Warren Lindley Penny v Carlisle Lathlain Bowling Club Inc [1995] IRCA 419

C A T C H W O R D S INDUSTRIAL LAW - Termination of employment - claim for unlawful termination - whether procedural fairness - whether valid reason for termination INDUSTRIAL RELATIONS ACT 1988, Ss 170EA, 170DC, 170DE Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 126 ALR 233 WARREN LINDLEY PENNY v CARLISLE LATHLAIN BOWLING CLUB INC - WI 628 of 1994 Before: BOON JR Place: PERTH Date: 17 MAY 1995

IN THE INDUSTRIAL RELATIONS ) COURT OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) No. WI 628 of 1994 BETWEEN WARREN LINDLEY PENNY - Applicant CARLISLE LATHLAIN BOWLING CLUB INC - Respondent MINUTE OF ORDERS BEFORE: BOON JR PLACE: PERTH DATE: 17 MAY 1995 THE COURT ORDERS AND DECLARES THAT: 1. The termination of the Applicant's employment contravenes the provisions of Section 170DC of the Industrial Relations Act, 1988. 2. The Respondent pay to the Applicant the sum of $4,000 by way of compensation for unlawful termination of employment within 28 days of the date of this order. 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 ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) No. WI 628 of 1994 BETWEEN WARREN LINDLEY PENNY - Applicant CARLISLE LATHLAIN BOWLING CLUB INC - Respondent BEFORE: BOON JR PLACE: PERTH DATE: 17 MAY 1995 REASONS FOR JUDGMENT This is an application under Section 170EA of the Industrial Relations Act 1988 in respect of the termination of the Applicant's employment by the Respondent. The Applicant, who at all relevant times was 37 years of age, was employed by the Respondent on 8 February 1994 as an Assistant Greenkeeper or Turf Manager. Prior to this he had worked at another bowling club in the Perth metropolitan area for over three years. During 1992 and 1993 he studied at Carine TAFE to become a certified Turf Manager. Before the Applicant started work with the Respondent, he was interviewed by several members of the Committee of Management of the Respondent. The Applicant and the Respondent entered into a verbal contract of employment whereby the Applicant was to be paid a flat rate of $400 gross per week. When Mr Penny, the Applicant, was interviewed, he told the Committee that he was single and that he had no problems with working on weekends. According to Mr Penny, at the interview he was told that "we'll try you out for six months". The Committee members who interviewed him didn't recall this being said but they didn't deny that it was possible. I accept Mr Penny's evidence that he was told that he was employed on a six month trial period. I accept on the evidence that it is common practice in bowling clubs in Western Australia for greenkeeping staff to be paid a specified sum of money per week in return for doing whatever work is necessary to maintain the greens. Greenkeeping staff usually work on weekends as it is often necessary to cut the grass each day. Staff employed under such conditions go home early if they finish their work early or if it is raining. The hours of work vary during the year according to the weather and the condition of the greens. It became apparent that the conditions of the greens at the Respondent club were such that Mr Penny needed to work seven days per week. Some time after he started work with the Respondent, Mr Penny entered into a de facto relationship and he has recently married. His de facto wife became seriously ill and the couple had to pay a lot of medical bills as a result. The Committee allowed Mr Penny a week off on full pay to look after his de facto wife. In August, when the six months' trial period expired, Mr Penny considered that a wage review was due and approached John Carter, the new Greens Chairman of the Club. Mr Penny told Mr Carter that his circumstances had changed (because he was now living with his de facto wife and had a lot of expenses) and asked for a pay rise. Mr Penny considered that as he was working seven days a week for the Club and putting in a lot of hours at work, it was fair to ask for an increase in pay. Mr Carter said "Leave it with me". Mr Penny also spoke to Mr Ball, the Greenkeeper at the Club, who was his immediate superior. He raised the question of a pay rise with Mr Ball. Mr Ball recalled speaking to Peter Kelley, the previous incumbent of Mr Penny's position, who had said that he had received $30 a week more than Mr Penny. Mr Ball wrote a letter to Mr Carter outlining the request for a pay rise. Mr Ball and Mr Carter had a discussion at which Mr Ball raised the figure of $30 per week. Mr Carter agreed to take this request to the Finance Committee of the Club. It was at this stage that the first misunderstanding took place. Mr Penny's request for a pay rise was on the basis that his six month trial period had expired, his circumstances had changed and he was putting in a lot of hours. Mr Carter understood from his conversation with Mr Ball that the request for the pay rise was primarily on the basis that Mr Kelley had been paid more than the amount Mr Penny was now receiving. Mr Penny knew nothing the of $30 amount raised by Mr Ball. Mr Carter took the matter to the Finance Committee. They checked Mr Kelley's wage records and found that he had also received $400 gross per week. On this basis they rejected the request for a pay rise. It was the Committee's position that ordinarily wage increases were only granted after twelve months' employment. Mr Carter wrote to Mr Ball to advise him of the decision of the Finance Committee. The letter states in part "If Mr Penny would like me to take the matter further at the next Committee meeting scheduled on the 10 October 1994, please don't hesitate to get in contact with me about this matter. Please let Mr Penny know that his dedication to the turf industry and to Carlisle Lathlain Bowling Club has not gone without notice." After this Mr Penny spoke to Mr Carter again about a possible pay rise. He told Mr Carter that he had a lot of bills and needed more money. Mr Carter asked how much Mr Penny wanted. Mr Penny thought that the Club was opening negotiations and as a result asked for $50 to $75 per week. In his verbal evidence Mr Penny said he deliberately asked for more than he thought he might get as he thought that they were just starting negotiations. He also did not know that a figure of $30 had previously been raised by Mr Ball. This is the second occasion on which a misunderstanding may have arisen. I find on the evidence that Mr Penny thought he was being asked to enter into negotiations for a pay rise. Mr Penny's opening request, which was treated as a "demand" by the Club, was considered at the October meeting of the Committee. The Committee rejected the notion of any pay increase on the basis that no pay increase would be granted for the first twelve months of employment. I find on the evidence that the Committee did not, because of the misunderstandings referred to above, understand what led up to the Applicant's request and considered that his "demand" was excessive. As a result of this, they began to view Mr Penny with some suspicion. Mr Penny, in turn, felt aggrieved by the Committee's decision and the relationship between him and his employers deteriorated from this time. On 20 October 1994 Mr Penny wrote to the Greens Chairman stating that as the hours he had been working were so long he wanted to be paid in accordance with the Award rates. He included an estimate of the payment due to him under the Award provisions and this amounted to $525.24 gross per week when one took into account the hours he normally worked on Saturdays and Sundays. The Club's position was that the $400 gross per week being paid to the Applicant was reasonable as it was $125 more per fortnight than the Award rate. The relevant award (the 1993 Golf-Link and Bowling Green Employees' Award) provides for a fortnightly base rate of $795.40 for a Greenkeeper Grade 1 and a $675.00 fortnightly base rate for an Assistant Greenkeeper. There is a question as to which grade is the one which applies to the Applicant. I am however satisfied that the Applicant was employed as a Greenkeeper's Assistant and that as far as the Committee was concerned, the appropriate award rate was $675.00 per fortnight. The base rate, however, only applies to a normal Monday to Friday 76 hour fortnight and provides penalty rates for weekend and overtime work. Mr Ball had kept a work diary detailing the number of hours worked by himself and Mr Penny. Although the Committee members dispute the accuracy of the record, not one witness called for the Respondent was able from his personal knowledge to contradict this evidence. In these circumstances I accept Mr Ball's evidence on the number of hours he and Mr Penny worked each week. The evidence is that in the eight month "summer" period, Mr Penny worked 10 to 12 hours overtime a week, being seven hours on a Saturday and four hours on a Sunday and in the four month "winter" period he worked four to five hours overtime a week, being three hours on a Saturday and two hours on a Sunday. In these circumstances, Mr Penny would have been considerably better off financially if he had been paid under the Award. The Committee met in early November to discuss the Applicant's letter. Mr Carter also had some discussions with the union representative. Mr Carter stated that this was because he was concerned that the Applicant would lose $125 per fortnight in pay. At the meeting, the Committee directed Mr Carter to have Mr Penny's performance monitored. The Committee decided that if Mr Penny wanted to be paid under the Award, he would have to work according to a roster. Mr Penny was provided with a work roster under which he was only rostered to work from Monday to Friday. He was never rostered to work on weekends. The Club rejected any notion of Mr Penny being able to claim overtime or penalty rates. The relationship between the parties broke down further. Mr Penny was dissatisfied because he was not given the opportunity to earn more money by working on weekends. The Club's Committee members were dissatisfied because it caused the Club great inconvenience to no longer have Mr Penny work on weekends. They had to arrange for volunteers to do the weekend work. These people were largely members of Committee members' families who were given cartons of beer in return for their work. Mr Ball, Mr Penny's immediate superior, gave evidence that Mr Carter instructed him to provide a written report on Mr Penny's work. Mr Ball was left with the impression that unless he gave an adverse report on Mr Penny he (Mr Ball himself) would be put on to Award rates and that was something he could not afford. Mr Carter denied that such pressure was put on Mr Ball. I do not have to decide what really happened in that regard, but I am satisfied that in any event Mr Ball felt that he was being pressured. As a result of this incident and other matters arising out of his employment with the Club, Mr Ball has received medical treatment for anxiety and stress. Mr Ball prepared a report in accordance with the directions. In that report, Mr Ball stated that on the Monday and Tuesday of the week in question (in early November), Mr Penny went into a "go slow mode". Wednesday saw an improvement and by Thursday and Friday his work was back to normal. The report referred to Mr Penny's attitude leaving a bit to be desired and Mr Ball also stated that he thoroughly disapproved of Mr Penny's "behaviour over an issue he himself brought on". Mr Ball stated that he never handed the report to Mr Carter and assumed that it was taken from his vehicle without his knowledge. In his verbal evidence, Mr Ball stated that he was not at all happy about the contents of the report. He said that Mr Carter seemed to have a very vindictive attitude to Mr Penny and that he himself was becoming the meat in the sandwich. Mr Ball also said that apart from the "go slow" incident early in that one week, Mr Penny's work was always very good. He was also aware that Mr Penny was under a lot of pressure at around this time as a result of his wife's cancer. Mr Penny had apologised to him on the Wednesday of the week in question. Mr Ball communicated this apology to Mr Carter who "appeared very happy with the situation". On the evidence, I am unable to find that Mr Penny was ever reprimanded or warned by his employers over this "go slow" incident. Chief Justice Wilcox in Nicolson v Heaven and Earth Gallery Pty Ltd (1994) 126 ALR 233 said that to satisfy the requirements of the Industrial Relations Act it was not sufficient for an employer to give the employee a general exhortation to improve. Any allegations against the employee must be put squarely to him or her, and it must be made clear that his or her job is on the line. In addition, apart from this one occasion, I am unable to find that Mr Penny engaged in a "go slow" work campaign. The only witness who had anything to add on that question was John Evans, the President of the Club, who once saw Mr Penny go into a shed at 10:00 am and come out at 10:35 am. As he was unable to say when this incident occurred and as it was also consistent with Mr Penny having a meal break (based on a 6:00 am start to the day) I did not find this evidence helpful. Further, although Mr Penny probably realised that the Committee was not pleased with his decision to work under Award conditions, it was never put to him that his employment would be terminated if he did not revert back to the original conditions under the verbal contract of employment. The Committee met in late November. In Mr Carter's affidavit, he states "... both Committee members and myself had experienced a negative approach from Mr Penny in the last weeks of his employment. In my opinion, this was affecting his ability to perform his duties satisfactorily. Following Mr Ball's complaints, as Greens Chairman, I reported to the Committee concerning Mr Penny's employment. I presented all the evidence before the Committee and they all agreed that they could not tolerate this situation any longer. That was when the decision to terminate Mr Penny with a week's pay in lieu of notice was made". The Applicant was handed a letter of termination dated 24 November 1994 which simply stated "Due to the fact that we require staff for the preparation of greens for Saturday Pennants and Sunday Club events, and you have declined to carry out these duties on those days, as you have elected to revert to the Award conditions with a noticeable go slow approach, the Committee has no alternative but to terminate your employment forthwith". Section 170DC of the Act makes it quite clear that an employer must not terminate an employee's employment for reasons related to the employee's conduct or performance unless the employee has been given an opportunity to defend himself or herself against the allegations made. Even on the evidence of the Respondent's witnesses, Mr Penny was not given an opportunity to defend himself against the allegations. The decision to terminate was made at a Committee meeting which was not attended by Mr Penny and the Committee didn't get his version of the facts before the decision was made. It is possible that if they had gone into the allegations in depth the misunderstandings referred to above could have been cleared up to the satisfaction of both parties. Even if the procedural fairness provisions had been complied with, I do not consider that the reasons given for the termination could have been found to be valid within the meaning of Section 170DE of the Act. The first reason for termination was that Mr Penny declined to work on Saturdays and Sundays. In fact, the evidence at the hearing was that Mr Penny was never given an opportunity to work on Saturdays and Sundays after the Committee accepted his decision to work to Award conditions. Mr Penny did not refuse to work on weekends; he simply was never rostered to work on those days. The second reason for the termination was his "noticeable go slow approach". As I have already indicated above, this was only apparent on two days, with no reoccurrence. In these circumstances, the Applicant must succeed in his application. In passing, I shall say that it may be difficult for voluntary, unpaid committees of management such as the Respondent's committee to have a full understanding of all the circumstances surrounding their employees' performance at work. It may be difficult to make some management decisions in such circumstances. In such situations there is a considerable risk of misunderstandings arising. However it is precisely in such situations that there is a risk of employees being treated unfairly. The Respondent club was not necessarily acting unfairly in refusing a pay rise before the expiration of twelve months (although the number of hours worked and a comparison between the contract rate of pay and what the Applicant would have received under the Award illustrate that the Applicant was probably underpaid). What was unfair was that the Committee made the decision to terminate on inaccurate information and without giving Mr Penny an opportunity to be heard. The termination cost Mr Penny his livelihood in his chosen occupation, at least for the time being. All the evidence points to the lawn bowling community in the Perth metropolitan area being close knit and Mr Penny fears that as a result of the termination he may not get an opportunity to work as a greenkeeper again because word of incidents such as this gets around quickly. He fears that all of his training may have been wasted as a result. The Applicant gave evidence that the only work he has been able to obtain since termination was at the Balcatta refuse site. He earns $550 per week for a 56-1/2 hour week. He started his new job on 19 December 1994. REMEDY I consider that because of the relationship between the Applicant and the Committee members and also because the Applicant is now working elsewhere, reinstatement would be impracticable. The Applicant was unemployed for a period of just less than a month. He is now earning more than he was earning at his previous base rate of $400 per week and an amount similar to what he would have earned in his previous position with the Respondent if he had been paid at Award rates. In his present position, however, he is working far longer hours. I accept that Mr Penny may have some difficulty finding work in the greenkeeping area in the near future partly because such positions don't arise frequently. It is clear from the decision of Wilcox CJ in Nicolson v Heaven and Earth Gallery Pty Ltd that in assessing the appropriate amount of compensation, the Court must take into account whether or not the Applicant would have stayed with the Respondent for much longer in any event. In this case, the relationship between the parties had deteriorated to such an extent that I consider it likely that the Applicant would not have worked with the Respondent for very many more months. I also don't consider that the evidence warrants a finding that the Applicant will never be able to work in his chosen field again. In the circumstances, I consider that an award of $4,000 compensation is appropriate in this matter. The appropriate orders are: 1. This Court declares that the termination of the Applicant's employment contravenes the provisions of Section 170DC of the Industrial Relations Act, 1988. 2. The Respondent pay to the Applicant the sum of $4,000 by way of compensation for unlawful termination of employment within 28 days of the date of this order.