AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Workplace Relations Act 1996
s.170CE application for relief in respect of termination of employment
Petra Marquis
and
Fire Protection Professionals NT Pty Ltd
(U2002/5791)
COMMISSIONER LAWSON |
SYDNEY, 8 MAY 2003 |
Termination of employment - Arbitration
DECISION
INTRODUCTION
[1] This matter concerns the determination of an application filed pursuant to s.170CE of the Workplace Relations Act 1996 (the Act) by Ms P. Marquis (the Applicant) for relief in regard to the termination of her employment by Fire Protection Professional NT Pty Ltd (the Respondent) on 17 October 2002. The arbitration has an extensive history commencing with a decision taken by the Respondent's directors Mr C and Mrs S. Oldroyd, in October 2002 to unilaterally change the Applicant's employment contract from that of a full-time office assistant to casual employment.
[2] When the Applicant was first advised of her changed employment circumstances she was on a workers compensation related return-to-work programme. That programme was due to conclude with the Applicant's return to full-time duties on 17 October 2002. As a consequence of the decision to change the Applicant's employment status the Australian Municipal, Administrative, Clerical and Services Union (the ASU) filed a s.99 dispute notice on 16 October 2002 seeking to have the matter dealt with by the Commission as an industrial dispute (C2002/3601). The following day - 17 October 2002 - Commission Hodder listed the dispute for hearing in Darwin for 30 October. When the Respondent received the Commission's notice of listing Mr Oldroyd filed a 24 page submission related to the proposed hearing. The submission included exchanges of correspondence between the ASU and the Respondent; it raised jurisdictional issues and challenged alleged facts in relation to the change to the Applicant's employment status; and it included a request for an adjournment of the listed hearing.
[3] Coinciding with the filing of the dispute notification and receipt by the Respondent of the Commission's notice of listing the Applicant's employment was allegedly terminated. In correspondence from the ASU to Commissioner Hodder dated 18 October the ASU alleged that the Respondent had fraudulently backdated certain correspondence said to have been forwarded to the Applicant in relation to her `termination'. The ASU sought to summons the directors of the Respondent. On 22 October 2002, having considered s.170HB of the Act, the ASU withdrew the s.99 dispute notification so as to facilitate pursuit of the substantive s.170CE application.
[4] In its Notice of Employer's Appearance (Form R21) the Respondent contended that the Applicant's full-time position was to change to casual employment and that an offer to that effect had been put to the Applicant and refused by her on 14 October 2002. The proposed restructure of office positions was to have taken place on 17 October 2002 coinciding with the Applicant's return to full-time duties.
[5] The substantive matter was first listed for conciliation by Deputy Industrial Registrar McHattie on 20 November 2002. The listing was cancelled in light of the jurisdictional objections raised by the Respondent. The matter was re-listed for hearing of the objections by Commissioner Roberts for 27 November 2002. On 25 November 2002 the Applicant filed extensive submissions and attachments in relation to the jurisdictional objections. At the Respondent's request that hearing was cancelled. It was subsequently listed for hearing by DP McCarthy for 13 December 2002. Directions were issued by DP McCarthy on 5 December 2002 which required the Respondent to file and serve submissions and supporting documents by 11 December 2002. That direction was complied with. In a decision and order [Print PR926070; PR926118] dated 23 December 2002, DP McCarthy dismissed the Respondent's two jurisdiction objections concerning (i) the claimed probationary employment status of the Applicant, and (ii) the claimed casual nature of the Applicant's employment. Furthermore DP McCarthy found that the Applicant's termination on 17 October 2002 was at the initiative of the employer. The substantive application was thus not excluded from jurisdiction of the Commission. The file was referred for conciliation pursuant to s.170CE.
[6] On 29 January 2003 the Respondent notified the Darwin Registry that it would be represented in future proceedings by Mr Jozef Kalmar.
[7] On 3 February 2003 Deputy Industrial Registrar Robson dealt with the matter in conciliation. The matter did not settle. On 3 February 2003 the Applicant filed a request for a second conciliation on the ground ".... that there is a better than 50% chance of th(e) matter being settled....". A further conciliation conference was listed before Commissioner Eames for 13 February 2003 but deferred at the Applicant's request. It was relisted for 20 February 2003 and again deferred due to the unavailability of the ASU. It was next listed for a video conference conciliation before Commissioner Eames for 11 March 2003. By request on 4 March 2003 the ASU made application for a face-to-face conciliation conference in lieu of the listed video conference. The matter was then relisted for conciliation by SDP Watson for 4 March 2003. Mr Kalmar (for the Respondent) failed to attend the listed conciliation. Both Mr Kalmar and the Respondent were then informed that the matter would be relisted for the following day.
[8] Immediately following the unsuccessful conference on 4 March 2003 the ASU wrote to the Respondent and raised the implications for the Respondent should it not attend the rescheduled conference. The ASU's correspondence also included a proposal that the Respondent make a lump sum redundancy payment to the Applicant in full settlement. No reply was received.
[9] On 5 March 2003, the Respondent again failed to attend the relisted conciliation conference. No explanation was given by the directors of the Respondent, nor by Mr Kalmar. SDP Watson then issued a relevant s.170CF certificate on 5 March 2003. The Applicant immediately filed a s.170CFA notice to proceed to arbitration.
[10] The matter was next listed for arbitration in Darwin for 2 April 2003. Commission directions were issued on 14 March 2003 which required the parties to file and serve outline submissions, witness statements and other documents to be relied upon by 21 March 2003, and to file and serve reply submissions and other materials by 26 March 2003. The Applicant complied with the directions by filing extensive document on 15 March 2003, and further documents on 27 March 2003. Despite numerous telephone contacts between Commission officers and the directors of the Respondent and with Mr Kalmar the Respondent totally failed to comply with the directions.
Representation of the Respondent at the Hearing on 2 April 2003
[11] The business relationship between the Respondent and Mr Kalmar is not known, nevertheless Mr Kalmar is known to the Commission (as presently constituted) as an employer in his own right. Mr Kalmar is currently a respondent employer in two separate applications concerning termination of employment (U2002/2744 and 2793). Those matters were listed for arbitration in Darwin on successive days. On 31 March, Mr Kalmar attended the listed arbitration hearing for matter U2002/2744:it was adjourned after a short time. On 1 April 2003 Mr Kalmar failed to attend the listed arbitration hearing for matter U2002/2793 after having provided an unacceptable explanation for his non-attendance some 40 minutes prior to the hearing commencing, and after having stated on 31 March his intention to be legally represented in both matters. Mr Kalmar's non-attendance in that matter was noted and the consequences arising from it were dealt with in the Commission's decision in matter U2002/2793 [Print PR930449].
[12] In the current matter Mr Kalmar again failed to attend the listed arbitration hearing on 2 April 2003, after having notified the Registrar via a 3rd party "Chris" some 55 minutes before the commencement of the hearing of his inability to attend. "Chris" was advised that it was in the interests of the Respondent that it be represented. The Registrar attempted to contact the principals of the Respondent: both Mr and Mrs Oldroyd were unavailable. The unidentified person who answered the telephone was given a return telephone number and was reminded of the importance of attendance at the proceeding. The unidentified person referred the Registrar to Mr Kalmar: the unidentified person was unaware that Mr Kalmar had earlier advised his non-attendance. The hearing thus proceeded in the absence of representation by the Respondent.
Representation of the Applicant at the Hearing on 2 April 2003
[13] At the hearing the Applicant was represented by Mr L. Matarazzo (of the ASU). It was Mr Matarazzo's contention that the Applicant was terminated approximately one hour after the Respondent received the Commission's notice of listing concerning the s.99 dispute notification in matter C2002/3601. That dispute concerned:
· the unilateral decision to change the Applicant's employment status without her consent or consultation;
· a number of unresolved matters in regard to the Applicant's employment raised by ASU in correspondence to the Respondent dated 4 and 10 October 2002;
· the Respondent's alleged refusal to open the said ASU correspondence, and to otherwise deal with the issues;
· the harsh unjust and unreasonable action by the Respondent in unilaterally attempting to extend the Applicant's probationary period.
The dispute notification had also contented that the Applicant had been unfairly discriminated against because of her "trade union membership and trade union activities".
EVIDENCE FOR THE APPLICANT AT THE HARING ON 2 APRIL 2003
Verbal evidence was given by the Applicant (only). Surprisingly, Mr Mattarazzo also sought to tender the entire Commission file in matter U2002/3601 as evidence in the current matter, as well as the Respondent's detailed submission and documented material filed for the jurisdictional hearing. That material included the complete documentation provided to Commissioner Hodder on 17 October 2002, and to DP McCarthy by covering fax transmission letter on 10 December 2002 with 23 pages of attachments. In so doing Mr Mattarazzo in effect provided the Commission with the Respondent's arguments in defence of its decision to terminate the Applicant's employment. I have given appropriate weight to that material particularly where alleged `facts' are contradictory.
[14] Relevant facts related to the substantive application deduced from the evidence, from the supporting documentation and from Mr Matarazzo's submissions are:
· the Applicant was employed initially as a casual `classification one clerical assistant' on 27 March 2002. She was paid over the award rate of pay and was paid full District Allowance;
· the Applicant commenced full-time employment - and a 3 month probationary period - on 4 July 2002;
· due to extended absences from work arising from two workers compensation claims and sick leave the Respondent attempted to unilaterally extend the Applicant's probationary period from 3 October 2002 to 3 January 2003;
· the Applicant claimed to have been subjected to a number of ill-defined incidents of bullying at work arising from oppressive and aggressive behaviour by Mr Oldroyd;
· the Applicant conceded that she suffered personal pressures from outside the workplace;
· on 2 October 2002 the Respondent notified the Applicant in writing of the decision to extend her probationary period of employment (Ex. M1). The tone of the letter was generally complementary towards the Applicant;
· on 4 October 2002 the ASU wrote to the Respondent on behalf of the Applicant raising a number of claims of alleged underpayment of wages, and challenging the change made to the Applicant's probationary period. The union also alleged discrimination on the grounds of the Applicant's union membership and absences from work due to illness and injury;
· the Respondent failed to reply to the letter and to the claims therein. The ASU re-sent the letter by registered mail on 10 October evoking a response on 15 October 2002;
· the Applicant was supported financially, materially and otherwise by the Respondent during her workers compensation absence in August 2002 and during her progressive return-to-work programme;
· on 9 October 2002 a proposed company restructure was discussed with the Applicant. The Applicant was offered and refused a position of casual clerical assistant;
· on 14 October 2002 the Applicant informed the Respondent that she would seek alternative employment, and that she would be moving her residential address;
· the Respondent challenged the accuracy of the ASU's record of events and material in support of the Applicant's `claims';
· on 11 October 2002 the Applicant was medically cleared to return to work on a full-time basis from 17 October 2002. She was terminated on that day at the initiative of the employer;
· statutory declarations by three fellow employees of the Respondent - filed with the Respondent's documents in relation to the jurisdictional proceedings (Attachments 9, 10 and 11)- detailed various incidents of uninvited and improper sexually-implicit conduct by the Applicant towards the deponents. (They were not available for examination in these proceedings);
· following her termination the Application mitigated her loss by obtaining better paid employment from mid - November 2002. The Applicant did not seek reinstatement as a remedy to her substantive application.
SUBMISSIONS FOR THE APPLICANT
[15] Without repeating the detailed submissions put by Mr Matarazzo to DP McCarthy which were dealt with by the Deputy President in his decision of 23 December 2002, the relevant submissions in relation to the merit issues of the substantive application were brief. It was submitted that in contrast to the lawful nature of the Applicant's workers compensation absences the Respondent's decision to unilaterally alter the Applicant's employment status from full-time to casual without consent or consultation was unlawful. Similarly, the termination was not a bona-fide redundancy as the work previously undertaken by the Applicant continued to be performed by a junior casual office assistant
[16] Mr Matarazzo submitted that the Respondent's conduct was designed to construct a circumstance from which it was `easier' for the Respondent to terminate the Applicant's services. The Respondent had claimed to have acted in accordance with advice from the Department of Employment and Workplace Relations (DEWR) (Ex. M1) - a letter to the Applicant dated 2 October 2002. The letter was evidence of the employer's intent to unilaterally extend the Applicant's probationary period. The ASU challenged that decision, and in subsequent correspondence failed to resolve the emerging dispute.
[17] Mr Matarazzo challenged the validity of the Respondent's memo to all employees dated 17 October 2002 (Ex. M4) which purported to notify the company restructure affecting 3 employees. It purported to record the Applicant's refusal of an offer to become a `casual clerical assistant'. It was Mr Matarazzo's submission that at no time had the Applicant refused an offer of alternative employment: she had simply challenged the Respondent's right to unilaterally change her employment status.
[18] On 20 November 2002 - a month after the Applicant's termination - the Respondent wrote to the Applicant and accused her of pursuing a `frivolous and vexatious application' (Ex. M6), and putting her on notice of the Respondent's intent to seek costs for the (then) listed proceedings before Commissioner Roberts. The Respondent stated such costs would include "all legal representative fees and administrative and labour costs for all company time in responding to this ridiculous claim". The letter then purported to substantiate the Applicant's `redundancy'. Mr Matarazzo reiterated that at no time had the Applicant resigned.
[19] It was Mr Matarazzo's submission that there was no valid reason to terminate the Applicant's employment (s.170CG3(a)); that there was no operational requirement of the Respondent's business which warranted the termination and that no valid reason existed related to the Applicant's conduct or performance. Having regard to s.170CG3(b), it was Mr Matarazzo's submission that the employer's conduct was unfair in that the Applicant was not properly notified of a reason for her termination.
[20] Mr Matarazzo next contended that the Applicant was not given a proper opportunity to respond to the reason for termination (s.170CG3(c)), but the ASU had responded by filing the s.99 dispute notification - subsequently withdrawn because of the effect of s.170HB.
[21] Under s.170CG3(da) Mr Matarazzo submitted that the size of the employer's undertaking was not relevant and should not be taken into account because the termination was not a bona fide redundancy.
[22] Under s.170CG3(db), Mr Matarazzo submitted that the Respondent had both taken advice from DEWR and had followed that advice in deciding to change the nature of the Applicant's employment status. The Commission was asked to consider that action when assessing whether the Respondent's conduct constituted a wilful termination of the Applicant's employment.
[23] While drawing the Commission's attention to the Applicant's efforts to mitigate her losses, Mr Matarazzo sought a lump sum remedy which he quantified at $4000.
LEGISLATIVE FRAMEWORK
[24] Pursuant to s.170CG(3) of the Act, the Commission must have regard to the following factors when determining whether a termination was harsh, unjust or unreasonable:
"(3) In determining, for the purposes of the arbitration, whether a termination was harsh, unjust or unreasonable, the Commission must have regard to:
(a) whether there was a valid reason for the termination related to the capacity or conduct of the employee or to the operational requirements of the employer's undertaking, establishment or service; and
(b) whether the employee was notified of that reason; and
(c) whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee; and
(d) if the termination related to unsatisfactory performance by the employee-whether the employee had been warned about that unsatisfactory performance before the termination; and
(da) the degree to which the size of the employer's undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination; and
(db) the degree to which the absence of dedicated human resource management specialists or expertise in the undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination; and
(e) any other matters that the Commission considers relevant"
[25] In determining whether a particular termination is harsh, unjust or unreasonable pursuant to s.170CG(3) consideration can be given to whether the penalty of termination is excessive or inappropriate. See Byrne (and Frew) v Australian Airlines Limited (1995) 185 CLR 410 per McHugh and Gummow JJ at 465:
"It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted."
[26] If the termination is found to be harsh, unjust or unreasonable, s.170CH deals with remedies. It is partially extracted below:
"(1) Subject to this section, the Commission may, on completion of the arbitration, make an order that provides for a remedy of a kind referred to in subsection (3), (4) or (6) if it has determined that the termination was harsh, unjust or unreasonable.
(2) The Commission must not make an order under subsection (1) unless the Commission is satisfied, having regard to all the circumstances of the case including:
(a) the effect of the order on the viability of the employer's undertaking, establishment or service; and
(b) the length of the employee's service with the employer; and
(c) the remuneration that the employee would have received, or would have been likely to receive, if the employee's employment had not been terminated; and
(d) the efforts of the employee (if any) to mitigate the loss suffered by the employee as a result of the termination; and
(e) any other matter that the Commission considers relevant;
that the remedy ordered is appropriate.
(3) If the Commission considers it appropriate, the Commission may make an order requiring the employer to reinstate the employee by:
(a) reappointing the employee to the position in which the employee was employed immediately before the termination.
(b) appointing the employee to another position on terms and conditions no less favorable than those on which the employee was employed immediately before the termination.
...
(6) If the Commission thinks that the reinstatement of the employee is inappropriate, the Commission may, if the Commission considers it appropriate in all the circumstances of the case, make an order requiring the employer to pay the employee an amount ordered by the Commission in lieu of reinstatement.
(7) Subject to subsection (8), in determining an amount for the purposes of an order under subsection (6), the Commission must have regard to all the circumstances of the case including:
(a) the effect of the order on the viability of the employer's undertaking, establishment or service; and
(b) the length of the employee's service with the employer; and
(c) the remuneration that the employee would have received, or would have been likely to receive, if the employee's employment had not been terminated; and
(d) the efforts of the employee (if any) to mitigate the loss suffered by the employee as a result of the termination; and
(e) any other matter that the Commission considers relevant."
CONSIDERATIONS AND CONCLUSIONS
[27] Having regard to the decision of DP McCarthy that the Applicant's termination was at the initiative of the employer, it is left to the Commission as presently constituted to consider the validity of the reason given, and whether termination in the circumstances was harsh unjust and unreasonable.
[28] There is clear evidence that the directors of the Respondent took a unilateral decision to restructure their business operations. The rationale for doing so however is not obvious from the materials before me. There is some evidence that consultation did occur with the Applicant in early October. The position with regard to consultation with other employees is not known. The memo to employees - coincidentally dated 17 October 2002 (Ex. M4) - refers to the immediate implementation of the restructure and provides details of the changed status for three employees including the Applicant. That the Applicant did not accept a proposal to change her employment status does not detract from the prima facie position that the termination was due to the operational requirement of the employer's undertaking: s.170CG3(a). Unfortunately that prima facie position could not be tested during the proceedings. In order to test the validity of the reasons the Commission is left to consider the sequence of events leading to the day of termination:
· the Applicant had been absent on workers compensation and was progressively increasing her hours at work in accordance with an approved return-to-work programme, and was due to return to full-time work on 17 October 2002;
· the Applicant and her union had challenged the Respondent's unilateral attempt to extend her probationary period;
· Mrs Oldroyd, as Director/Secretary/Office Manager, had announced her intention to return to full-time work thus reducing the Respondent's need for a full-time office assistant;
· the ASU was pro-active in pursuing what it regarded as the Applicant's `rights';
· the relationship between the Applicant and the Respondent deteriorated rapidly. The Respondent refused to engage in discussion with the ASU over the Applicant's circumstances. The Respondent was forced to respond to the ASU correspondence when delivered by registered mail and then did so in a forthright manner on 15 October 2002;
· the ASU filed its s.99 dispute notification on 16 October 2002.
[29] When those events are viewed together with the evidence given by Mrs Oldroyd to DP McCarthy on 13 December 2002:
"So we decided that we would finish her up on 17 October and after she came in from her lunch break she said that she was going home as she was ill.
Until I said - look we had a busy morning I hadn't had a chance to talk to her yet, and I said "well, if you're going to go now we might as well finish you now and give you your final pay" which I had worked out the night before from her award." (Transcript 13 December 2002; PN236 -237).
it is my view that the Respondent acted in an opportunistic manner to terminate the Applicant's employment. That termination in those circumstances was both hash and unreasonable. I am unable to conclude that the reason was `valid' and related to the `operational requirements of the employer's undertaking' as required in s.170CG3(a).
[30] While the Respondent acted in an opportunistic way, I am satisfied that the Respondent notified the Applicant of the reason for her termination in a manner sufficient enough to satisfy the provisions of s.170CG3(b) both during the period leading up to the date of termination and at the time of her termination.
[31] I do not need to consider subsections 170CG3(d), (da) and (db) in this matter as they are not directly relevant to the manner in which the termination was effected.
[32] The Respondent's reliance upon the advice obtained from DEWR and the Respondent's subsequent intransigence in dealing with both the Applicant's protests and the ASU's challenges, are matters which in my view fall into the category of "any other matters which the Commission considers relevant" s.170CG3(e).
[33] More importantly in relation to s.170CG3(e) the Respondent's failure to participate in the arbitration in any way - despite the normal and extra ordinary efforts made by Commission officers to persuade the Respondent's directors and their nominated representative Mr Kalmar of the necessity of participation - constituted in my view a contempt of Commission proceedings rarely experienced in proceedings of this nature.
[34] Having considered all of the evidence, relevant documentation and submissions, I find that the termination of the Applicant's employment was harsh unjust and unreasonable.
Remedy
[35] Having so decided it is my view that the Applicant is entitled to a remedy pursuant to s,170CH of the Act. Subsection 170CH(2) prevents the Commission from making an order without first considering a number of criteria. From the material before me I am unable to assess the effect of any order on the viability of the employer's undertaking apart from the apparent continuity of the Respondent's business, and from contentious in that regard made by Mr Matarazzo (PN 307 -316).
[36] The Applicant had 71/2 months service with the Respondent, and had an expectation of continuing employment albeit as casual employee for an undefined number of hours of work per week. It was Mr Matarazzo's submission that the Applicant had an expectation of ongoing employment "in excess of six months" (PN319). In considering the remaining provisions of s.170CH(2) and the other issues determined in this matter it is the Commission's view that a remedy is appropriate. For the reasons referred to above I do not consider that reinstatement is the appropriate remedy.
[37] In all of the circumstances I consider that the alternative remedy available pursuant to s.170CH(6), being an award of compensation, is appropriate.
[38] In calculating an amount to be ordered in lieu of reinstatement I have applied the principles of in Sprigg v Paul's Licenced Festival Supermarket [Print R0235]. I assess the first component of the Applicant's actual economic loss to be four weeks at her pre-employment full-time wage rate. To that amount is to be added my assessment of the Applicant's expectation of continuing employment - I assess that period to be a total of 50% of the available hours over 6 months. Taken together the maximum amount that might be calculated pursuant to s.170CH(8) is:
· Four (4) weeks loss of earnings (17 October - Mid November 2002)
· plus 13 weeks casual employment (50% of casual hours over 6 months)
totalling 17 weeks @ $480.77 per week = $8173
[39] I note that approximately one month after her termination on 17 October the Applicant secured alternative employment as a console operator at a service station. The Applicant had since worked both night shift and afternoon shift in pursuit of alternative employment. The Applicant's efforts to mitigate her losses are commendable.
[40] The second step in Sprigg requires a deduction of the amount earned by the Applicant since her termination which I assess at $9000 (18 weeks @ average of $500 per week), which would result in the Applicant receiving no compensation. That in my view, would be an inequitable outcome. It follows that the application of the remaining three steps in Sprigg are a nullity.
[41] In my view the Applicant is entitled to a quantifiable remedy from the application of the `fair go all round' principle: s.170CA(2). As well, the Respondent should be deterred from treating the Commission proceedings with contempt. I therefore determine that the Respondent pay to the Applicant an amount of $3200 in lieu of reinstatement within 14 days of this decision.
[42] A separate order to that effect is published on PR931173
BY THE COMMISSION:
COMMISSIONER
Hearing details:
Darwin, 2 April 2003
Appearance:
Mr L Matarazzo, Australian Services Union for Ms P Marquis
Printed by authority of the Commonwealth Government Printer
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