Carol Moreland v Optus Communications Pty Ltd [1995] IRCA 263

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - Claim of unlawful termination - Finding by Judicial Registrar of procedural unfairness but no substantive unfairness - Determination that reinstatement was impracticable and order for payment of compensation - Review of Judicial Registrar's decision - Failure of employer's representative to ascertain whether prior warning and exhortation had been heeded before deciding to terminate the employment - Immediate default was only the latest in a series of defaults - Significance of that fact in relation to substantive fairness and appropriate remedy - Judicial Registrar's decision affirmed. Industrial Relations Act 1988, ss.170DC and 170DE. CAROL MORELAND v. OPTUS COMMUNICATIONS PTY LTD No. NI.0437 of 1994 CORAM: WILCOX CJ PLACE: SYDNEY DATE: 4 MAY 1995

IN THE INDUSTRIAL RELATIONS COURT) OF AUSTRALIA ) No. NI.0437R of 1994 NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: CAROL MORELAND Applicant AND: OPTUS COMMUNICATIONS PTY LTD Respondent CORAM: WILCOX CJ PLACE: SYDNEY DATE: 4 MAY 1995 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The application for review be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.

IN THE INDUSTRIAL RELATIONS COURT) OF AUSTRALIA ) No. NI.0437R of 1994 NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: CAROL MORELAND Applicant AND: OPTUS COMMUNICATIONS PTY LTD Respondent CORAM: WILCOX CJ PLACE: SYDNEY DATE: 4 MAY 1995 EXTEMPORE REASONS FOR JUDGMENT WILCOX CJ: This is an application by a dismissed employee, Carol Moreland, for review of a decision by a Judicial Registrar in relation to her claim under s.17EA of the Industrial Relations Act 1988. The Judicial Registrar gave a decision in which he found that the termination of the applicant's employment was procedurally unfair, that is to say that it was in contravention of s.170DC of the Act, but that the employment was not in breach of s.170DE of the Act, that is to say it was for a reason connected with the employee's capacity or based on the operational requirements of the employer's undertaking. Inherent in the Judicial Registrar's conclusion is the view that the termination was not harsh, unjust or unreasonable. The Judicial Registrar considered whether this was a case in which he ought to make an order for reinstatement of the applicant but he held that reinstatement was impracticable. He therefore made an order for compensation pursuant to s.170EE(2) of the Act and awarded the sum of $7,500. As I have said, Ms Carol Moreland seeks review of that decision. Her contention is that the Judicial Registrar erred in rejecting her claim of substantive unfairness and also erred in failing to make an order for reinstatement. In response to the application for review, the employer, Optus Communications Pty Limited, contends that the Judicial Registrar's decision was unduly favourable to the applicant. Its contention is that the Judicial Registrar erred in finding procedural unfairness and ought to have dismissed the application. The reasons of the Judicial Registrar are comprehensive. They set out in some detail the evidence adduced before him over the course of three days. The submissions put to me today by counsel have canvassed all the salient issues in the case. As will be apparent from what I have already said, numerous permutations have been argued. My mind has fluctuated from time to time as to whether the Judicial Registrar's conclusion was unduly favourable to the applicant, as the respondent contends, or whether it insufficiently appreciated the strength of her case, as the applicant contends. At the end of the day, and after considering all of these matters, I have come to the conclusion that the Judicial Registrar was correct in his determination of each of the issues presented to him. Because I take that view, and because his reasons are set out clearly, I can very briefly state my reasons for reaching that conclusion. First, I agree that there was procedural unfairness. The evidence indicates that the applicant had been given the task of preparing some documents, called Documents of Understanding, which were intended to set out in plain English terms the arrangements made between Optus and various equipment suppliers. These documents were supposed to be drafted, negotiated with the various suppliers, approved by Ms Moreland's supervisor, Mr Kimpton, and distributed to Optus' service managers; all by the end of May 1994. It is clear that this did not occur. It seems to be clear that Ms Moreland did achieve finality in respect of the Document of Understanding with one supplier, Nokia, by about the middle of May; but the documents involving the other suppliers were not in an agreed form until the end of May. There was an issue before the Judicial Registrar as to whether there was any delay in consideration of drafts by Mr Kimpton. Ms Moreland said that she left drafts of the documents involving the other three suppliers on Mr Kimpton's desk. He denied having received them. Whatever the merits of this controversy, it is quite clear that there was no possibility of the necessary work being carried out by the relevant date. It is equally clear that Mr Kimpton's complaints in relation to this matter were discussed at a meeting attended by himself, Ms Moreland and Mr Cheel, the Human Resources Consultant attached to Optus, which occurred on 7 June 1994, two days before the termination of her employment. The meeting went on for at least an hour, probably two hours. Ms Moreland's failure to achieve the target date in respect of the Documents of Understanding was the primary matter of discussion. If the only basis of the termination of Miss Moreland's employment was her failure to complete the Documents of Understanding, it would be difficult for her to maintain the argument that there was a denial of procedural fairness. That issue was very clearly brought to her attention. She was given the opportunity of putting her side of the story, and did so at some length. However, there was a second factor which influenced the decision to terminate her employment. Mr Cheel gave evidence about this. He said that he was influenced by Ms Moreland's failure to improve her relationships with people, both within Optus and outside the company, in the period between 24 May 1994, when she was given a warning or exhortation to improve her performance, and 7 June. It is clear, however, and indeed Mr Cheel conceded this, that he made no attempt to ascertain whether Miss Moreland had acceded to this exhortation or warning before using her failure to improve her relationships as a reason for termination. It also appears that he did not put this matter to her at the meeting on 7 June. The same comment can be made about Mr Kimpton, the person who actually took the termination decision. He had been overseas, for all but a few days, between 24 May and 7 June. He had made no attempt to check the position; probably he had had little opportunity to do so. It seems to me that, for the termination decision to be made on a basis which included a failure to improve relationships, when no attempt had been made to check the facts and this allegation had not been put to Ms Moreland, involved a breach of s.170DC. The Judicial Registrar placed some emphasis upon the fact that a written assessment document prepared by Mr Kimpton on 23 May and containing criticisms of Ms Moreland, and which was intended to be commented on by her and indeed was commented on by her on 27 May, was not considered before the termination decision was made. I do not see the fact that the document was not considered as a critical matter. I think the critical point is that, if the document had been considered, then it is likely that the second factor to which I have referred would have been uppermost in the minds of the people involved in the decision. They would have known what Miss Moreland had to say about it. Because of the existence of this second factor, and the way it was handled, it was correct for the Judicial Registrar to find a breach of s.170DC. When I turn to the question of substantive unfairness, I conclude immediately that there was a reason for termination connected with the applicant's capacity and conduct and the operation of Optus' business. It is quite clear that a major factor in Ms Moreland's dismissal was her failure to complete the arrangements about the Documents of Understanding by the stipulated date. This failure falls into the category which I mentioned. However, at one stage of the argument I wondered whether it could fairly be said that, despite the fact that s.170DE(1) was satisfied, a decision to terminate employment was an over reaction to Ms Moreland's failure and to the effect on the business of Optus and was harsh, unjust or unreasonable. The matter of the Documents of Understanding was significant; but it would be difficult to say that, considered by itself, it was of critical importance. If it was the only default revealed by the evidence, I would have taken the view that the termination was harsh. However, it was not. Because of the fact that a degree of animosity has developed between Mr Kimpton and Ms Moreland, I do not place a great deal of weight upon Mr Kimpton's evidence of Ms Moreland's deficiencies; however there was evidence about this matter given by a fellow employee of Ms Moreland, Peter O'Connell. Mr O'Connell was on the same level of seniority as Ms Moreland. He took over part of her duties when he commenced working for Optus in February 1994. He gave evidence that his initial relationship with her was excellent and that she had been of great assistance to him in commencing his work. Mr O'Connell was cross‑examined before the Judicial Registrar and the Judicial Registrar specifically stated that he was impressed with his fairness and readiness to give credit to Ms Moreland where that was appropriate. Notwithstanding these facts, Mr O'Connell itemised a number of incidents in which Ms Moreland displayed a failure to carry through a task in an organised way. I need not set out the evidence in relation to these matters. It is sufficient to say, that although each task was different from that of producing the Documents of Understanding, her failure was of a like kind. It seems that, in each of the cases, Ms Moreland demonstrated an inability to organise her time in an efficient way, to select priorities and to co-operate in a supportive way with other people involved in the project. In reaching the decision to terminate Ms Moreland's services, Mr Kimpton was entitled to have regard to the fact that the Documents of Understanding incident was only the latest in a number of similar incidents. He was entitled to take the view that she was not able to fulfil the responsibilities of her position in a satisfactory way. The failure to deal properly with the Documents of Understanding is more significant than for itself alone. I do not think that the decision to terminate on this ground warrants being described as harsh, unjust or unreasonable. As I have mentioned, the applicant contends that the appropriate remedy was reinstatement. It is clear that it would be impracticable to order the reinstatement of Ms Moreland to her previous position. Her relationship with Mr Kimpton would make this course disastrous. However, counsel submits that I ought to order that she be reinstated to another position on terms and conditions no less favourable than those on which she was employed immediately before the termination. There is no evidence as to what positions might be available within the Optus organisation to a person of Ms Moreland's qualifications and experience. But there is evidence that Optus employs two to three thousand people in Sydney and that the work-force is rapidly expanding. Accordingly, I would be prepared to conclude that a suitable position is likely to be available. However, in considering whether I should make such an order, and whether the result would be a practicable one, I think I must take into account the point to which I have referred: that the Documents of Understanding default was only the latest of several problems in relation to which Ms Moreland indicated an inability to carry out her work in a satisfactory way. If Ms Moreland was placed in a position of commensurate responsibility, it is likely that the same problems would emerge. Accordingly, my finding about harshness of termination is important in considering the appropriate remedy. With all these matters in mind, it seems to me, as I say, that the Judicial Registrar's decision was correct on all points. No complaint is made about the quantum of the award of compensation. In my view, the correct order is that the application for review be dismissed. I so order. I certify that this and the preceding eight (8) pages are a true copy of the Reasons for Judgment of his Honour Chief Justice Wilcox. Associate: Dated: 4 May 1995 APPEARANCES Counsel for the Applicant: S Crawshaw Solicitor for the Applicant: Geoffrey Edwards & Co Counsel for the Respondent: P M Kite Solicitor for the Respondent: Minter Ellison Morris Fletcher Dates of hearing: 4 May 1995