C A T C H W O R D S INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - RESIGNATION or TERMINATION - REINSTATEMENT - REMUNERATION lost. INDUSTRIAL RELATIONS ACT 1988 S 170EE Mullany v Active Concrete Wilcox CJ 3/5/95, NI 0747R of 1994 IOAN COSTIN -v- BRADKEN PERTH, A DIVISION OF ANI CORPORATION LIMITED WI 95/1591 BEFORE: STAINDL JR PLACE: PERTH DATE: 20 SEPTEMBER 1995 IN THE INDUSTRIAL RELATIONS ) COURT OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) No. WI 95/1591 BETWEEN: IOAN COSTIN - - Applicant AND: BRADKEN PERTH, A DIVISION OF ANI CORPORATION LIMITED - Respondent MINUTE OF ORDERS BEFORE: STAINDL JR PLACE: PERTH DATE: 20 SEPTEMBER 1995 THE COURT ORDERS THAT: 1. The respondent reinstate the applicant by reappointing him to the position in which he was employed immediately prior to the termination. 2. The applicant's employment with the respondent be treated as being continuous for all purposes. 2. The respondent pay to the applicant the sum of $8,109.00 within seven days, being remuneration lost by the applicant because of the termination. NOTE: Settlement and entry of Orders is dealt with by Order 36 of the Industrial Relations Court Rules IN THE INDUSTRIAL RELATIONS ) COURT OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) No. WI 95/1591 BETWEEN: IOAN COSTIN - - Applicant AND: BRADKEN PERTH, A DIVISION OF ANI CORPORATION LIMITED - Respondent BEFORE: STAINDL JR PLACE: PERTH DATE: 20 SEPTEMBER 1995 REASONS FOR JUDGMENT Ioan Costin ("the applicant") commenced employment with Bradken Perth ("the respondent") on 19 May 1993. He was employed as a plate moulder and essentially prepared moulds into which metal was later poured. These moulds were prepared by packing special sand both under and around a steel frame which was placed in a moulding box. A type of gas was then applied to the sand causing it to set hard. The sand and frame were then removed and separated (although not by the applicant). Hot metal would then be poured into this mould. Termination at the Initiative of the Employer or Resignation? On 16 May 1995 the applicant's employment finished. I use this neutral description because the main issue in the case was whether or not the applicant's employment was terminated at the initiative of the employer of whether he resigned. At about 7.30 am on 16 May a forklift driver, Kurt Gresch, had placed a pallet upright against a wire mesh wall. This upset the applicant because on a previous occasion a pallet which had been stored in such a manner had fallen and hurt his leg. The applicant remonstrated with Mr Gresche, although turned away when Mr Gresch tried to explain why he placed the pallet there. I am satisfied that Mr Gresch pulled the upper part of the applicant's jumper but that he did not put his hands around the applicant's neck. In making these findings about the incident I largely reject the applicant's version which I find was significantly exaggerated. Although I have referred to this incident it is not directly relevant to the termination of employment (whether by employer or employee) but it is part of the necessary background. The critical incident occurred around 10.00 am. Mr Gresch, the forklift driver, apparently placed a pallet of steel frames next to the moulding box on which the applicant was working. The applicant was not there at the time. These frames were used in the moulding process on which the applicant was engaged. The distance between the frames and the moulding box was 300 mm, and this distance was insufficient to allow the applicant to move between the two. The applicant thought that Mr Gresch was deliberately trying to make things difficult for him, especially in the light of the earlier incident involving both of them. However, I do not accept that this was the case. Mr Gresch had only been driving the forklift in that area for about a week and did not know of any preference on the applicant's part as to where the pallet should be put. Mr Gresch placed the pallet according to his normal practice, thus allowing sufficient room for traffic on the other side of the pallet. The moulding boxes were of various sizes. I am satisfied by the evidence of Mr Mauro Caputi (the applicant's supervisor) together with the evidence of Mr Neville Self (another plate moulder) that the applicant was using a "K" sized box on this day. The dimensions of this box are 600 mm x 1350 mm; its size allows a plate moulder to reach over from one side of the box to spread out the sand with his/her hands. As such it is not normally necessary for the plate moulder to go to the other side of the box. If in fact it was necessary for the applicant to work from the other side of the box then he could walk around the three clear sides of the box. Depending on where the applicant was standing and where he wanted to work it is possible that he may have had to walk several extra steps because the pallet was placed next to the box, although I am satisfied that this possibility was more imagined than real. Accordingly, I find that on the day in question it was not necessary for the applicant to have an uninterrupted path right around the moulding box, and there was no safety issue involved in the placing of the frames next to the box. After the pallet of frames had been placed next to the moulding box the applicant's supervisor, Mr Caputi, asked him why he wasn't working. The applicant told Mr Caputi that the frames were too close to the box but Mr Caputi told him that there was no problem with their positioning. The applicant complained that he would have to go around the box but Mr Caputi said that he didn't because it was a narrow box. Mr Caputi also said that he would not move the pallet. The applicant then said "I'll resign and go home if you don't remove the frames". Mr Caputi replied that there was no safety issue and no problem. The applicant repeated that he'd resign and go home if the frames weren't moved. Mr Caputi replied "I'm sorry, I'll accept your resignation". He then said he'd take the applicant across to see Mr Pat Lawrence (the respondent's personnel manager) because he handled all the dismissals. Some time was spent searching for Mr Lawrence but he could not be located. Mr Caputi then said to the applicant to come in tomorrow morning and the whole thing would be sorted out. Mr Caputi and the applicant returned to the applicant's work area in order to measure the distance between the pallet and the moulding box. In fact the applicant tendered in evidence a stick which he had broken off to equal this distance so as there could be no argument about the distance. As noted earlier this distance was 300 mm. The applicant went home at about 10.30 am. Shortly before 1.00 pm a letter was delivered by courier to the applicant. It read (omitting formal parts): "On Tuesday 16 May 1995 at about 1030 you verbally informed your Supervisor Mr Caputi that you give him notice to terminate your employment with this company. You walked off the job and left the company premises, and the company accepts your resignation and abandonment of your employment as of 1030 Tuesday 16 May 1995. All monies owing to you will be deposited into your bank account and a separation certificate will be forwarded to you in the mail. Yours faithfully Patrick Lawrence (JP) Human Resources Officer" The applicant sought assistance in reading this letter (as his ability to read and speak English is limited). When he returned home there was a message from Mr Lawrence on his telephone answering machine. The applicant rang Mr Lawrence and said that he had not resigned. Mr Lawrence replied that his information was that he had resigned and arrangements were then made for the applicant to collect tools and outstanding pay. In setting out my findings on the facts, I have largely accepted the evidence of the respondent's witnesses. However, I am still not convinced that the applicant resigned. Mr Caputi had said to the applicant that the pallet of steel frames would not be moved. The applicant had then said that he would resign and go home if the frames were not removed. It was not an unconditional statement. In fact, if Mr Caputi had repeated that he would not move the frames after the applicant's ultimatum then it would have been up to the applicant to either resign in fact or to back down. There is a possibility that he was bluffing or that he may have changed his mind. If the applicant did not resign then he should have continued working. Failure to do so would have opened the possibility of some sort of disciplinary action against him. But events did not get that far. Mr Caputi said that they should go and see Mr Lawrence (and although he used the term "dismissals" in reference to the reason for seeing Mr Lawrence, I think it was merely an inaccurate use of language). Mr Caputi thought the applicant had resigned and later conveyed this to Mr Lawrence. However, I am convinced that the applicant did not think he had resigned. Support for this view is to be found from the fact that after Mr Caputi and the applicant had not been able to locate Mr Lawrence, they measured the distance between the frames and the moulding box. This was at the applicant's insistence and is a strange action if he had thought that he had already resigned. Secondly, the applicant's first statement in his telephone conversation with Mr Lawrence later in the afternoon is that he did not resign. I have already noted that the applicant's ability to speak English is limited. The same can be said of Mr Caputi. No criticism is intended of either man, but simply a recognition that English is not their first language. Given these circumstances, and the applicant's denial over the phone of having resigned, it is surprising that Mr Lawrence did not investigate the matter further. He seems to have taken the position that he should not question the word of a line manager (Mr Caputi). Where there is some ambiguity about whether or not an employee has resigned it is incumbent upon the employer to investigate. In the present case there was ambiguity as to whether or not the applicant had resigned. The employer should have conducted further investigations. I am of the view that he had not resigned but that his employment was terminated at the initiative of the employer. This termination occurred at the very latest when the applicant received the letter which was hand delivered to him. Valid Reason for Termination The respondent argued that even if I found that it had terminated the applicant's employment that I should nevertheless not find his termination unlawful. It argued that procedural fairness had been accorded to the applicant and that past warnings given to him could be taken into account. This argument is fundamentally flawed. The employer's case was that it did not terminate the applicant's employment. In such circumstances it is difficult to accept that the applicant's employment was terminated for a valid reason when the employer did not consider whether or not it had a reason to terminate the applicant's employment. I find that the applicant's employment was not terminated for a valid reason. Remedy The applicant seeks reinstatement. The respondent argued that reinstatement is impracticable because of the applicant's poor work history and because there is no longer a job available. The applicant's previous work history seems to me to have little relevance in the present case. Given my finding that there was no valid reason for the termination it is difficult to see how previous matters are relevant. The respondent led evidence to the effect that the applicant's job was no longer available. This evidence was unsatisfactory in that it did not really explain why the job was unavailable. Some reference was made to a restructuring which the company was undergoing, but this evidence was not related directly to the applicant's position. The respondent employs some 180 people. About 28 of these are plate moulders, although half of this group is multi-skilled and so can perform a variety of tasks. Given this, it seems to me that reinstatement is not impracticable. The multi-skilling of employees should allow a position as plate moulder to be found for the applicant. Furthermore, it is not clear to me as to whether or not plate moulders have been employed by the respondent since the applicant's employment was terminated. On the evidence that remains a possibility (the evidence being that a plate moulder was employed "4-5 months" ago). If that were the case then it is not appropriate for the respondent to come along to court and say that it no longer has a job available. Given that the respondent must demonstrate that reinstatement is impracticable, I am unable to be satisfied on this point. Accordingly, I propose to order reinstatement. Remuneration lost by the Applicant Paragraph 170EE(1)(b)(ii) provides that if the Court makes an order for reinstatement then it may make an order "requiring the employer to pay to the employee the remuneration lost by the employee because of the termination". Where an employee is reinstated then ordinarily an order will be made providing for lost remuneration. In the present case it is appropriate to make such an order. There is a period of 18 weeks between 16 May and 19 September. Although there was some dispute about the applicant's level of remuneration I accept the figure of $450.50 per week. This was the figure contended for in the respondent's summary of facts and accepted in the opening made on behalf of the applicant. The amount of $450.50 multiplied by 18 gives $8,109.00. The applicant gave evidence that he received social security payments of $305 per fortnight. The respondent argued that this amount should be taken into account. Wilcox CJ considered a similar question under s.170EE(3) where it was argued that social security payments made to an applicant should be deducted from the compensation awarded. In Mullany v Active Concrete (Unreported, 3/5/95, NI 0474R of 1994) His Honour said: "The Court is required under s.170EE(3), in working out the amount of compensation, 'to have regard to the remuneration that the employee would have received or would have been likely to have received if the employer had not terminated the employment'; but the amount must not exceed the amount of remuneration that would have been received by the employee in respect of the period of six months that immediately followed the date of termination. I think that the subsection directs attention to remuneration received in respect of work done, not money received from other sources and unrelated to work done; for example, social security receipts or gifts received from organisations or persons who take a charitable interest in the employee's plight. Accordingly, I do not propose to reduce the amount of compensation to which I think the applicant is otherwise entitled because of the social services payments." The question is whether the phrase "remuneration lost" contained in s.170EE(1)(b)(ii) can be distinguished from the phrase "remuneration that the employee would have received" (but for the termination). I do not think that a valid distinction can be made. Both phrases use the word "remuneration", which draws attention to the pay or income received by a person as a result of that person's work or labour. The remuneration lost refers to the pay or income foregone by the applicant because he was not employed during the period of termination to reinstatement. Accordingly, in my view I should not take into account the social security payments received by the applicant. The orders I make are as follows: 1. That the respondent reinstate the applicant by reappointing him to the position in which he was employed immediately prior to the termination. 2. That the applicant's employment with the respondent be treated as being continuous for all purposes. 2. That the respondent pay to the applicant the sum of $8,109.00 within seven days, being remuneration lost by the applicant because of the termination. I certify that this and the preceding eight pages are a true copy of the Reasons for Judgment of Judicial Registrar Staindl. Associate Date: Appearances Representative for the applicant: Mr A Lovell Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia Representative for the respondent: Mr J Uphill Chamber of Commerce and Industry of Western Australia Hearing date: 18 & 19 September 1995 Judgment date: 20 September 1995