Nicholl v Bard Australia Pty Ltd [1996] IRCA 602

DECISION NO:602/96 C A T C H W O R D S INDUSTRIAL LAW - termination of employment - associated jurisdiction - reasonable notice. Workplace Relations Act 1996 ss.170DE, 170EA, 430 CASES:

Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371

Kerr v Jaroma Pty Ltd (unreported, IRCA, Marshall J, 7 October 1996)

Nettlefold v Kym Smoker Pty Ltd (unreported, IRCA, Lee J, 4 October 1996)

Brackenridge v Toyota Motor Corporation Australia Limited (1996) 67 IR 162

Federated Mutual Insurance Company of Australia Limited v Sapideen (1920) SALR 284 at 292

Quinn v Jack Chia Australia Limited (1992) 1 VR 567 at 580

Dunstan v National Mutual Life Association of Australia Limited (1992) 5 VIR 73

Grout v Gunnadah Shire Council (1994) 125 ALR 355

NICHOLL -v- BARD AUSTRALIA PTY LTD No. VI-1842 of 1996 Before: Ryan JR Place: Melbourne Date: 26 November 1996

INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI-1842 of 1996 B E T W E E N : NICHOLL Applicant AND BARD AUSTRALIA PTY LTD Respondent MINUTES OF ORDERS Judicial Registrar Ryan 26 November 1996 THE COURT ORDERS: (1) The application pursuant to s170EA of the Act be dismissed; (2) The Respondent pay the Applicant within 21 days the sum of $12,078.31, damages for breach of contract of employment and specifically breach of the implied term that reasonable notice of termination be given or payment in lieu thereof. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.

INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI-1842 of 1996 B E T W E E N : NICHOLL Applicant AND BARD AUSTRALIA PTY LTD Respondent Before: Ryan JR Place: Melbourne Date: 26 November 1996 REASONS FOR JUDGMENT (Delivered ex tempore) This is a claim of unlawful termination of employment. The Applicant was a territory manager and state manager of a company which supplies a range of products used in hospitals for surgical and other physically invasive interventions. The position required skills in presenting and demonstrating the company's products. At the commencement of the hearing on 26 November the Applicant filed a statement of claim claiming $28,124.31 loss in lieu of reasonable notice of termination plus unspecified damages for the breach of contract said to arise out of the lack of reasonable notice. Counsel for the Respondent, somewhat to the Court's surprise, consented to what was a very late application to amend the application under s170EA of the Industrial Relations Act 1988 to permit the Applicant to pursue a breach of contract claim in the court's associated jurisdiction. The breach of contract claim is essentially the claim for reasonable notice outlined above. Having heard evidence from the Applicant and Alexander McMichael, Divisional Manager, Andrea Baldwin, Marketing Manager, and Michelle Zara, Territory Manager, and having considered 23 documents tendered by the Respondent and seven documents tendered by the Applicant, I have no doubt that the employment of the Applicant was terminated by the Respondent for a valid reason connected with the Applicant's performance and that is was a sound, defensible, well founded reason within the terms outlined in Selvachandran v Peteron Plastics Pty Limited (1995) 62 IR 371. I have no doubt the termination was for a valid reason defensible and/or justifiable on any objective analysis of the facts and I refer there to Kerr v Jaroma Pty Limited, (unreported) Marshall J, 7 October 1996. I do not consider the termination unjust or unfair in the sense that I apprehend those words to have been used by Lee J in the unreported decision of Nettlefold v Kim Smoker Pty Limited (4 October 1996). I have no doubt that the Applicant was counselled, assisted and warned in respect of performance by Ms Baldwin and counselled and warned by Mr McMichael in respect to performance. I accept the evidence of Ms Baldwin, supported by the Applicant's staff development review of March 1994, exhibit R16, that from early 1994 the Applicant was required to develop his presentation skills by attending a presentation course and allowing more time to plan presentations and was required to obtain a good understanding of what is described as button and peg placement. I also accept Ms Baldwin's evidence that she came to Melbourne on a number of occasions in 1994 and 1995 to assist the Applicant and to demonstrate in his presence the presentation of the Respondent's BIP range of products. I note that on 6 September 1995 Mr McMichael asked the Applicant to practice Stegman Gough ligator and peg and button procedures with Ms Baldwin on 11 September 1995, (exhibit R1), and on 3 November requested in writing that the Applicant propose means to bring his clinical knowledge in BIP, BMP and Simpulse up to expected levels, (exhibit R5). On 10 November 1995 Mr McMichael, again by memorandum, asked the Applicant to arrange to watch procedures in Solcotrans, Simpulse and BIP and to advise him of appointment times made to watch such procedures, (exhibit R6). On 16 November 1995, by memorandum, Mr McMichael was even more specific in requesting the Applicant to improve his clinical knowledge in BMP, Simpulse and BIP, (exhibit R7). The Applicant was an unimpressive witness. His evidence was inconsistent and at times contradictory. Wherever his evidence conflicted with that of Ms Baldwin, Ms Zara or Mr McMichael I have preferred the evidence of the Respondent's witnesses. The Applicant conceded in a memorandum to Mr McMichael on 28 February 1996, (exhibit A3), that he had not put enough work into an in-service presentation of Solcotrans at the Mercy Hospital. The court notes that Mr McMichael gave evidence that he never received this memo and that counsel for the Applicant produced the original of the memo as an exhibit. However, irrespective of whether the memo was ever sent to the Respondent, the Applicant concedes he wrote it and signed it and it does contain his concession that he had not put enough work into the in-service presentation of Solcotrans. More importantly, in cross-examination, the Applicant responded to the proposition that he was not up to the accepted standard in Solcotrans presentation as follows: "I wasn't up to 0.2 per cent of my budget. I was not at a high level of proficiency, only at a get by level. They (the Respondent) had high expectations" It was a constant refrain in the Applicant's evidence that Solcotrans sales, and therefore Solcotrans presentations, were only a tiny proportion of his overall sales budget and targets and that all of the areas, where he concedes the Respondent wanted him to improve his performance, amounted to less than 10 per cent of his budget and targets. The Court is satisfied that the Applicant knew his knowledge of those areas was deficient and that he did not face up to the necessity to improve that knowledge and his skills and presentation. In effect, the Applicant justifies his neglect of these areas by pointing to the pressures on him to meet overall budget targets. On his assessment, 90 per cent of the targets related to other areas. It is irrelevant whether his failure to attain the required standard in the areas embraced by Solcotrans, BIP, BMP, Simpulse, Stegman Gough ligator kits and peg and button procedures, was or was not because he elected to concentrate on other areas. The fact is that the Applicant did not reach the required standards and conceded that to be so. In my view he was given ample assistance, counselling and warning. While it is unnecessary to go into the detail of the complaints made about the performance of the Applicant in respect of incidents involving the Western Hospital, the Avenue Private Hospital, the Alfred Hospital, the Mercy Hospital and the Malvern Private Hospital, respectively in August and October 95 and January, February and May 1996, the court is satisfied that all five of these incidents involved inadequate performance by the Applicant and the court found the Applicant's explanations of each incident unacceptable and inherently unlikely and in any event often contradictory. The Court repeats the Respondent had a valid reason pursuant to s170DE(1) for terminating the Applicant's employment for inadequate performance. The application for remedy for unlawful termination of employment pursuant to s170EA will be dismissed. I turn now to the claim in the accrued jurisdiction of the Court, a claim of breach of contract, breach of an implied term of reasonable notice. The Applicant sued the Respondent for damages for wrongful dismissal in the accrued jurisdiction of the Court alleging that the Respondent dismissed him without reasonable notice. Leave to pursue the claim was granted and the Respondent did not object to the filing of the amended claim. As to the validity of the claim, I am content to rely on the recent judgment of Beasley J in Brackenridge v Toyota Motor Corporation Australia Limited (1996) 67 IR 162. In particular, I rely on the authorities cited by her Honour at 185 to 188 under the heading of "claim for damages in the Court's associated jurisdiction." The issue of what terms are contained within a contract of employment, where it is not comprised by a written document merely requiring construction, is to be determined by the tribunal of fact, as a matter of fact, but there may also be matters implied into the contract. In considering whether a term should be implied and if so, what the term should be, the Court should determine the presume intention of the parties by an objective evaluation of the circumstances: Federated Mutual Insurance Company of Australia Limited v Sapideen (1920) SALR 284 at 292. I would not imply a term that the contract of employment was determinable by the employer at will. Such a term, in my view, would be inconsistent with the overall extent of the contract which involved the Applicant in a position of some importance with medium range remuneration and other benefits, including a fully maintained vehicle. The content of reasonable notice is to be determined as at the date when notice is given, not when the contract is entered into. In this context, matters occurring antecedently to the making of and in the course of the performance of the contract up to the date of determination are not irrelevant. See Quinn v Jack Chia Australia Limited (1992) 1 VR 567 at 580. Having said that, I have not considered any reduction in what comprises reasonable notice because of the fact that the Applicant was put on a form of notice three months prior to termination, that is notice that other steps would be taken if his performance did not improve within a six month period. In Chia at 580 and in Dunstan v National Mutual Life Association of Australia Limited (1992) 5 VIR 73 at 84 and in Grout v Gunnadah Shire Council (1994) 125 ALR 355 at 363; and indeed, in many reported cases, reference is made to criteria relevant to assessing a proper period of notice and listed in Macken MaCarry and Sappideen The Law of Employment Third Edition at pages 157 to 158, and listed as follows:

· the duration of the hiring

· industry practice

· the seniority of the position held

· the importance of the position held

· the size of the salary

· the worker's age

· the worker's length of service

· what the worker gave up to come to the present employer

· the worker's perspective pension or other rights.

Given the nature and responsibilities of the position, the relative seniority, the importance of the position, a stated salary of $52,000 per annum and no demurrer from such salary by the Respondent, the age of the Applicant, his length of service an the employer's superannuation contributions, I assess reasonable notice at four months. At $52,000 per annum I assess

· salary for four months at $17,334

· employer superannuation contributions at 5 per cent for four months at $870

· a car for four months at $4000 I, therefore, assess a loss associated with the lack of reasonable notice at a total of $22,204 less five week's pay in lieu of notice calculated by the Applicant at $4903.84; less pro rata long service leave calculated by the Applicant at $5221.85. Therefore, I assess total loss at $12,078.31. MINUTES OF ORDERS THE COURT ORDERS: (1) The application pursuant to s170EA of the Act be dismissed; (2) The Respondent pay the Applicant within 21 days the sum of $12,078.31, damages for breach of contract of employment and specifically breach of the implied term that reasonable notice of termination be given or payment in lieu thereof. 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 5 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan. Associate: Dated: 5 December 1996 Solicitors for the Applicant: Purcell Balfe & Webb

Counsel for the Applicant: Ms M Young

Solicitors for the Respondent: Baker & McKenzie

Counsel for the Respondent: Mr G McNamara

Date of hearing: 22, 25 and 26 November 1996

Date of judgment: 26 November 1996