INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 1125 of 1995 B E T W E E N : FRANKA MASTRANGIOLI Applicant AND MELLOW BANNER PTY LTD Respondent Before: Judicial Registrar Millane Place: Melbourne Date: REASONS FOR JUDGMENT By an application made on 13 June 1995 the applicant alleges breaches of Division 3 Part VIA of the Industrial Relations Act 1988 (the Act) when her employment by the Respondent was terminated on 9 February 1995. This occurred after some five days of employment in the respondent's bakery as a shop assistant. The respondent meets the claim made on two fronts. The first is that the applicant was employed on one weeks probation and, if that allegation is not sustained, she at interview misrepresented her capacity to perform the job as to her experience in sales, the use of a cash register and her ability to speak Italian to the respondent's Italian customers. Insofar as misrepresentation was alleged the respondent relied on the decision of Mr Justice Crockett in Academy of Health and Fitness Pty Ltd v Power [1973] VR 254 which upheld the equitable right of a party to rescind a contract for innocent misrepresentation. The Facts The applicant is 23 years of age. Her work history is limited however since approximately 1990 she has been studying at the Australian Catholic University both full time and part time for a Bachelor of Social Science majoring in Psychology. Her course of studies have leaded to various placements in family welfare and drug and alcohol rehabilitation programs, her last placement being from mid-1994 to approximately December 1994 when she decided to in her words "look for a different challenge and enter the paid workforce on a full time basis". She contended in her evidence that she had considered returning to her studies in 1995 but was uncertain of whether that would be full time or part time or at all. As it turns out she has not returned to any study so far. I observed the applicant to be a forthright and truthful witness who appears to have been extremely conscientious in her approach to her employment and the task of learning her new job. The respondent's two witnesses Descampardon Sanchez (Mrs Sanchez) and Roaul Sanchez (Mr Sanchez) are proprietors of the respondent's bakery business and whilst I accept them both as witnesses of credit there were a number of inconsistencies and contradictions in the respondent's case overall which led me to the conclusion that the applicant's recollection of events is to be preferred. In late November 1994 the applicant answered an advertisement by the respondent placed with the CES as follows:- "A position is available for a person to work in a bakery shop. Will be required to assist in sales and cleaning. 38 hr pw $360 pw 18-40 start date asap transport Experience in sales preferred." An appointment for an interview was arranged by the CES and the applicant attended on Mrs Sanchez at the shop and was interviewed "in the middle of the bakery". Mrs Sanchez gave evidence with the assistance of a Spanish speaking interpreter. It would be fair to say that Mrs Sanchez displayed a rudimentary command of spoken English. The interview was conducted in English. The applicant's estimate of the interview time was between five and eight minutes and this estimate was not challenged by Mrs Sanchez. The applicant's recollection is that she told Mrs Sanchez that she had not worked in a bakery before but had sales experience in telemarketing and direct sales. Further that she was fluent in the Italian language and was prepared to learn the job. The applicant recalled being told that her duties would involve customer service and some cleaning. There was no discussion of wages. The applicant was adamant that there was no discussion of employment being entered into on a trial basis either at interview or on the following Monday when she commenced work. Interestingly enough, Mrs Sanchez made no mention of any trial period at interview. Her allegation is confined to the morning on which the applicant commenced employment. A couple of days following the interview with Mrs Sanchez the applicant was telephoned by the respondent's employee, known as Margaret, who in a brief conversation informed the applicant that she had the position. There was short exchange as to whether the applicant would commence on the Monday or the Tuesday, however, after consulting with Mrs Sanchez, Margaret informed the applicant that Mrs Sanchez needed the applicant to start the following Monday at 7.00am. The applicant was enthusiastic about starting her new job and arrived at work on the Monday at about 6.50am to, as she said "get acquainted with it and be introduced". When the applicant arrived at work on the Monday morning there was a short discussion with Mrs Sanchez during which time her uniform was handed to her and the applicant proceeded to get changed and start work. It is contended by Mrs Sanchez that she gave the applicant her uniform and said "you start on probation for one week". According to Mrs Sanchez the respondent always put its staff on one weeks' probation. It was conceded by Mrs Sanchez that when she made the alleged statement to the applicant about the probationary period the applicant had turned to go and put on her uniform and did not respond to the statement made. In the five days of employment which followed the applicant is said to have had great difficulty with the operation of the cash register, to have failed to have addressed the Italian clientele in Italian, to have damaged the bread slicing machine presumably through incompetence and to have performed poorly as a shop assistant. At the initial interview Mrs Sanchez recalled being told that the applicant had sales experience. She denied being told it was in telemarketing and direct sales. Further she recalled asking the applicant if she spoke Italian because nearly 60 percent of the bakery customers were Italian and Mrs Sanchez told the applicant that it was important she have experience with the cash register to which the applicant replied "yes it would be alright". From time to time Mrs Sanchez served the customers in the front of the shop along with the applicant as did two other shop assistants, however, her prime duties were as a pastry cook working alongside her husband baker at the back of the shop. Probationary employment Regulation 30B(I)(c) of the Act excludes employees from the benefits contained in Subdivisions B, C, D & E of the Division 3 Part VIA of the Act where: "(c) an employee serving a period of probation or a qualifying period of employment, if the duration of the period or the maximum duration of the period, as the case requires: (i) is determined in advance; and (ii) is reasonable, having regard to the nature and circumstances of the employment;" On the facts of this case it is difficult to see how the respondent can satisfy Regulation 30B(I)(c)(i) because, by the time the applicant reported for work on 5 December 1994 she had been offered and had accepted employment with the respondent in circumstances where a probationary period was a not a term of that contract of employment. Moreover, on the evidence I am not satisfied that it can be said that such a period was determined in advance when the applicant denies that the alleged statement was ever made by Mrs Sanchez. Mrs Sanchez concedes that the applicant was moving away from her when she made the statement and was not responsive at all after she was purportedly told that there was one weeks' probation. I conclude from this evidence that if Mrs Sanchez did make the statement at all, and I must say that I have some real doubt that she ever used the word "probation" because of her very limited command of English, then it was not heard or acknowledged by the applicant and could not support a finding that it was a term of a contract of employment and that such period of probation was determined in advance. Lastly, the advertisement with the CES makes no reference at all to any probationary period of employment and to that extent supports the applicant's version of events. The Representations at Interview and the Applicant's Performance The issue as to the applicant's fluency in the Italian language is best described as a distraction in what was otherwise a respondent's case with little substance to it. I accept the applicant's evidence that she is fluent in both written and spoken Italian and that she did not speak in Italian to many of the customers in her first five days of work because she, first, had not been directed or instructed to do this; secondly, she had no way of knowing which customers did or did not speak Italian unless she was directly addressed in the Italian language; and, thirdly, she did not have the time nor did her employment last long enough for her to get to know all the regular Italian speaking customers sufficiently to distinguish them from any other customers. Mrs Sanchez was mainly occupied behind the shop in pastry cooking duties and could not give evidence on what the applicant did throughout her five days serving customers even though she attempted to do so. Mrs Sanchez seemed to believe that the applicant should have known to speak to a customer in Italian if they said "buongiorno" otherwise, there was no instructional guidance on how the applicant was going to identify one customer from another. There was certainly no suggestion that there were any customer complaints or any instance when the respondent had to remonstrate with the applicant because of her "poor" performance. Overall the impression I gained from the evidence was that the applicant was not a confident personality and did not, even with the very best of intentions, learn all of her duties as quickly as Mrs Sanchez required. The applicant went to great lengths to learn the prices of goods even taking a note pad to work with her to write down the prices used during busy hours whilst serving customers and a calculator to assist her in making quick calculations of the numerous items purchased by any one customer. These efforts were not sufficient for Mrs Sanchez. The performance issue of greatest concern to the respondent was that it was alleged the applicant had represented she had experience with a cash register before being employed by the respondent and, if Mrs Sanchez had known otherwise, she would not have employed her. Any reference to experience in the use of a cash register at the interview was strongly denied by the applicant who agreed that she had difficulty mastering the cash register during the five days of her employment, however, over a period of a few days she had formed the belief that her performance had improved significantly. She had no warnings or caution from Mrs Sanchez that her performance was anything other than satisfactory and recalls both Mrs Sanchez and Mr Sanchez telling her that it took up to a week to fully learn the use of the cash register. The cash register has an alarm system which alerts the user to an incorrect entry. It also apparently stops functioning properly unless the entry is corrected. Mrs Sanchez seemed to assume that each time the cash register "beeped" this was some indication that the applicant had misused the cash register. The other two employees using the cash register and serving the customers seemed to have also had difficulty in correcting the function of the cash register after a wrong entry causing Mrs Sanchez to be called on numerous occasions to the shop to correct the problem. The applicant concedes that she was not immediately able to operate the machine and took time to become familiar with its workings. However, Mrs Sanchez made no arrangements for her to be trained in or shown the use of the machine other than for ten minutes prior to her commencing her duties when she was referred to the other two shop assistants who were required to train her. Indeed, it is alleged by the applicant that Alvira, the shop assistant whose position the applicant filled, remained in her employment until the Wednesday of the week upon which the applicant commenced her duties in order to help her. This was not contested by the respondent. If, as is alleged, Mrs Sanchez felt that knowledge of a cash register was a pre-requisite to giving the applicant the job it is curious that the advertisement neither stated this nor did Mrs Sanchez, whilst interviewing the applicant in the shop where a cash register is located, seek some demonstration of the applicant's skills on that particular model of machine. It cannot be that all cash registers function in the same way or that experience on one cash register or another would necessarily equip the applicant or any other potential employee for use of all cash register machines. On the evidence I am not satisfied that use of the cash register was a pre-requisite to obtaining the job or that during the very short interview Mrs Sanchez had any specific discussion with the applicant as to her experience in the use of the machine. The other matter relied on regarding the applicant's experience was the allegation at interview that she represented experience in retail sales. When it was put to Mrs Sanchez that she was told by the applicant that she had experience in direct sales and telemarketing sales Mrs Sanchez responded by saying that she did not "remember that....maybe she said that....I understand her to say she had experience with sales....". Because of the short duration of the interview Mrs Sanchez claimed that the applicant did not describe the sales experience she had. In these circumstances I am unable to infer that the applicant misrepresented her sales experience at interview. It must also be kept in mind that Mrs Sanchez's English is limited and because of her responses to the questions put to her in Court I was left with some doubt as to how well she could conduct a meaningful interview in English. On the abovementioned evidence the respondent has not established on the balance of probabilities that there was any misrepresentation innocent or otherwise by the applicant in the pre-contractual period which would allow the respondent to avoid the contract and further avoid its responsibilities as an employer to provide training, specific warnings, notice and an opportunity to respond to the criticisms of the applicant's performance during her short period of employment. The Termination By Friday 9 December 1994 Mr and Mrs Sanchez had privately discussed the applicant's future and had decided that she was "no good for business". The applicant's hours were 7.00am to 2.30pm if she did not take a half hour lunch break. The applicant had elected not to take the lunch break and finished at 2.30pm. At approximately 2.45pm on the Friday the applicant was still finishing off her cleaning tasks and according to Mrs Sanchez she approached the applicant and said she was "very sorry but Roaul and me think we don't need you and that's it - she didn't give me any answer and I said this is the money what paid normally to Alvira". The applicant's recollection of the last discussion was that Mrs Sanchez said "they hadn't been very busy that week and she was going to get her children it to help out at the shop". The applicant said "you don't want me to come back on Monday?" To which Mrs Sanchez replied "yes". Three hundred and fifteen dollars in cash was left on the counter with no accompanying documentation to explain how this sum was made up. The respondent's son was already engaged in the business and there is no evidence that the respondent employed the Sanchez children to replace the applicant. Indeed, she was replaced by another 23 year old shop assistant at a later date. I conclude from this that the respondent was not happy with the applicant's performance and personality in the first week of her employment and this was the reason for terminating her employment. There was another incident upon which the respondent relied and that was the applicant's misuse of a bread slicing machine which, according to the respondent, required the respondent to have the machine repaired in circumstances where the machine had not previously malfunctioned. The applicant denied that she was the cause of the malfunction in the bread slicing machine and whether or not this is true I am satisfied that this incident was yet another event which led to the respondent deciding to dismiss the applicant. Mrs Sanchez on a number of occasions described the applicant as anxious and not very confident. Having found against the respondent on the only two matters that may have taken the respondent outside the reach of Division 3 Part VIA of the Act it is apparent from the evidence given of the termination process that it was unlawful in the sense that it was at the very least procedurally unfair. In failing to offer the applicant training and the opportunity to explain and improve her performance before suddenly and immediately terminating her employment after a very short period of time during which the applicant received no warnings the respondent has breached s170 DC and has also breached s170 DE(2) in that the termination was harsh, unjust and unreasonable. Moreover, on the evidence I am not satisfied that the respondent has discharged its burden of proof in showing on balance that the applicant's performance was so wanting that it provided a valid reason for termination of her employment. After the termination of her employment the applicant obtained advice from the Department of Business and Employment and on 12 December 1994 forwarded a letter to the Sanchez's (Exhibit A3) noting amongst other things that she had not been paid in accordance with the award rate and had not received one week's compensation in lieu of notice. She sought outstanding wages of $77.40 and one weeks pay at the rate of $392.40. The response to this letter came from Mr Sanchez although it was claimed that the letter was drafted by the respondent's accountant because of the Sanchezs' poor command of English (Exhibit A4). The letter noted that the rate of pay was $392.40 less tax of $77.40 giving a payment of $314.00. In fact the job advertised at the CES was at the gross rate of $360.00 per week and the applicant claims to have been left a cash payment of $315.00 with no accompanying explanation. I infer from their accountant's action in sending a group certificate and the confirmation that the appropriate rate of pay was $392.40 that by the date of writing that letter the respondent had come to understand the error it had made on the award rates and made whatever adjustments were necessary for the purposes of taxation. The letter drafted by the respondent's accountant also declined to pay the sum in lieu of notice because "you were aware you were employed on a trial basis and consequently are not eligible for pay in lieu of notice...". Having found that this assertion is not supported by the evidence it is clear that the applicant has at the very least established an entitlement to one week's damages in the sum of $392.40 pursuant to Section 170 EE(5) of the Act. On 27 January 1995 the applicant alleges she received a telephone call from the Sanchez's son, and this call was not denied, who told her to pick up her termination pay from the bakery. By that date the application before this Court had been issued and the applicant told the caller that she would consider the offer and telephone the respondent in the afternoon. When she telephoned the respondent's bakery the same afternoon the applicant had a discussion with Mrs Sanchez for some ten to fifteen minutes during which time Mrs Sanchez sought some resolution of the proceeding. The applicant alleges that she rejected the offer made in the morning and told Mrs Sanchez that the letter of 19 December 1994 from the respondent to the applicant was false and untruthful and she sought a retraction of it. The applicant conceded that communication with Mrs Sanchez was difficult and Mrs Sanchez had said she did not understand what the applicant was asking for and she would get the respondent's Solicitors to talk to the applicant. This never happened. As with earlier conversation there must be some doubt as to how well Mrs Sanchez could communicate with or understand the applicant in the telephone conversation referred to. The son was not called to give evidence and I should infer from this that he would not have assisted the respondent's case in saying that no offer of settlement was made on that day. Be that as it may, my findings on the matters already mentioned lead to a position where a remedy for breaches of Section 170 DE and 170 DC is available to the applicant apart from the remedy she is entitled to under Section 170 DB of the Act. Remedy Neither party endorsed reinstatement as a remedy. Taking into consideration the small shop environment worked in with the Sanchezs and two to three other employees as well as the applicant's recent re-employment, I am satisfied that it would be impracticable to order reinstatement in this case. On the question of appropriate compensation I have considered the following matters:- (a) the likelihood that the applicant would not have remained with this employer over a lengthy period in circumstances where her relationship and her personality and ability to perform in the type of sales of environment run by the Sanchezs was not viewed favourably by the Sanchezs ( see Nicolson v Heaven and Earth Gallery Pty Ltd [1994] 126 ALR 333); (b) the applicant did not return to her studies in 1995 and from 9 December 1994 was unemployed until the first week of May 1995 when she commenced work in what she describes as casual part-time employment with Epic Communications telemarketing. She has shown some aptitude for this employment and her hours have increased from 6 hours in the first week at the rate of $10.00 per hour to 16 hours in the week ending 1 June 1995 on an increased rate of $12.50 per hour, which rate was increased from the fourth week of her employment as well as receiving a bonus payment of $20.00 in the fifth week. The applicant agrees that her prospects with the telemarketing job are improving and should continue to do so; (c) after being terminated the applicant did not receive unemployment benefits for approximately three weeks. From the date of receipt until May 1995 she received $150.00 per week in unemployment benefits; (d) it is not clear why the applicant has not exercised her option of returning to full time or part time study in order to complete a professional qualification however she agrees that this is likely to happen and is her preferred course. Accordingly, I have assessed appropriate compensation at $1,500. MINUTES OF ORDERS THE COURT ORDERS: 1. That within 14 days of the date of this order the respondent pay to the applicant compensation in the sum of $1,500. 2. That within 14 days of the date of this order the respondent pay to the applicant damages pursuant to s170 EE(5) of the Industrial Relations Act 1988 in the sum of $392.40. 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 fifteen (15) pages are a true copy of the reasons for judgment of Judicial Registrar Millane. Associate: Dated: 19 June 1995 Solicitors for the Applicant: Rogers & Gaylard Counsel for the Applicant: Mr Wood Solicitors for the Respondent: Home Wilkinson & Lowry Counsel for the Respondent: Mr J Bourke Date of hearing: 5 June 1995 Date of judgment: 19 June 1995 C A T C H W O R D S INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - UNLAWFUL TERMINATION - PROBATIONARY EMPLOYMENT - MISREPRESENTATION OF EXPERIENCE. Industrial Relations Act 1988 ss.170 DB, 170 DC, 170 DE, 170 DE(2) & 170 EE(5). Industrial Relations Regulations - Regulation 30B(I)(c). CASES: Academy of Health and Fitness Pty Ltd v Power [1973] VR 254, Justice Crockett. Nicolson v Heaven and Earth Gallery Pty Ltd [1994] 126 ALR 333 FRANKA MASTRANGIOLI -v- MELLOW BANNER PTY LTD No. VI 1125 of 1995 Before: Judicial Registrar Millane Place: Melbourne Date: 19 June 1995 INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 1125 of 1995 B E T W E E N : FRANKA MASTRANGIOLI Applicant AND MELLOW BANNER PTY LTD Respondent MINUTES OF ORDERS Judicial Registrar Millane 19 June 1995 THE COURT ORDERS: 1. That within 14 days of the date of this order the respondent pay to the applicant compensation in the sum of $1,500. 2. That within 14 days of the date of this order the respondent pay to the applicant damages pursuant to s170 EE(5) of the Industrial Relations Act 1988 in the sum of $392.40. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.