Jennifer Ann Guice v Ninetieth Traburn Pty Ltd [1995] IRCA 641

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 2769 of 1995 B E T W E E N: JENNIFER ANN GUICE Applicant A N D NINETIETH TRABURN PTY LTD Respondent REASONS FOR DECISION 1 December 1995 PARKINSON JR This is an application made pursuant to s170EA of the Industrial Relation Act 1988. This decision is made in relation to a preliminary jurisdiction matter raised by way of the respondent's notice of motion filed on 30 October 1995. In that notice the respondent seeks that the application be dismissed for want of jurisdiction in that it submits that the applicant resigned or abandoned her employment on 24 April 1995 and that there is no termination of the type to which s170EA is directed, that being a termination of employment at the initiative of the employer. The applicant submits that the termination was initiated by the employer as a consequence of the conduct of the respondent in warning the applicant as to her work performance, and fundamentally altering her duties so as to constitute a repudiation of the contract of employment by the employer. This, it was further submitted, constituted a termination of employment at the initiative of the employer, being a constructive dismissal. It is necessary to set out my findings of fact in relation to the circumstances of termination of the employment and I now do so. Background and findings of fact The applicant was employed on 29 March 1993 as a senior child care worker at the respondent's child care centre and was appointed to the position of Director of the centre in January 1994. She was originally engaged pursuant to an Individual Employment Agreement made pursuant to the Employee Relations Act 1992 (Vic). The operation of this agreement is in issue in these proceedings only in so far as it was relied upon as establishing the applicant's duties and responsibilities. I am not satisfied that this agreement continued in operation in respect of the variation to the employment agreement occurring in January 1994, although in my view nothing in these proceedings turns upon that fact. The applicant's evidence was that she was not given a copy of her job description as Director of the centre until the date that her employment terminated. However, in my view the duties and responsibilities of a Director of a child care centre are well known to persons in that industry, and the question otherwise as to her accountability and supervision are matters for findings of fact. Further, the evidence was that the applicant's duties and responsibilities were discussed with her at the time she was appointed to the Director's position. The applicant's duties and responsibilities required that she supervise and manage the operations of the centre. This included supervision of staff, rostering and ensuring compliance with regulatory requirements. For reasons which will become apparent in the course of this decision, the question of by whom, if anyone, and to what degree the applicant was subject to supervision was in issue in these proceedings. The evidence of the respondent was that the applicant was responsible to Mrs Cook, the manager of the respondent's two centres. Whilst the applicant was not subject to the day to day direction and control of Mrs Cook, I am satisfied the evidence establishes that Mrs Cook had overall authority in relation to the centres and the applicant in the performance of her duties. The respondent's evidence was that the owner, Mrs Roberts, and the manager became concerned as to the direction of the applicant's centre, and in particular issues such as staff rostering, standards and programme delivery. Consequently, and during the course of the process of seeking accreditation for the centre, Mrs Cook attended frequently at the centre and involved herself in its operation. The applicant had previously raised her concerns as to the manager's attendance at and involvement in the centre with Mrs Roberts in the course of a telephone conversation initiated by the applicant, and I am satisfied on that occasion and at a subsequent staff meeting, held on 5 April 1995 the applicant and staff were clearly informed of the role of the manager, including her responsibility to oversee the operations of the centre. Further, I am satisfied that the respondent through its manager was, irrespective of the duties and responsibilities attributed to the applicant in her contract of employment, entitled and indeed obliged to ensure that the centre was operating in a manner which satisfied not only its requirements but also those of the accreditation body. Shortly after the meeting of 5 April 1995 the applicant went on annual leave. During that leave, the respondent's evidence was that it became clear that the various concerns it held required intervention and correction. Evidence of this concern was given by Mrs Roberts and Mrs Cook. Whilst I make no finding as to the validity or otherwise of those concerns, I accept the respondent's evidence that the concerns were truly held, and that it was felt that immediate steps needed to be implemented to overcome them. As a result, the respondent decided that it would draw to the applicant's attention the various matters of concern in relation to the operation of the centre, and her performance in that regard. This was done in accordance with the policy of the respondent to provide written warnings to staff where there were matters of concern regarding their work performance. The policy was well known to the applicant and, notwithstanding her evidence that it was usual practice to raise concerns verbally initially, in the circumstances of such a responsible and senior position it was appropriate in my view that the respondent address in writing specifically and in detail the concerns that it held. A document was drafted setting out those concerns, and upon the applicant's return from annual leave she was asked to attend a meeting with Mrs Roberts and with Mrs Cook. At that meeting the applicant was handed the document titled "First Written Warning". That document, Exhibit R1, set out in clear terms the areas of concern to the respondent and the processes by which it was proposed to resolve those concerns. The evidence of the applicant and Mrs Roberts and Mrs Cook was that the applicant was asked to read the document, it being intended that the matters therein would be discussed. The applicant briefly read the contents of the document and then ceased to read any further. Her evidence was that she was startled by the contents and in particular one aspect of the document which she regarded as relieving her of her duties as Director of the centre. It is appropriate to set out the relevant part of Exhibit R1, (CDR8), the warning letter, at page two thereof: Until further notice, your specific responsibilities include: 1. Performing according to your written job description. 2. Working under my direction until such time as I am confident you are running the centre to the standard required by me. You will be Director in name only until this is achieved. 3. Participating in all rostered duties. No changes can be made to the roster without prior consultation with me. 4. No Agency or extra staff will be employed without first seeking my authorisation, except for normal staff sickness. The only Agency to be used to replace staff is the ABC Agency. 5. You will continue the cleaning routine that has been commenced, until the standard required by the Children's Services Regulations has been attained. It is not contested that the applicant then declined to discuss the matter further with the respondent and shortly thereafter left the room, despite the evidence that both Mrs Roberts and Mrs Cook asked her to remain and sit down to talk through the issues with them. I am satisfied that it was made clear to the applicant that there was a desire on the part of both Mrs Roberts and Mrs Cook to resolve the matters of concern to both parties arising from that warning letter, and that this was clearly expressed to the applicant. The applicant relies upon a construction of the conversation which occurred between the parties as constituting an express termination of employment by the respondent. Her evidence was that when she queried the respondent as to "what happens now", the response was " we will arrange for your entitlements to be paid to you". The applicant's evidence was that she construed this as meaning that her employment was being terminated by the respondent. I am not satisfied that this exchange occurred, but even if it did it was not in the context suggested by the applicant. This is because such an exchange , if it did occur, happened only after the applicant had been reassured by the respondent's representatives that this was a warning letter only, and that they had a desire to work things out. The evidence was that Mrs Roberts said, " there's no need for it to end like this, sit down and we will discuss the issues but the changes have to be made" Mrs Cook's evidence was that she recalled the applicant saying she was leaving now or words to that effect immediately after saying "I'm not reading this", in relation to the warning letter. Her evidence was "that the applicant was handed the document, she only read it for a short time and said that there was no real reason for her to continue to work for us and that she would resign her position at that stage. I can't be sure as to whether she said 'leave' or 'resign'. I asked her to look at page two because there was a lot of rehabilitation statements that I felt we could work through, but she briefly looked at it but said no and that she would go back to emergency teaching. She stood up, handed the key and left the building." The applicant's recollection of the conversation was different in that whilst she conceded that there was discussion about sitting down and talking through the issues, her evidence was that she said " I have had enough of this, you've got what you wanted, I'm leaving now." The applicant's construction of this statement was that she intended to simply leave the room to calm down. Her evidence was however, that at that point she was then told that she would be paid her entitlements and this in her mind led her to believe that the employment was being terminated by the employer. Whilst it may be that this was the interpretation of the applicant, I am not satisfied that it was a reasonable construction of the intent or meaning of the conversation, and I am of the view that it was reasonable for the respondent to conclude from the conduct and words of the applicant that she had decided to leave her employment by resigning. I am not satisfied that there was any conduct on the part of the respondent in the course of the interview which constituted an express termination of employment of the applicant by the respondent, or conduct which could be reasonably construed as such. On this aspect of the proceeding I have decided that there was not a termination of the employment at the initiative of the employer in the sense contemplated by s170EA of the Act. I turn now to consider the submission put on behalf of the applicant to the effect that the fact of the warning letter being given in terms which substantially varied the applicant's employment contract constituted a repudiation of the contract by the respondent, striking at the root of the contract and thereby entitling the applicant to accept the repudiation. This, it was submitted, constituted a termination of employment at the initiative of the employer. It is appropriate at this point to make some observations in relation to the operation of Division 3 Part VIA of the Act. One of the significant aspects of this division is that it imposes an obligation pursuant to s170DE(2) upon an employer to not terminate employment harshly, unjustly or unreasonably. To avoid such a charge, one way in which an employer might proceed to deal with areas of concern regarding an employee's performance or conduct is to adopt a warning procedure, and another is to modify duties to enable greater supervision of areas of concern. In so far as a warning process might be said to be a necessary component of the obligation to accord procedural fairness, it arises under as part of the scheme of this Act. The very adoption by an employer of such a warning process and any other procedures designed to avoid a termination of employment are to be encouraged, and are relevant to a determination as to whether there has been harshness or unreasonableness in the termination of the employment. It seems to me to be an unusual and possibly unsatisfactory approach to this legislation, and in particular the meaning of the term "termination of employment at the initiative of the employer", to contend that the very steps taken by the respondent with a view to resolving the difficulties arising in the employment may be characterised by way of the application of strict contractual formulation, as constituting a termination of employment at the initiative of the employer. In this regard it is appropriate to refer to an extract from the decision of Chief Justice Wilcox in Siagian v Sanel Pty Ltd (1994) 122 ALR 333 at 351 where his Honour said: " it seems preferable to treat the words "termination of ...employment" in Div 3 of Pt VIA of the Industrial Relations Act as including any act that brings to an end the employer-employee relationship, whether or not the act, or any acceptance of it, also brings to an end the contract of employment." ( my italics) However it is unnecessary for me to determine this matter on that point as I am not satisfied that there was in the contractual arrangements between the parties any term which prohibited the respondent from determining the appropriate allocation of duties and responsibilities between its employees, or from taking steps to ensure that the duties were carried out in the manner which it required. Further, in this case the evidence is that the only alterations made to the duties of the applicant, if they could be described as alterations, were to specify the boundaries of her authority in relation to a limited number of matters such as which agency was to be used to recruit temporary staff, and how staffing levels were to be administered and rosters determined. Whilst the warning letter specified that the applicant was for a limited period to be "director in name only", the practical consequences for the duties of the applicant were minimal, and there was no alteration to her salary or any other conditions of employment. I am not satisfied that there was a fundamental and unilateral alteration to the terms of the employment agreement such that it would constitute a repudiation of the agreement. I do not accept the submissions made on behalf of the applicant that she had been removed from her position as director of the centre and replaced with Mrs Cook, nor that the applicant had in fact been demoted in her position or duties. This is not a case comparable to the downgrading or demotion cases cited by counsel for the applicant. These cases, to which I have had regard, included "Truth" and Sportsman Ltd v Molesworth [1956] AR (NSW) 924 and In re David Jones Ltd and the Australian Workers Union [1978] AR (NSW) 206. In all of those cases the alterations were significant and permanent. That is not the case in this matter. For these reasons I distinguish the authorities cited to me by counsel for the applicant. For the reasons set out herein I am not satisfied that the termination of the employment was at the initiative of the employer. The application made by the respondent by notice of motion dated 30 October 1995 is granted and the application made pursuant to s170EA of the Industrial Relations Act 1988 is dismissed. 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: 1 December 1995 Representative for the applicant: Australian Liquor Hospitality and Miscellaneous Workers Union Representative appearing for the applicant: Mr B Tee Solicitors for the respondent: Holding Redlich Solicitor appearing for the respondent: Mr L Johns Dates of hearing: 16 & 17 November 1995