Irena Williams v Sigma Chemicals Pty Limited [1995] IRCA 666

C A T C H W O R D S INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - claim of UNLAWFUL TERMINTION - RESIGNATION or termination - whether CONSTRUCTIVE DISMISSAL - whether VALID REASON - COMPENSATION INDUSTRIAL RELATIONS ACT 1988 Ss 170EA, 170DE Nicol v ABC (unreported, IRCA No. 479 of 1995, Boulton JR, 8 August 1995) APESMA v David Graphics Pty Limited (unreported, IRCA No. 410 of 1995, Wilcox CJ, 12 July 1995) IRENA WILLIAMS -v- SIGMA CHEMICALS PTY LIMITED - WI 95/1918 BEFORE: R D FARRELL JR PLACE: PERTH DATE: 29 NOVEMBER 1995

IN THE INDUSTRIAL RELATIONS ) COURT OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) No. WI 95/1918 BETWEEN: IRENA WILLIAMS - Applicant AND: SIGMA CHEMICALS PTY LTD - Respondent BEFORE: R D FARRELL JR PLACE: PERTH DATE: 29 NOVEMBER 1995 THE COURT ORDERS THAT: 1. The respondent pay to the applicant the sum of $3,365 within 14 days of today. 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 95/1918 BETWEEN: IRENA WILLIAMS - Applicant AND: SIGMA CHEMICALS PTY LTD - Respondent BEFORE: R D FARRELL JR PLACE: PERTH DATE: 29 NOVEMBER 1995 REASONS FOR JUDGMENT This is an application under Section 170EA of the Industrial Relations Act 1988 for compensation arising from the alleged unlawful termination of employment of the applicant, Irena Williams ("Mrs Williams") by the respondent, Sigma Chemicals Pty Ltd ("Sigma Chemicals"). Reinstatement is not sought. It was Mrs Williams' contention that she was forced to resign in circumstances which amounted to a constructive dismissal. It was Sigma Chemicals's contention that Mrs Williams resigned, and that there was no termination at the initiative of the employer. Accordingly, they submitted that this Court had no jurisdiction in connection with the ending of Mrs Williams' employment. It was Sigma Chemicals's further contention that by resigning, the applicant deprived the employer of the opportunity to institute formal disciplinary procedures which would have had the effect of either resolving the difficulties in the workplace which led to the employee's resignation or of eventually resulting in the applicant's lawful dismissal. THE FACTUAL BACKGROUND Mrs Williams commenced her employment in a secretarial capacity with Sigma Chemicals on 14 November 1994. She filed two long statements covering her history with the company, both of which she adopted in evidence. The statements, and Mrs Williams' oral evidence, could fairly be described as a catalogue of misery, detailing her profoundly unhappy experience working for Sigma Chemicals. From Mrs Williams' point of view there were a number of unsatisfactory aspects of working at Sigma Chemicals. Chief among these was a campaign of harassment waged against her by two fellow employees - Amy Johannes and Sandra Miles. It was not denied by Sigma Chemicals that this conflict of personalities existed and that it was not resolved despite numerous pleas from Mrs Williams to the Manager, Mr Brown. Mr Brown's response was invariably to tell Mrs Williams to just ignore Ms Johannes and Ms Miles, and to undertake to Mrs Williams that he would talk to them about the problems. If he did so, it had no effect. Mr Brown's ineffectual response to the situation may be explained by the fact that Ms Johannes was a friend of his wife and Ms Miles was his sister-in-law. There were open plan working arrangements in Sigma Chemical's office with many people working in a confined area. The effect of any conflicts of personality were therefore aggravated by constant contact between the people in question. No witnesses were called to dispute Mrs Williams' account of her dealings with these employees, or Mr Brown's ineffectual response. Her evidence was supported by the evidence of two other ex-employees of Sigma Chemicals. Despite her unhappiness, Mrs Williams continued to work at Sigma Chemicals, and made the best of it she could, though her evidence was that she was looking for a job elsewhere towards the end of her employment. After a particularly bad confrontation between Ms Johannes and Mrs Williams, Mr Brown announced to Mrs Williams that he had decided to put Ms Johannes in charge of delegating Mrs Williams' work. Mrs Williams eventually accepted this, in the context of Ms Johannes accepting certain ground-rules drawn up by Mrs Williams as to their future conduct towards each other. They shook hands on the arrangement and Mrs Williams said she left the room feeling optimistic and that she felt as if a load had been lifted off her back. Within three weeks there was another altercation, after which Ms Johannes ran into Mr Brown's room shouting "I can't stand listening to her any more, you've got to get rid of her now". The next day, the morning of Friday 21 July 1995, Mrs Williams was called into Mr Brown's office. According to Mrs Williams, Mr Brown said the present situation could not continue, and that it was bad for business. Mrs Williams suggested that matters be put back as they used to be so that Ms Johannes no longer delegated the work, and that Ms Mordarski, another manager, be asked to delegate her work. Mr Brown said no, and that it had to be Ms Johannes. Mrs Williams said that this wouldn't work as Ms Johannes was not capable of behaving diplomatically towards her. She told Mr Brown that he was putting her in an impossible situation. Mr Brown accepted this account in his evidence, saying that it was completely impractical for Ms Mordarski to supervise Mrs Williams, as she did not have Ms Johannes' understanding of the work that had to be done. Mr Brown then called in to the meeting Ms Johannes and Mr Tyler, another manager. I am satisfied that Mrs Williams asked for an independent witness and that Mr Brown did not agree to this request. He gave two reasons for his refusal of an independent witness. First, he said the discussion was merely concerned with Mrs Williams' workload; and secondly, he considered Mr Tyler independent. Mr Brown says there was no intention to terminate Mrs Williams' services. He says he wanted them to settle down and agree to do their jobs. He says he explained to both of them that the fighting, the foul language and the arguments could not go on any longer in front of the customers, and that the only work available was in the accounts section, in which Ms Johannes was the senior person. He says he explained to Mrs Williams that if she was not prepared to do the accounts work without fighting with Ms Johannes then there was no other position she could fulfil at Sigma Chemicals. He explained that in larger organisations it was possible to shift people to different sections of the organisation. Sigma Chemicals, however, was a small company, and it was therefore not practical to shift Mrs Williams into any position where she wouldn't come into conflict with Ms Johannes. He says he explained that there was a definite job to be filled, and that it had to be done by somebody. He said "the ball is in your court", and told them to go away and think about it, and to let him know when they had made a decision. Mrs Williams says she considered that the outcome of this meeting was that she had no choice but to work under Ms Johannes' supervision. Mrs Williams says Mr Brown said "I'm sorry but I have no choice, you'll either have to work with Amy or leave". Mrs Williams said she replied by saying he had better fire her then as she was not prepared to leave voluntarily. She said Mr Brown told her "Of course, I'll pay you a week in lieu of notice and any holiday pay, we'll be sorry to see you go". He denies this. She agrees he then said "The ball's in your court". He then told her to go and think about it. Mrs Williams went to the tea room to think. Eventually, Mrs Williams returned to Mr Brown's office and said "Could you ask Glenys (the paymaster) to make up my pay and only deduct the standard 20% tax." Mr Brown said "You can go any time you like, Irena". Mrs Williams then left Sigma Chemicals. The Department of Social Security separation certificate is unhelpful, stating as the reason for the ending of employment - "Irena was not happy in our work environment". There was some suggestion in Mr Brown's evidence that it was his intention, if Mrs Williams had not resigned, to issue written warnings to both Ms Johannes and Mrs Williams about their behaviour. Ms Mordarski, whom I found to be a particularly credible witness, gave evidence that Mr Brown had told her that if things really got out of hand, then he would have to issue them with a warning. Constructive Dismissal? Based on Mr Brown's own account of the meeting, I am satisfied that the particular meeting which brought about Mrs Williams' resignation was not for the purpose of issuing warnings to the employees, in an effort to try to try and bring the unacceptable behaviour to a halt. If that were so, he could not have characterised it as being merely about Mrs Williams' workload, when he decided to not allow her an independent witness. Rather I am satisfied that Mr Brown's initial tactic was to see if the personality conflict could be resolved more easily and finally - by securing the removal one of the personalities. On Mr Brown's own evidence, he effectively gave Mrs Williams the choice of continuing to work in circumstances which she had already told him were "impossible", or to resign. Mrs Williams was effectively faced with an ultimatum. If he had a plan to take concrete steps to make the circumstances more tolerable - by for example issuing warnings to the employees concerned - then he chose not to make that known to Mrs Williams. I infer that he did not want Mrs Williams to focus on the possibility that the problem might be capable of resolution if she stayed. I am satisfied that in this case, as in Nicol v ABC (unreported, IRCA No. 479 of 1995, Boulton JR, 8 August 1995), management failed to address a problem between the applicant and another employee in the workplace. In this case, I am satisfied that problem was allowed to deteriorate until it was intolerable, and that management chose to use the intolerable nature of the problem as a lever to secure the end of Mrs Williams' employment, rather than go about the more difficult task of dealing with the problem. Accordingly I find that this was a termination at the initiative of the employer. I am reinforced in this view by the decision of Wilcox CJ in APESMA v David Graphics Pty Limited (unreported, IRCA No. 410 of 1995, Wilcox CJ, 12 July 1995). In that case, Wilcox CJ found a termination at the initiative of the employer in circumstances where an employer gave the employee the ultimatum that he either work the overtime required of him or find another job, in circumstances where the employer knew the employee had difficulty working overtime because he had to available out of working hours to look after his children. Given that this was a termination at the initiative of the employer, the employer has not satisfied me that there was any valid reason for the termination. I therefore find a breach of Section 170DE of the Act. Remedy It was common cause that reinstatement was impracticable. In assessing compensation, I am required to look at what would have been likely to occur had the Act not been contravened. I have had to take into account Mrs Williams' evidence that she was looking for alternative employment at the time, though she would only have left if she had got another job. I also recognise that it would have been easier for Mrs Williams to get a job from employment. Also, had Sigma Chemicals initiated the disciplinary process, one possible outcome of the process may have been the lawful dismissal of Mrs Williams. I cannot therefore assume that Mrs Williams would have remained employed by Sigma Chemicals for the next 6 months if they had not secured her resignation on this occasion. In all the circumstances, I consider it appropriate to award compensation to the value of about two months' employment, which is a sum of $3,365.00. I certify that this and the preceding 6 pages are a true copy of the Reasons for Judgment of Judicial Registrar Farrell. Associate Date: The applicant appeared in person Representative for the respondent: Mr L Joyce Chamber of Commerce & Industry Hearing date: 24 October 1995 Judgment date: 29 November 1995