Jonathan Stewart Darley v Lanlex No 77 Pty Limited (t/as Independent Tyre Distributors) [1995] IRCA 196

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VI 2804 of 1994 VICTORIA DISTRICT REGISTRY B E T W E E N: JONATHAN STEWART DARLEY Applicant A N D LANLEX NO. 77 PTY LIMITED (t/as INDEPENDENT TYRE DISTRIBUTORS) Respondent Reasons for Judgment 15 May 1995 PARKINSON JR This is an application pursuant to S170EA of the Industrial Relations Act 1988. The applicant was employed by the respondent on 28 July 1994. The respondent's business is selling tyres to retail outlets. It is apparently a large operation with wholesale outlets in various country and city regions throughout Australia. Its head office is in Sydney. The applicant was employed at the respondent's newly opened Shepparton outlet. His employment occurred as a result of his hearing that there were openings for sales representatives with the new operation, and approaching the manager Mr Orman for a position. There is dispute as to the position to which the applicant was appointed. The applicant says he was employed as a sales representative and the respondent says he was employed as a storeman/driver, with a view to his being trained as a sales representative. The applicant was employed pursuant to a contract of employment which specified a three month probationary period. However his employment was not terminated until 14 December 1994 after the probationary period had expired. The evidence of the applicant was that he was employed as a sales representative. It was submitted that this was evidenced by the fact that he was supplied with a business card which held that title (Exhibit M2). The applicant says that he was employed at a rate of pay which was to be increased after the expiration of the probationary period of employment. The respondent says that it was reluctant to employ the applicant as a sales representative, although that was what it initially had in mind, in view of his lack of experience or training in that position. However because of his skills and experience as a tyre fitter, he was employed as a storeman/driver, with a view to his eventually becoming a sales representative. The respondent says that the applicant was told this, and that he was fully informed that his position would be reviewed at the end of the three month period and if satisfactory he would be upgraded to a sales representative position. The duties of his position were to look after the stores area, including stock control and cleaning duties, together with undertaking regular delivery runs. The applicant confirmed that these were included amongst his duties, but says he also took orders by telephone and in the course of his delivery runs. The respondent says that the applicant was employed pursuant to the Vehicle Industry Repair Services and Retail Award in the classification of Storeman/Driver Level 2 of the Award. The evidence was that this rate of pay was applied to the applicant from his date of commencement. In this regard the respondent points to electronic mail correspondence between Mr Orman and Ms Carol Littlejohn, the paymistress of the respondent dated 4 August 1994 wherein the applicant's classification and rate of pay per annum was confirmed (Exhibit S1). Therein lies the dispute between the parties which, together with various work performance issues, led to a breakdown in relations of such a nature that the termination of the applicant's employment resulted. During the course of the applicant's trial period of employment I am satisfied that the respondent's manager Mr Orman had a number of concerns with the work performance of the applicant. These concerns related to the manner in which the applicant approached and related to customers when out on his delivery runs. In particular they arose when the applicant was required to obtain payment from customers prior to the customer taking actual delivery of the goods. Other matters such as sending orders to the wrong location were also raised. These are not matters which were only raised with the applicant subsequent to the termination or during the course of these proceedings, rather they had been the subject of ongoing concern on the part of the respondent, which was expressed and discussed with the applicant during the course of the employment. These issues were raised with the applicant on a number of occasions and it is not contested that the respondent reduced to writing such warnings as were given, although copies were not given to the applicant. The evidence was that on two occasions during the probationary period the applicant signed the written warnings, however he apparently declined on the occasion of a third warning which occurred outside the probationary period. The respondent failed to produce copies of the written warnings and, whilst the explanation given by the respondent's witness in relation to this failure was not entirely satisfactory, on balance, in view of the evidence of the applicant and the electronic mail documentation (Exhibit S1) which records a warning having been given on 7 September 1994, I am satisfied that warnings were given as to the work performance issues relied upon by the respondent. I am satisfied that the respondent was dissatisfied with the applicant's work performance and that this dissatisfaction predated any issue being raised by the applicant in relation to his wages. It should be noted that the applicant's continued employment was in fact under threat as at 7 September 1994 at which time Mr Orman had decided to terminate the applicant's employment during the probation period. Mr Orman was instructed by Ms Littlejohn not to proceed to terminate the employment but rather to inform the applicant of how he was failing to perform properly and to assist him to improve his performance. I am satisfied that Mr Orman did raise concerns as to the applicant's work performance with him on a number of occasions between the date of the first warning and the date of the termination of the employment. The respondent's evidence was that the reason for the failure to increase the applicant's pay at the expiration of the probationary period was because of the warnings he had received and his failure to satisfy the respondent that he could perform the duties of a sales representative. The respondent's evidence was that the applicant's position in this regard was to be further reviewed in two months time, and that the applicant was advised of this on a number of occasions. The applicant's case was that the real issue for the termination related to the breakdown of relations between he and Mr Orman as a result of his querying the fact that his wage rate did not increase at the expiration of the probationary period. It was clearly the applicant's expectation that his wages would be increased at the expiration of that period. Whilst the issue of the appropriate classification for the applicant's work is not a matter before me, it is necessary to determine in these proceedings whether the issue of the wage concerns was the reason for the termination or one of the reasons. The applicant began to query the rate of pay he was receiving only after the expiration of the probationary period. However the evidence is that the applicant's work performance was under scrutiny prior to his raising the issue of his pay rate. The respondent says that the last straw in a chain of events was the conduct of the applicant on the days prior to the termination of the employment when in relation to his pay rate entitlement he allegedly "harassed and abused" various members of staff of the respondent. It was put that the applicant continued to telephone persons in relation to his rate of pay after being informed by his manager and others as to the position regarding his pay rate. The evidence is that the applicant, in the company of his wife, visited Mr Orman's home on Monday 12 December 1994 and a heated discussion occurred between them as to the applicant's wage entitlements. On the following day, Mr Orman informed the applicant that his conduct in pursuing him at home was not acceptable and should not happen again. No action was taken to terminate his employment at that time, although it is clear from the contents of Exhibit S1 that it was being contemplated. The applicant attended at work and once again complained as to his pay rise not having been forthcoming, together with a further complaint that he was being underpaid. The evidence was that it was a hostile approach and that the conversation became heated. Mr Orman referred the applicant to the paymistress for any further information he required, and the applicant then engaged in a telephone conversation with her, which on the evidence of the respondent became quite heated at least on the applicant's part. The conduct of the applicant and his attitude towards the respondent's employees was the catalyst for the decision to terminate his employment. The respondent says that he was rude and aggressive to a number of members of its staff. I am satisfied that it was the applicant's manner toward other employees, particularly on the penultimate day of employment, and not his demands in relation to his wages, which resulted in the decision by the respondent to terminate his employment. I am further satisfied that the termination decision arose as a result of a history of work performance issues and ongoing tensions arising out of the pay issue, the attitude of the applicant to the respondent's paymistress during the course of the telephone conversation on 13 December being the last in a series of unsatisfactory events in the course of the employment. Having regard to these matters I find that the respondent had valid reason for the termination of the applicant's employment. I turn now to consider S170DE(2) as to whether the termination of the employment was harsh, unjust or unreasonable. I am not satisfied on balance, having regard to the work history of the applicant with the respondent and the various work performance issues raised during the course of the employment, that the termination of the employment was harsh, unjust or unreasonable. Having regard to the numerous discussions held with the applicant as to his work performance and work related issues during the course of the employment, I am satisfied that he was, or ought reasonably to have been, aware of the issues as to his work performance which were of ongoing concern to his employer. Consequently I am not satisfied that there has in this respect been a denial of fairness to the applicant. S170DC Division 3 Part IVA of the Industrial Relations Act, and in particular S170DC, requires that before employment is terminated for reasons of conduct or work performance, the employee must be given an opportunity to respond to the allegations against him. This provision represents nothing more than a fundamental requirement of fairness. I have had careful regard to the steps which were taken by the respondent in this matter in implementing the termination of the employment. There is no evidence before me of any opportunity being given to the applicant to be heard in relation to the termination. The evidence is that the applicant was handed a letter signed by the National Sales Director of the respondent, setting out the reasons for the termination (Exhibit M3). The National Sales Director apparently took the decision to terminate the applicant's employment, although there was no evidence as to the process adopted by him in this regard. The electronic mail records (Exhibit S1) identify that there was ongoing communication between Mr Orman and the respondent's paymistress in the last days leading to the termination of the employment. That the issues existed and complaints were made is clear, however the process adopted wherein it was finally decided to terminate the employment was not. I am not satisfied that the applicant was given an opportunity to be heard at the time of the termination of the employment in accordance with S170DC of the Act. I am not satisfied that any inquiries were made by the respondent's National Sales Director in relation to the reasons for the termination of the employment and no consideration was had of the applicant's version of events or explanations of his conduct. Having regard to these matters, I find that there was a contravention of S170DC of the Act by the respondent. It is appropriate therefore to determine what remedy the applicant is entitled to in the circumstances. S170EE The applicant seeks compensation on a continuing basis. I am satisfied that reinstatement would be impracticable. He has been unemployed since the termination of the employment, and subsequent to the termination was paid an amount of two weeks pay in lieu of notice. In this case, having regard to the matters which were the reasons for the termination of the employment and to the relations between the parties during the course of the employment, in particular the applicant, his manager Mr Orman, and other more senior staff of the respondent, I am satisfied that the applicant's employment was unlikely to have continued for any significant period of time beyond the notice period eventually paid by the respondent. This is a relevant consideration when an assessment is being made of the appropriate amount of compensation. See in this regard the decision of the Chief Justice in Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 126 ALR 233 at 246. Whilst it cannot be assumed that the applicant's employment was likely to have been terminated even had there been compliance with S170DC, nevertheless there is no aspect of this employment relationship or history which would suggest that the applicant had any reasonable likelihood of lengthy ongoing employment with the respondent. The applicant has received an amount equivalent to two weeks notice of termination and I am satisfied that although some compensation ought lie as a result of the contravention of S170DC, that amount ought be relevant to the likely ongoing employment. In this case I assess that as, at best, a further two weeks and that is the amount of compensation I propose to award the applicant. The orders of the court will be: 1. That the respondent pay to the applicant the sum of $704.00 in compensation. 2. That payment be made within 7 days of the date of this order. I certify that this and the preceding ten (10) pages are a true copy of the reasons for judgment of Judicial Registrar Parkinson. Associate: Dated: 15 May 1995