Janice Shackley v Australian Croatian Club Ltd [1995] IRCA 439

CATCHWORDS INDUSTRIAL LAW - termination of employment - unlawful termination - for reasons of race - harsh, unjust or unreasonable Industrial Relations Act 1988, ss 170DC, 170DE, 170DF(1) 170EDA and 377 Association of Professional Engineers, Scientists and Managers Australia v Deniliquin Council (1995) 129 ALR 418 Gibson v Bosmac Pty Ltd (1995) 130 ALR 245 No. AI 136 of 1994 JANICE SHACKLEY -v- AUSTRALIAN CROATIAN CLUB LTD MOORE J CANBERRA 6 September 1995

IN THE INDUSTRIAL RELATIONS ) ) COURT OF AUSTRALIA ) No. AI 136 of 1994 ) NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: JANICE SHACKLEY Applicant AND: AUSTRALIAN CROATIAN CLUB LTD Respondent JUDGE: Moore J PLACE: Canberra DATE: 6 September 1995 ORDER OF THE COURT THE COURT ORDERS THAT: 1. Declares the termination of the employment of Janice Shackley by the Australian Croatian Club Ltd was in contravention of ss170DC, 170DE and 170DF of the Industrial Relations Act 1988. 2. The Australian Croatian Club Ltd pay Janice Shackley the sum of $12,100 by way of compensation in lieu of the sum ordered to be paid by the Judicial Registrar. 3. Costs reserved. 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. AI 136 of 1994 ) NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: JANICE SHACKLEY Applicant AND: AUSTRALIAN CROATIAN CLUB LTD Respondent JUDGE: Moore J PLACE: Canberra DATE: 6 September 1995 REASONS FOR JUDGMENT This is an application under s377 of the Industrial Relations Act 1988 ("the Act") by the Australian Croatian Club Limited ("the Club") seeking the review of the exercise of powers by a Judicial Registrar resulting in an order for the payment of compensation in an application brought by Ms Janice Shackley under s170EA of the Act. The nature of the review is a hearing de novo: see Association of Professional Engineers, Scientists and Managers Australia v Deniliquin Council (1995) 129 ALR 418 per Moore J and Gibson v Bosmac Pty Ltd (1995) 130 ALR 245 per Wilcox CJ. In the review, Ms Shackley contended that the termination of her employment in May 1994 by the Club was in contravention of various provisions of Division 3 of Part VIA of the Act, namely ss 170DC, 170DE, and 170DF(1)(f) which involves an allegation that the termination was for a reason relating to Ms Shackley's race. Background The following is the background leading to the termination and events which followed it. It represents findings of fact I have made. In January 1994, Ms Shackley answered an advertisement in the Canberra Times for a position of Secretary/Manager for the Club. The position was part-time with the hours of work being from 11.00am - 5.00pm Monday to Friday. She was interviewed on 17 January 1994 by a Mr Ivan Bagic who was the President of the Club. There was discussion about the duties and the working conditions. The conditions discussed were that she would work Monday to Friday 11.00am - 5.30pm and that she would have a lunch break of half an hour. It is not in issue that weekend work was a matter discussed at this initial interview. What was said and what was ultimately agreed about weekend work was, however, contentious. Not in issue is that after that initial interview Ms Shackley was offered and later accepted the job as Secretary Manager. It follows that before she started either agreement was actually reached between Ms Shackley and Mr Bagic about what work would be done at weekends, Ms Shackley and Mr Bagic believed agreement had been reached but they did not share the same understanding as to what had been agreed or, more remotely, one or both of the parties were maintaining the pretence of agreement without any intention of giving effect to it at least in the longer term. Ms Shackley's evidence in her affidavit was that when she was interviewed by Mr Bagic on 17 January 1994 she was told there would be occasional weekend work. She was phoned the next day by Mr Bagic who offered her the job, but suggested another meeting. They met again though present on this occasion was the Club's accountant. Mr Bagic indicated at this second meeting that he wanted Ms Shackley to work seven days because the Club was open Saturday and Sunday. Ms Shackley said she was not prepared to do that but she suggested that the Club Treasurer, Mr Belovic, Mr Bagic and herself do weekend work every third week. This was agreed. On 24 January 1994 she was given a letter by Mr Bagic setting out the terms of her employment. It provided: "Hours 11.00 to 5.30pm each day Monday to Friday including one half hour for a lunch break each day. Extra Hours Mutually agreed extra hours may be arranged when necessary. Rate $12.00 per hour to be reviewed at the end of the agreed probationary period. Probation A probationary period of three months to 27th April, 1994 will apply to your engagement and your engagement may be terminated by youself [sic] or the Club during this time. Commencement As discussed your engagement will commence at 11.00am on 27th January, 1994." In oral evidence in chief, Ms Shackley said that Mr Bagic had said that sometimes it would be necessary for her to work at weekends. She did not identify in her evidence at which meeting this was said. She responded to Mr Bagic's statement by saying that because she had children it would not be convenient to work every weekend but that she would be open to trying to work out a roster system where she could work some weekends. She recounted that she said in no uncertain terms she was not able to work seven days a week. She had then worked out a roster so that she would work one weekend in three. Mr Bagic said in his affidavit that at the initial interview he asked her whether she was available Saturdays and Sundays if necessary to which she replied "yes". This was repeated orally in evidence in chief. When questioned on this issue Mr Bagic said the previous manager had been working Saturdays and Sundays. In cross examination Mr Bagic agreed that a few days after being employed Ms Shackley organised a roster for weekend work. Ms Shackley's counsel put to Mr Bagic that when he gave her the letter of employment at the second interview there was no discussion about Saturday and Sunday work. This appears to be at odds with Ms Shackley's account of what occurred, though it is not entirely clear from her evidence whether she says she was given the letter at the second interview. All she says is that she was given it on 24 January 1994. Mr Bagic generally adhered to his account that what had been discussed and agreed was that she would work seven days if necessary. He accepted that it did not mean that she had to work seven days every week. The accountant who was at the second interview was not called by the Club. In my view what is likely to have occurred was that while both Ms Shackley and Mr Bagic believed they had reached agreement on to the extent to which she would work at weekends, they had differing understandings as to what this would entail. Nonetheless, whatever had been discussed about weekend work, it is clear that the letter of appointment was in terms consistent with Ms Shackley's understanding of what had been agreed and she was, in my opinion, then entitled to act on the basis that the letter reflected the limits of her obligations to work at weekends. Ms Shackley commenced work on 27 January 1994. She worked on one day for each of the first five weekends and thereafter one Saturday in March 1994 and two in April 1994. The performance of her duties was generally uncontroversial though several matters were identified in the evidence as matters that caused Mr Bagic and other members of the committee concern. The probationary period of 27 April 1994 referred to in her letter of employment passed without incident and no suggestion was made to her at that time that her employment during the probationary period was unsatisfactory such that her employment would conclude at the end of the probationary period. Mr Bagic touched upon this matter but his evidence, at its highest, was that it was nothing more than a vague intimation that something was said by way of complaint at the end of her probationary period. Plainly, as a matter of fact, her employment did not come to an end at the end of the probationary period. However several weeks later her employment was terminated. On Wednesday 18 May 1994 she had a conversation with Mr Bagic. He informed her that she was dismissed. This conversation assumes some significance in these proceedings and I will consider the conflicting accounts of Mr Bagic and Ms Shackley in due course. Ms Shackley did not in fact leave her employment till Friday 19 May 1994 at which time she received a reference written by Mr Bagic. It had been composed by Ms Shackley though had been read by Mr Bagic. It read: "To Whom It May Concern Janice Shackley has been employed by the Croatian Club in the capacity of part-time secretary manager. Janice has attended to her duties in an efficient and conscientious manner. Her duties have included banking, invoicing, stock ordering and control, poker machine clearances, attendance to correspondence, payroll and income tax payments, and many other tasks associated with running a small licensed club. Janice is a punctual, polite and enthusiastic worker. Any further enquiries may be directed to me at the club on the above phone number. I wish Janice well in her future employment. Ivan Bagic President Australian Croatian Club" In August 1994 Ms Shackley was contacted by Mr Bagic on three occasions asking her to return to the Club. She had been unemployed since her dismissal. She met with Mr Bagic on 16 August 1994 and she gave him a letter setting out the terms upon which she would consider further employment with the Club. Also present were Mr Belovic and Ms Shackley's fiance. At least some of the contents of the letter were discussed between them and agreement reached on some matters though there was an issue as to what was agreed and the nature of the agreement. While there was considerable attention paid to this meeting in the oral evidence I do not view it as material other than evidencing a willingness on the part of the Club and those representing it to re-employ Ms Shackley. At the time of the meeting on 16 August 1994 these proceedings had been commenced. The application under s170EA had been filed on 14 July 1994. The meeting did not lead to further employment. Ms Shackley was unemployed till 9 November 1994 though she was actively looking for work following her dismissal. Her employment on 9 November 1994 did not become paid employment till a month later. The contentious evidence - generally Evidence was given in these proceedings by Ms Shackley, Mr Michael Leonard who is Ms Shackley's fiance, Mr Bagic, Mr Ivica Frankovic who was a member of the committee of the Club, Mr Tomislov Simunic who was also a committee member, Mr Miro Kopcic who was both a committee member and secretary. Ms Shackley and Mr Leonard are fluent in English and it is plainly their first language. The same is not true of the other witnesses and it was reasonably obvious that, to varying degrees, their capacity to readily comprehend questions asked in English and their capacity to answer them precisely and fluently was limited to some extent. Mr Kopcic gave evidence through an interpreter. My general assessment of Ms Shackley and Mr Leonard was that they were giving a truthful account of their recollections of what had occurred at various times though on occasions Ms Shackley answered questions in a less than direct way that appeared designed to defend or justify an answer earlier given or defend her performance as manager when employed by the Club. It is less easy to assess whether a witness whose first language is not English is answering truthfully when giving evidence. Hesitations and apparent contradictions in answers may well result from a lack of fluency rather than the problems witnesses sometimes experience when they are giving a false account and are having to modify or review that account as the evidence proceeds. This difficulty in assessing the credibility of the witnesses in these proceedings was compounded by the aggressive and confronting cross-examination of the respondent's witnesses. However the general impression I gained of the evidence of Mr Frankovic, Mr Sumanic and Mr Kopcic was that they were endeavouring to give a truthful account of what had occurred. However the account they gave was in many material respects vague and this has implications in proceedings such as this where s170EDA requires, in specified circumstances, an employer to satisfy the Court of certain matters in applications brought under s170EA. The impression I gained of Mr Bagic was less straight forward. He was plainly genuinely distressed by the suggestion that he was giving a false account of events in his evidence. At times he impressed me as endeavouring to give his evidence truthfully though labouring under the difficulties of not speaking English fluently. On other occasions I was less sure whether hesitations and contradictions were a product of those matters, or of evidence that was less than truthful. On some matters I did not accept what Mr Bagic said, not because of the way he said it but because of what he said. For example his evidence about whether he was paid a travelling allowance when attending the Club at weekends I found not entirely credible. I will now consider the evidence about certain contentious matters. Were complaints made to Ms Shackley about her work and was her work unsatisfactory? The evidence in relation to Ms Shackley's performance and whether she was told it was unsatisfactory was, in many respects, quite vague. In the evidence of witnesses called by the Club, her work was criticised. This criticism included her failure to ensure that the Club had an adequate supply of tablecloths and an adequate stock of alcohol, her failure to ensure the bar area was clean particularly when committee members acted as bar attendants at night, her failure to work at weekends as requested and an error she made when quoting wine prices to a Mr Grigic for a wedding function held at the Club. The last mentioned incident was conceded by Ms Shackley though the quotation was given three to four days after she started. She says that the prices she quoted were by reference to prices recorded on a sign above the till. While she was challenged in cross examination about whether the price she quoted for wine was recorded on a sign, no evidence was called to demonstrate what she quoted and what the sign recorded. I accept Ms Shackley's evidence as to the circumstances in which the quotation was given. The prices were subsequently increased. There was a conflict between her and Mr Bagic about whether they discussed the renegotiation of the quotation before the wedding function which took place on 14 May 1994. It was not in issue that there had been a renegotiation of the price. There was also no issue that Mr Bagic was the person who, on behalf of the committee, liaised with Ms Shackley. I accept Ms Shackley's evidence that the prices were renegotiated before the wedding and that she had discussed the matter with Mr Bagic. Her account is more plausible than that of Mr Bagic. As to the supply of tablecloths and alcohol, Ms Shackley conceded that on at least one occasion and probably on at least one other there had been insufficient tablecloths. The first occasion was shortly after she started. In relation to any other occasions, she said members of the committee had taken tablecloths for their own use at the Club premises, and this created the shortfall. This was not denied. Ms Shackley also conceded that there was the occasion when she was spoken to by Mr Sumonic about a shortage of alcohol at the bar. There was evidence of complaints by Mr Sumonic on more than one occasion about understocking of alcohol. However the evidence is vague and does not establish the circumstances that gave rise to the criticism. As to the cleanliness of the bar area, the complaint was that on occasions the bar area would be untidy after an evening when members of the committee had acted as bar attendants. The evidence of Mr Bagic was that Ms Shackley failed to direct the staff under her control to clean up. At one stage his evidence was that she failed to get the committee members themselves to clean up. It is unlikely that this was said as it is unlikely, in my opinion, that either Mr Bagic or Ms Shackley would have believed she had any authority to direct members of the committee as to what they should do. Ms Shackley accepted that on one occasion Mr Bagic asked her to direct the bar staff to tidy the bar and her evidence was that she did. I accept this evidence. In my opinion, the heart of the problem concerning Ms Shackley's employment as perceived by Mr Bagic, was Ms Shackley's unwillingness to work at weekends. I accept he criticised her, on occasions, at meetings of the committee but the real problem, and cause of complaint, was weekend work. Her failure to work at weekends cast a burden on him. The problem was encapsulated by something said by Mr Frankovic: "Did you ever talk to Ms Shackley at all?--Couple of times probably. What happened, if I can explain. We did decide to appoint one person to deal with Ms Shackley, we appointed the president of the club because as far as I know, with all rules and everything is not really fair for everyone to go and give her orders, so we decided to appoint a person to deal with Ms Shackley and that was Mr Bagic. And Mr Bagic did complain on many occasions about Ms Shackley and one particular time he did decide to get Mr Bagic to spend a bit more time with her to sort of lead her in the right way. So he was always complaining, so he spent a lot of time and it's costing him a lot of money for his petrol. Then we did decide to pay him about - I think it was in those days it was 57 cents per kilometre. So he wasn't - Mr Bagic was probably a bit soft when he come ---" (emphasis added) It is to be remembered that the letter of appointment spoke of "mutually agreed extra hours". In my opinion Mr Bagic had an expectation that Ms Shackley would work at weekends as much as requested, which in practical terms meant those weekends when he or Mr Belovic were not prepared to work. This understanding was not shared by Ms Shackley. Accordingly, Ms Shackley's unwillingness to work at weekends as much as Mr Bagic wished was a source of concern and irritation to him. He saw it, wrongly, as a failure on Ms Shackley's part to do the job she had been engaged to do. What was said at the time of dismissal There is a direct conflict between the evidence of Ms Shackley and Mr Bagic as to whether he said to her at the time her employment was terminated on 17 May 1994 words to the effect, according to Ms Shackley: Bagic: "I am very sorry to tell you this but the Committee has instructed me to tell you that you are to be sacked". Shackley:"Why?" Bagic: "It's because you are not Croatian. They can make up any reason they want but it's because you aren't Croatian." This is the evidence of Ms Shackley in her affidavit and her cross-examination did not cause me to doubt that evidence. Mr Bagic denied saying those words. Other evidence which bears upon what finding should be made was evidence given by Mr Leonard without objection. He said he was contacted by Ms Shackley by phone on the day of her dismissal and was told by her that she had been dismissed. When he asked her why she said she was told that she was not a Croatian. He then rang the Industrial Relations Court and Human Rights Commission to see what could be done. While plainly, Mr Leonard's evidence should not be given undue weight depending as it does on what he was told by Ms Shackley, it is nonetheless corroborative of Ms Shackley's version of events. I accept Mr Leonard's evidence and it follows that either the conversation that Ms Shackley now contends occurred, had in fact occurred or she had contrived a version of events shortly after she had been told her employment would be terminated which she then told Mr Leonard. Why she would have done so is not obvious unless it was to immediately create a basis upon which a claim such as the present one could be brought. Mr Leonard also said that Ms Shackley sounded distraught and distressed on the phone and I accept his evidence that she did. This is consistent with her own evidence as to the state she was in at the time she telephoned him. It is unlikely, in my opinion, that in these circumstances and in this emotional state Ms Shackley would have contrived the version of events that she recounted to Mr Leonard. Mr Bagic's denial of having made the comment has to be put into context. The evening preceding the day on which he informed Ms Shackley that her services were terminated there had been a meeting of the committee. There is no decision recorded in the minutes that Ms Shackley's employment should be terminated and no evidence was given orally that a decision was made in any formal sense. At a meeting the week before the committee had discussed with Ms Marcobasic her employment as manager and, on balance, I am satisfied that she was offered the position. She is Croatian. In the circumstances Mr Bagic was confronting of having to terminate Ms Shackley's employment, it would have been necessary for him to advance a reason. In my opinion the underlying reason for the dissatisfaction on Mr Bagic's part with Ms Shackley was her failure to accept his authority and work at weekends when asked. His dissatisfaction and the dissatisfaction of other committee members probably also flowed from Ms Shackley's attempts to regularise practices in the Club that she viewed as inappropriate or even improper. To that extent she was challenging the culture or ethos that then existed in the Club. For present purposes it does not matter whether her judgment in that regard was correct. It may be that Mr Bagic believed that the reason she was being dismissed could best be explained to Ms Shackley by saying that she was being dismissed because she was not Croatian. If so, it may have been intended to convey to her that her attitude did not accommodate the authority he derived from the committee to direct her to work in the way he wished. She was, as he perceived it, being too independent. I am satisfied that Mr Bagic did say to Ms Shackley that she was being dismissed because she was not Croatian. Contravention of Section 170DF It should be emphasised that no submission was made that the characteristic of being Croatian is not a characteristic of "race" as that word appears in s170DF(1)(f), in contradistinction to "national extraction or social origin". The matter proceeded on the assumption that it was and the issue raised in the proceedings was principally a factual one, namely did Mr Bagic say the words alleged. What is comprehended by the word "race" and whether, as a matter of construction, it is descriptive of characteristics that may also be comprehended by the words "national extraction or social origin" is a matter I need not address. In written submissions made at the conclusion of the hearing it was suggested on behalf of the applicant that her termination was not only for reasons of "race", but for reasons of "national extraction" as well. The case was not opened on that basis. However given the way I view the application of s170EDA in these proceedings, this distinction is not a material one. The fact that Mr Bagic told Ms Shackley that she was being dismissed because she was not Croatian would not, apart from the operation of s170EDA, establish conclusively that she was being dismissed because of her race though it would plainly support such a conclusion. It would be possible, for example, that the reason given by Mr Bagic did not represent the true reason and that it was chosen by him as a convenient means of explaining the termination of her employment. Whether this was the case or not is a matter I need not determine. This is so because s170EDA(2) provides that if an application under s170EA alleges that the termination of employment contravenes s170DF because it was for one of the proscribed reasons, then the termination is taken to have contravened that section unless the employer proves that the termination was not for the reason alleged. In the present case, because Ms Shackley has alleged in her application that the termination was for the reason that she was not Croatian which has been accepted as an allegation that she was dismissed because of her race, it is necessary for the Club to show that her termination was not for that reason. If they fail to do so s170EDA requires the Court to deal with the application on the basis that the termination was for the reason alleged. It is not necessary for the applicant to make out a prima facie case in the way submitted on behalf of the Club by reference to McDonnell Douglas Corporation v Green (1973) 411 US 792. The words used Mr Bagic suggest that it was for the reason alleged. However I do accept that there was a measure of dissatisfaction amongst the members of the committee about the work Ms Shackley was doing notwithstanding that the level of dissatisfaction has, in my opinion, been somewhat overstated in these proceedings though probably not deliberately by the witnesses themselves. Further the evidence is vague about the conduct of Ms Shackley that lead to the criticism. I should add that in her evidence Ms Shackley admitted that on some occasions, she made mistakes. Viewing the evidence as a whole, the Club has not displaced the statutory presumption that the termination of Ms Shackley's employment was for the reason she alleged, and accordingly s170EDA results in an assumed contravention of s170DF(1)(f). I find that the termination of Ms Shackley's employment was in contravention of s170DF. Contravention of s170DC On any view of the evidence, the Club and those acting on its behalf did not raise with Ms Shackley the concerns they had about her work in a context where it would have been apparent to her that a failure to rectify them would result in her termination. While she was aware of some concerns, they were generally non-specific and it was not suggested to her that her employment might be terminated. Section 170DC requires an employer to give an employee the opportunity to defend himself or herself against allegations concerning performance so that an employee can demonstrate that the allegations are without substance or otherwise explain the performance. I find that the termination of Ms Shackley was in contravention of s170DC. Alleged contravention of s170DE Section 170DE precludes an employer terminating an employee's employment unless there is a valid reason connected with the employee's capacity or conduct. In the present case matters were raised in the evidence concerning the way Ms Shackley went about her work. While it can be said that on a limited number of occasions she made errors, it is by no means apparent that she was not performing her duties satisfactorily. The errors she made were during a probationary period and insofar as it related to the quotation provided to Mr Grigic I have already expressed the view that it was an error that is explicable. Insofar as she failed to order tablecloths on several occasions, that matter is not significant and, in any event, was the subject of a plausible explanation by Ms Shackley. The allegation that sufficient alcohol was not available on one or two occasions during her probationary period could, in my opinion, scarcely be said to justify her termination. Section 170EDA operates in the way I have already discussed if an employee alleges that the termination was in contravention of s170DE. In the present case not only were the allegations of inadequate performance of limited substance I plainly have to have regard to both the reference given to Ms Shackley by Mr Bagic and, more importantly, the request later made on behalf of the Club for her to take up again the employment from which she had earlier been dismissed. I accept the submission made on behalf of the Club that the reference has to be viewed with some caution given that it was not only composed by Ms Shackley who is fluent in English, but composed at a time when she was contemplating action against the Club. As to the later offer of re-employment it is unlikely that the standard of her performance was such that her termination could be justified if, within months of it, she is offered further employment in the same position. It was not suggested to or by Mr Bagic in evidence that the offer was made because she had commenced proceedings in this Court and that it was designed to mollify Ms Shackley and perhaps induce her to discontinue the proceedings. While it is true she did not accept further employment when offered it in August 1994, that refusal was, in the circumstances, understandable. She was otherwise persisting in her attempts to obtain regular employment. She came to the club from regular employment and I accept that her dismissal would have been particularly traumatic. In my opinion she should be awarded the maximum amount of compensation which is, rounded off, $12,100. There was a passing reference made in the written submission of the Club filed after the hearing had concluded that Ms Shackley had an adequate alternative remedy: see s170EB in the form of a remedy with the Human Rights and Equal Opportunity Commission. It is quite inappropriate in my opinion, for such an issue, if it be an issue, to be raised at that time and in that way. No substantive argument is advanced as to why it is an adequate alternate remedy, and I am not satisfied it is. Both parties asked at the hearing that they be given an opportunity to address the Court on the question of costs after judgment is given though it was a matter subsequently addressed in the written submissions. In my view it is appropriate that the parties have the benefit of these reasons before I deal with the question of costs and accordingly I reserve on that question. I certify that this and the preceding twenty (20) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore. Associate: ...................... Dated: 6/9/95 APPEARANCES Solicitor for the Applicant: Mr P Shields QC of Scott Shields & Glover Solicitor for the Respondent: Mr B Colleary of Bernard Colleary and Associates Dates of Hearing: 19 June, 7 July 1995 Written Submissions Complete: 2 August 1995