Zappia v Kingmill Pty Limited [1995] IRCA 204

C A T C H W O R D S INDUSTRIAL LAW - Termination of employment - procedural fairness - compensation. Industrial Relations Act 1988, S170EA, S170DC, S170DE, S170EDA, S170EE. Nicholson v Heaven and Earth Gallery Pty Limited, (1994) 126 ALR 233. ZAPPIA v KINGMILL PTY LIMITED - No. NI 1231 of 1995 Before: Judicial Registrar LINKENBAGH Place: Sydney Hearing Date: 3-4 May 1995 Judgment Date: 4 May 1995

INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N0. NI 1231 of 1995

Between: STEFANI LOUISE ZAPPIA Applicant And: KINGMILL PTY LIMITED Respondent Before: Judicial Registrar LINKENBAGH Place: Sydney Hearing Date: 3-4 May 1995 Judgment Date: 4 May 1995 MINUTES OF ORDER THE COURT DECLARES: The termination of the employment of the applicant contravened S170EE(2) of the Industrial Relations Act, 1988. AND THE COURT ORDERS THAT: The respondent is to pay to the applicant the sum of Three Thousand Dollars, within 14 days. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.

INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NO. NI 1231 of 1995

Between: STEFANI LOUISE ZAPPIA Applicant And: KINGMILL PTY LIMITED Respondent Before: Judicial Registrar LINKENBAGH Place: Sydney Hearing Date: 3-4 May 1995 Judgment Date: 4 May 1995 REASONS FOR JUDGMENT (EX-TEMPORE REVISED FROM TRANSCRIPT) This is an application pursuant to the provisions of Section 170EA of the Industrial Relations Act 1988 made by the applicant in respect of the termination of her employment with the respondent, which termination occurred on 30 January 1995. The applicant was employed at that time as a Duty Manager with the respondent at its car rental office at Kings Cross and she had been employed in various capacities with the respondent since the 11 November 1991. I shall deal firstly with the question of whether or not the respondent in effecting the termination complied with the provisions of Section 170DC of the Act. The decision to terminate was made, on the evidence of Ms Turrell, either the day before 30 January or on 30 January. Ms Turrell had a letter prepared and also prepared a cheque and had a statement printed calculating the payment to be made to the applicant on termination. Ms Turrell arranged for the applicant to come and see her and she arranged for a witness to be present. She commenced that meeting with a statement reminding the applicant of a previous warning to the effect that she would accept no more customer complaints. She stated that since the previous warning she had received written complaints from customers, verbal complaints from customers, verbal complaints from staff and written complaints from franchisees and she said: "I don't see that I have any other choice but to terminate your employment." She then handed to the applicant the letter of termination, the cheque and the statement. The applicant then continued the conversation with a request that she be permitted to see the written complaints that had been made against her. I find that there was a breach of Section 170DC of the Act on this occasion in that the applicant was not given the opportunity to defend herself against the allegations made. In fact, the terms of those allegations and the details of those allegations were not even made known to her prior to the act of termination. The next question to be answered is whether or not there is a breach of Section 170DE and that question is whether there was a valid reason connected with the applicant's capacity or conduct for the termination. The evidence in the matter related to her manner and attitude towards work. Those are always matters which are difficult to judge and in respect of which the amount of evidence which is required varies very much from case to case. The adverse evidence about conduct must be considered in the perspective of the applicant's conduct at other times and the Court must be satisfied that on the balance, the incidence of adverse behaviour are such as to in effect, out weigh the good behaviour and to justify the termination of the employment. The history of the matter in summary, is that until April of 1994 there had been no cause for the employer to offer any criticism to the applicant at all. In April she was spoken to by Mr Brunning in relation to what might be seen as minor matters. She perceived that thereafter, Mr Brunning had formed the intention to terminate her employment. She told the Court that after 1 April, whenever Mr Brunning visited the office he ignored her and she felt that she was being victimised and harassed because Mr Brunning wanted to get rid of her. There is no evidence before this Court to substantiate the applicant's perception in relation to Mr Brunning. In July the State Manager, Mr McKee spoke to the applicant on two occasions and he again spoke to her early in August. On each of those occasions he spoke to her about complaints concerning her manner and attitude. Twice at that time he issued her with what could be called a final warning in terms that if she was the subject of one further complaint regarding rude and unsatisfactory service her employment would cease. At that time, and during the course of her oral evidence, the applicant did not concede that there was any cause for her employer to question the appropriateness of her manner and attitude in her employment. Following the letter to her of 1 August which might be described as the final warning, she continued working and was not the subject of any further notice by her employer until early in December when Ms Turrell spoke to her and gave her another final warning. I agree with Mr de Meyrick's observations that the evidence shows that Ms Turrell had very little material within her own experience on which to base the stance that she took on 7 December, that, in effect, the applicant's employment was on the line. Nevertheless, she did give that final warning and it was in terms that the applicant's: "Customer service is below an acceptable standard and your staff relations and attitude are poor. If I do not see a considerable improvement in both of these areas immediately I will be forced to terminate you." The letter concludes with a suggestion that if the applicant needs any assistance or guidance she is to let Ms Turrell know. That letter is very clear in its terms. Certainly at that stage the applicant had been given no detail of any complaints which had been made, but she was on notice from Ms Turrell that things had to "improve." The letter clearly spells out the consequence of a failure to "improve." Thereafter, it could be said that the applicant slid downhill. She did not respond to the letter of 7 December in the same way as it might be seen that she apparently responded to the letter of 1 August. Within days there were further incidents involving her and complaints about her. Each one of those incidents or complaints, as I have observed during the course of the hearing, taken in isolation might perhaps have been explained away or not given sufficient weight to enable them to be seen as reasons for justification of termination. The employment situation happens on a day to day basis. Employees build up a record, a history in their employment and conduct which occurs at isolated incidences can have greater significance if it is repeated. It is not as easy to forgive repeated breaches of the employers standards. There were several incidences in December including the receipt of a letter, which was annexure C to Ms Turrell's affidavit, from the New South Wales Rentals Manager of DasFleet, who would have to be seen as an independent observer. He complains of the applicant's shortness with customers and his perception was that she seemed to talk down to the customers: "Almost like it was all too much trouble." Significantly the author of that letter notes that the conduct that he observed in the applicant, and this was conduct observed on two occasions, was unusual for a Thrifty employee. Another of the instances after 7 December is described in annexure E to Ms Carroll's affidavit, which is a letter from a Thrifty operator in Victoria to Ms Carroll drawing her attention to his observations of the tone of the applicant in two telephone conversations which he had with her about business matters. He mentions also that her attitude was "completely out of place within the Thrifty system." In addition there is the evidence of another employee, Ms Ghilks, that the applicant spoke to her about the work performance of some of the people that Ms Ghilks supervised in derogatory terms and used swear words, or a swear word at her. Other matters which indicate the attitude of the applicant towards her employer which I have noted from the evidence are her evidence that she could see no wrong in her own conduct and I think that it is fair to say that her own evidence discloses that it did not occur to her to take a step back and look at herself and her conduct given what was being said to her on the occasions during the last half of 1994. Her manner in interviews with her superiors involved her raising her voice and on each occasion when she was given a letter and asked to sign it, she refused to sign it. The applicant admitted in evidence that "people may take her the wrong way" but she was apparently unable to perceive that it may not have been everyone else that was out of step but, in fact, herself that was not marching with the army. Another issue which was raised in the evidence was the incidence of the applicant's personal telephone calls and without canvassing all of the detail of that evidence the significance of it in my view is that the applicant knew at least as at 7 December 1994 that the number and duration of personal telephone calls which she received and made in the office was at an unacceptable level, at least as far as Ms Carroll was concerned. Notwithstanding that, Ms Carroll had reason to speak to her fairly shortly after 7 December in relation to the length of a personal telephone call on at least one occasion. That evidence is significant as an indication of the attitude of the applicant which, tied in with the other evidence as to her attitude, adds to the snowballing effect of the successive incidents. As I have said, the respondent's manner of dealing with the actual termination on 30 January was a breach the Act and left much to be desired. The manner in which the termination was effected was symptomatic in my view of an inability in the respondent to communicate effectively with the applicant and of a lack of what might be seen as sophistication in personnel management practices on behalf of the respondent. The respondent could have dealt with the applicant differently at each stage of the process. That is not to say that what the respondent did was wrong or that it takes away from the total gravity of the conduct of the applicant but the respondent should be aware that it is the view of the Court that in dealings with employees, it would be desirable for there to be a greater degree of real understanding and communication between the parties and a greater degree of the offering of assistance or guidance to the employee who is seen to be in difficulties. To some extent it might be said that the attitude of the respondent or the manner in which the respondent dealt with the applicant did nothing to encourage her to mend her ways and may have exacerbated the attitude problem which she had. I find therefore that the respondent did have a valid reason for the termination of the employment and it has discharged its obligations under section 170EDA(1)(a). I am left then with the task of determining what amount of compensation pursuant to section 170EE is appropriate given the breach of section 170DC. I think that this is a case to which Nicholson v Heaven and Earth Gallery Pty Limited, which is reported in 126 ALR, page 233, applies. At page 247 the Chief Justice of this Court says: "If I had reached the question of compensation I would have assessed it on the basis that the procedural irregularity deprived Mr Nicholson of the chance of retaining his employment. However, I would not have awarded him a large sum. If the directors had brought his difficulties with the shop staff into the open and assured everyone approached him in an open and constructive manner there would have been a possibility of overcoming that problem but I think Mr Nicholson had another problem that would have been more difficult to resolve. It is clear that by the date of his dismissal Mrs Norton had formed a strong view that he was not the person for the job. This view was not so much founded on the friction between him and the shop staff but because she thought he was out of tune with the ethos underlying the company's products. As Mrs Norton put the matter in her evidence, Mr Nicholson did not understand the brief I had given him." In this case the evidence is that this applicant did not understand what her employer was saying to her. Her conduct after having been given her final warning on 7 December deteriorated, and it is only a matter of time in my observation on the evidence that the employment would have come to an end. The applicant is entitled to a some compensation. Her employment ceased on 30 January 1995 and she was unemployed until 3 April 1995. Her employment since then has been in a job which pays some $390 a week and which does not have the status or career opportunities which she may have had, had her employment with Thrifty continued. I do not give that aspect a great deal of weight because of my finding that in fact it was the applicant's own conduct after 7 December which brought about her demise as a Thrifty employee. Her average weekly wage for the six months prior to termination with Thrifty was $858 per week. I have determined that in this instance while some compensation is appropriate that compensation should be in a limited amount and the order that I make is that the respondent pay to the applicant compensation pursuant to section 170EE(2) of the Act in the sum of $3,000. I will allow 14 days to pay. I note that the applicant received three weeks pay in lieu of notice which was the appropriate amount or the minimum amount to which she was entitled under the provisions of section 170DB(2) of the Act and the evidence is that she received all other entitlements in relation to her employment. I certify that this and the proceeding six (6) pages are a true copy of the Reasons for Judgment of Judicial Registrar Linkenbagh. Associate: Kerry Harrison ______________ Date signed: 23 May 1995 Appearances Counsel for the applicant: Mr R. de Meyrick Solicitor for the applicant: Ms V. Saliba, Carroll & Knudsen Counsel for the respondent: MrR. Dubler Solicitor for the respondent: Mr J. Roper, Esplins Solicitors Date of Hearing : 3-4 May 1995 Date of Judgment : 4 May 1995