Graham Neil Yallop v BIA Carrum Pty Limited (t/as National Water Sports Centre) [1995] IRCA 189

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VI 2420 of 1994 VICTORIA DISTRICT REGISTRY B E T W E E N: GRAHAM NEIL YALLOP Applicant A N D BIA CARRUM PTY LIMITED (t/as NATIONAL WATER SPORTS CENTRE) Respondent Reasons for Judgment 8 May 1995 PARKINSON JR This is an application pursuant to S170EA of the Industrial Relations Act 1988. The following persons gave evidence in the proceeding: Graham Neil Yallop - the applicant Graham Francis Phillips - company director James Donald Hicks - referee for the applicant Katrina Southwood - assistant manager for the respondent Lindsay Robert Grenfell - executive director BIA of Victoria Pty Ltd Peter Buckingham - director of the respondent Desmond Jackson - chairman of the Board of the respondent The applicant was employed by the respondent on 25 March 1994 and his employment was terminated on 21 November 1994. He was employed as the inaugural manager for the respondent of its newly leased water sports centre at Carrum in Victoria. The respondent leases the facility, known as the National Water Sports Centre, from its owner Melbourne Parks and Centre is purpose built for various water sport activities but is principally used for powered and non-powered boating, including rowing. The respondent's directors are drawn from a boating industry association and various facility user groups. The respondent manages its affairs by way of Board meetings held monthly at which time decisions on policy and expenditure are made. The applicant attended the meetings of the respondent and reported on his activities to those meetings by way of a manager's report appended to the agenda for the meetings, together with incoming and outgoing correspondence. The applicant is a former test cricketer for Australia and captained the Australian test side for some time. Prior to being employed with the respondent he had managed and operated his own sporting club business, including squash courts and an indoor cricket centre. The evidence was that the applicant was also keenly interested in boating and that this interest was what attracted him to apply for the position with the respondent. It was this interest which also contributed to the respondent's decision to hire the applicant. The applicant was employed after two interviews with Mr Grenfell and Mr Ponting, representatives of the respondent. It is common ground between the parties that at those interviews the issue of the applicant's ongoing cricket activities was raised. There is, however, an issue between the parties as to the context in which it was raised. Terms of the Applicant's Employment Contract The terms and conditions of the applicant's employment were not reduced to writing and all parties to the proceeding were vague as to terms in so far as hours of work were concerned. The applicant's evidence was that his hours of work were 40 per week, and that they were to be worked Monday to Friday with a requirement for weekend work for special events. His evidence was that after he commenced employment it was decided to open the Centre to the public seven days per week and consequently it became necessary to staff the Centre on weekends. This decision was further facilitated by the hiring of an assistant manager at the Centre at beginning of September 1994. The respondent's evidence is that the applicant was employed to work such number of hours as required, and that this included weekends. There is some variance between the evidence of the respondent's witnesses Mr Jackson and Mr Grenfell on the one hand, and Mr Buckingham on the other, as to when the Centre first opened to the public on weekends, as to what the hours of work of the applicant were, and when the requirement that he be at the Centre all weekend came into operation. However there was no definitive account of the hours of work or working arrangements provided by any witness for the respondent. The respondent's case was that it was a term of the applicant's employment contract that he would not play cricket so as to interfere with the performance of his duties, and that any playing of cricket on the weekend would have that consequence. It was the respondent's case that, in committing himself to play cricket on Saturday afternoons with a local district club, the applicant had breached a fundamental term of his contract of employment. That term was expressed in various ways during the course of the proceeding, however counsel for the respondent articulated it as being: " That he was not going to play cricket at a level which would interfere with the carrying out of his duties." The evidence of Mr Grenfell was that the contractual term directly prohibited playing cricket. However I do not accept that this was the case. Counsel further submitted that the resumption of cricket was a serious and fundamental breach of the applicant's employment agreement for which he was liable to be summarily dismissed. The applicant acknowledged that cricket was discussed during the interview and that this was in the context of it interfering with his availability. He denied giving any undertaking that he would not play cricket, and denied that it was a term of his contract of employment. It was put to the applicant in cross-examination that he deliberately concealed from the Board of the respondent that he had decided to play cricket. As I appreciate the purpose of this cross-examination, it was put on the basis of establishing the likelihood of a contractual term of the nature contended for by the respondent. The applicant denied this concealment and asserted that it was common knowledge that he was playing cricket. Having regard to the proximity to the workplace of the locality where the applicant was playing cricket, (ie: Frankston) I am satisfied that it would have been generally known that the applicant had commenced to play for a local district side and that it would have been a pointless exercise on his part to attempt to conceal this fact. I am satisfied that there was no deliberate conduct on the part of the applicant in this regard. I am satisfied on the evidence that, put at its highest, the applicant informed his interviewers, in response to expressed concerns as to his availability, that he was no longer involved in cricket. I do not accept that it was a term of the contract of employment, or a representation, that the applicant would not play cricket on weekends. I do however accept that it was either a term of the contract, or a necessary consequence of the nature of the employment, that the applicant be available to work weekends as required. The issue in these proceedings is whether he failed to meet that requirement. The evidence was that the Centre had no set opening or closing times on weekends and that the user groups, as opposed to members of the general public, had access to the Centre by way of keys at any hour. It was said by Mr Jackson that the applicant was required to be present at all times that the Centre was open to the public on weekends, which had the potential for the applicant to be on duty for extremely lengthy periods of time. No witness was able to point to a definitive statement of the times of opening and closing of the Centre either for the public or the user groups. There is dispute between the parties as to at what point in the employment the Centre actually opened to the public on weekends. The applicant's evidence is that the opening arrangements changed around the time that the assistant manager Ms Southwood was employed. The evidence of Mr Jackson was that he had assumed the Centre was open to the public on weekends during the entire course of the applicant's employment and that this was further evidence of the applicant's failure to meet his obligations pursuant to the contract. I am not satisfied that there was prior to September 1994 any obligation on the applicant to attend as a matter of course on weekends, other than in respect of scheduled special events. I accept the evidence of the applicant that the arrangements were altered in or around September to provide for general opening and staffing of the Centre for entire weekends. The evidence in Exhibit S7 that the assistant manager was not told at interview that she would be required to work every weekend is consistent with this conclusion, and Mr Grenfell's evidence also tended to support this conclusion. No formal rostering arrangements had been made between the manager and the assistant manager as to weekend or other work until just prior to the termination of the applicant's employment when the applicant informed the assistant manager of arrangements he wished to impose. Prior to that time there had been an informal arrangement in relation to weekend work. The applicant's evidence was that from the beginning of his employment he consistently worked in excess of 40 hours per week. His evidence was that at least from September 1994 he worked 6 and 1/2 days per week. This is supported by correspondence to the applicant from Ms Southwood wherein she acknowledges the lengthy hours each of them were required to work (Exhibit S7). The applicant's evidence was that he worked each weekend from September 1994 to the date of the termination. During September 1994 his evidence was that he worked Monday to Friday, and in addition each Saturday and Sunday. This evidence was not contested. The evidence was that during October 1994 the applicant commenced playing cricket on Saturday afternoons pursuant to a contract he had entered with a district side, and he did not attend the Centre on Saturday afternoons, but did attend on Sundays. This evidence was not contested. His evidence was that from the time he commenced playing cricket on Saturday afternoons during October and November he did attend on Saturday mornings, however Ms Southwood's evidence was that she did not see him whilst she was in attendance on Saturdays. S170DE(1) and (2) - Valid Reason and Harsh, Unjust and Unreasonable Having regard to the vague nature of the evidence as to the actual terms and conditions of the employment, the annual salary of the applicant of $37,500.00, the hiring of an assistant manager and her attendance at the Centre on Saturdays, the lengthy working hours of the employees, the absence of any paid overtime, and the pattern of work attendance of the applicant, I am satisfied that the applicant attended work in conformity with the terms and conditions of his employment. It should however be noted that the issue of whether or not a respondent had valid reason to terminate the contract of employment is not solely determined by reference to the contractual obligations between the parties. This is particularly so when one has regard to the provisions of S170DE(2) of the Act, in particular the expression " harsh, unjust or unreasonable". Had there been valid reason based upon a contractual obligation and relevant conduct of the applicant, there would nevertheless have been an element of harshness and unreasonableness in the decision to terminate upon the basis of the cricket issue, when one has regard to the vagueness of the terms of the contract and the onerous nature of the expectations of the respondent as to attendance at the workplace. There was evidence in relation to allegations as to the applicant not performing his work adequately. This evidence, together with the alleged breach of the contractual term involving his absence from the workplace playing cricket on Saturdays, formed the basis for the termination of the employment. The performance or conduct based allegations in the proceedings were as set out below. I deal with each in turn in relation to my findings on the evidence. 1. That in relation to contractual negotiations regarding signage rights at the premises, the applicant did not progress the negotiations to finality as quickly as the chairman, Mr Jackson, thought ought to have occurred and that the agreement the applicant had recommended to the Board was in the opinion of Mr Jackson not commercially viable. It is clear that the applicant did not have business or negotiation skills of the level of Mr Jackson. However there is no evidence in the proceedings that the applicant "sat on his hands and did nothing to progress the signage contract finalisation" as was put to him in cross- examination. I am of the view that it would be unfair to lay the blame for the delay in the contract process at the feet of the applicant having regard to the difficulties which arose in relation to the terms of the lease arrangements. I accept the evidence of the applicant that he acted to frequently follow up the progression of the matter. To terminate the applicant's employment as a result of this matter would be harsh and unreasonable. 2. That the applicant had represented to the Board that a tractor would be able to be purchased by arrangement with Melbourne Parks and Water in such a way as to avoid the payment of sales tax, and that this had not been possible. In this aspect of the matter I do not accept on the material before me that there was in the purchase of the tractor any damage done as a result of any alleged representation by the applicant. The fact was that the applicant, in the company of Mr Grenfell,was advised by Melbourne Parks and Water that it would not be a party to such an arrangement. The evidence was that the purchase of the tractor was necessary in any event. The decision to expend funds was not brought about by any representation of the applicant. No actual expenditure took place until after the sales tax position had been established. It was harsh and unreasonable to rely upon this matter as a reason for the termination of the applicant's employment. 3. That the applicant had not been present at the Centre on Saturday 15 October, a busy afternoon, and that notwithstanding that the assistant manager was in attendance, she had been unable to control aspects of the behaviour of certain users of the facility. That as a result, real issues arose as to the safety of the facility for users. This matter was raised on the basis that the assistant manager ought not to have been left attending the premises on her own, and that the applicant ought to have been present and not playing cricket. I have earlier dealt with the nature of the terms and conditions of employment in relation to weekend work and do not repeat those matters, other than to note that there were no guidelines laid down nor had there been any discussion, notes or direction as to the sharing or splitting of weekend attendance between the assistant manager and the manager. The assistant manager complained in the proceedings of being used by the applicant as merely an administrator when she was qualified in recreation and outdoor education and wanted more responsibility. The Board complained that the assistant manager had been left in charge on her own on the day. This conflict between the former and latter complaints paints a picture of an organisation which had given no real consideration to the roles and division of responsibilities between the persons it employed. It was not unreasonable for the applicant to assume that a person employed as an assistant manager was competent to staff the premises on what was apparently to be a normal usage Saturday afternoon. That the conduct of some users on that day was disgraceful was not a matter that should or could be blamed upon the applicant. Whilst it may have called for a clarification or confirmation of the position in relation to staffing on weekends, the incident itself was not a result of any unreasonable or improper conduct on the part of the applicant, and to rely upon that incident to terminate the employment of the applicant is harsh and unreasonable. 4. During the course of the proceedings an allegation was made that the applicant had improperly sold the respondent a ride-on mower which had been not fit for the purposes of the facility. Aside from the fact that I am not satisfied that this issue arose prior to the termination of the employment, the mower concerned had been used by the respondent at its premises, without any payment to the applicant, for approximately five months prior to the purchase. It is harsh and unfair of the respondent to allege lack of bona fides on the part of the applicant, having regard to this use and to the fact that the applicant had the equipment valued independently prior to the sale (Exhibit S9). 5. That there had been issues of safety raised by the rowing clubs in relation to the beach area outside the rowing sheds and that the applicant failed to deal adequately with this matter or the complaints of the user groups in this regard. The evidence in the proceedings was that the applicant had no authority to expend the funds of the respondent. Decisions as to expenditure were made by the Board. The applicant, upon receiving complaints in relation to this matter, took steps to respond to the complainants and to advise the Board in relation to the complaints and the resolution of the issue. The Board minutes identify numerous instances where the issue of the sand is raised, and it is also raised and discussed in the manager's report. No decision as to expenditure on the sand issue was made by the Board until 8 November 1994 (Exhibit S8 - Minutes of Board Meeting.) Further, the evidence was that consequent upon the decision to place sand in the area, the applicant took steps to arrange for a free load of sand from a supporter of the Centre. Any criticism of the applicant in relation to prevarication on this matter could equally be levelled at the Board as it was not the applicant who was the ultimate decision maker. There is however one aspect of this matter which was justifiably complained of by the respondent, that being the initial response to the bursar of Hailebury College who wrote to complain as to safety problems arising out of the absence of the sand in front of the sheds (Exhibit K2 and Exhibit K3). The applicant's response to him was unsatisfactory by its failure to adopt, as the manager of the Centre, any responsibility for the issue. However, this issue was not raised with the applicant during the course of his employment, notwithstanding that the correspondence was attached to the Board minutes. It was first raised as a consequence of these proceedings. In view of these factors I am satisfied that to terminate the applicant's employment on this basis would be harsh and unreasonable. Whilst I accept that there were various members of the Board of the respondent who held concerns as to the suitability of the applicant for the position of manager, those concerns were never articulated to the applicant and the above matters were not such as to warrant the termination of the employment of the applicant without warning. Procedural Fairness - S170DE(2) and S170DC There was a dispute in the evidence as to the matters which were raised with the applicant at the termination interview on 21 November 1994. The respondent's evidence was that advice was given to the applicant as to the reasons for the termination, and that he could have raised issues in his own defence had he wished. Further, it submits that the applicant failed to offer any alternatives to the termination of the employment. The applicant says that Mr Jackson merely advised him that the Board had decided to terminate his employment and gave four reasons, without any detail of allegations. The applicant alleges that there was never any intention to accord him an opportunity to be heard and that the outcome of the meeting was a foregone conclusion. The respondent denies that the outcome of the termination meeting was a foregone conclusion. Notwithstanding the evidence that the Board had, at a special meeting, determined to terminate the applicant's employment, it says that an opportunity was accorded to the applicant to be heard. I am satisfied that the applicant was not given any real opportunity to discuss the issues of concern to the respondent. The meeting was a foregone conclusion and one factor points strongly to this fact. That is, it was never put to the applicant that the employer had a view about the contractual relationship between them and that the playing of cricket was inconsistent with this, and that the applicant should cease playing cricket on Saturday afternoons. No opportunity was given to the applicant to cease playing cricket. There was no consideration of these options, nor of any alternatives either with the applicant or previously with the Board. Further, there is no evidence of any express criticism of the applicant's work performance during the course of the employment, either orally or in the minute documents provided to the court upon which the respondent would be entitled to rely as evidence of the matters having been raised previously with the applicant. I am satisfied that the applicant was not accorded the requisite opportunity to be heard pursuant to S170DC of the Industrial Relations Act. I am further satisfied that the termination of the applicant's employment was harsh, unjust and unreasonable having regard to the failure of the respondent to consider alternatives to termination of the employment and the absence of any previous warning in relation to the work performance. Remedy - S170EE Having regard to the hostility between the parties which was apparent during the course of the proceedings, I am satisfied that reinstatement would be impracticable. I am therefore required to look at the amount of compensation which would be appropriate in the circumstances. The applicant seeks an amount of $ 20,000.00. Having regard to the annual income of the applicant, this amount appears to exceed the maximum amount of compensation imposed by S170EE(3)(b) and (4) of the Act. It was submitted by the applicant's counsel that, having regard to the applicant's public profile, if there were damage done to his good name and reputation then the applicant is entitled to additional compensation beyond that which would be awarded to a manager who had no public profile. Even were this to be a correct approach to the compensation provisions in S170EE, in this case I am not satisfied that it would be an appropriate one. The evidence shows that the applicant has not suffered in his reputation by the fact of the termination of his employment. He has continued to obtain advertising and publicity engagements as a result of his profile as a cricketer. These engagements occurred subsequent to the termination of the employment. There is no evidence in these proceedings of ongoing damage in this regard. The applicant had not obtained full time employment as at the date of the hearing of this matter. He had been in receipt of some income however, arising out of a cricket tour he participated in and television commercial engagements. I have considered the likely ongoing length of the employment together with the likelihood of his obtaining alternative employment and have decided that an amount of $12,500 in compensation is an appropriate amount. This amount equates to an additional four months pay which, having regard to the length of the employment, the months pay in lieu of notice already given, together with what could reasonably be anticipated in the circumstances as the likely length of continuation of the employment, I regard as reasonable compensation. It should be noted that in coming to this amount of compensation I have taken into account the earnings of the applicant in the period after the termination of the employment. The orders of the court will be: 1. That the respondent pay to the applicant compensation in the sum of $12,500. 2. That the time for payment is twenty one days from the date of this order. I certify that this and the preceding seventeen (17) pages are a true copy of the reasons for judgment of Judicial Registrar Parkinson. Associate: Dated: 8 May 1995 Solicitors for the applicant: Rigby Cooke Counsel appearing for the applicant: Mr R Spicer Solicitors for the respondent: G Katz & Associates Solicitor appearing for the respondent:Mr G Katz Dates of hearing: 3, 4 and 5 April 1995 Date of judgment: 8 May 1995