Highton-Garrett v Mack [1996] IRCA 400

DECISION NO: 400/96 C A T C H W O R D S INDUSTRIAL LAW - termination of employment - respondent leads no evidence of valid reason for termination - claims of termination for prohibited reasons under section 170DF(1) rejected - performance of employee questionable - future duration of employment 8 days only. Industrial Relations Act 1988 ss.170CC, 170DE, 170EA, 170EE Industrial Relations Regulations - Regulation 30B CASES: Johns and Gunns Limited (1995) 60 IR 258

Heidt v Chrysler Australia Ltd (1976) 26 FLR 257

R v Hush; Ex parte Devanny (1932) 48 CLR 487

Lawrence v Hobart Coaches Pty Ltd (1994) 1 IRCR 92; 57 IR 218

Nicolson v Heaven and Earth Gallery Pty Ltd (1994) 1 IRCR 199

Byrne and Frew v Australian Airlines Pty Ltd (1995) 131 ALR 422 HIGHTON-GARRETT -v- MACK No. VI-1347 of 1996 Before: Ryan JR Place: Melbourne Date: 31 July 1996

INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI-1347 of 1996 B E T W E E N : VIRGINIA KATRINA HIGHTON-GARRETT Applicant AND STEPHEN MACK Respondent MINUTES OF ORDERS Judicial Registrar Ryan 31 July 1996 THE COURT ORDERS: 1. That compensation in the sum of $676 be paid to the Applicant within 21 days. 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-1347 of 1995 B E T W E E N : VIRGINIA KATRINA HIGHTON-GARRETT Applicant AND STEPHEN MACK Respondent Before: Ryan JR Place: Melbourne Date: 31 July 1996 REASONS FOR JUDGMENT (EX TEMPORE) The Applicant claims unlawful termination of employment and asserts in the application that she worked for the Respondent as a telephone consultant sales custom services at 347 Chapel Street, South Yarra on the 18 December 1995 to the 28 December 1995, a period of 10 days. The Applicant also has written in her application in paragraph 11 of Form 132 "off work due to injury after 28/12 hospitalised from 4/1/96 to 11/1/96". Initially she claimed that the National Union of Workers was acting on her behalf but requested that Court notices be sent to her at a post office box provided in paragraph 2 of the application. The Applicant now appears on her own behalf. The application has a sorry history involving: (i) no appearance for the Applicant at the initial conciliation conference at the Industrial Relations Commission (ii) withdrawal of union representation on behalf of the Applicant (iii) non-appearance at a Directions Hearing of a representative allegedly appearing for the Applicant (iv) alleged settlement of the application (v) alleged changes in the method and timing of payment in accordance with a purported settlement (vi) an apparent withdrawal by the Applicant of instructions for a solicitor (vii) an unsuccessful submission to the Court by a solicitor for the Respondent to the effect that the matter had settled and that the Court had no jurisdiction to proceed further (viii) the unavailability of the Respondent to proceed to hearing on 9 July because of a belief that the matter had settled (ix) relisting of the matter today for hearing The progress of this matter continued today in what I can only describe as an unusual manner. Mr Chan appeared for the Respondent. He conceded that the Respondent had terminated the employment of the Applicant but elected to lead no evidence in support of any proposition that the termination was for valid reason under S170DE(1) of the Industrial Relations Act 1988 (the Act). While making no concession that the termination was unlawful, a failure to discharge the onus to establish that an admitted termination was for valid reason is likely to lead to the conclusion in the absence of evidence to the contrary that the termination was not for valid reason and was unlawful. Mr Chan further submitted that: (i) reinstatement was not only impractical but impossible because the Respondent ceased to conduct the business of telemarketing on the 12 January 1996 (ii) the Applicant while terminated from her employment on the 2 January 1996 could only have worked for another eight working days before the closure of the business and would only be entitled to compensation of a maximum equivalent to eight days namely $636 gross This amounts to a fundamental misconception as to the power of the Court to award compensation if reinstatement is found impracticable. Mr Chan seems to have assumed that an order under S170EE(1)(b)(ii) to require an employer to pay to the employee the remuneration lost by the employee because of a termination applies other than in cases of reinstatement. Alternatively, Counsel for the Respondent appears to have relied on Slifka and J W Sanders North J, IRCA (unreported) 19 December 1995 as in some way being authority for such proposition. S170EE(1)(b) does not apply where reinstatement is found impracticable. S170EE(2) and S170EE(3) apply. The Court may, if it considers it appropriate, make an order requiring the employer to pay the employee compensation of such amount as the Court thinks appropriate. Slifka provides assistance and indeed authority as to the calculation of compensation in certain circumstances. It is not authority and does not purport to find that compensation must be limited to remuneration lost in the circumstances set out in S170EE(1)(b). The Respondent was a sub-contractor. He carried out a telemarketing process known as churning. The Respondent had a contract with a business called Austnet. Telemarketers or phone operators employed by the Respondent were required to contact Optus customers and tried to persuade those customers to go back to Telstra. The Respondent began business on the 18 December 1995. The Applicant and several others were employed by the Respondent on and from 18 December 1995. The Court pauses to note that it may well be that the employees were casual employees engaged for a short period within the meaning of Regulation 30B(3) and thus excluded employees or perhaps excluded employees under Regulation 30B(1). If this was so such employees are excluded from the operation of Subdivisions B, C, D and E of Division 3 of Part VIA of the Act. However, no evidence of exclusion from jurisdiction was led and the Court has no alternative but to assume that the Applicant is not an excluded employee even though this seems a classic task for excluded employees. The Respondent was an employer as an individual. He did not employ staff through a company or a registered business. He gave evidence, which I accept, that Telstra because of objections from Austel, discontinued the practice of churning by way of Austnet and sub-contractors like the Respondent. I accept the Respondent's evidence that the program was terminated on the 5 January 1996 and that the Respondent's telemarketing operations were closed on the 12 January 1996. I might add that this is a curious case in which the Respondent apparently would not have given evidence at all if the Court had not required evidence of the termination of the Applicant and evidence of the closure of the Respondent's business. In the course of questions from the Court the Respondent deposed that he had decided to terminate the Applicant on the 27 December 1995 because her performance was unsatisfactory. After failing to contact her on the 28 December 1995, when he claimed she left work early, (and there is a concession from the Applicant that she did leave work early on the 28 December 1995), he spoke to her by telephone on the 2 January 1996 and told her that her services were terminated and he was not happy with her performance. Again, because of questions from the Court, and with the consent of Counsel for the Respondent, a copy of a letter dated 27 December 1995 was admitted as Exhibit R1. Exhibit R1 reads:

"MackNet Marketing 3/347 Chapel St Sth Yarra Vic 3142 December 27, 1995 Katrina Highton Garrett PO Box 135 Camberwell Vic 3124 Dear Katrina,

I thank you for your services. These will not be required any longer. Enclosed is a cheque for your wages and one week's pay in place of notice. One weeks pay at $352. Less over pay of $79.50 (advance payment for 27/12/95 and 28/12/95, whilst worked only on 28/12/95). Cheque enclosed $272.50. Yours sincerely STEPHEN MACK" The Respondent conceded that Exhibit A2 was a copy of his cheque dated 27 December 1995 for $272.50. He also conceded that an envelope, Exhibit A1, postmarked 5 January 1996, 6pm and addressed to the Applicant and re-routed to Hartwell Private Hospital, was probably the envelope containing the cheque for $272.50. The Court is satisfied on the basis of the exhibits and on a balance of probability and from the evidence of the Respondent and the Applicant that the envelope contained the cheque and the termination letter (Exhibit R1). The Court is satisfied from the evidence of the Applicant that she received a letter and cheque on or about 8 January 1996. The Applicant represented herself. At no stage did she give notice of a claim that the termination of her employment was unlawful because of a breach of S170DF(1) for a reason or reasons including temporary absence from work because of illness, or because of the filing of a complaint, or the participation in proceedings against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities. However, as the Applicant did represent herself, and as the Applicant had in paragraph 11 of her S170EA application referred to being off work after 28 December and hospitalised from 4 January to 11 January, she was allowed to give evidence of what seemed to be a claim, imprecisely expressed or implied, that she had been terminated unlawfully for a reason or reasons which included the prohibited grounds contained in S170DF(1)(a) and (e). The Court is very conscious of the difficult onus placed on a Respondent in respect of S170DF(1). It is effect an onus to establish a negative. An onus described by Northrop J in Johns and Gunns Limited (1995) 60 IR 258 at 261 and 267. At 267 Northrop J stated: "The reasons of an employer for terminating the employment of an employee are solely within the knowledge of the employer. The employer may state a reason but that reason need not be the actual reason nor need it be the only reason. Parliament has, from time to time, devised procedures to transfer to an employer the onus of proving the reason for termination of employment. Thus S5 of the Conciliation and Arbitration Act 1904 made it a criminal offence for an employer to dismiss an employee by reason of specified circumstances. Section 5(4) provided that in proceedings for an offence, if all the relevant facts and circumstances, other than the reason "set out in the charge as being the reason...of the...(dismissal)...are proved, it lies upon the person charged to prove that......(the dismissal)....was not activated by that reason....". In Heidt v Chrysler Australia Ltd (1976) 26 FLR 257, those provisions and earlier authorities relating to them were discussed at length and in particular at 266-271. I set out a passage appearing at 268 which has equal application to cases where S170DF(1)(a) of the Act applies: 'The provisions of S5(4) of the Act cast an onus of disproving facts, namely, that the reason for the defendant's action was not actuated by the reason alleged in the charge. It has been held that a defendant need not prove the reason why he dismissed an employee: Atkins v Kirkstall-Repco Pty Ltd (1957) 3 FLR 439. The mere proof of a reason for dismissal, other than the reason alleged in the charge, does not necessarily negate the reason alleged in the charge. A mere denial of the reason alleged in the charge may not be sufficient to satisfy the onus cast upon the defendant. All the facts and circumstances leading up to the dismissal must be considered, including any reason expressed at the time of the dismissal, as well as any denial of the reason alleged in the charge.' In the same lengthy passage, at 267 reference is made to averment provisions and what was said by Dixon J in R v Hush; Ex parte Devanny (1932) 48 CLR 487. These views could have equal force in the application of S170DE(1) and S170DF(1) of the Act. The section now corresponding to S5 of the Conciliation and Arbitration Act is S334 of the Act. The wording is somewhat different but, for relevant purposes, the effect is the same, see Lawrence v Hobart Coaches Pty Ltd (1994) 1 IRCR 92; 57 IR 218. Section 170EDA was inserted into the Act and came into operation on 30 June 1994. Section 170EDA(1) and (2) commences 'If an application under Section 170EA alleges.....'. The section was enacted when the Court Rules contained provisions that an application, being the formal document initiating a claim or application for a remedy under S170EA(1), had either itself or in the accompanying affidavit, to allege the employer's stated reason for termination. Since then, from 14 October 1994, under the Court Rules, no allegation of reason for termination is required to be given. Order 75 describes an application under S170EA(1) as a 'claim' and Form 132 adopts that terminology. As a result, if a claim for a remedy comes before the Court there is no application containing an allegation of reason for termination. Section 170EDA applies with respect to terminations where the employee alleges there are no valid reasons for the termination under S170DE(1) as well as to reasons, not necessarily the only reason, prohibited under S170DF(1)." I pause to note that there were not in this application any allegations in respect of S170DF(1) other than the fact that as the Applicant was unrepresented I allowed evidence to be given which, in effect, amounted to implied allegations of breaches of S170DF(1). "In my opinion, the opening words of S170EDA(1) are to be construed as meaning that if, upon all of the evidence, the termination is proved, then the employee is entitled to a remedy unless the employer establishes a valid reason or reasons under S170DE(1). If established, S170DE(2) has to be applied. If this construction is not accepted, the absence of appropriate forms in the Court Rules could defeat the intention of the Parliament." However, unlike the case of Johns, there were no such specific allegations by the Applicant here of breaches of S170DF(1). I have considered the Applicant's assertions in evidence, both her expressed assertions and her implied assertions. The Respondent denies that he terminated the Applicant for any reason including a prohibited reason. Indeed the Respondent, presumably on advice really declined to give evidence of the reason for termination at all. However, in answer to questions from the Court, he asserted on oath that he terminated the Applicant by telephone on the 2 January, having reached that decision on the 27 December, and that he terminated her because her performance was unsatisfactory. I have observed the Applicant closely during this hearing and in an earlier Directions Hearing on 9 July. I have noted her evidence and evidence from Lance Kenningham, who stated that he was employed by the WorkCover authority. Mr Kenningham in fact appears to be employed by the Metro-West Office of the Industry Services Division of the Department of Business and Employment as an Ergonomics Officer, but no matter. He has given evidence of two telephone conversations with a woman identifying herself as the Applicant. His notes of the conversations are Exhibit A3. First, I note there is no record in those notes of any report by the person on the other end of the telephone identifying herself or referring to the termination of her employment. Of course, I suppose it is possible that the telephone conversation on the 2 January between the Applicant and Mr Kenningham took place prior to the telephone conversation which the Respondent says he had with the Applicant on the 2 January, I concede that is a possibility. If of course the telephone conversation between the Respondent and the Applicant took place on the 2 January, prior to the conversation with Mr Kenningham, then the Court would find it surprising indeed that there was no reference to the termination in that conversation with Mr Kenningham. Mr Kenningham's notes of the conversation are Exhibit A3. There is nothing in those notes, or in his evidence, which provides relevant admissible evidence in support of the Applicant's implied proposition that she was terminated for a prohibited reason under S170DF(1). There was much in his evidence which is double hearsay including claims by telephone by the Applicant of what the Respondent allegedly said and did. I accept that the conversations took place. I accept that the Applicant was complaining of a back condition and of inadequate seating and that the Applicant complained of both to the Respondent. I do not accept that the claims of termination in breach of S170DF(1) have been substantiated. However, the Respondent clearly, on his own admission, terminated the Applicant's employment. He did not claim to have a valid reason although performance or inadequate performance can be a valid reason and operational requirements leading to the total closure of a business can most certainly be a valid reason for termination. Even if the Respondent had asserted valid reason, and he did not, there is no evidence the Applicant was consulted or warned or accorded any opportunity to respond to allegations of inadequate performance. The termination was in breach of S170DE(1) and S170DE(2). Having said that, the Applicant had only worked with the Respondent for a few days between 18 and 28 December. There are real question marks over her performance even on the basis of her own evidence. The business closed on 12 January. There is no substance whatsoever to her claims that the business only closed because the Respondent was seeking to avoid unexpressed obligations to the Applicant in respect of work safety, work cover or any other obligations or requirements or law which the Applicant asserts, vaguely and generally, apply to her and were the real reason for the closure of the business. The Applicant has also stated that she was unfit for work at all until 23 February and fit only for part-time work for some months thereafter. In accordance with the dicta of the Chief Justice of this Court in Nicolson v Heaven and Earth Gallery Pty Ltd (1994) 1 IRCR 199, her tenure of employment would have been short indeed, in fact eight more working days. The circumstances of this case lead me to the view that some compensation is warranted but only in respect of the eight days work foregone because of the termination on 2 January, a termination confirmed in writing by letter dated 27 January but delivered to the Applicant on or about 8 January. The Court is required to take account of the circumstances. That is clear given the amendments to the legislation effective 15 January 1996. In my view it was clear prior to 15 January 1996 and the High Court decision of Byrne and Frew v Australian Airlines Pty Ltd (1995) 131 ALR 422 puts the matter beyond doubt. I propose to award compensation based on eight days at a daily gross of $79.50, i.e. $636 and I allow interest for 7 months roughly at 10%, i.e. $37.10 say $40. I order compensation in the sum of $676 to be paid to the Applicant within 21 days. MINUTES OF ORDERS THE COURT ORDERS: 1. That compensation in the sum of $676 be paid to the Applicant within 21 days. 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 8 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan. Associate: Dated: 26 August 1996 Ms Kate Highton-Garrett appeared for herself. Solicitors for the Respondent: Sackville Wilkes & Co Counsel for the Respondent: Mr D Chan Date of hearing: 9 and 31 July 1996 Date of judgment: 31 July 1996