IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 2483 of 1995 B E T W E E N: Linda Jane BURGESS Applicant A N D FLORGALE UNIFORMS PTY LTD Respondent REASONS FOR DECISION 27 October 1995 PARKINSON JR This is an application made pursuant to S170EA of the Industrial Relations Act 1988. The applicant seeks an order for compensation. No order for reinstatement is sought. The applicant was employed by the respondent as a designer/sales executive on 21 January 1994. The applicant left the workplace on 11 April 1995 in circumstances which are now disputed between the parties. The respondent submits the applicant resigned her employment and the applicant submits her employment was terminated by the respondent. During the initial period of her employment the applicant's time was almost entirely spent upon a specific design project. The evidence is that the applicant was involved in the working up of proposals for clients and prospective clients together with preparation of story boards and concepts for clients. The evidence was that the applicant was a good employee, and I am satisfied that there were in general no complaints as to her work capabilities. However, there may have been some concerns held by the respondent, particularly in the latter period of the employment, as to the applicant's preparedness to accept direction as to priorities in the performance of her duties. It was this issue which led to the events which resulted in the termination of the employment. The respondent submits that there was no termination of employment at the initiative of the employer, and that the applicant resigned her employment by leaving the workplace and failing to return despite requests to do so from the employer. The applicant submits that during the course of a conversation on 11 April 1995 between herself and Mr John Burnes, the managing director of the respondent, the applicant's employment was terminated. I am unable to accept that the circumstances of the termination of employment involved a termination of employment at the initiative of the employer, this being the type of termination of employment with which S170EA is concerned. The evidence in the proceedings establishes that the applicant was not advised by the employer either expressly or implicitly that her employment was terminated. Rather, the conversation contained an express stipulation as to the applicant's future work performance. The evidence is that the applicant was told: "if you continue to ignore my instructions then there will not be a position for you in the company." That words to this effect were said is the evidence of both the applicant and the witnesses for the respondent in this case. There is no dispute that Mr Burnes qualified the threat made in relation to the continued employment of the applicant, although the applicant's evidence was that he went on to say that she "could pack her car and go now." This latter evidence was, however, in the context of the initial qualification made. There was not, in my opinion, any conduct on the part of the respondent which constituted a termination of the employment at the initiative of the employer. The conduct constituted a warning by the employer directed to the employee regarding her failure to meet his work requirements, and the consequences if there was not compliance with his directions. As a result of this conversation the applicant left the workplace. In my view the evidence does not establish that Mr Burnes behaved in a manner which, on any reasonable view, was oppressive and thereby could reasonably constitute a constructive dismissal. I am satisfied on the evidence as to the contents of the conversation alone, that the termination of employment was not at the initiative of the employer. However, even if one were to accept that "termination of employment at the initiative of the employer" was broad enough to include a circumstance where an employer allows a misunderstanding as to intended consequences of a warning procedure to go unchecked, this was not the case here. Whether the applicant left because she had misunderstood the content of Mr Burnes' injunction is not in this case of significant consequence as a result of the subsequent conduct of the respondent in attempting to resolve the situation and any misunderstandings, and to ascertain the applicant's future intentions regarding the employment. In this case the applicant was informed clearly that she had not been terminated on that date. She was informed of this both by telephone and in writing. The applicant's evidence was that all communication by telephone with Mr Burnes was amicable, and she acknowledged that she was informed on 18 April 1995 that she had not been dismissed and that she was welcome, and indeed expected, to return to work at the respondent. The respondent was informed by the applicant that her solicitor would be contacting him, but no such contact was made. On 21 April 1995 the respondent by letter confirmed the advice to the applicant, and confirmed that the position remained open for her (Exhibit R1). Further, no termination payments of any type were made to the applicant, nor were instructions given to the pay office in this regard, until the expiration of some 14 days after the date the applicant left the workplace, when automatic bank transfer crediting of wages ceased. This payment occurred after expiry of the date set by the respondent in Exhibit R1 as the deadline for a return to work by the applicant. The respondent in my opinion took all reasonable steps to clarify the situation with the applicant's employment, and in my view the employment terminated by the failure of the applicant to return to work at or by the specified time. This is not a situation where the employer has taken active ongoing steps to enforce a resignation that was apparently made under duress, nor failed to take any steps to clarify the applicant's position, as was the case in Grout v Gunnedah Shire Council (No. 1) (1994) 125 ALR 355. There was in this case in effect an abandonment of the employment by the applicant. In all of the circumstances, I am not satisfied that there was a termination of the employment at the initiative of the employer, and as a result I dismiss the application made pursuant to S170EA of the Act. I turn now to consider the outstanding matters in this proceeding. The Contract Claim The applicant made a claim in the accrued jurisdiction of the court in respect of commission entitlements outstanding and in relation to annual leave entitlements. These claims were made at the time the applicant filed the application pursuant to S170EA. I am satisfied that the claims in the accrued or associated jurisdiction arise out of a similar substratum of facts and are appropriate to be determined in this proceedings. I am further satisfied that the application made pursuant to S170EA was made bona fide and not colourably in the sense discussed in Burgundy Royale Investments Pty Ltd v Westpac Banking Corp (1987) 76 ALR 173 as extracted in the decision of Moore J in Grout's case at 382 - 383. In that decision, his Honour, in considering whether the court was entitled to continue to hear and determine a claim in the accrued jurisdiction of the court in circumstances of the application being outside of the original jurisdiction of S170EA, said at 383: "In this matter, there were clearly issues of substance as to whether there had been a termination and whether there was an adequate alternative remedy. It cannot be said that the statutory application was not made bona fide or is colourable. The court had and continues to have jurisdiction to deal with the claims brought by the applicant concerning his rights at common law notwithstanding that the prohibition in s170EB presently operates to preclude further consideration of the statutory claim." I am of the view that the above approach is equally apposite in the present circumstances, and I propose to determine the claim in the accrued jurisdiction. The applicant submits that she is entitled to annual leave payments of the equivalent of one weeks annual leave, and to commission payments of various amounts. The respondent's counsel in submissions conceded commission entitlements owing in respect of March and April 1995, but no other amounts. I am satisfied that there were also commissions owing to the applicant as a consequence of her involvement in the Health Services of Australia (HSOA) project and consequent sales. On the figures calculated by the respondent in Exhibit R3 the commission owing on that project was in the sum of $2,683.68. In calculating the amounts of money owed by the respondent to the applicant as a result of the contractual claim, the respondent submits that various deductions or set-offs ought be made as a consequence of monies owing to it by the applicant. These amounts include an obligation on the applicant to accord two weeks notice of termination, various amounts for payment for personal purchases made, and further a set-off of an amount of what the respondent submits is advance payment of commissions in expectation of a level of orders from Myer Ltd, which level of sales was never achieved. In respect of the latter matter, I am satisfied that the agreement between the applicant and the respondent in respect of weekly wages is reflected in the wages records of the respondent and by way of the correspondence between the parties in Exhibits A1 and A2. In particular, it is noted that the payslips in Exhibit A2 for 21 January, 21 February and 21 March 1995 specify an hourly rate of pay of $13.4211 per hour for a 38 hour week. This calculates to a weekly rate of $510.00. There is no reference in any of this documentation to an obligation on the applicant to pay back or refund any amount in circumstances where the Myer order was not as expected. Further, there is no mention in any of the documentation of there being an advance payment in wages on account of expected commissions. The applicant denied any such arrangement existed and the respondent's witness Mr Burnes conceded in his evidence that such a condition upon the weekly payment was never discussed with the applicant. In the absence of express evidence of that arrangement, and I note that the wages records of the respondent do not support this view of the payments, I am not prepared to imply such an arrangement. I am not satisfied that there was any agreement between the applicant and the respondent as to the repayment of any advance payment of commission made by the respondent on account of the Myer Account. I am satisfied that the applicant was entitled to a base wage of $510.00 per week, and that is in fact what she received. I do not accept there ought be a deduction or set-off of any amount of prepaid commission against any outstanding commission payments. I accept the evidence of the respondent as to the amount of commission owing and as to the correctness of the payments made to the date of the termination of employment. In so far as commission owing is concerned, I am satisfied that the applicant is due the commission payable for the month of March and April, in the sum of $ 628.01 and 84.56 respectively, and $ 2,683.68 on account of the HSOA sales. This latter amount is based upon the commission of 3% calculated by the respondent as a proportion of the work done in relation to the sales as at the time of the termination of the employment. I accept this is the appropriate amount. I am also satisfied that the applicant was entitled to payment for one weeks annual leave owing. That amount is set by reference to the weekly rate of pay of $510.00. I am satisfied that the amounts owing to the applicant pursuant to the contract is $3,906.25. I am further satisfied that there were various amounts owing to the respondent by the applicant, and that those amounts ought be set off against the amount of damages awarded to the applicant. Those sums were: - an amount equivalent to payment for 2 weeks notice, being the amount of $1,020.00, which is the period of notice the respondent submitted was due to it by the applicant upon termination of employment. I accept that there was at least a contractual obligation of this nature on the part of the applicant, and the applicant conceded as much in her evidence. - an amount of $ 126.00 being payment for personal purchases of trousers by the applicant on the account of the respondent. - an amount of $ 235.85 being payment for personal purchases of shirts by the applicant on the account of the respondent. - an amount of $194.40 on account of parking fines and penalties incurred by the applicant whilst in possession of the company car. The total of these amounts is $1,576.25 and is to be set off against the damages of $3,906.25 payable to the applicant. I am satisfied that these amounts due to the respondent are due pursuant to the contractual arrangements between the parties and, in particular the obligation on the applicant to give notice, does not in this case depend upon the existence of an award obligation. There is one further aspect to these proceedings upon which it is appropriate to comment. During the course of the proceedings I enquired of counsel as to any applicable industrial award. This matter may have been of relevance in so far as it was necessary to determine the issue of the actual wage entitlements of the applicant for the purpose of calculating remuneration or compensation payable pursuant to S170EA. As a consequence of my decision in relation to jurisdiction and my finding of fact as to the contractual wage entitlement, it is not necessary to hear from counsel further in relation to the application of any award. The material before me was sufficient to enable me to determine the accrued claim. I find that the respondent is liable to the applicant in contract for the sum of $3,906.25. I further find that the applicant is liable to the respondent in contract for the sum of $1,576.25, and that such amount is to be set off against the damages ordered to be paid to the applicant. In the result, the amount of damages payable to the applicant shall be $2,330.00. The orders of the court will be: 1. That the application pursuant to S170EA of the Industrial Relations Act 1988 be dismissed. 2. That the respondent pay to the applicant the sum of $2,330.00 in damages on the contractual claim. 3. That payment be made within 21 days of the date of this order. I certify that this and the preceding eight (8) pages are a true copy of the reasons for decision of Judicial Registrar Parkinson. Associate: Dated: 27 October 1995 APPEARANCES Solicitors for the applicant: Jonathon Kemp Counsel appearing for the applicant: Mr R Moore Solicitors for the respondent: Baker & McKenzie Counsel appearing for the respondent: Mr G McNamara Date of hearing: 17 October 1995 Date of judgment: 27 October 1995 IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 2483 of 1995 B E T W E E N: Linda Jane BURGESS Applicant A N D FLORGALE UNIFORMS PTY LTD Respondent MINUTES OF ORDERS 27 October 1995 PARKINSON JR THE COURT ORDERS THAT: 1. The application pursuant to S170EA of the Industrial Relations Act 1988 be dismissed. 2. The respondent pay to the applicant the sum of $2,330.00 in damages on the contractual claim. 3. Payment be made within 21 days of the date of this order. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. CATCHWORDS INDUSTRIAL LAW - complaint of UNLAWFUL TERMINATION - whether RESIGNATION or termination at the initiative of the employer - accrued jurisdiction - contractual claim for commission and other entitlements - whether appropriate to determine in these proceedings - whether claim bona fide and not colourable Industrial Relations Act 1988, ss 170EA Grout v Gunnedah Shire Council (No. 1) (1994) 125 ALR 355 Burgundy Royale Investments Pty Ltd v Westpac Banking Corp (1987) 76 ALR 173 LINDA JANE BURGESS v FLORGALE UNIFORMS PTY LTD VI 2483 of 1995 Before: PARKINSON JR Place: MELBOURNE Date: 27 OCTOBER 1995