DECISION NO: 90/96 C A T C H W O R D S INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - alleged unlawful termination - incorporated association - incapacity of respondent to defend claim - application to intervene - whether valid reason for termination - harsh, unjust or unreasonable - reinstatement - compensation - associated juristication - non-compliance with objects of incorporated association. INDUSTRIAL RELATIONS ACT 1988 Ss 170DE, 170EA, 170EDA, 170EE. Associations Incorporations Act 1895, Ss 31, 34. Spiteri -v- Monocure Pty Ltd IRCA No. 299 of 1995, Wilcox CJ, reported, 20 Dec 1990 Annetts -v- McCann (1990) 170 CLR 596 Walker -v- Ken Vidler Surfsports IRCA No. 655 of 1995, RD Farrell JR, unreported, 30 November 1995 Aitken -v- CMETSWUA (WA Branch) IRCA No. 352 of 1995, Lee J, unreported, 7 August 1995 CHRISTINE ELIZABETH BARSBY & Ors -v- GREAT SOUTHERN SHELTER INC - WI95/2093 & Ors BEFORE: R. D. FARRELL JR PLACE: PERTH (Heard in Albany) DATE: 8 MARCH 1996 IN THE INDUSTRIAL RELATIONS ) COURT OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) No. WI 95/2096 BETWEEN: ELSIE AGNES WOODS - Applicant AND: GREAT SOUTHERN SHELTER INC - Respondent MINUTE OF ORDERS BEFORE: R. D. FARRELL JR PLACE: PERTH (Heard in Albany) DATE: 8 MARCH 1996 THE COURT ORDERS THAT: 1. The respondent pay to the applicant compensation pursuant to Section 170EE(2) of the Industrial relations Act 1988 in the sum of $2,089.00 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 95/2093 BETWEEN: CHRISTINE ELIZABETH BARSBY - Applicant and: GREAT SOUTHERN SHELTER INC - Respondent AND No. WI 95/2097 BETWEEN: JAN ALEXIS BACK - Applicant and: GREAT SOUTHERN SHELTER INC - Respondent AND No. WI 95/2124 BETWEEN: CORALIE FAYE DESLANDES - Applicant and: GREAT SOUTHERN SHELTER INC - Respondent AND No. WI 95/2094 BETWEEN: CHRISTINE CHARLOTTE EAST - Applicant and: GREAT SOUTHERN SHELTER INC - Respondent AND No. WI 95/2095 BETWEEN: JOY JESSICA LEHRAIN - Applicant and: GREAT SOUTHERN SHELTER INC - Respondent AND No. WI 95/2096 BETWEEN: ELSIE AGNES WOODS - Applicant and: GREAT SOUTHERN SHELTER INC - Respondent BEFORE: R D FARRELL JR PLACE: PERTH (HEARD IN ALBANY) DATE: 8 MARCH, 1996 FINAL REASONS FOR JUDGMENT These are applications under Section 170EA of the Industrial Relations Act 1988 arising from the alleged unlawful termination of the employment of the applicants, Christine Elizabeth Barsby ("Ms Barsby"), Jan Alexis Back ("Ms Back"), Christine Charlotte East ("Ms East"), Joy Jessica Lehrain ("Ms Lehrain"), Elsie Agnes Woods ("Ms Woods") and Coralie Faye Deslandes ("Ms Deslandes") by the respondent, Great Southern Shelter Inc. ("the Association"), which is an association incorporated under the Associations Incorporation Act 1895. With the exception of Ms Deslandes and Ms Woods, the applicants sought reinstatement, if I were of the view it were practicable. All of the applicants sought compensation. Ms Barsby, Ms Back, Ms East, Ms Lehrain and Ms East were members of the Australian Municipal, Administrative, Clerical and Services Union ("the Union") and were represented by Ms Sackville, an official of the union. Ms Deslandes represented herself. It was contended by Ms Sackville and Ms Deslandes that there was no valid reason for the applicants' dismissal, contrary to Section 170DE (1) of the Act, and that in any event their dismissal was harsh, unjust or unreasonable, contrary to Section 170DE (2) of the Act. The applicants also brought several other claims which the Court could deal with under its associated jurisdiction. These included claims under applicable awards, and claims for underpayment of minimum wage entitlements. The detail of each applicant's claims is dealt with below. These reasons should be read together with my interim reasons for decision published on 22 December 1995 in connection with Ms Barsby's application. I have found in my earlier reasons that the termination by the Association of Ms Barsby's employment, and that of her fellow employees, was in breach of Section 170DE of the Act. I set out the reasons for this finding below. With regard to Ms Sackville's contention that Ms Barsby was owed money by the association arising from underpayment of wages and the failure to pay out accrued annual leave on termination, I have adequately dealt with this aspect of Ms Barsby's claim in my interim reasons. The Incapacity of the Respondent to Appear There was no appearance by the respondent. Having satisfied myself that the respondent was properly notified of the time and place of hearing by the Court, I proceeded to hear the application in the respondent's absence. Ms Sackville then led evidence which satisfied me that, while the respondent still exists as a legal entity, it no longer has a serving executive committee, and therefore has no capacity to instruct representatives to appear on its behalf. While it sometimes happens that respondents do not appear in matters brought before this court, usually that can be characterised as a matter of choice on the respondent's part. In this case, the respondent had no capacity to exercise a choice. The consequences of this incapacity are significant where, as under Section 170EDA of the Industrial Relations Act, the onus is placed on the respondent to show a valid reason for dismissal. At the conclusion of the applicants' case, I had insufficient evidence to reach a view as to the reason for dismissal. It was not in the applicants' interests to call such evidence because, in the absence of evidence of a valid reason, I am required by the legislation to find for the applicants. The Court has an inherent power to call witnesses of its own motion. It is a highly qualified power and the discretion to take this course should be used sparingly and with great care. (See Hon. Mr Justice D A Ipp, "Judicial Intervention in the Trial Process", 69 Australian Law Journal 365 at pp373ff; cited with approval by Wilcox CJ in Spiteri v Monocure Pty Ltd IRCA No. 299 of 1995 at pp8-9). I was satisfied that this was a case in which that discretion should be exercised, given that the adversarial process which would normally have brought such evidence before the Court was not functioning, due to the incapacity of the respondent. It seemed to me, in all the circumstances, that the Court owed a duty to the respondent to call readily available evidence the respondent might have called had it had the capacity to do so. It became apparent in the course of this hearing that a number of former members of the respondent's executive committee were attending and interested in the hearing, and accordingly I invited two of those former members of the respondent's committee to give evidence as to the reasons for the respondent's decisions which brought about the dismissal of the applicants. They accepted that invitation and their evidence is discussed below. Request by the Minister for Family and Community Services to be Heard The other procedural matter to which I will briefly refer is informal application by a third party, the then Western Australian Minister for Family and Childrens' Services, Mr Roger Nicholls, for an opportunity to be heard. The manner in which this matter was raised is canvassed in my interim reasons. I have given consideration to the Minister's request, and to the proper response of this Court. I am satisfied that, if it were the intention of this Court to make adverse comments or recommendations concerning the Department of Family and Childrens' Services ("the Department"), its Director General, or the Minister, then those parties would have a right to be heard in opposition to any potential adverse finding in relation to themselves: Annetts v McCann [1990] 170 CLR 596. I am also aware that, as a matter of practice, the Court should normally refrain from making adverse comments concerning persons who are neither witnesses nor parties to the proceedings where it is unnecessary to do so for the purposes of resolving the matter before the Court. I am satisfied that I am not required to make findings, adverse or otherwise, concerning the behaviour of the Department, its Director General, or the Minister. It will suffice to recount the evidence of the two witnesses who were members of the committee. These committee members formed a view as to the Department's intentions concerning the respondent. I make no finding as to whether their view was a correct view. It is sufficient for the purposes of this case that the committee members genuinely believed the Department wished them to act in a particular way, even if they were mistaken in that belief. Given that I do not propose to make adverse comments or recommendations concerning the Department, its Director General, or the Minister, I have not considered it necessary to hear from them. Great Southern Shelter Inc The association was incorporated in 1985. It ran the Albany Women's Refuge, providing 24 hour emergency accommodation, assistance and support to women and children in the Albany region. It was solely funded under the Supported Accommodation and Assistance Programme ("S.A.A.P.") and relied on those funds for its continued operation. That funding was administered by the Department of Family and Childrens' Services. Before 1994, the refuge had been run on a collective model. On the evidence before me, the collective appears to have had no formal structure nor formal membership. Ms East said that in order to be a member of the collective, one had to be a full-time employee or a "community member". Ms Back gave evidence that, by the end of the collective's existence, there were problems and disputes as to who was entitled to participate in the collective's decision-making processes. In 1994, the association became governed by a committee, presumably as a result of a change to its rules. Ms Back says that the collective decided to change to a committee because if it did not do so it would face defunding. Ms Bojcun, the committee's President or Chairperson, acknowledged that the management committee was introduced under the funding guidelines. Under Rule 16 of the Rules of the Association, the affairs of the association are managed by a Committee of Management. It comprises a President, Vice-President, Secretary, Treasurer, Co-ordinator (or any other senior employee), and not more than six committee members, with the capacity to co-opt two additional members. Ms Back was Acting Co-ordinator of the Great Southern Shelter at the time of the dismissals and therefore, under the rules, a member of the committee. The other applicants were full-time or part-time refuge workers. Ms Back says the committee was formed after the association asked different people whether they would go on it. In other words, the committee was recruited by the old collective. There does not appear to have been any election conducted. According to the Register of Management the members of the Committee of Management as at June 1995 were Merryn Bojcun (Chairperson), Bronwyn Bateman (Acting Secretary), Ingrid Baas-Becking (Treasurer), Treacy Woods, Catherine Pirie, Jenny Williams, Jacqui Muir and Megan Griffiths. As I have noted, the senior employee at the time was Ms Back. The quorum for Committee of Management meetings is fixed at five committee members (Rule 17.5). The potential number of committee members was thirteen. The actual number was, in my view, nine. The minutes of the meeting dated 31 August 1995 suggest there were only seven committee members. It would appear that they exclude Ms Pirie (who it seems had not attended a meeting since December 1994) and Ms Back, who as the senior employee was automatically a member of the Committee under the rules. Ms Back gave evidence that the committee met once a month, usually for about 2 hours. Ms Back said she attended quite a few of the meetings, even when the other co-ordinator had been there. Despite the association having rules prescribing the manner in which members might join the association by completing prescribed application forms, Ms Back, Ms East and Mrs Muir all confirmed that neither they, nor to their knowledge, anyone else had ever completed those forms. It seems the membership of the association has never been formalised. While the applicants did not challenge the legitimacy or validity of the committee, the non-compliance with the rules governing membership of the association raises obvious difficulties with identifying a manner in which the committee might be elected or replaced, given that the rules of the association provide for election at a General Meeting of members. The Committee in Crisis I have referred earlier to the invitation extended by the Court to two of the former committee members to give evidence. Jacqueline Muir ("Mrs Muir"), a committee member who attended to the book-keeping requirements of the association, accepted the invitation. Susan Merryn Bojcun ("Mrs Bojcun"), the former Chairperson of the Committee, also accepted the Court's invitation, while stressing that she was speaking only on her own behalf and not on behalf of the other former committee members. Mrs Bojcun explained that, under the S.A.A.P. funding guidelines, the management committee was required to adopt a management plan for the respondent. She said it took some time and negotiations with the "funding provider" to draw up the management plan which was eventually adopted. Mrs Bojcun explained that when she referred to the "funding provider", she meant the Regional Manager of the Department, Mr John Dean, who was the Regional Administrator of the S.A.A.P. funds. While most of the correspondence came direct from the Minister, Mrs Bojcun said that the management committee liaised with Mr Dean as to "what the Minister was really talking about and what he wanted, that sort of thing". Mrs Bojcun said that there were things in the management plan which involved changes from the service that had previously been provided. She said the management committee tried to satisfy the Department by implementing and adopting the strategies and objectives that had been outlined in that plan. In about March 1995, when the committee was part of the way through this process, Mrs Bojcun says the committee was advised by the Department that the type of service to be provided was to change to a "case management" model, but Mrs Bojcun said there were never clear guidelines as to exactly what that model was. By an undated letter to Mrs Bojcun, the Minister offered an extension to the current funding agreement until 31 December 1995 under the same terms and conditions. Mrs Bojcun accepted this offer in writing by letter dated 24 June 1995. The fact that the funding had been extended to the end of December became well known among the staff, and Mrs Muir understood that funding after December 1995 was likely, but perhaps not in the same form and not for the same service. When shown that correspondence, Mrs Bojcun said that it was the job of the Regional Administrator - Mr Dean - to determine the allocation of funds. According to Mrs Bojcun, he controlled the purse strings and if he did not want to give the Association further funds, he did not have to. She said that more than a year before, Mr Dean had indicated that the refuge shouldn't be receiving as large a slice of the funds as it had been. It was Mrs Bojcun's evidence that there was other correspondence from the Minister's Office to the committee advising that the Minister would not provide funding for the normal two year period, but rather would only grant the funding quarter by quarter, reviewing the position each quarter to see that the committee was adopting the new guidelines. She said that the committee received correspondence from the Minister's Office in about July or August 1995 advising that, if the case management model was not implemented in that quarter, funding for the next quarter to 31 December would be jeopardised. She said that a short time later the Minister indicated in correspondence that he wanted an undertaking from the committee that the case management model was being implemented, and told the committee that if it could not give that undertaking, then he would not release the funds for the next quarter. Ms Barsby agrees that, with the implementation of S.A.A.P. funding, changes were required to be implemented. For example, the provision of child care was stopped. Voluntary work was stopped. Ms Barsby gave evidence that a case management system, with a qualified case manager, had to be put in place by 31 December 1995. Ms Barsby explained that the staff were concerned that the case manager's wage - $43,000 - would have to be met by cutting the hours of other staff, given that the total wages funding was only $140,000. Ms Barsby says Mrs Bojcun assured the staff that no one would lose their job. Mrs Muir said the committee was told by the Ministry that there would be changes in the way the services were operated, but she agreed that there were no definite guidelines as to the way their services would be expected to be run after the end of December. They knew only that it would be a case management program with a case manager employed by the association. Given the salary implications of employing a case manager, Mrs Muir understood why the workers were concerned that there would be some job losses. Mrs Bojcun acknowledged that the members of the management committee had been aware that these changes were causing the staff to feel insecure, because they realised that there was only funding for a certain number of staff to be employed. Given that a professional case manager had to be employed under the new model, they quite rightly felt insecure as far as their jobs were concerned. Mrs Bojcun said that the management committee was aware that the staff were dedicated to their work and very conscientious, that they had put in time that exceeded that for which they were paid. They had worked for the association for a long time and the committee recognised that historically they had made a huge contribution to the cause of the victims of domestic violence, and that the service had been started by volunteers and financed by those volunteers for quite a long time. The management committee was made up of volunteers. Mrs Bojcun described them as professional and semi-professional people who gave time to the management of the refuge, which she says they saw as managing a small business. The committee was receiving instructions from the Department to provide a certain type of service and a certain standard of service, which required changes. Mrs Bojcun said that there was an uncomfortable feeling when the collective was dissolved and a management committee was put in place to take over the management. Mrs Bojcun said there were pressures on the members of the management committee because they were torn between their loyalty to the staff and the fact that they had given an undertaking to the Minister to provide a certain type of service. The pressures became so great that a number of those members eventually resigned. Mrs Bojcun tendered her own resignation on 30 August, 1995, to come into effect on 30 September 1995. Mrs Bojcun said that her own resignation was due to the fact that she could not assure the Minister as the Chairperson of the committee that the case management model would be implemented by the date that he wanted, ie. the end of September. She believes that other members of the management committee resigned because they felt they couldn't deal with the issues that the staff had raised and satisfy the Minister at the same time. Mrs Bojcun thought that the members of the committee were under a great deal of pressure and they felt that resigning was their only option at that stage because they could not give any guarantees regarding the service. Mrs Bojcun said that she had discussions with the Department prior to tendering her resignation because she felt that she was obliged as Chairperson to let them know that she was going to resign. Mrs Bojcun and Mrs Muir said that, since about late June, there had been three meetings called before the August meeting which had had to be postponed because there was not a quorum. As I have noted above, a quorum required at least five of the nine committee members to attend. Mrs Bojcun thinks that at the June 1995 meeting it was suggested that the management committee be expanded. She said she knew of a number of men in the community who had professional expertise that might help with the problems they had been encountering. This would have required a change to the constitution. She says the staff representative, presumably Ms Back, wanted to discuss expansion of the committee with the other staff before it actually happened. Mrs Muir said she thought it would be very difficult to rejuvenate the committee. When asked if there had been attempts to rejuvenate the committee, Mrs Muir replied that they had recognised that they needed a much bigger group from which to draw the management committee and had all been asked to put names forward. However, any nominations would have been required to go before the committee, which wasn't getting quorums, to consider those sort of matters. She was not told by the staff of any specific names they were proposing for the committee, though it was said that they knew of people that would be interested in joining the committee. She said she told them to put the names to the committee. Ms Back confirmed that the last three meetings had been without quorums. Ms Back said that just before the motion to dissolve the association was passed she had approached Mrs Muir and told her that the staff had three people that were quite interested in being on the committee and that was going to be presented at the August meeting. They never got the opportunity. She said the committee had said quite often that we needed to get new committee members. Ms Back then consulted with the staff. Ms Back claimed that she was not allowed to attend the meeting on 31 August 1995. An ordinary committee meeting was scheduled for 4.00pm that afternoon. Ms Back says that at 3.00pm, one of the committee members, Jenny Williams, contacted Ms Back and told her that they would be holding a meeting at a restaurant and that no staff were to attend. When asked if the meeting was unusual, Mrs Muir said it was unusual that the meeting was not called at the refuge. She presumed the staff were not expected to be at the meeting. She does not recall anything expressly being said about the staff not attending. On Thursday, 31 August, 1995, some members of the Committee of Management met. Minutes of the meeting were drawn up and apparently signed by Ms Bateman. (They were also signed by Mrs Bojcun, but as she was not present, that signifies little). Mrs Muir gave evidence that the minutes were accurate in so far as she could recall. A copy of the minutes was provided to the Court. The minutes were as follows: "GREAT SOUTHERN SHELTER (INC) COMMITTEE MEETING VENUE: Cosi's Cafe TIME: 4.15pm DATE: 31 August 1995 PRESENT: Jenny Williams Libby Hawker (FACS) (ex officio) Jacqui Muir By Proxy: Ingrid Baas Becking Bronwyn Bateman Merryn Bojcun APOLOGIES: Treacy Woods Megan Griffiths SUBSCRIPTIONS: Subscription fees were set at 10c. The sum of 70c was collected on behalf of all 7 members of the Committee. GENERAL BUSINESS: Notice of resignation was tendered by: Merryn Bojcun dated 30 August 1995 - effective 30 September 1995 Ingrid Baas Becking dated 31 August 1995 - effective 1 October 1995 Bronwyn Bateman dated 31 August 1995 - effective 1 October 1995 Jenny Williams dated 31 August 1995 - effective 1 October 1995 Libby referred Committee to S. 30 of the Associations Incorporation Act. She said the staff were not being sacked, however because the Committee was unconstitutional, funding would not be available after September 30. Discussion ensued about care of current and future Refuge clients. Libby said FACS would send a case worker to the Refuge on Monday. Clients would be relocated and FACS would be able to ensure continuing support for women and families in crisis until the Refuge could re-open. Libby also said she would contact Police to ask for their co-operation. FACS would be calling for expressions of interest from other incorporated bodies to take over the management committee role. Libby said she had contacted various bodies to check if Committee's action was legal and reassured members that it was. Upon Libby's advice it became clear that the resignations would have the effect of rendering the Association unconstitutional. It was proposed that the Association be dissolved. Upon Libby's advice a motion was put by Jacqui pursuant to S.30 of the Associations Incorporation Act that the Association be voluntarily wound up. This motion was seconded by Jenny and carried unanimously by Bronwyn (as proxy for Merryn), by Bronwyn, by Jenny (as proxy for Ingrid), by Jenny and by Jacqui. Jacqui agreed to oversee the dissolution and winding up of the Association and to carry out all necessary duties in accordance with the Associations Incorporation Act and the funding agreement with FACS. (Signed) 14 Sept. 1995 NB. A decision was subsequently made that a special general meeting would have to be called to consider dissolution. Under the Constitution a special general meeting would have to be convened for the purpose of considering the motion which had been previously put and carried regarding dissolution." Mrs Muir told the Court she was of the view that there wasn't a quorum at the meeting on 31 August, 1995. Whether or not the validity of the purported decisions of the committee was susceptible to challenge, they were ultimately implemented, as I will recount below. The applicants do not seek to challenge the validity of what the committee purports to have done. Mrs Muir says that the decision to close the refuge came about because of the degeneration of the management committee's numbers. Obviously there was a pre-existing difficulty in achieving a quorum. This was greatly exacerbated by the resignation of a further four committee members. The committee was therefore unable to make decisions concerning the operation of the shelter and the management of the funding. Mrs Muir says the committee's members felt that they were in breach of the constitution and in breach of the S.A.A.P. funding agreement. Mrs Muir says that by 31 August they felt there was really no option but to close down the operations and liquidate the association. They believed there was no alternative but to close the shelter. Mrs Muir expressed the view - which she stressed was a personal opinion - that she had a very strong impression that the Department had decided the refuge should close. Mrs Muir said that Libby Hawker, from the Department, was treated as an ex officio member. According to Mrs Muir, the Department's officer had all the documentation with her on the breaches of the funding agreement and on closing the refuge down, which she gave to Mrs Muir. Mrs Muir says that cancellation of funding was not discussed at that meeting. However, Mrs Muir explained that if the committee closed the refuge there would be no need for the Department to defund it. It would automatically follow. A Notice of Special General Meeting dated 14 September was drawn up and the meeting was held the same day, making it very short notice indeed. I will not reproduce in full the handwritten minutes of that meeting. A resolution "that the association be voluntarily wound up in accordance with the Constitution and the Associations Incorporation Act" was passed by Bronwyn Bateman, Ingrid Baas Becking, Merryn Bojcun, Jenny Williams and Jacqui Muir (by proxy Ingrid Baas Becking). Only the first four committee members were present. The validity of this meeting is also questionable, and in any event, it was not effective in winding up the association, for reasons I discuss below. The Closure of the Refuge The applicants' employment was terminated on the morning of Monday, 4 September, 1995 without warning. Mrs Muir arrived at the refuge that day at about 10.00am, about an hour later than she usually arrived to organise the wages. Ms Back says Mrs Muir initially spoke with her alone. Mrs Muir advised Ms Back that the management committee had decided to dissolve the association and that all the workers had been terminated "as from now on". Ms Back says it was a big shock. Mrs Muir told her to get all the workers into the refuge as soon as possible, and that a person from the Department would be arriving to take over looking after the three families resident at the refuge at that time. Ms Back then advised the others present of the news. Ms Barsby rang Ms Deslandes and Ms Lehrain and asked them to come in. The other staff were already there. Ms Back contacted the union. Ms Lehrain confirms that Ms Barsby rang her up and said "you'll have to come in urgently". She was told the refuge was closing. Mrs Muir told the workers that they should stop answering the phones and stop doing anything at all. Eventually all the workers gathered at the refuge. They all went in and spoke to Mrs Muir. Ms Lehrain says that Mrs Muir came out and said that the committee had decided to close the refuge and dissolve the committee, that they had given four weeks wages in lieu of notice and that the committee felt that this was very generous. Ms East recalls Mrs Muir advising them that the refuge was closing and that the employees were all "sacked". Ms East says the reason given by Mrs Muir was that the management committee had been dissolved and therefore they did not have an employer. Therefore the employees had to get off the premises, give their keys in and not answer the phones. Ms East says they were not given any reason why the committee decided to dissolve itself. Ms Lehrain agrees that the workers asked Mrs Muir why the organisation was being wound up but did not get an answer. Ms Back says she asked Mrs Muir why their employment was being terminated, but Mrs Muir would not elaborate. Ms Back concedes that she does not remember quite a lot of the conversation but she said that Mrs Muir was stuck for words quite a few times. Each of the applicants was given a letter dated 3 September 1995, signed by Mrs Muir, which read as follows, omitting formal parts: "You are hereby advised that as from Monday, 3rd September (sic) 1995, the entity known as the Great Southern Shelter (Inc) is to be wound up. The Albany Women's Refuge will cease operation on that date & your employment at the Refuge will be terminated. Below is a statement showing your termination payment. A cheque is attached for the net amount. Your sincerely, Jacqui FOR THE MANAGEMENT COMMITTEE THE GREAT SOUTHERN SHELTER (INC)" The termination payment was four weeks' pay. It seems the applicants accepted the cheque for the previous fortnight's pay, but refused to accept the termination payment on the Monday. It was later mailed to them. Ms Back says she asked Mrs Muir why the committee could not have come to the workers and said "Right, we are having this problem and we have got no choice. Either we are going to have to dissolve the association or find a new committee". Ms Back says the other workers proceeded to say what they felt about the situation and more or less said the same thing that she had, asking why, if the committee was so concerned, they could not call a special meeting with all the staff and the committee. Ms Back believed the committee could have involved the workers in making a decision as to how to go about trying to salvage and save the refuge from being closed, but they were never given that opportunity. Ms East said that there were other avenues to explore. She said the employees might have been able to find other people to go on to the committee to replace those who did not seem to attend. Ms East says she thinks she raised with Mrs Muir the fact that they were all prepared to work voluntarily. Mrs Muir said that that was not possible. A "FACS person", ie a representative of the Department, arrived. The refuge's clients were then collected at her request and sent individually to speak with her. Ms Barsby described their reaction as "bewildered". It appears accommodation was arranged for them at a motel. The staff were told to collect their belongings and leave the premises. They did so at about 1.00pm, necessarily leaving some of their belongings behind. Ms Barsby says she felt numb. Ms Back gave evidence that she was upset, both about the situation with the workers and with the fact that they could close the shelter down knowing full well that there were residents in there and that there had been a tripling of clientele. The staff kept in contact with each other in the ensuing days. By Wednesday 6 September, they had decided to go back to work at the refuge as volunteers until an interim committee could be established for the association, or a FACS administrator appointed. They then discovered that the locks to the refuge had been changed - it is unclear by whom. The union wrote to the Minister on 4 September 1995. The Minister responded by letter dated 12 October 1995. He advised that: "Family and Children's Services will be winding up the agreement with the Association over the next two months. Thereafter, the accommodation will be returned to Homeswest. In the interim, services for crisis and support by counselling and accommodation will be provided by social work staff at the department's Albany District office. Family and Children's Services will seek a suitable incorporated body to assist in the provision of services to women and children in the Great Southern, which services will be supported by the staff of the department's Albany District office. It is proposed that a new agreement will be established once specifications for a new service are drawn up and the expressions of interest process is completed. Family and Children's Services is not in a position to address the situation with respect to employees of the Shelter - this is a matter between the employees and the Association. Future options for employment of staff for the Shelter will be a matter for the agency funded to deliver the service in the Great Southern. The department would not seek to direct any agency on who it should employ." In the course of September, the union initiated various proceedings against the association in this Court and in the Australian Industrial Relations Commission, including the present proceedings. Throughout September, Ms Bojcun represented the association. However, after 30 September, when her resignation took effect, Ms Bojcun ceased to represent the association, and returned correspondence for the association which was directed to her. Whether Valid Reason for Termination of Ms Barsby's Employment The reason given by Mrs Muir's letter was to the effect that the employees were dismissed because the refuge was ceasing operations. The refuge was ceasing operations because the association was being wound up. No reason was given to the employees for winding up the association. The immediate reason given to the Court was that the association was "unconstitutional"; in other words, that the four resignations of committee members had made it impossible for the committee to continue to achieve a quorum. The reasons for the resignations appear to have been a perceived incapacity on the part of some committee members to reconcile their obligations to the staff with the commitment sought by the department. It is apparent that there was a chain of decisions which resulted in the dismissal of the applicants. It is arguable how far along this chain the Court should inquire in seeking a "valid reason" for the termination of the applicants' employment. If the Association, through its committee, decided to cease providing the community service it had formerly provided, ie cease the refuge's operations, then that is arguably analogous to a decision by a company in business to cease trading. I put to Ms Sackville the proposition that, where a company decides to cease trading, it might be argued that the consequential dismissal of the company's employees is justified by a valid reason based on the operational requirements of the undertaking, establishment or service. The reason is, in short, the fact that the company no longer has any operational requirements. Was it necessary or appropriate for the Court to look behind or question the validity of the company's decision to cease trading? Ms Sackville responded that "in the context of the social and community services sector and the public interest,... managerial prerogative is somewhat curtailed and... the employer deeming that it no longer wishes to provide the service should not be equated to a valid reason for termination on the basis of operational requirements." Certainly, the objects of the association include the provision of emergency accommodation by women for women, and it is strongly arguable that the committee in deciding to cease the refuge's operations was acting contrary to the objectives of the association, particularly where that outcome might have been avoided, as I believe it could have been in this instance. Just as company directors have duties to their shareholders, their employees and their creditors, so committees of associations have analogous duties to their membership, their employees and the community. Where the reasons underlying a decision to terminate employees of an association are not consistent with those duties, then I am satisfied that the reasons for the decision to terminate can be said to be invalid. Had the association done its best to continue and the Department later withdrawn funding, then it is very likely the loss of funding would have been a valid reason for terminating the applicants' employment. However, having acted in anticipation of that possibility, the association cannot rely on the mere possibility of funds being denied in future as a valid reason for termination. I appreciate the personal predicament in which the committee members felt they had been placed. However, in winding up the association rather than for example taking further steps in consultation with the employees and the community to rejuvenate the committee, they acted contrary to the objects of the association, the interests of their employees and the interests of that part of the community which the association was created to serve. Given that the decision to cease the operations of the refuge can be impugned on that basis, I am not satisfied that there was a valid reason for the termination of the applicant's employment, and that the terminations were therefore in breach of Section 170DE(1). Whether the Termination was Harsh, Unjust or Unreasonable Even if I am wrong in relation to Section 170DE(1), it is abundantly clear that there was not the adequate consultation with the employees as required prior to employees being dismissed due to operational requirements, and that the dismissals were therefore contrary to Section 170DE(2). It is well established that, even in the case of a genuine termination on the grounds of operational requirements, the termination of employment of a particular employee may be harsh, unjust and unreasonable. Although Section 170DE(2) is commonly regarded as being related to substantive unfairness, a termination may be harsh, unjust or unreasonable because of procedural unfairness. I have reviewed the numerous authorities on this point in Walker v Ken Vidler Surfsports (IRCA No. 655/95, RD Farrell JR, 30 November 1995 at pp 9-12). The relevant requirements in these circumstances were for the employer to give the employees notice of its proposed cause of action, to consult with the employees and to consider any alternative solutions offered by the employees. In this instance, the employee's representative, who was a committee member under the rules, was excluded from the crucial committee meeting. The decision to dismiss the employees was presented as a fait accompli. It is apparent from my earlier account of the employees' evidence that they were aware of and indeed raised numerous alternative proposals which would have kept the refuge open and which were not considered. Further, as I have indicated above, I am of the view on balance that there were viable alternatives to winding up the association, and that proper consultation with the workforce may have averted the dismissals. I have no hesitation in finding that I am satisfied that the dismissals were in breach of Section 170DE(2) of the Act. Whether Reinstatement is Impracticable The applicants, other than Ms Woods and Ms Deslandes, persisted with their reinstatement claims, and made it clear in their evidence that they wanted the refuge to reopen and their employment as refuge workers to resume. The actions of the committee were not successful in winding up the association. A resolution for its voluntary winding up was received by the Commissioner for Corporate Affairs but not accepted, initially because of formal defects and then because the association could not determine its solvency due to an unspecified claim - presumably these claims - being pursued against the association. The association therefore still exists as a legal entity; as I remarked during the hearing - the ship is still afloat, but has no crew to steer it. It is therefore legally possible to make orders against the association, including an order that it reinstate the applicants. However, as a result of the association ceasing to meet its obligations under the funding agreement, the Department has now cancelled that agreement. There are, therefore, no more ongoing funds to pay staff to run the refuge. Ultimately, it will probably be necessary for the association to be wound up by the Supreme Court, pursuant to Section 31 of the Associations Incorporation Act 1987. Upon reviewing that Act, I noted that there was provision under Section 34 for the Commissioner for Corporate Affairs to order that an association's undertaking be transferred to another body carrying out the undertaking or operations of the association. Where such an order is made, the association is dissolved, the property of the association becomes the property of the other body, and the rights and liabilities of the association become rights and liabilities of the other body. Such an order might be a neat solution to Ms Barsby's predicament, given that the undertaking of running the refuge is being put out to tender by the Department, following which it will be carried on by the successful tenderer. Orders against the association to reinstate Ms Barsby and others would thus be liabilities which could be transferred to the body corporate which was the successful tenderer. As attractive as this option might be, were it to come about, I have formed the view that it is too difficult and productive of too many uncertainties to be considered practicable. It is necessary, for example, for the association to request the transfer. It does not have the capacity to do so, being without a committee. If that problem could be surmounted, there is no guarantee that the Commissioner would exercise his or her discretion to order the transfer. While there is no express requirement that the other body consent, it may be unlikely that the Commissioner would order such a transfer against the wishes of the other body. Regrettably, therefore, I have found that reinstatement with the association is impracticable. Assessment of Compensation The remedy originally claimed by the applicants was compensation. By letter dated 6 December 1995, the Minister advised the union that "current funding arrangements will be extended until 30 June 1996, and new service agreements to 30 June 1998 will be negotiated before 30 June 1996. This effectively means that S.A.A.P. agencies will be funded at their current levels until 30 June 1998." For the reasons I discussed in my preliminary reasons for judgment in relation to Ms Barsby's application, I do not propose to finally decide the question of the entitlement to compensation of Ms Back, Ms East, and Ms Lehrain. I have instead awarded an interim amount of compensation reflecting their loss up to the date of hearing, and have given them leave to apply. Application can be made for a final award of compensation for any additional loss when it becomes clear whether or not they have obtained employment when the Albany Womens' Refuge reopens. Associated Claims The Australian Industrial Relations Commission issued the Great Southern Shelter (Inc.) Redundancy Award 1995 on 2 November 1995, which came into force on 31 August 1995. The Award is expressed to apply to the applicants other than Ms Deslandes and the Association is the named respondent to the Award. Ms Barsby: Compensation and Associated Claims Ms Barsby is 47 years of age. She had been employed by Great Southern Shelter for less than a year, beginning on 19 December 1994. At the time her employment was terminated, she was a permanent part-time employee, working one regular night shift in the refuge per fortnight, commencing 8.00pm and finishing at 8.00am. She otherwise acted as a casual relief worker, when the refuge was busy or when one of the other employees was not available. She was paid the same rate of pay as the person she was relieving, where that person was on holiday. If she was brought in for emergency relief, she received $15 per hour. As at the date of hearing, Ms Barsby had not succeeded in obtaining employment since her dismissal. She has been supported by her husband since her dismissal and been in receipt of no other income. I have made an interim award of compensation in the amount of $1,750. The manner in which that amount was calculated is dealt with in my interim reasons. Ms Sackville also contended that Ms Barsby is owed money by the association arising from underpayment of wages and the failure to pay out accrued annual leave on termination. I have adequately dealt with this aspect of Ms Barsby's claim in my interim reasons. Ms Back: Compensation and Associated Claims Ms Back commenced her employment at the refuge on 29 July 1989, on a part-time basis. She became a full-time employee in 1994. She was acting co-ordinator for two months in 1994 until December 1994, when a new co-ordinator was appointed. She resumed the role of acting co-ordinator when the new co-ordinator left in May 1995. She had more than 6 years' service at the time of her dismissal. Her weekly wage was $500, but she contended that the correct wage for a co-ordinator was $600 per week. The previous co-ordinator had been paid at that rate. Ms Back received $600 per week when she first took on the acting co-ordinator role in late 1994. However, Ms Back's actual rate of pay at the time of her dismissal was $500 per week. When she commenced in the acting position again, Mrs Muir had said that $500 was all she would get. The rate of pay applicable to the position was contractual in nature - the rate was not prescribed in any award. On Ms Back's own evidence it is clear she never reached any agreement to be paid more than $500 in the position. I have therefore proceeded on the basis that she is likely to have earned remuneration of $13,000 in the six months after the date of termination, had the Association not terminated her employment, so that $13,000 is the maximum award of compensation I can make to Ms Back. The Great Southern Shelter (Inc.) Redundancy Award 1995 prescribes that, in addition to the relevant notice period requirements (which have been met) the association will pay Ms Back 8 weeks pay as severance pay, because she has a period of over four years continuous service. This obligation has not been met, and so I will order that the association pay the $4000 in severance pay due to Ms Back, under the associated jurisdiction of the Court. Ms Back received four weeks' pay in lieu of notice on termination, paid at the rate of $500 per week. Fourteen weeks had elapsed to the date of hearing. Ms Back has been unemployed throughout that time, despite her efforts to find alternative employment. As at the date of hearing, after taking into account the pay in lieu of notice she has received and the severance pay to which she is entitled, she had already suffered monetary loss of $1000. I have therefore made an interim award of compensation in that amount and have given her leave to apply for additional compensation for any loss suffered after the hearing. Ms Deslandes: Compensation and Associated Claims Ms Deslandes commenced her employment at the refuge on 3 October 1994. Ms Back and Ms Barsby confirmed that Ms Deslandes was initially working 60 hours each week for $200 per week payment. Her payment was increased in January or February to $300 per week, and then in the beginning of July to $400 per week. Ms Deslandes claimed to have been underpaid and sought orders for back pay, based on the Minimum Conditions of Employment Act 1993 (WA). The minimum hourly rate of pay prescribed under that Act is $7.53. That Ms Deslandes worked more than 38 hours per week and that those hours were worked at night is not relevant, because there are no overtime or shift rates prescribed under that Act. For her 60 hour week she was entitled, therefore, to receive $451.80. Accordingly, she was underpaid throughout her employment, though the extent of the underpayment decreased . She was underpaid $251.80 per week for the first 12 weeks following her employment, $151.80 for the next 26 weeks and $51.80 for the final 9 weeks of her employment. The total back pay due from the respondent to the applicant was therefore $7,434.00 and I have ordered that it be paid. I have proceeded on the basis that Ms Deslandes was likely to have earned remuneration of $11,746.80 (ie $451.80 x 26 weeks) in the six months after the date of termination, had the association not terminated her employment, and had it paid her in accordance with the Minimum Conditions of Employment Act 1993 (WA) to continue to work 60 hours per week. That is therefore the maximum award of compensation I can make to Ms Deslandes. Ms Deslandes has been unsuccessful in finding alternate employment since her dismissal but, because she did not seek reinstatement, I have made a final award of compensation in her case. In the circumstances, I am satisfied that she should be awarded $10,146.80 in compensation. The amount awarded is $1,600 less than the maximum. Ms Deslandes was paid $1600 in lieu of notice, which is the equivalent of 3.5 weeks' correct pay. She was only entitled to 1 week's notice under the Act or 2 weeks' notice under the Crisis Assistance, Supported Housing Award 1991 so there was an ex gratia element to the payment. An amount paid in lieu of notice would not normally be deducted from an award of compensation, where the loss resulting from the dismissal is assessed to exceed 6 months' wages. I have chosen to do so on this occasion in recognition of the partly ex gratia nature of the notice given, and in recognition of the possibility that Ms Deslandes may have worked less hours or even left her employ had she not been dismissed. Ms East: Compensation and Associated Claims Ms East had been employed by the Great Southern Shelters for 9 and a half years, starting in March 1986. She was initially employed in a part time capacity. Ms East became a full time employee when the association became governed by a management committee. Ms East has been unsuccessful in finding alternate employment since her dismissal, save for $80 earned in a casual job picking cauliflowers. Ms East's rate of pay at the time of her dismissal was $445 per week. I have therefore proceeded on the basis that she is likely to have earned remuneration of $11,570 in the six months after the date of termination, had the association not terminated her employment, so that $11,570 is the maximum award of compensation I can make to Ms East. The Great Southern Shelter (Inc.) Redundancy Award 1995 prescribes that, in addition to the relevant notice period requirements (which have been met) the association will pay Ms East 8 weeks pay as severance pay, because she has a period of over four years continuous service. This obligation has not been met, and so I have ordered that the association pay the $3,560 in severance pay due to Ms East, under the associated jurisdiction of the Court. Ms East received four weeks' pay in lieu of notice on termination, paid at the rate of $445 per week. Fourteen weeks had elapsed to the date of hearing. As at the date of hearing, after taking into account the pay in lieu of notice she has received ($1,780), the severance pay to which she is entitled ($3,560), and the money earned picking cauliflowers ($80) she had already suffered monetary loss of $810. I have therefore made an interim award of compensation in that amount and have given her leave to apply for additional compensation for any loss suffered after the hearing. Ms Lehrain: Compensation and Associated Claims Ms Lehrain was employed on 1 April 1993 as a child care officer and gardener. When the child care section was closed down, she began work as a refuge worker, and continued with her cleaning and gardening duties. She became a permanent employee at that time, having originally been hired as a part-time employee. Ms Lehrain gave evidence that since her dismissal she was working as a cleaner, and earning $100 gross per fortnight. She gave evidence that she had earned $250 since her dismissal. Ms Lehrain's rate of pay at the time of her dismissal was $435 per week. I have therefore proceeded on the basis that she is likely to have earned remuneration of $11,310 in the six months after the date of termination, had the association not terminated her employment, so that $11,310 is the maximum award of compensation I can make to Ms Lehrain. Ms Lehrain is entitled to 6 weeks' pay as severance pay. I have ordered that the association pay the $2,610 in severance pay due to Ms East, under the associated jurisdiction of the Court. Ms East received four weeks' pay in lieu of notice on termination, paid at the rate of $435 per week. Fourteen weeks had elapsed to the date of hearing. As at the date of hearing, after taking into account the pay in lieu of notice she has received ($1,740), the severance pay to which she is entitled ($2,610), and the money earned cleaning ($250) she had already suffered monetary loss of $1,490. I have therefore made an interim award of compensation in that amount and have given her leave to apply for additional compensation for any loss suffered after the hearing. Ms Woods: Compensation and Associated Claims Ms Woods had been employed by Great Southern Shelter for less than a year, beginning on 4 October 1994. Ms Woods was originally employed as a part-time worker, working 20 hours per fortnight, and then later on a full-time basis. There was no evidence at the hearing as to her earnings since her dismissal. Her weekly salary at the time of her dismissal was $270 gross. I have therefore proceeded on the basis that she is likely to have earned remuneration of $7,020 in the six months after the date of termination, had the Association not terminated her employment, so that $7,020 is the maximum award of compensation I can make to Ms Woods. Ms Woods did not seek reinstatement, so I was minded to make a final order for compensation, but could not properly calculate the appropriate compensation payable without evidence of her earnings since the dismissal. Accordingly, I ordered that Ms Woods file further affidavit evidence on this point. The affidavit was filed on 21 February 1996. The affidavit, when read with an earlier affidavit, disclosed that Ms Woods succeeded in gaining alternate employment in Roebourne with "Yaandina Daycare" as a child care worker on 23 October 1995 at a wage higher than that earned while she was employed with the respondent. While the employment is on a trial basis, she had remained employed at least up to mid-February 1996. She has had to leave her mother and father, whose health is poor, and to incur relocation expenses of $1289. She puts the costs she has incurred since being terminated at $2000. Ms Woods was unemployed for 7 weeks. She received 4 weeks pay in lieu of notice. Her loss of remuneration is therefore limited to 3 weeks' wages, ie $810. The Court is empowered, however, to award compensation of such an amount as it considers appropriate. In calculating the amount of that compensation one of the matters to which the court must have regard is the loss of remuneration. It is not restricted to that matter however; the Court must consider all the relevant circumstances. As Lee J observed in Aitken v CMETSWUA - WA Branch (IRCA No. 352 of 1995, 7/8/95): "The Court will consider the detriment occasioned to the employee by the employer's contravention of the Act, and the extent to which it is reasonable to compensate the employee for such consequences." It will sometimes be appropriate for the Court to take into account expenses incurred in the finding of new employment where the court is satisfied that the incurring of those expenses was a direct consequence of the employer's contravention of the Act. I am so satisfied in this case, at least in relation to the relocation expenses. Accordingly, I will award compensation in the sum of $2,089.00. I certify that this and the preceding 31 pages are a true copy of the Reasons for Judgment of Judicial Registrar R. D. Farrell. Assistant Date: 8 March, 1996 Representative for the applicant: Ms R. Sackville Australian Municipal, Administrative, Clerical and Services Union No appearance by the respondent. Hearing dates: 11 & 12 December, 1995. Judgment date: 8 March, 1996