Lyn Cieslik v Catholic Church Insurance [1995] IRCA 65

CATCHWORDS INDUSTRIAL LAW - Termination of employment - Valid reason - Termination harsh unjust & unreasonable - Redundancy payment - Industry standard - Unrepresented applicant - Reference. Industrial Relations Act 1988, ss. 170EA, 170DB, 170DE. LYN CIESLIK v CATHOLIC CHURCH INSURANCE No. NI 777 of 1994 CORAM: McILWAINE JR PLACE: SYDNEY HEARING DATE: 17 JANUARY 1995 JUDGMENT DATE: 9 MARCH 1995 IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. NI 777 OF 1994 BETWEEN: LYN CIESLIK Applicant AND: CATHOLIC CHURCH INSURANCES Respondent CORAM: McILWAINE JR PLACE: SYDNEY HEARING DATE: 17 JANUARY 1995 JUDGMENT DATE: 9 MARCH 1995 REASONS FOR JUDGMENT (Delivered Ex Tempore - Revised from Transcript) This is an application under section 170EA of the Industrial Relations Act 1988 made by Ms Lyn Cieslik. The applicant claims an order declaring the termination of the employer's employment of the employee to have contravened Division 3 of Part VIA of the Industrial Relations Act 1988 and an order that the respondent pay compensation to the employee. The applicant makes no claim to be reinstated and as the applicant was unrepresented in these proceedings I gave her the opportunity at an early stage to seek an amendment to her application in that regard. No amendment was sought. Therefore I do not propose to consider the question of reinstatement. In any case it appears to me that her reemployment, in view of the circumstances as given in evidence of the company, would be impracticable.

In the applicant's affidavit (Exhibit 2), Ms Cieslik gives evidence that she was employed as an Development Manager under an insurance award, although the award was not tendered to me in evidence by either party. There is no dispute by either party that Ms Cieslik commenced employment on 9 April 1990 and that her termination occurred on 15 August 1994 when Mr Sutherland advised her that Ms Cieslik was to be made redundant. Ms Cieslik was given a choice of when to leave her employment. There have been a number of exhibits tendered and in the applicant's case they range from Exhibits 1 to 13. It appears that a bundle of documents headed "Private and Confidential CCI Services Pty Limited 1 September 1993" and thereafter a series of salary reviews may not have been marked and I now mark those Exhibit 14 in the proceedings. Exhibit 3 comprised a series of documents outlining the history of the applicant with the respondent and also a positive executive performance appraisal which is dated 27 July 1994 and in that appraisal there was no suggestion that the applicant's position was in jeopardy. On 15 August 1994 Mr Sutherland advised Ms Cieslik that she was to be made redundant. Exhibit 4 comprises a series of diaries and outlines the extensive work that the applicant did for the company and this is confirmed by the evidence of the respondent that Ms Cieslik was a valued employee. It is also verified in a complimentary reference (Exhibit 8) which was issued to Ms Cieslik by Mr Sutherland. The reference appears to be undated. Exhibit 6 comprises some operating results and from those figures it appears the company is suffering losses in a number of states including New South Wales. Exhibit 7 was a list of persons which the applicant submitted as evidence of people that had been introduced to the company by her personal efforts. Ms Cieslik made the point that no commission was paid for that business. When I asked if Ms Cieslik wished to make a claim in relation to any outstanding commission it was not pursued. Ms Cieslik was cross examined as to her reservations about the reference which was issued. Certain alterations were suggested by the solicitor for the respondent. An assurance has been given by the company that it is agreeable to a revised reference being issued on that basis. Exhibit 9 is an inter-office memo dated 3 September 1991, from Mr Rooney who gave evidence in support of the applicant. Mr Rooney's evidence supports the fact that Ms Cieslik was a valued employee. Unfortunately he also was made redundant and in his evidence advised the Court that he saw it as an opportunity to move in a different direction and has accepted his termination and gone onto better things. Ms Cieslik sought to obtain from Mr Rooney evidence of things that occurred after he left the company and, in that regard, Mr Rooney's evidence cannot be accepted. Exhibit 10 is a memorandum dated 1 September 1992 recording her appointment as the Development Manager. That has already been taken into account in view of the company's offer to issue a revised reference. Exhibit 11 was a report showing the management structure of the respondent and the position of Administration Manager. Exhibit 12 is a letter to the applicant dated 14 September 1994 from Mr O' Malley, the General Manager. Exhibit 13 contains a sheet containing the calculation of the termination payment. I am satisfied on the evidence of both parties that Ms Cieslik commenced work on 19 April 1990, and was terminated on 19 August 1994. This period covers four years and nineteen weeks which the company has calculated is 4.36 years. A redundancy payment has been paid on the basis of three weeks for each year of service plus eight weeks in lieu of notice. Both parties accepted that the redundancy payment was based on the industry standard. Under the provisions of Section 170DB (2) the company was obliged to pay three weeks notice and has indeed paid more than that amount . There is no breach of that section of the Act. In addition to the eight weeks notice, there was the three weeks' salary for each year of service paid as a redundancy. Exhibit 14 contains an August 1993 salary review and it shows that there was an increase in salary which was to have taken effect from 1 September 1993 and other evidence in relation to income protection insurance and the housing loan. Turning to the respondent's evidence, Mr Sutherland gave evidence and was cross examined. His evidence is also set out in his affidavit marked Exhibit A in the proceedings. The termination of Ms Cieslik was as a result of the difficult financial and economic pressures placed on the respondent company. I accept that there was no personal animosity towards Ms Cieslik in her selection for redundancy. In making that finding, I am satisfied that under Section 170DE(1) that there was a valid reason for the termination of Ms Cieslik from her employment and that was to do with the obvious financial difficulties in which the company was placed. I have regard to Ms Cieslik's undoubted capacity, her good conduct, and valuable contribution to the company. The performance review dated 27 July 1994 is also favourable to her. That review was completed a few short days before Ms Cielsik was called in and advised by Mr Sutherland that her employment was to be terminated. I also had the benefit of observing her in the witness box, enabling me to assess how the termination had affected her. Moreover Ms Cieslik gave some evidence that there was not an opportunity for her to discuss any alternatives to her employment being finalised. Complaints were also made about the failure of the company to assist in finding another job or providing counselling services. I find that in all of those circumstances, the termination was harsh, unjust and unreasonable and therefore is not a valid termination. The company has contravened section 170DE(2). Having made that decision, I now turn to the question of compensation. Ms Cieslik gave evidence as to attempts to obtain other employment. I understand the situation to be that Ms Cieslik was only able to obtain three weeks employment with an insurance broker who was a friend of hers since 19 August 1994. It seems to me that the company has done what it can in a financial sense to compensate the employee. I therefore propose that any award of compensation should be in the lower range. Ms Cieslik is a relatively short term employee, ie 4.36 years compared with somebody who may have ten or twelve years with a company which finds itself in similar circumstances. In all the circumstances, an amount of compensation that would be appropriate is $450.00. I find that it would be impracticable to reinstate the employee even though no application is made in this case. I also order the Respondent within seven days to provide a revised reference by an appropriate officer of the company in the terms as have been agreed in the evidence. A new second paragraph should be inserted in the reference which is Exhibit 8 in these proceedings. _____________________________________________________________ REPRESENTATION Applicant in Person Solicitor for the Respondent: P A Ludeke Dunhill Madden Butler, Solicitors I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment of Judicial Registrar McIlwaine. Associate: Julianne Taverner Date: 9 March 1995