conversation led to the cessation of her employment.

At no stage in February, March or until the cessation of the Applicant’s employment did the Respondent provide the Applicant with any explanation for the dramatic alteration in the hours worked, nor did it produce any minutes or documentary record evidencing any executive decision taken by management to alter the supervisory arrangements and to, as it claims “condense” wages, through a reallocation of shifts to the managers.

It was also argued by Agostinello that the Respondent considered Armstrong a more suitable candidate to continue supervisory duties during the shifts that were not taken over by the managers.  He stated that from Friday 22 April 1994 it had been the Respondent’s intention to have the Applicant resume her waitressing duties.  Armstrong was still absent on sick leave and did not resume supervisory duties until early May 1994.  Agostinello gave no reason to the Court for the decision to commence the Applicant in waitressing duties from 22 April 1994 some weeks prior to Armstrong being available to replace the Applicant during her supervisory shifts.  Nor did he explain the inconsistency between his evidence that he told the Applicant on 22 April 1994 that her position as a supervisor no longer existed and then proceeded not only to attempt to justify allocating Armstrong to her position but actually employed Armstrong in her position from early May 1994 until Armstrong ceased her employment with the Respondent in June 1994.

The effect of the Respondent’s evidence was that in changing the supervisory duties it was restructuring to save wages.  The Applicant was the only person to leave her employment in April 1994 however according to the Respondent there was never any intention to terminate any employees to achieve the desired wage reduction.  Agostinello argued that the Respondent’s objective was to save wages by a process of attrition; as waitresses left the Respondent would save wages by not replacing them.  Agostinello’s evidence in this matter as general manager was vague and inconsistent.  He denied that to save wages the Respondent needed to have staff leave or be terminated at or around the time of the alleged restructuring and claimed that the company was continuing to interview extra staff for waitressing throughout this entire period.

It is reasonable to conclude from the abovementioned evidence that the Respondent did want staff to leave if its objective was to cut wages and have management assume functions otherwise undertaken by supervisory staff and that meant that the Respondent wanted to terminate the Applicant’s employment not just reallocate her to waitressing duties.

Moreover, the fact that Agostinello without any fair or detailed enquiry believed the complaint of sexual harassment to be untrue and further believed that the Applicant was overly sensitive to the issue of sexual harassment in the workplace permits the Court at the very least to conclude that this attitude was held by the Respondent’s management at the time it made the decision in late April 1994 to change the Applicant’s employment and further to alter her shifts, hours and duties in the interval between mid-February 1994 and 22 April 1994 without any explanation given to her for doing this.  The absence of any other credible explanation for such dramatic changes to the Applicant’s work times and duties and the inconsistency in the Respondent’s evidence allows the Court to infer that the complaint of sexual harassment was causally linked with the events of 22 April 1994 and made it more likely than not that the Respondent sought to bring her employment to an end.

(e)It was further contended by the Applicant that when she pressed Agostinello for reasons as to why she was being terminated he relied on an incident where she had worn leather pants to work, which attire was considered unsuitable by Agostinello and further some difficulties she had encountered in disciplining the performers on possibly two occasions.  Agostinello and the Respondent relied on these matters to demonstrate performance based reasons for shifting the Applicant from supervisory duties to waitressing duties and preferring Armstrong in the Applicant’s stead to work with the performers.

However, the events relied on by the Respondent had occurred either in late 1993 or early 1994, well before 22 April 1994 and the complaint of sexual harassment and were events which did not appear to assume any particular significance when they occurred.  Even Massey when pressed in cross-examination, conceded that the performers were temperamental and liable to complain vigorously and regularly.  Armstrong too had her difficulties with them.  On the evidence it could hardly be said that there was some contemporary and consistent problem between the Applicant and the performers requiring the Respondent to replace the Applicant in her supervisory role.

On the other hand, if the Respondent did have some concern with the Applicant’s dress and performance this concern coupled with what Agostinello called the Applicant’s “unfounded” complaint of sexual harassment makes it more probable than not that the Respondent wished to terminate the Applicant’s employment and not offer her further supervisory duties if they came available at the Men’s Gallery.

(f)Agostinello was present in Court throughout the hearing and was the last witness to give evidence.  The Respondent called Massey as its first witness and, it was during the cross examination of Massey that the Court was told of a meeting of managers in late April 1994 at which the cessation of the Applicant’s employment was discussed.  Cross examination of Massey contained the following exchange:-

Yes.And in that discussion Mr Ross - Mr Ross Kennedy made it quite clear, that he did not, that Ms Stefanovski’s employment had to be terminated?...  To my recollection he said that something had to be done about it.

And everyone at that meeting, did they not, that that meant her employment had to be terminated?...  Well, I can’t speak for everyone else in the meeting.

Certainly that is how you understood it, is it not, Mr Massey?...  I was quite astounded with what he said.

You certainly understood at that meeting, did you not, that he thought Ms Stefanovski’s employment had to be terminated?...  They were more under the impression that she was not to be doing the girls any longer.

Well, no, that is just not the case, is it? At that meeting...?...I am sorry, were you at the meeting?

At that meeting he made it very clear, did he not, that something had to be done about her and her employment had to be terminated?...  I agree with the first part; not the second.

In re-examination Massey alleged that Agostinello was told:-

...to suggest to her that perhaps because of a number of                    problems that she was having with the girls that it may have                  been better to go back to waitressing.

Agostinello heard Massey’s evidence on this matter and in his evidence in chief referred to a decision at a meeting in late April 1994 to allocate the day shift supervision to a manager, some of the evening shift to another manager Hollows and the rest of the evening shift to Armstrong.  Agostinello alleged that Kennedy left him the task of “giving the news” to the Applicant that she would be reverting to waitressing duties. Given the order in which the witnesses were called it cannot be said as Counsel for the Respondent sought to say that these witnesses corroborated one another.

In giving his evidence of the alleged April manager’s meeting Massey was guarded and evasive.  It took him some time to respond directly and explicitly to the questions put to him.  Agostinello in any event had the opportunity to tailor his evidence accordingly and even then made no mention of any complaint about the Applicant’s performance at the April management meeting; such complaint being a basis for shifting the Applicant from supervisory duties to waitressing duties.  Indeed, his evidence focused on the Respondent’s desire to restructure as the reason for changing the Applicant’s duties.

The failure to call Kennedy to give evidence of the decision made and the instructions given to Agostinello as well as the failure to produce any document or minute recording the restructuring programme and the terms of the decision made, in my view weighs heavily against the Respondent in this matter.  The evidence of the management meetings both in February and in April 1994 at which significant decisions were made on the allocation of duties to staff and the Applicant’s future was at best fragmented and imprecise.

Taking all the abovementioned matters into account I have concluded that the Applicant’s employment was terminated at the initiative of the Respondent on 22 April 1994 and such termination contravened Section 170 DE(1) of the Act in that on that date there was no valid reason connected with the Applicant’s conduct, performance or the Respondent’s operational requirements.

Remedy

Neither party sought reinstatement as a remedy.  One of the matters relied on by the Applicant was the Respondent’s response to her complaint of sexual harassment.  Whilst it was not necessary for the Court to decide whether there was in fact sexual harassment in the workplace the Applicant was and is now reluctant to return to the Respondent’s employment.  I have taken this matter into account as well as the significant period of time which has elapsed since the date of termination in deciding that it would be impracticable for this woman to return to the same workplace as a supervisor.

The Applicant gave evidence that she worked for three to four weeks at a club as a waitress.  This was Platinum Club and that work consisted of two nights per week with pay of $80.00 and $100.00 gross for each week worked.  Despite numerous and regular applications for waitressing employment the Applicant remains unemployed and in receipt of unemployment benefits of approximately $320.00 per fortnight from July 1994.

The Applicant argues that her gross weekly earnings should be treated as averaging some $750.00 per week.  The pay slips tendered in evidence support that conclusion; so that over a six month period her gross earnings would have approximated $19,500.00.

On the evidence I am satisfied that the Applicant would have remained working at the very least as a waitress with the Respondent for no less than the six month period subsequent to the unlawful termination of her employment.  Accordingly, with appropriate deductions for unemployment benefits and income received in that six month period I have calculated compensation payable at $16,700.00.

MINUTES OF ORDERS

THE COURT DECLARES:

1.That in terminating the employment of the Applicant the Respondent contravened Division 3 of Part IVA of the Industrial Relations Act 1988.

AND FURTHER ORDERS:

2.That the Respondent pay the Applicant compensation in the sum of $16,700.00.

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

I certify that this and the preceding thirty (30) pages are a true copy of the reasons for judgment of Judicial Registrar Millane.

Associate:            
Dated:  6 February 1995

Solicitors for the Applicant:      Messrs Ryan Carlisle Thomas
Counsel for the Applicant:        Mr A Watson

Solicitors for the Respondent:   Messrs T J Mulvany & Co.
Counsel for the Respondent:     Mr B Lacy

Date of hearing:  28 & 29 November 1994
Date of judgment:  6 February 1995

C A T C H W O R D S

INDUSTRIAL LAW - Termination of employment - whether Applicant’s employment terminated at the initiative of the Respondent - onus of proof and termination.

Industrial Relations Act 1988 ss. 170 CB, 170EA, 170 EDA(1)(a) & (2),
170 DE(1), 170 DF(1). 170 EE.

CASES:     Siagian v Sanel Pty Ltd (1994) 122 ALR 333.

Skilled Association of Professional Engineers, Scientists and Managers Australia (APESMA) v Skilled Engineering Pty Ltd (1994) 122 ALR 471.

Grout v Gunnedah Shire Council (1994) 125 ALR 355.

Australian Broadcasting Tribunal v Bond & Ors (1990) 170 CLR 321.

SUZANNA STEFANOVSKI -v- WHISKISODA PTY LTD

No. VI 312/94

Before:  Judicial Registrar Millane
Place:  Melbourne
Date:  6 February 1995

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 312/94

B E T W E E N :

SUZANNA STEFANOVSKI
         Applicant

AND

WHISKISODA PTY LTD
Respondent

MINUTES OF ORDERS

Judicial Registrar Millane       6 February 1995

THE COURT DECLARES:

1. That in terminating the employment of the Applicant the Respondent contravened Division 3 of Part IVA of the Industrial Relations Act 1988.

AND FURTHER ORDERS:

2.      That the Respondent pay the Applicant compensation in the sum of $16,700.00.

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