Holmes v A1 Professional Cleaning Services [1996] IRCA 632

DECISION NO:632/96 C A T C H W O R D S INDUSTRIAL LAW - termination of employment - whether employment terminated by employer or employee - Held abandonment of employment - the legitimate refusal of an employer to make an unauthorised payment demanded by an employee does not constitute an act which results in a termination of employment which attracts the jurisdiction of Division 3 of Part VIA of the Workplace Relations Act 1996 Workplace Relations Act 1996 ss170CB, 170DE, 170EA CASES:

Mohazzab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200

Rheinberger v Huxley Marketing Pty Ltd (1996) 67 IR 154

Santos v SIDY's Ice Cream (unreported, IRCA, Millane JR, 10 May 1996)

WILLIAM HOLMES -v- A1 PROFESSIONAL CLEANING SERVICES No. VI-1064 of 1996 Before: Ryan JR Place: Melbourne Date: 24 December 1996

INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI-1064 of 1996 B E T W E E N : WILLIAM HOLMES Applicant AND A1 PROFESSIONAL CLEANING SERVICES Respondent MINUTES OF ORDERS Judicial Registrar Ryan 24 December 1996 THE COURT ORDERS: 1. That the application be dismissed. 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-1064 of 1996 B E T W E E N : WILLIAM HOLMES Applicant AND A1 PROFESSIONAL CLEANING SERVICES Respondent Before: Ryan JR Place: Melbourne Date: 24 December 1996 REASONS FOR JUDGMENT This claim of unlawful termination of employment revolves around a dispute as to whether the Applicant was entitled to payment in lieu of "leave" which had not accrued. The Applicant asserts that Mr Arthur Karras, then Cleaning Services Supervisor with the Respondent, had agreed to provide him with payment in lieu of leave which had not accrued and that when he persisted with his attempts to have the agreement honoured, Mr Karras unlawfully terminated his employment. Mr Karras denies that there was any agreement to pay for non existent leave. Mr Karras no longer works for the Respondent but he was the only person to give evidence for the employer. The Applicant was the only person to give evidence on his own behalf. Both parties were represented by counsel. The Applicant's position is that there was an unlawful termination of employment and he now seeks reinstatement although when he lodged his application he sought compensation only. The Respondent's position is that the Applicant abandoned the employment. It is not necessary to go into detail about the employment relationship except to the extent that the developing dispute between the Applicant and Mr Karras reflects on their credibility. The Court has to determine which version of events is the more probable. The onus lies with the Applicant to establish that there was an act or initiative of the Respondent as employer which led to the unlawful termination of the employment. I have concluded that the Applicant has failed to discharge this onus and that the application must be dismissed. The Applicant was employed under a Job Start Wage Subsidy Agreement cleaning portable buildings. He was employed from about 16 August 1995 to 4 January 1996. He admitted in cross-examination that he had received holiday pay in advance in December 1995. He also admitted that the Wageline organisation which he consulted advised him that he was only entitled to 7 days leave after his short employment but that Mr Karras had "promised me 14 days". He also admitted that Mr Karras had confirmed that he could only be paid for accrued leave but that he nevertheless wanted payment and that he believed that he was entitled to the payment because of their agreement. Both men agree that over the Christmas break between 22 December and 3 January there were several telephone discussions in which the Applicant persisted with his claim for payment in lieu of unaccrued leave. The dispute came to a head on Thursday 4 January 1996. Mr Karras was delayed in traffic on the Westgate Bridge. The Applicant contacted him on his car telephone and demanded his wages (and almost certainly repeated his demand for the payment for the unaccrued leave). Mr Karras agreed to travel to a licensed club in Frankston to pay wages due to the Applicant who indicated that he was certainly not willing to remain at the work site in Cheltenham until Mr Karras arrived. The Applicant claims that: · Mr Karras arrived at the club and threw the wages across a table

· he indicated that the amount was incorrect because he had not been paid for Christmas period holidays The Applicant was at that time continuing with his oft repeated claim for unaccrued leave. Mr Karras denied that he threw the wages to the Applicant. He stated that when the Applicant persisted in his claim for additional payment in respect of the unaccrued leave he told the Applicant that they would discuss the matter further at the work site in Cheltenham on Friday 5 January. Mr Karras stated that the Applicant was not at the work site at 8.00 am on 5 January but that he telephoned at about 1.30 pm when Mr Karras was in the western suburbs and that the Applicant then told him that he had contacted Wageline. The Applicant admitted in his evidence that Wageline had in effect advised him that he was not entitled to the additional payments but that he nevertheless persisted with his demand. Both parties concede that this telephone conversation became somewhat heated. Mr Karras states that he told the Applicant that they "would need to get together and work the matter through" and that the Applicant told him that he wanted the additional payments and that he (Mr Karras) "could stick the job up his arse". The Applicant denies that he ever used words similar to that or of that import. Indeed he claims that Mr Karras told him that he was "to get his gear and get off the site and......get his arse out of here"". The Applicant never returned to work after 5 January. Indeed, from the point of view of the Respondent, and the Court, there is no evidence that Mr Holmes worked at all after Thursday 4 January. Both counsel but particularly counsel for the Applicant sought to rely on Mohazzab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200. In that case at 204 a Full Court of this court stated: "It is necessary to consider the ordinary meaning of the expression "termination at the initiative of the employer" in context in the Convention having regard to its object and purpose. The word "initiative" is relevantly defined in the New Shorter Oxford Dictionary in the following way:

'initiative 1. The action of initiating something or of taking the first step or the lead; an act setting a process or chain of events in motion; an independent or enterprising act.'

And in the Concise Macquarie Dictionary in the following way:

'initiative 1. an introductory act or step; leading action; to take the initiative. 2. Readiness and ability in initiating action; enterprise: to lack initiative.' These definitions reflect the ordinary meaning of the word 'initiative'. Viewed as a whole, the Convention is plainly intended to protect workers from termination by the employer unless there is a valid reason for termination. It addresses the termination of the employment relationship by the employer. It accords with the purpose of the Convention to treat the expression 'termination at the initiative of the employer' as a reference to a termination that is brought about by an employer and which is not agreed to by the employee. Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship." Again, at 205 the Full Court stated:

"in these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship. This issue was addressed by Wilcox CJ in APESMA v David Graphic Pty Ltd (unreported, Industrial Relations Court of Australia, 12 July 1995, Wilcox CJ). His Honour, at p3, referred to the situation of an employee who resigned because "he felt he had no other option". His Honour described those circumstances as:

"...a termination of employment at the instance [of] the employer rather than of the employee."

And at p5:

"I agree with the proposition that termination may involve more than one action. But I think it is necesssary to ask oneself what was the critical action, or what were the critical actions, that constituted a termination of the employment." In Rheinberger v Huxley Marketing Pty Ltd (1996) 67 IR 154 at 160 Moore J commented on the above passages as follows: "However it is plain from these passages that it is not sufficient to demonstrate that the employee did not voluntarily leave his or her employment to establish that there had been a termination of the employment at the initiative of the employer. Such a termination must result from some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect. I leave open the question of whether a termination of employment at the initiative of the employer requires the employer to intend by its action that the employment will conclude. I am prepared to assume, for present purposes, that there can be a termination at the initiative of the employer if the cessation of the employment relationship is the probable result of the employer's conduct." In this case all Mr Karras did on behalf of the Respondent was indicate that he could not pay for holidays which had not been taken or for leave which had not accrued. I cannot accept, and in the absence of clear authority to the contrary will not accept, that either the Convention or the Full Court dicta in Mohazab at 204, 205 and 206 can be interpreted as support for the proposition that an employer, who refuses to make an unauthorised payment to an employee, has, by that act of refusal, brought about the termination of the employment relationship. There may be many actions of an employer which can be correctly categorised as actions which bring about the termination of the employment in circumstances which attract the jurisdiction of Division 3 of Part VIA of the Workplace Relations Act 1996. However, the legitimate refusal of an employer to make a payment for leave which is not due or authorised under a relevant industrial award cannot be so categorised. Counsel for the Applicant concedes that the Applicant wrongly believed himself entitled to be paid for holidays accrued but not taken. However, it is asserted on behalf of the Applicant that, although he misconceived his entitlements, the Respondent, through Mr Karras, was fed up with the Applicant's constant requests for payment and that, even if the Court was to conclude that the Applicant told Mr Karras where he could put his job, nevertheless a failure by Mr Karras to explain to the Applicant the inability to make the payments "culminated in conduct on the part of the Respondent which, on any reasonable view, would have or could have as its probable effect the bringing of the Applicant's employment to an end or that the cessation of such employment would or could be the probable result of the employer's conduct". I do not accept this proposition. It is difficult in such cases where there is evidence only from two witnesses and where there are stark conflicts as to what occurred. I have concluded that the most likely circumstances are that the Applicant did tell Mr Karras what he could do with the job and did abandon his employment. Having observed Mr Karras and the Applicant giving their evidence, I have preferred the evidence of the former. The Applicant presented as agressive and assertive. He had taken a position which he maintained while giving evidence. His position was that Mr Karras had agreed to give him payment in lieu of unaccrued, unauthorised leave and that he was entitled to such payment although Wageline had confirmed that he had no such entitlement. The Court accepts that the most likely course of events is that Mr Karras:

· advised the Applicant of the basic conditions of employment when the Job Start Agreement began

· advised the Applicant that the Christmas break late December to early January was an accepted and required practice in the cleaning industry

· advised the Applicant that his Christmas pay would include accrued leave and public holidays

· advised the Applicant that he was not entitled to unaccrued extra leave

· advised the Applicant that he could discuss the dispute over unaccrued leave with Wageline and his Job Start Case Manager The Court has concluded that it is more probable than not that the Applicant told Mr Karras to "stick the job up his arse" and that it is less probable that Mr Karras told the Applicant that "he was to get off the site...and get his arse out of here". The Court has concluded that the Applicant stubbornly persisted in a demand for an additional payment for leave which was unauthorised and which had not accrued and, having earlier received a payment in advance for leave which later accrued, the Applicant was quite unprepared to work after 4 January 1996 and did not work on 5 January. The Applicant abandoned his employment. While the facts differ my conclusion is the same as that reached in Santos v Sidys Ice Cream (unreported, IRCA, Millane JR, 10 May 1996) and expresed as follows:

"The evidence before the Court fails to establish on the balance of probability that there was any intention on the part of the employer to bring the employment to an end or that on any reasonable view of the evidence the probable effect of the Respondent's actions....would have the effect of bringing the Applicant's employment to an end"

The employment was not ended by an action or initiative of the Respondent. The application under s170EA lacks jurisdiction and must be dismissed. MINUTES OF ORDERS THE COURT ORDERS: 1. That the application be dismissed. 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 6 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan. Associate: Dated: 24 June 1996 Solicitors for the Applicant: McDonald Murholme Counsel for the Applicant: Mr P Ginnane Solicitors for the Respondent: George Rossis & Co Counsel for the Respondent: Mr G Devries Date of hearing: 21 and 24 June 1996 Date of judgment: 24 December 1996