Takako v Nina Ricci Perfumes
[1997] IRCA 110
•09 April 1997
DECISION NO:110/97
CATCHWORDS
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - Some important matters which, in part, were reasons for the termination of the applicant’s employment were never put to her as factors in the (possible) decision to terminate her employment - Section 170DC of the Workplace Relations Act therefore not complied with - COMPENSATION - DUTY TO MITIGATE -An employee whose employment has been unlawfully terminated has a duty to act reasonably to mitigate his or her loss.
Workplace Relations Act, 1996; section 170DC
Bechara v Gregory Harrison Healey & Co (1996) 65 IR 382
Browne v Dunn (1893) 6 R 67
Nicolson v Heaven and Earth Gallery Pty Limited (1994) 1 IRCR 199
Perrin v Des Taylor Pty Limited (1995) 58 IR 254
TAKAKO v NINA RICCI PERFUMES
NI 1227 of 1996
Before: PATCH JR
Place: SYDNEY
Date/s of hearing: 4 OCTOBER, 1 NOVEMBER 1996
Date of judgment: 9 APRIL 1997
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NI 1227 of 1996
BETWEEN:
LINDREA TAKAKO
Applicant
AND
NINA RICCI PERFUMES
Respondent
BEFORE: PATCH JR
PLACE: SYDNEY
DATE: 9 APRIL 1997
MINUTES OF ORDERS
THE COURT ORDERS THAT:
As compensation for the unlawful termination of her employment, the respondent is to pay the applicant, within 21 days of today, the sum of $5,600.
Any sum paid by the respondent to the Commissioner of Taxation in respect of the sum in order 1 is to be regarded as having been paid in pro tanto satisfaction of the judgment debt.
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
NEW SOUTH WALES DISTRICT REGISTRY
NI 1227 of 1996
BETWEEN:
LINDREA TAKAKO
Applicant
AND
NINA RICCI PERFUMES
Respondent
BEFORE: PATCH JR
PLACE: SYDNEY
DATE: 9 APRIL 1997
REASONS FOR DECISION
The applicant claims that the termination of her employment was unlawful. In her application, she sought reinstatement, or compensation.
BACKGROUND FACTS
The applicant started working for the respondent in early 1989. Her employment was terminated on 22 December 1996. The applicant’s job involved her visiting stores in Australia, New Zealand and the Pacific region at which the respondent’s products (principally, perhaps entirely, perfumes) were sold. Amongst other things she was responsible for training the sales staff at those stores, and ensuring the company’s products were properly displayed in order to maximise sales.
In February 1995 she was given a job description (exhibit 3). A photocopy of that job description is annexed to this judgment.
The applicant’s immediate supervisor was Danielle Pearce. It was Ms Pearce who had given the applicant the job description.
WAS THERE A VALID REASON FOR THE TERMINATION OF THE APPLICANT’S EMPLOYMENT?
Paragraph 12 of the applicant’s job description reads as follows:
12 “Provide a summary of beauty advisers sales reports at the end of each month, highlighting trouble spots. The beauty advisers are to be then addressed and consulted as to the results and provide feedback as to why such results occurred. Copy of summary to be given to Danielle Pearce.”
In her evidence, Ms Pearce said that she had, consistently throughout 1995 and up to the termination of the applicant’s employment, requested the applicant to provide those summaries of the beauty advisers’ sales reports. Ms Pearce gave evidence that she and the applicant had regular meetings, and that it was at those meetings that the applicant was told by Ms Pearce to provide those sales reports.
The applicant initially gave evidence that Ms Pearce, during that period, did not speak to her about doing those reports.
However, later on in her testimony, she contradicted herself, and agreed that Ms Pearce had asked her for the monthly written reports. At page 73 of the transcript she is recorded as agreeing with the proposition that on almost all occasions that she met with Ms Pearce in 1995, Ms Pearce asked for the summaries. On page 74 of the transcript, she repeated that Ms Pearce had asked her for those summaries, but couldn’t remember how often.
In view of the internal contradictions within the applicant’s evidence, and in view of the fact that no such contradictions occurred in respect of Ms Pearce’s evidence, I accept Ms Pearce’s version of the events on this aspect of the matter.
Counsel for the applicant submitted that the fact that no such request was ever put in writing by Ms Pearce indicated that it was not important from her point of view that the applicant comply with paragraph 12 of her job description.
I do not agree. In my view, the fact that Ms Pearce repeatedly asked the applicant to comply with paragraph 12, at all (or nearly all) of the regular meetings between them indicates Ms Pearce did regard it as important. A reasonable person in the position of the applicant should have reached that conclusion.
In respect of the applicant’s failure to comply with paragraph 12, it was not simply the fact that she failed to comply with the paragraph (which was not disputed by the applicant) but rather the failure to do so after repeated requests by Ms Pearce which was a reason for the termination of the applicant’s employment.
A failure to carry out part of a job description might, or might not, in any particular case, be sufficiently serious to be a valid reason for the termination of employment - however, the fact that, in this case, the applicant’s failure to provide the written summaries was in the face of repeated requests from her superior that she do so, was sufficiently serious to amount to a valid reason for the termination of her employment.
Toward the end of the case, Ms Pearce gave evidence that, in addition to the applicant’s failure to carry out the requirements of paragraph 12 of her job description, there were three other parts of the job description that the applicant had not carried out. These were her failure to provide training to the “beauty advisors” in the stores (paragraph 2 of the job description), to ensure that all the counters were clean from dust and makeup marks (paragraph 6 of the job description), and to provide sales targets and incentives for the beauty advisers (paragraph 8 of the job description).
Ms Pearce gave evidence that all three of those other parts of the applicant’s job description were “very important”, and that the applicant’s failure to carry them out had played a role in the decision to terminate the applicant’s employment.
The applicant was never cross-examined in respect of those three other matters. Although I accept Ms Pearce’s evidence that all three of those matters were reasons for the termination of the applicant’s employment, in view of the fact that the applicant was never cross-examined about them, I do not accept that the respondent has proven that the applicant failed to carry out those particular parts of her job description. See Browne v Dunn (1893) 6 R 67.
WAS THE APPLICANT’S EMPLOYMENT TERMINATED IN BREACH OF S.170DC OF THE ACT?
Section 170DC of the Act reads as follows:
EMPLOYEE TO HAVE OPPORTUNITY TO RESPOND TO ALLEGATIONS.
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 give 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.
In Perrin v Des Taylor Pty Limited (1995) 58 IR 254, at 256, his Honour, Moore J, discussed section 170DC of the Act. He said:
The purpose (of section 170DC) is at least twofold. It is to give the employee the opportunity to demonstrate that the allegations have no foundation in fact or they should not be viewed as reflecting on the employee's capacity.....
A second purpose of section 170DC is that an employee with whom an allegation has been raised may be able to persuade the employer, that while the allegation is of substance, there are factors that should persuade the employer not to terminate the employment. There may be extenuating personal circumstances or they may involve undertakings about future conduct.
His Honour, Wilcox CJ, considered section 170DC in Nicolson v Heaven and Earth Gallery Pty Limited (1994) 1 IRCR 199. At page 209 his Honour said this:
The paragraph does not require any particular formality. But this does not mean that it is unimportant or capable of perfunctory satisfaction. Section 170DC carries into Australian labour law a fundamental component of the concept know to lawyers as "natural justice", or, more recently, "procedural fairness". The relevant principle is that a person should not exercise legal power over another, to that person's disadvantage and for a reason personal to him or her, without first affording the affected person an opportunity to present a case. The principle is well established in public administrative law. It was accepted into international labour law when Art 7 was inserted in the Termination of Employment Convention. Section 170DC is directly modelled on Art 7. The principle is, I believe, well understood in the community. It represents part of what Australians call "a fair go". In the context of section 170DC, it is not to be treated lightly. The employee is to be given the opportunity to defend himself or herself "against the allegations made”; that is, the particular allegations of misconduct or poor performance that are putting the employee's job at risk. Section 170DC(a) is not satisfied by a mere exhortation to improve.”
Ms Pearce gave evidence that she had made it clear to the applicant, in one way or another, that, unless the applicant provided the summaries as required by paragraph 12 of the job description, her employment was in jeopardy.
The applicant denied that.
Once again, because of the internal inconsistencies within the applicant’s evidence, I accept Ms Pearce’s version of the facts.
However, Ms Pearce conceded that nothing was ever said to the applicant her failure to provide training to the “beauty advisors” in the stores (paragraph 2 of the job description), to ensure that all the counters were clean from dust and makeup marks (paragraph 6 of the job description), and to provide sales targets and incentives for the beauty advisers (paragraph 8 of the job description) were putting her job in jeopardy.
Counsel for the respondent, in his submissions at the end of the case, conceded (quite properly in my view) that this meant that the termination of the applicant’s employment did not comply with section 170DC of the Act.
It follows that the termination of the applicant’s employment was unlawful.
REMEDY
Reinstatement
In my view, it is clear that to order the reinstatement of the applicant would be impracticable.
The reasons for this are as follows:
The termination of the applicant’s employment was, at least in part, for a valid reason.
The working relationship between the applicant and Ms Pearce has broken down and Ms Pearce no longer has confidence in the applicant - this is soundly based, at least in significant parts.
In my view, to order the reinstatement of the applicant would be likely to cause serious disharmony within the workplace.
Compensation
Duty to mitigate
Counsel for the applicant submits that there is no duty, in cases of unlawful termination of employment under the Act, for dismissed employees to mitigate their loss. He submits that there is merely a duty “not to exacerbate” the loss.
It is difficult to understand what is meant by that submission. However, in my view, there is a duty placed upon employees whose employment is terminated unlawfully, to act reasonably to mitigate the loss suffered by them. This is because the Court is empowered to order such compensation as, in the opinion of the Court, is “appropriate” in circumstances of the case. In my view, it would not be appropriate to permit a person whose employment has been terminated, albeit unlawfully, to simply sit back and do nothing, and not try and obtain alternative employment, in the belief that the Court will, nonetheless, order compensation up to the maximum amount permitted by the Act.
The authorities support the conclusion that where compensation is sought as a remedy, there is a duty on the dismissed employee to mitigate the loss suffered. See Bechara v Gregory Harrison Healey & Co (1996) 65 IR 382, a decision of Justice Madgwick, which was upheld by the Full Court on appeal.
The applicant made few attempts to obtain alternative employment. There was one job for which she applied with Alders Duty Free in Pitt Street in February 1996. She was offered a position there, but refused it because it was in the duty free industry and she would “have to see the people from Nina Ricci so I really don’t want to see the people at that time.” (sic)
In my view, the decision of the applicant not to take that job in order to avoid regular contact with what would have been her replacement and, possibly Ms Pearce, was not unreasonable. She was, at the time, quite stressed by the termination of her employment.
However, shortly after that the applicant went to Japan for 2 weeks. After that there is no evidence of any application for employment for another job by the applicant until May.
There was some evidence to the effect that the applicant was ill, but that evidence did not anywhere near to establishing that the applicant was so ill that she was unable to either look for work or to do work.
In my opinion, the evidence establishes that, after the applicant’s refusal of the job with Alders Duty Free in February, and her return from Japan, she failed to take reasonable steps to mitigate her loss.
The quantum of compensation
The applicant remained unemployed for a long time after the termination of her employment. Nonetheless, in view of her failure to mitigate her loss, the appropriate amount to order by way of compensation should be limited to a sum equal to the value of 2 months remuneration, as at the time of the termination of the applicant’s employment.
At the time of the termination of her employment, the applicant was earning $2,800 (gross) per month.
ORDERS
The orders that the Court makes are as follows:
As compensation for the unlawful termination of her employment, the respondent is to pay the applicant, within 21 days of today, the sum of $5,600.
Any sum paid by the respondent to the Commissioner of Taxation in respect of the sum in order 1 is to be regarded as having been paid in pro tanto satisfaction of the judgment debt.
I certify that this and the preceding 10 pages
are a true copy of the reasons for decision of
Judicial Registrar Patch
Associate: Debra Scott
Dated: 9 April 1997
APPEARANCES
Solicitors for the applicant: Andrew Fegent & Co Counsel appearing for the respondent: R. Johnson Solicitors for the respondent: Burt & Allen Dates of hearing: 4 October, 1 November 1996
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