Tony John Saliba v Cold Seas Pty Limited [1995] IRCA 699

CATCHWORDS TERMINATION OF EMPLOYMENT - salesman - whether opportunity given to meet allegations - which valid reason for termination based on employee's capacity or conduct - no point of principle. Industrial Relations Act 1988 s170DC, s170DE(1), s170EDA. No. AI 0173R of 1994 TONY JOHN SALIBA v COLD SEAS PTY LIMITED MOORE J CANBERRA 7 November 1995

IN THE INDUSTRIAL RELATIONS ) ) COURT OF AUSTRALIA ) No. AI 0173R of 1994 ) AUSTRALIAN CAPITAL TERRITORY ) ) DISTRICT REGISTRY ) BETWEEN: TONY JOHN SALIBA Applicant AND: COLD SEAS PTY LIMITED Respondent JUDGE: Moore J PLACE: Canberra DATE: 7 November 1995 ORDER OF THE COURT THE COURT ORDERS THAT: 1. The respondent pay the applicant the sum of $6,500 by way of compensation. 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 0173R of 1994 ) AUSTRALIAN CAPITAL TERRITORY ) ) DISTRICT REGISTRY ) BETWEEN: TONY JOHN SALIBA Applicant AND: COLD SEAS PTY LIMITED Respondent JUDGE: Moore J PLACE: Canberra DATE: 7 November 1995 EX TEMPORE JUDGMENT These proceedings involved the exercise of the powers of this Court to review a determination by a Judicial Registrar and those powers arise under section 377 of the Industrial Relations Act 1988 ("the Act"). An application was made in September 1994 by Mr Tony Saliba under section 170EA of the Act. It concerned the termination of his employment by Cold Seas Pty Ltd on or about 19 August 1994. The application was ultimately dealt with by a Judicial Registrar who, on 19 April 1995, decided that the termination of Mr Saliba's employment was in contravention of provisions of the Act and decided that compensation in the sum of $6,000 should be awarded to Mr Saliba. The review that I am undertaking is of the exercise of those powers resulting in that decision. The hearing is a hearing de novo and evidence has been given by both Mr Saliba and Mr Emilio Konidaris, who is the executive director of the respondent. The review was sought, in part, because the respondent felt it had been unable to fully present its case to the Judicial Registrar as a result of the unavailability of a witness to give evidence. It has in this review been given, in my view, a full opportunity to put to the Court whatever material it wished to rely upon in resisting the application. The evidence of both Mr Konidaris and Mr Saliba diverged in a number of respects, though in many respects their evidence was to the same effect. In summary I conclude, from that evidence, that Mr Saliba was employed by Cold Seas Pty Limited following discussions between Mr Saliba and Mr Konidaris, and Mr Saliba commenced employment on 26 June 1994 as a salesman. There was an issue as to whether, prior to commencing employment, it was agreed between Mr Konidaris and Mr Saliba that Mr Saliba's employment would be for a probationary period of three months. Mr Saliba's evidence was to the effect that that was not discussed nor agreed. Mr Konidaris's evidence was to the effect that it was discussed and agreed. It is to be noted that the employment of Mr Saliba was terminated on 19 August 1994, well before any three month probationary period would have expired. It is often difficult for people to recall with any precision, a year or so after the event, what was discussed or not discussed in any particular conversation. It is possible that during the discussions that Mr Saliba and Mr Konidaris had before Mr Saliba commenced employment, Mr Konidaris thought that it may be appropriate to assess Mr Saliba's employment as a salesman after three months and review his employment. I am not satisfied, however, that that was made known to Mr Saliba and thus I am not satisfied that it formed a term of the contract of employment. That view is reached in part from the evidence of Mr Saliba and in part from the inference I draw from the fact that the employment was terminated well short of any three month probationary period. Had there been an express agreement that the employment would be for a three month probationary period, it is more likely than not, in my view, that Mr Saliba would have protested, at the time of his termination, that he was being terminated at a time short of the agreed probationary period. There were no such protests and, in my view, that supports inferentially the conclusion I have reached, that there had been no agreement about the probationary period. It appears to be common ground that during the period Mr Saliba worked as a salesman certain errors were committed by him and so much was conceded by him today in his oral evidence. However, I am not satisfied, on the evidence, that Mr Saliba's performance of his duties as a salesman were in any material respect deficient. This has a bearing on the contention that is made by Mr Saliba, that the termination of his employment was in contravention of section 170DE of the Act, to which I will come shortly. The termination of Mr Saliba occurred in circumstances where he was spoken to by Mr Konidaris and, in essence, told that his employment was not satisfactory and his services were no longer required. It is contended by Mr Saliba that this termination was in contravention of the Act in two respects. It is firstly contended that he was not given an opportunity to defend himself in relation to allegations concerning his conduct. That is a requirement found in section 170DC of the Act. I have indicated that I accept, as was conceded by Mr Saliba, that his work as a salesman was not entirely satisfactory. However, the evidence does not disclose that the difficulties he was having were raised with him at, or at some point reasonably close to, the time of his termination so as to enable him to explain to the employer his account of why it was his duties as a salesman were not being performed to the entire satisfaction of the employer. In the absence of being afforded such an opportunity it follows that the termination was in contravention of section 170DC of the Act and I so find. It was not suggested s170DC(b) had any application. As to whether or not the employment was terminated in circumstances that resulted in a contravention of section 170DE, it is necessary to bear in mind that the Act contains a provision that, in substance, reverses the onus of proof in a case such as the present. If an allegation is made that employment was terminated in contravention of section 170DE(1) it is necessary, having regard to the provisions of section 170EDA, for the employer to show that there was a valid reason or reasons of the type referred to in section 170DE(1). Whilst I have already referred to both the concession by Mr Saliba that he made mistakes and to some evidence of the not entirely satisfactory discharge of his duties as a salesman, I am not satisfied that the respondent has, in these proceedings, established that the termination was for a valid reason of the type referred to in section 170DE. Accordingly, I am not satisfied that the employer has discharged the onus arising under section 170EDA. This leads to the question of a remedy. It is accepted by Mr Saliba, and it would seem not put in issue by the respondent, that reinstatement is not practicable. Were it otherwise, it would be necessary for the Court to give consideration to making an order for reinstatment. Given the fact that reinstatement is not practicable, the only remedy that then arises for consideration is compensation under section 170EE. It is submitted by Mr Constance appearing for Mr Saliba, that compensation should be awarded in the sum of $8,440, being 11 weeks salary at the rate of $673 gross per week for a period of 11 weeks and a further amount of $173 per week for a further six weeks during which Mr Saliba worked but during which time he was not earning the salary he had formerly earned when employed by Cold Seas Pty Limited. The respondent puts in issue whether or not the salary was, in truth, $673 gross per week and reliance is placed on a wages record maintained by the respondent which identifies the gross salary as $626 per week. The difference between these two sums is not, in my view, material given that I do not propose to award the compensation in the sum claimed by the applicant. However were it necessary to resolve that question I would prefer the evidence emerging from the wages record, that the gross salary being paid to Mr Saliba at the relevant time was $626 per week. In determining an appropriate amount of compensation it is relevant for me to consider whether, had Mr Saliba's employment not been terminated in contravention of the Act, it might have been terminated at some later point in time in a way that was consistent with the provisions of the Act. It is, in my view, possible that that may have occurred. It is certainly possible that had Mr Konidaris been apprised of his obligations under the Act, and in particular of section 170DC, he may have more carefully and thoroughly taken up with Mr Saliba the perceived deficiencies in his employment and given Mr Saliba a full opportunity to answer them. It is also possible that notwithstanding being given that opportunity, Mr Saliba's employment may nonetheless have been terminated. It is also the case that had Mr Saliba continued in employment, his performance may not have improved or indeed may have deteriorated to a point when it could be said there was a valid reason as that expression appears in section 170DE. In my view, it is appropriate that some allowance be made for these possibilities. In the circumstances it seems to me that the appropriate amount to be awarded by way of compensation is $6,500 and I so order. I find that the termination of Mr Saliba was in contravention of both section 170DC of the Act and section 170DE of the Act and I order compensation to be paid by the respondent in the sum of $6,500. In relation to the application that has just been made for an order for costs, I presently assume the application for review can be treated as a separate proceeding though that is a matter about which there is some doubt. If the review is a separate proceeding, s347 would operate so as to enable a costs order to be made only if the party seeking the review instituted the proceeding vexatiously and without reasonable cause. I am not satisfied in the circumstances of this case that it can be said that the application for review was brought vexatiously or without reasonable cause. The application turned, at least in part, on whether I accepted the evidence of Mr Konidaris as to whether a probationary period had been discussed. He did not give evidence before the Judicial Registrar and in those circumstances it seems to me the institution of the proceedings by way of review was not vexatious or without reasonable cause in the sense that the respondent may reasonably have formed the view that, at least in that respect, the evidence of Mr Konidaris may be accepted. His evidence on the question of a probationary period, if accepted, may have had a bearing on the issue of whether the Division 3 had any application to the employment of Mr Saliba and also may have a bearing on the amount of compensation that might have been awarded. I propose to make no order as to costs because I am not satisfied that the review proceedings were instituted vexatiously or without reasonable cause." I certify that this and the preceding nine (9) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore. Associate: ...................... Dated: ..../..../.... APPEARANCES Counsel for the Applicant: Mr J W Constance Solicitor for the Applicant: Snedden Hall & Gallop Counsel for the Respondent: Mr A J Chase Solicitor for the Respondent: Confederation of ACT Industry Dates of Hearing: 6 September 1995 and 7 November 1995 Date of Judgment: 7 November 1995