Jodie Johnstone v Bates Pets Paradise Pty Ltd (ACN 006 919 222) [1996] IRCA 10

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NI 3479 of 1995 JODIE JOHNSTONE Applicant BATES PETS PARADISE PTY LIMITED (A.C.N. 006 919 222) Respondent Court: Linkenbagh J.R. Place: Sydney Date: 19 January, 1996 REASONS FOR JUDGMENT REVISED FROM THE TRANSCRIPT This is an application under the provisions of Section 170 EA of the Industrial Relations Act, 1988 in which the applicant seeks a remedy in respect of the termination of her employment which became effective on 28 June 1995. The applicant is a 16 year old female person who was employed by the respondent between 21 March 1995 and 28 June 1995. She was employed as a shop assistant at the respondent's pet shop in the Westfield Shopping complex at Parramatta. The respondent conceded that there were no difficulties at all in relation to the applicant's conduct or performance during the term of her employment. I find that there were two factors which brought the relationship between these parties to an end. The first of those related to the disposition of the business by the respondent. The respondent is a corporation which owned the pet shop at the time the applicant was employed but it transferred its interest in that business under a franchise arrangement which was to become effective on 3 July 1995, with the effect that the respondent would no longer own the business and be the employer of the staff of the business. I find that the employees at the pet shop were informed of those changes in the business arrangements of the respondent orally and, I must say, in a somewhat informal manner, about two weeks prior to 3 July. There is no evidence before me as to the exact date when the information was communicated to the employees and I rely on the applicant's evidence that she thought it was about two weeks before the changes were to take place. As I have said the notification was oral and part of the information communicated to the applicant was that she and the other junior in the store would have the opportunity to work for the franchisee. The applicant is educated to Year 10 standard and left school shortly into Year 11. It is unlikely, in my estimation, that she had any real understanding as to the meaning of the changes that her employer was effecting, although she did understand that the business was to change hands. I find that she had an expectation, created in her mind by whatever she was told on behalf of the respondent, that she would have a job after the changes took place. Unfortunate circumstances, however, intervened. The applicant became ill. She came home from work on the evening of Sunday 25 June complaining to her mother of not feeling well. She attended on her doctor on 26 June and 28 June. She had her mother telephone the employees of the respondent and inform them of her inability to work. I find that there was more than one telephone call and, in as much as the applicant was able to do so given her illness, the respondent was informed of her position. On Thursday, 29 June the applicant had a conversation with Lee Store who is a more senior person than the applicant in the respondent's organisation. There was conflict in the evidence about when that conversation took place. I accept the evidence of the applicant and her mother that that conversation took place on the morning of Thursday, 29 June. There was also conflict as to exactly what was said. The applicant, because of her present state of health, has great difficulty in remembering many things, and her memory of the conversation is defective. She does recall, however, that she answered most of what was put to her by Miss Store in terms that she did not know what the future held for her or when she would be able to return to work because she did not know the nature and seriousness of her own illness at that time. The applicant's conclusion from that conversation, whatever was said by either party, was that she no longer had a job after the telephone conversation. That conclusion is supported by the evidence of her mother to the effect that her mother was out of the house while the telephone conversation took place and that when she returned home the applicant was somewhat distressed and informed her mother that she no longer had a job, or words to that effect. The respondent's evidence is that the relationship came to an end amicably during that conversation and it may be that that is how it could be seen from the respondent's perspective. The effect of the conversation on 29 June was that the applicant was denied whatever opportunity she may have had of working until 3 July for the respondent, and working after 3 July for the franchisee who was to take the business over from the respondent on that date. The matter is further complicated in that the applicant's condition deteriorated and, with the benefit of hindsight, the Court can find that she was not fit for work at all at least up to 6 October 1995. She was receiving sickness benefits from the time of the termination of her employment until that date, and since that date she has been receiving a JobSearch allowance. Her capacity for work is, I find, still limited. It is limited by her own evidence that she probably could not work again in a pet shop because of suggestions that have been made to her that her illness may have been a condition known as psittacosis, which is related to or caused by exposure to bird droppings. Further, the applicant - is even at the date of the hearing suffering some disabilities. She was uncertain, in responding to questions from me, as to in what circumstances she would be able to maintain a five-day per week, eight hour a day position on an indefinite basis. From my observation of her in the witness box I would be very surprised if the applicant has the ability and stamina to return to the work force at this time, and I note that she and her mother confirm that she has an appointment with a neurologist who is to further investigate the difficulties she is having in relation to concentrating and loss of memory. It may well be that even today the applicant would be unfit to return to a position similar to the one which she had with the respondent. I note that the applicant gave evidence that she worked for two weeks at an office job on a temporary basis. That does not assist me or influence me as to whether or not she could really sustain a full time position at this stage. The applicant's work prospects are therefore, to say the least, gloomy, and she undoubtedly has ongoing disabilities relating to her state of health. Those are the facts. To apply the law to those facts, particularly given the amendments to the legislation which have come into effect this week, is not an easy exercise. The provisions of the Act which are relevant are several. The first I can deal with is section 170DB. It was pointed out to me during the course of the hearing that there was no claim for payment under 170DB. Nevertheless, the evidence indicates that in fact the applicant was not paid her entitlement under section 170DB at the time of termination, and I propose to make an order for damages in the equivalent of one weeks' pay under 170DB which will be $200. I find that the respondent is in breach of section 170DC. Whilst 170DC is, on its face, confined to termination for reasons related to conduct or performance and, as I have said, there was no complaint with the conduct or performance of the applicant during the course of her employment. Nevertheless at the very end, during the week commencing 25 June, her absence from work because of her illness, raised an issue which could be seen as conduct or performance and the manner in which the respondent dealt with that failure to attend for work left much to be desired. The respondent took the view, from the terms of the evidence of Lee Amanda Stone who was called for the respondent, that all it did in the conversation on 29 June was to bring forward the termination which was otherwise going to be effective from 3 July and, in that context, it is understandable that the respondent did not see any need to go into the reasons for the applicant's absence from work in any great detail, but it is regrettable that it did not do so. There is therefore a breach of Section 170DC. The respondent is enjoined under the provisions of Section 170DE(1) from terminating the employment without a valid reason. I look at the application of that Section to the facts in this matter in conjunction with the provisions of Section 170DF, as they do overlap to some extent. Turning to Section 170DF first, subsection (1)(a) of that Section prohibits termination for reasons which include a temporary absence from work because of illness or injury. It must be said that as at 28 and 29 June the applicant's absence from work could not have been seen as anything other than a temporary absence. With the benefit of hindsight we can now see that it turned into something other than temporary but at the time the condition had not been diagnosed, and the applicant was in her fourth day of absence from work. The action of the respondent in terminating the employment in those circumstances must be seen as a breach of Section 170DF(1)(a). The defence available to the respondent under Section 170DF(2) raises an interesting issue. It certainly appeared in the fullness of time that the applicant would certainly have been unable to return to this employment before 6 October and most likely not have been able to return to this work even at the date of the hearing, if at all, if in fact the psittacosis diagnosis is correct. At the time when the respondent took the action certainly the absence from work could not be seen as anything but temporary and there was nothing else known to the respondent at that time which would have prevented the applicant from returning to the employment. In those circumstances the defence is not available. For the same reasons I find that there was, as at 28 and 29 June 1995, no valid reason for the termination of this employment and there is therefore a breach of Section 170DE(1). I turn then to the issue of what remedy is appropriate. I note that the Industrial Relations and other Legislation Amendment Act 1995 amends the Industrial Relations Act 1988 by section 4 and clause 10 of schedule 2 of that Act. Clause 10 amends section 170EE(2) by the insertion of the words, "if the court considers it appropriate in all the circumstances of the case" in the part of that sub-section which empowers the court to make an order for compensation. It was conceded by both parties that reinstatement is impracticable and I do not propose to address the reasons for that impracticability. It is obvious that the applicant could not return to this employment at this stage if at all. The calculation of compensation is, following the amendments, to be done applying the same principles that have applied in the past except that the words inserted by the amendments add an overlay to the exercise of the discretion. The applicant's employment with the respondent would have come to an end on 3 July in any event and there is no doubt that she is entitled to be compensated for the period between her last day of work, 25 June , and 3 July. A very relevant consideration in my view is the fact that at the time when the termination took effect the respondent denied to the applicant whatever opportunity she may have had to continue her employment with the franchisee. The court does not unfortunately have a crystal ball and does not know and cannot know how the employment opportunity with the franchisee may have worked out. I note the evidence that the applicant was unfit for work until 6 October and during August she was so ill that she spent two weeks in hospital and six days of those two weeks were spent in intensive care. What patience the franchisee would have had in keeping the job open for the applicant can only be the subject of speculation but in fact what is known is that the respondent denied the applicant the opportunity to form whatever relationship with the franchisee might have otherwise been formed. In all of the circumstances of this case, to borrow the words of the amending legislation, an order for compensation is appropriate. That order is of necessity very limited. Whilst the court has great sympathy with the plight of the applicant, the exercise of the discretion in relation to compensation must be done within the confines of the legislation. In fact, at the end of the day, the Court must take note of the fact that the applicant was unfit for work for at least 14 weeks after her employment terminated and is still only perhaps what might be described as partially fit for work or perhaps fit for only work on a part time basis or work doing a limited range of duties. I propose to exercise my discretion in ordering a payment of $800 by way of compensation pursuant to the provisions of section 170EE(3). Before I make the orders I might refer to the two authorities which were put to me by the respondent's counsel. One of those was Barnes v Ranji Uranium Mines Pty Limited which is reported in 50IR at page 38. I do not propose to dwell on that case. It related to the calculation of damages in entirely different circumstances and I suspect, whilst I have not examined it in any great detail, that it may well have been overtaken by the recent decision of the High Court in Byrne and Frew v Australian Airlines. The other case the respondent referred to was Margaret MacKeen v Pets Paradise Pty Limited, an unreported decision of Judicial Registrar Murphy delivered in Melbourne on 8 December 1995 in proceedings number VI2957 of 1995. That case involved an associated company of the respondent in these proceedings and somewhat similar circumstances in that the applicant's employment in that matter came to an end because the business was sold to a franchisee. It is of limited assistance to me in this matter because the overlay facts of the incapacity for work of the applicant in that matter were very different. She was a person in receipt of workers compensation benefits who was certified by her doctor to be fit for a limited range of duties. That case is so distinguishable on its facts that it is of little assistance in this matter other than that I note that Judicial Registrar Murphy took the view that the sale of the business was a valid reason for the termination of the employment. That may be so but in the present case the termination, at the time it took place, was precipitated by the respondent's response to the absence from work of the applicant because of her illness. The orders I propose to make are therefore the orders that I foreshadowed yesterday being: (1) The time for filing of the application is extended to 31 August 1995. (2) That by consent the name of the respondent is changed to Bates Pets Paradise Pty Limited ACN 006 919 222, and (3) I order that the respondent pay to the applicant the sum of $800 as compensation pursuant to the provisions of section 170EE(3) of the Act (4) I order the respondent to pay to the applicant damages in the sum of $200 pursuant to the provisions of section 170EE(5) of the Act. I certify that this and the preceding 5 pages are a true copy of the Reasons for Judgment of Judicial Registrar Linkenbagh Associate: Stephen Williams Date: Solicitor for the Applicant: Mr George West Representative of the Respondent: Mr. Michael Easton Printed on 22 January 1996 at 4:38pm [LCB] CATCHWORDS INDUSTRIAL LAW, TERMINATION OF EMPLOYMENT -UNLAWFUL TERMINATION, TEMPORARY ABSENCE - ILLNESS-PROCEDURAL FAIRNESS, COMPENSATION - DAMAGES Industrial Relations Court 1988, S 170EA DB DC DE(1) DF(1)(a) DF(2) EE(2) EE(3) EE(5) Barnes v Ranji Uranium Mines Pty Ltd 50 IR 38 Margaret MacKeen v Pets Paradise Pty Ltd (unreported 8/12/95, VI 2957 of 1995) JODIE JOHNSTONE V BATES PETS PARADISE PTY LTD (ACN 006 919 222) No. NI 3479 of 1995 COURT: LINKENBAGH JR PLACE: SYDNEY DATE: 19 JANUARY 1996 IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NI 3479 of 1995 JODIE JOHNSTONE Applicant BATES PETS PARADISE PTY LIMITED (A.C.N. 006 919 222) Respondent Court: Linkenbagh J.R. Place: Sydney Date: 19 January, 1996 MINUTES OF ORDER (1) That the time for filing of the application be extended to 31 August 1995. (2) That by consent the name of the respondent be changed to Bates Pets Paradise Pty Limited ACN 006 919 222. (3) That the respondent pay to the applicant the sum of $800 as compensation pursuant to the provisions of section 170EE(3) of the Act (4) That the respondent pay to the applicant damages in the sum of $200 pursuant to the provisions of section 170EE(5) of the Act. Settlement and entry of Orders is dealt with by Order 36 of the Industrial Relations Court Rules