Vermeesch, Eleanor Jane v Harvey World Travel Franchises Pty Ltd
[1997] FCA 950
•1 SEPTEMBER 1997
FEDERAL COURT OF AUSTRALIA
EMPLOYMENT LAW - Termination of employment - Employee personal assistant to managing director of employer - Breakdown in relationship between employee and managing director following unacceptable conduct by him - No comparable position available within employer company - Offer by Board of equivalent position in related company - Offer refused and employee’s employment terminated - Whether termination for a valid reason related to the operational requirements of the employer’s undertaking.
CONTRACT LAW - Implied term of reasonable notice of termination - Whether termination covered by an express term of the contract of employment - Relevance of statutory provision for notice - Length of period constituting reasonable notice of termination - Calculation of damages.
Industrial Relations Act 1988 (now Workplace Relations Act 1996) - ss 170DB, 170DE and 170EE.
ELEANOR JANE VERMEESCH v HARVEY WORLD TRAVEL FRANCHISES PTY LTD
NI.3607 of 1995
JUDGE: WILCOX J
DATE: 1 SEPTEMBER 1997
PLACE: SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NI.3607 of 1995
BETWEEN:
ELEANOR JANE VERMEESCH
APPLICANTAND:
HARVEY WORLD TRAVEL FRANCHISES PTY LTD
RESPONDENTJUDGE:
WILCOX J
DATE OF ORDER:
1 SEPTEMBER 1997
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
In relation to the applicant’s claim under Division 3 of Part VIA of the Industrial Relations Act 1988, the decision of the Judicial Registrar be confirmed and the application for review be dismissed.
In relation to the applicant’s claim for common law damages, judgment be entered in favour of the applicant in the sum of $10,500.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NI.3607 of 1995
BETWEEN:
ELEANOR JANE VERMEESCH
APPLICANTAND:
HARVEY WORLD TRAVEL FRANCHISES PTY LTD
RESPONDENT
JUDGE:
WILCOX J
DATE:
1 SEPTEMBER 1997
PLACE:
SYDNEY
EXTEMPORE REASONS FOR JUDGMENT
WILCOX J: The matter has been discussed with counsel during the course of the morning and I do not propose to set out reasons at any length. I agree entirely with the reasons of the Judicial Registrar.
It seems to me the initial problem that arose between Mr Fleming and the applicant was, substantially at least, the fault of Mr Fleming, not the applicant. He spoke to her, on more than one occasion, in an unacceptable way and it would have been the decent and proper course for him to have made an unequivocal apology for his behaviour. Whether it was necessary for the apology to be put in writing is a matter upon which opinions might differ.
Had Ms Vermeesch's employment been terminated without any attempt to find a replacement position for her, the termination being simply because the relationship between her and Mr Fleming had become unmanageable or unduly strained, then I would certainly have taken the view that the termination was not for a valid reason. However, it is accepted by counsel for the applicant that there was no other position within the respondent company which would have been a suitable alternative position for her. The members of the company’s Board of Directors became involved in the matter, particularly Mr Kieran, the chairman. The Board offered to appoint the applicant as personal assistant to the proposed General Manager of an associated company. This may not have been as much to her taste as the position she already held, but she would have had a job, at the same salary and conditions of employment. It is true she did not know the identity of the proposed General Manager, but this is because the Board took the unusual step of offering her the position in advance of appointing the General Manager, in order to resolve the problem between her and Mr Fleming. I think it was a genuine offer and that she made a mistake in not accepting it. By doing so, she left the Board with no real alternative other than to terminate her employment. In the circumstances, there was a valid reason for the termination. Accordingly, the statutory claim must fail.
When the matter was before the Judicial Registrar, reference was made to an implied common law term but the Judicial Registrar pointed out the applicant’s pleading did not raise such an issue. Consequently, he felt bound to disregard it. Between the date of applying for a review of the Judicial Registrar's decision and today, the applicant has amended her statement of claim so as to raise, quite clearly, a claim of an implied term that the contract would not be terminated except upon reasonable notice. Accordingly, the applicant is entitled to advance that claim in this Court.
In response to it, Mr Gallagher, on behalf of the respondent, points to a document that was tendered in evidence in which certain terms and conditions of employment are set out. The evidence about this document is far from satisfactory but it appears to be the second version of a document created in early 1995 with the intention of regulating the terms and conditions of employment of all the respondent’s employees. At that time, the applicant had been working for the respondent for about seven years, in the position she continued to occupy until the time of termination. It is clear that she did not accept the first version of the document. It was revised and she was less unhappy about the revised version. Apparently, she signed it but did not communicate that fact to the respondent. She did not comply with the requirement, in the document itself, for acceptance of the offer contained in the document to be signified by the signing and return of the document. At a meeting that took place between the applicant and some of the members of the Board on 9 August, the applicant mentioned she had signed the document; but she also made it clear there were aspects about which she was unhappy and she relied upon her original letter of appointment seven years earlier.
Under those circumstances, it is impossible to say there was an acceptance of the offer
made in the document given to her earlier in the year, to vary the extant contract of employment. There is also a question whether any consideration was given, if any acceptance took place. So far as I can see, there was no such consideration, but it is not necessary to go into that matter because there was no acceptance. The result is that the issue of termination of the employment was not covered by any express agreement. I think there was an implied term that termination should be on the basis of reasonable notice.
It is always a matter of judgment as to what constitutes reasonable notice. Mr de Meyrick, on behalf of the applicant, suggested 12 months notice was required. I think that proposition is rather fanciful. On the other hand, I do not agree with the submission of Mr Gallagher that the five weeks provided by s 170DB of the Industrial Relations Act as a statutory period of notice should be treated as reasonable notice in this case. The statutory formula takes no account of the circumstances of individual employees, other than the duration of the employment and that the employee is over the age of 45 years. It does not differentiate between a person working in a highly specialised and responsible position, to which that person may have moved at considerable expense and inconvenience to himself or herself and family members, and a person who is in a position where it is relatively easy to obtain alternative employment. One has to look at the circumstances of the case.
The applicant in this case was employed in a senior position within the respondent organisation. She was personal assistant to the managing director. She had secretarial skills and, apparently, a considerable knowledge of the travel industry. On the other hand, she was in a position where it would probably have been relatively easy to obtain other employment. In saying that, I do not discount the significance of termination of employment or the difficulty people often have in obtaining alternative employment, particularly under present conditions. But the applicant lived and was employed in a large city. Her skills were marketable amongst a wide range of employers. I do not think she was in such a senior or specialised position that it can properly be said reasonable notice would exceed three months. That is the appropriate time to adopt.
Translating that time into figures is difficult because there were various items additional to salary, the evidence in relation to which is not very satisfactory. To a large extent, I have to make an assessment, which perhaps lies somewhere between the figures that have been put. It is not worthwhile the parties spending the time and cost to work out a precise figure.
Three months equals thirteen weeks. The applicant was paid for five weeks in lieu of notice, that being the statutory amount. This leaves a shortfall of eight weeks or 40 days. Translated into her salary of $134.62 per day, that amounts to $5,384.86. She had, in previous years, received a bonus. There is a suggestion that the bonus she received in 1994 was higher than might normally be expected. There has also been tendered, this morning, the minutes of a Board meeting held on 13 June 1995 where proposed bonuses were set out; they did not include one for the applicant. However, I note this was at a time when the problems between herself and the managing director had already arisen. I think the fair thing is to assume there would have been a bonus of $1,000 in September or October of 1995; that is to say, within three months of the termination. In addition, it seems clear that, had the applicant remained in employment during October, she would have been able to retain shares in a work-related company, which shares then paid $669.75 in dividends. She lost this benefit because she had to suffer the redemption of the shares when she left the job.
In addition to this, there are certain annual items. One of them is the value of concessional travel. There is a surprising difference between the applicant and the financial controller of the respondent as to the value of the travel she took during the course of her employment. The applicant put the concession as being worth $10,163 per annum whereas the financial controller brought in a figure of only $2,058 per annum. It is impossible to know where the truth lies, but I have a considerable doubt whether anybody in the applicant's position would have been so self-denying as to only take $2,000-odd worth of concessional travel when it was so readily available to her. On the other hand, there may be a problem about adopting her figure. I propose to take a compromise figure of $5,000. I add $1,752 per annum for loss of superannuation benefits. Those two annual items come to $6,752. I take a quarter of that figure, being for the three-month period of a proper period of notice - that is, $1,688. I add that to the figures previously mentioned. The result comes to $8,742.61. I think it reasonable to allow the applicant pre-judgment interest on that sum at the rate of 10 per cent per annum for two years - i.e., $1,748.52. That comes to a grand total of $10,491.13. I propose to round off that figure at $10,500 and enter judgment for the applicant on her common law claim in that amount.
In relation to costs, the claim under the Industrial Relations Act is covered by s 347 of that Act. There can be no order for costs of that claim, in the circumstances of this case, because of that section. In respect of the common law claim, there can be an order for costs in the applicant's favour in respect of the proceeding in this Court. However, I do not think it would be a proper exercise of discretion to make such an order. I bear in mind that she came here pursuing a statutory claim which I have held rightly failed. It would seem unfair to the respondent to allow her to have the benefit of a costs order on what was really put forward as an ancillary claim and did not add significantly to the length of the hearing. Accordingly, I make two orders:
In relation to the applicant's claim under Division 3 of Part VIA of the Industrial Relations Act, I confirm the decision of the Judicial Registrar and dismiss the application for review.
In relation to the applicant's claim for common law damages, I enter judgment in her favour in the sum of $10,500.
I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox.
Associate:
Dated: 1 September 1997
Counsel for the Applicant: J de Meyrick Solicitor for the Applicant: Lincoln Smith & Co Counsel for the Respondent: J Gallagher SC Solicitor for the Respondent: White & Associates Date of Hearing: 1 September 1997 Date of Judgment: 1 September 1997
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