DECISION NO: 164/96 CATCHWORDS INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - claims in the accrued jurisdiction of the Court - allegations of sexual harassment - independent investigation of sexual harassment allegations - BREACH OF PROCEDURAL FAIRNESS - whether material allegations put to the applicant - termination not for a VALID REASON - whether reinstatement appropriate in all the circumstances of the case - COMPENSATION - calculation of compensation for a non-award employee - whether superannuation constitutes part of the remuneration of an employee Industrial Relations Act 1988 ss 170DC, 170DE, 170EA, 170EE, 170EDA Industrial Relation Regulations r 30DA Superannuation Guarantee Charge Act 1992 Superannuation Guarantee (Administration) Act 1992 June 1986 National Wage Case (1986) 14 IR 187 Thomas Fischer v Commonwealth of Australia & Another, Industrial Relations Court of Australia, NI 3630 of 1995, 16 April 1996, Moore, Beazley and Marshall JJ, as yet unreported May v Lilyvale Hotel Pty Limited, Industrial Relations Court of Australia, NI 95/1963R, 1 December 1995, Wilcox CJ, as yet unreported Messervy v Maldoc Pty Limited ACN 001 091 596 t/as Toongabbie Hotel, Industrial Relations Court of Australia, NI 882 of 1995, 30 June 1995, Wilcox CJ, as yet unreported Anthony Smith & Associates Pty Limited v Gary Sinclair, Industrial Relations Court of Australia, RR 1260 of 1995, 22 April 1996, Wilcox CJ, Moore and Marshall JJ, as yet unreported No. VI 3891 of 1995 PAUL WILLIAM RIGBY v TECHNISEARCH LTD JUDGE: Marshall J PLACE: Melbourne DATE: 3 May 1996 IN THE INDUSTRIAL RELATIONS ) ) COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) No. VI 3891 of 1995 BETWEEN: PAUL WILLIAM RIGBY Applicant AND: TECHNISEARCH LTD Respondent JUDGE: Marshall J PLACE: Melbourne DATE: 3 May 1996 ORDER THE COURT ORDERS THAT: 1. It is declared that in terminating the employment of the applicant the respondent contravened ss 170DE and 170DC of the Industrial Relations Act 1988 ("the Act"). 2. Pursuant to section 170EE(3) of the Act the respondent shall pay the applicant, within 21 days hereof, compensation in the sum of $31,100.00. 3. The application be otherwise dismissed. 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 ) ) VICTORIA DISTRICT REGISTRY ) No. VI 3891 of 1995 BETWEEN: PAUL WILLIAM RIGBY Applicant AND: TECHNISEARCH LTD Respondent JUDGE: Marshall J PLACE: Melbourne DATE: 3 May 1996 REASONS FOR JUDGMENT BACKGROUND - THE PROCEEDING On 19 July 1995 the applicant filed in the Victoria District Registry an application under s170EA Industrial Relations Act 1988 ("the Act"). The application sought inter alia the remedies of reinstatement and compensation. It disclosed that the respondent had terminated the employment of the applicant on 10 July 1995. On 2 August 1995, the District Registrar of the Court referred the application to the Australian Industrial Relations Commission ("the Commission") for conciliation. On 1 September 1995, Deputy President Drake certified that the Commission had been unable to settle the matter by conciliation. On 16 September 1995 the applicant filed a statement of claim dated 4 September 1995 which set out the relief which was now additionally claimed in the "associated" jurisdiction of the Court. The relief sought, which actually invoked the "accrued" jurisdiction of the Court, included the following:- · damages for breach of a contract of employment; · damages for injury to the applicant's reputation; and · damages for negligence. On 26 September 1995, the application was listed for a directions hearing before Judicial Registrar Ryan. By consent, an order was made that the applicant have leave to amend his application by seeking the additional relief referred to in his statement of claim. Leave was given for the respondent to file a defence and various ancillary orders were made. The matter was adjourned to the judge's directions list on 16 October 1995 but it was unable to be heard that day. A directions hearing was held on 18 October 1995. Due to the impending permanent departure of a critical witness to an overseas location, the Court agreed to expedite the hearing of the matter. On 1 November 1995 an amended statement of claim was filed in which damages were sought for:- "... psychological reaction, emotional upset, anxiety and humiliation" An amended defence was filed on 20 November 1995. The application was heard on 6, 7, 8 and 9 February 1996 and 5 and 8 March 1996. Mr Justin Bourke, of counsel, appeared for the applicant. Mr Timothy Ginnane, of counsel, appeared for the respondent. BACKGROUND - THE FACTS The respondent, at the time of the termination of the employment of the applicant, i.e. 10 July 1995, was a commercial subsidiary of RMIT University ("RMIT") in Melbourne. The respondent's operations contained a unit known as the International Services Unit ("ISU"). The ISU, according to a publicity brochure which was admitted into evidence was responsible for:- ". promoting RMIT University internationally . receiving international students' applications . helping you [international students] settle into life in Melbourne . some student administration functions, such as collecting fees and helping with visa and Medibank renewals" The applicant was at all material times prior to 10 July 1995, the manager of the ISU. From 1977 to 1987 he was a lecturer at RMIT. In 1988, whilst employed by RMIT, he was appointed as RMIT co-ordinator, International Students. In 1989 he was seconded to the respondent as the co-ordinator of special projects. That activity involved him in the development of marketing strategies to bring international students to RMIT. In March 1991, whilst on secondment from RMIT, the applicant was promoted to manager of the ISU. In September 1993 he resigned from RMIT and became an employee of the respondent. As manager of the ISU he was involved in the supervision of the recruitment of international students to RMIT, market strategies, budgeting and staffing. A number of line managers reported to him. His work was almost exclusively of an administrative nature. He had little face to face contact with students. That work was performed primarily by student advisers and application officers. When such employees of the respondent were unable to assist students on certain matters, they were sometimes referred to student counsellors employed by RMIT. The applicant was primarily responsible for the ISU from March 1991 until July 1995. The evidence disclosed that the applicant was very good at his work. During that time, the number of international students studying at RMIT increased significantly. The managers of the respondent were appreciative of the work of the applicant, given that it was lucrative for RMIT to attract fee paying international students. In July 1994, the respondent approved the payment of an 18% pay rise to the applicant partly in recognition of his good work performance. The applicant worked long hours and often worked on week-ends. Prior to 12 May 1995, the applicant had been absent from work on account of illness on only one or two days since 1989. The respondent regarded the applicant as a very good employee who had a reputation in the industry as being "an excellent operator". Mr Desmond Teh was a student at RMIT. He first came to Australia, from Malaysia, in February 1992 (at the age of 19) to commence a course at RMIT. He completed a Business Degree (Marketing). The course lasted four years and was completed by him in 1995. Mr Teh had originally enrolled in a three year Business Administration course but switched streams to Marketing in 1993. It is a requirement of the marketing course that one year is spent off campus as a work experience student. This year is known as the co-operative year. During the later part of 1993, Mr Teh commenced to look for work to complete his co-operative year in 1994. In or about October 1993, Mr Teh was interviewed by the applicant regarding the possibility of working for the respondent in 1994. Arrangements were made for Mr Teh to attend at a lunch with the applicant in mid-November 1993. Mr Teh was informed at the lunch that his job application was successful and that he would be working for the respondent. He was told that he would report to Ms Melissa Adamson, the Marketing Services manager of ISU. At the lunch, Mr Teh asked if it was possible for him to commence work with the respondent at the conclusion of a forthcoming trip to Australia by his parents. A starting date of 16 December 1993 was agreed. The applicant and Mr Teh saw each other socially on a regular basis after this lunch for the next few weeks. In late November 1993, the applicant and Mr Teh became romantically involved with each other. The relationship became a sexual one towards the end of November 1993. The relationship intensified on and from 12 December 1993 after Mr Teh's parents returned to Malaysia. The only difficulty in the relationship at that stage appeared to be a concern on Mr Teh's behalf about the age difference between the two men. The applicant was 41 years old and Mr Teh was 21 years old at the time. On 16 December 1993, Mr Teh commenced work with the respondent as previously arranged. He worked under Ms Adamson's direction. His attendance for work in his employment with the respondent lasted only about five or six working days. There was no record of any paper work being generated to reflect that he was employed. He received no payment for his work. On 20 December 1993, the applicant and Mr Teh had a major disagreement which led to a confrontation between them and concluded with the applicant slapping Mr Teh and Mr Teh having a fit. The applicant alleged that Mr Teh pushed him heavily into a doorknob causing severe bruising to his lower back. The argument arose out of a quarrel induced by feelings of jealousy and/or insecurity in the relationship by either Mr Teh or the applicant or both of them. They each gave evidence of a concern that the other was "flirting". Mr Teh alleged that in the argument between the two men, the applicant terminated his employment. The applicant denied that he did so. Notwithstanding the altercation between the applicant and Mr Teh on 20 December 1993, the applicant spent the night at Mr Teh's flat. The two men travelled to work together the next day. There was no discussion about the status of Mr Teh's employment. There was no discussion about the altercation of the previous day. The applicant again stayed at Mr Teh's flat on the night of 21 December 1993. It was implicit in their conduct towards one and other that the relationship between them would continue. Both men attended for work the next day, 22 December 1993. That evening they went out to a restaurant and had a very pleasant time. Prior to going to the restaurant, Mr Teh told the applicant that Mr Teh's mother had telephoned him requesting that he go home to Malaysia as his father had suffered a stroke. Mr Teh fabricated the story about his father as an excuse to travel to Malaysia. The applicant was not aware of any difficulty in the relationship between him and Mr Teh on 22 December 1993. They stayed together again that night. The applicant drove Mr Teh to the airport the next day. Mr Teh hugged the applicant before boarding his flight. He told the applicant he would contact him as soon as he arrived in Kuala Lumpur. The applicant said it would be better if he called him the next day. Mr Teh said he would do so. However, as at 29 December 1993, Mr Teh had not contacted the applicant since leaving Australia a week beforehand. Mr Teh gave evidence that after the altercation of 20 December 1993 he was feeling very upset and did not want to stay in Australia. His testimony was that he wanted to get away from the applicant. By 29 December 1993 the applicant was worried because he hadn't heard from Mr Teh since Mr Teh left Australia. The applicant obtained Mr Teh's telephone number in Malaysia, most probably from the data base of the respondent. The applicant and Mr Teh were in fairly regular telephone contact from that time until 22 January 1994. Throughout this time Mr Teh maintained the story about his father's ill-health. The applicant's evidence is that the telephone calls were pleasant up until 21 January 1994. The applicant said that the 103 minute conversation of 22 January 1994 resulted in an agreement to put the relationship on hold. On 1 February 1994 there was a very unpleasant, in fact hostile, 22 minute conversation. Mr Teh's evidence was that he didn't welcome the phone calls he received from the applicant and that he really didn't want to talk to him but that it was difficult to avoid the calls. As to the long conversations, Mr Teh said that most of the time he would stay quiet on the telephone and the applicant would prompt him for a response. Mr Teh acknowledges that he made calls to the applicant during January 1994 but said that he felt obliged to ring back for fear that the applicant would keep leaving messages. He said that the events of 20 December 1993, together with the phone calls, were "very traumatic" and "very frightening". He said "I'd get frightened of picking up the phone". He maintained he didn't say anything to the applicant about his attitude to the applicant's calls because he was afraid of him, given that the applicant had "hit" him on 20 December 1993. He denied that he had many pleasant telephone conversations with the applicant whilst he was in Malaysia and Singapore. He admitted that the conversations for 68 minutes and 23 minutes on 29 December 1993, were very pleasant and that, on those occasions, he was extremely happy to hear from the applicant. He was unable to remember if the 102 minute conversation on 30 December 1993 was pleasant. The 29 and 44 minute conversations of 31 December 1993 included a discussion as to what each of them was going to do that evening, i.e. New Years' Eve. Although Mr Teh gave evidence of a 44 minute conversation of 3 January 1994 not being very pleasant, he gave further evidence that the discussion included talking about "catching up" in the event that the applicant travelled on business to Kuala Lumpur. On 22 February 1994, the applicant attempted to telephone Mr Teh in Malaysia to inform Mr Teh that his position with the respondent was still available should he wish to return to it. Earlier, on 3 January 1994, Mr Teh had sent a facsimile transmission to Ms Adamson tendering his resignation. The applicant spoke to Mr Teh's mother, on 22 February 1994, and was told that Mr Teh had returned to Australia. The applicant gave evidence that he telephoned Mr Teh at his flat in Melbourne in late February 1994 to inquire about a possible return by Mr Teh to his job with the respondent. He said that he had no intention to seek to resume his relationship with Mr Teh and that by this time he was seeing someone else. He said he just wanted to be friends with Mr Teh. It seems that from late February until late March 1994, Mr Teh and the applicant were friendly towards each other. In late March 1994 they had a major argument which resulted in the termination of their friendship. In April 1994, the applicant was suffering from depression. His doctor suggested that he "clear the air" with Mr Teh. The applicant rang Mr Teh to tell him what the doctor had said. Mr Teh agreed that it would be a good idea for the applicant to put some thoughts down in writing and send the result to Mr Teh. The telephone conversation was friendly and lasted for about an hour. Mr Teh did not read the letter that the applicant wrote. Subsequently, on 3 May 1994, the applicant wrote a letter to Mr Teh, in anger, complaining about Mr Teh's attitude towards him. Mr Teh's response was to seek assistance from a student rights officer at RMIT, Ms Joanne Kyrkilis. Mr Teh had a series of discussions with Ms Kyrkilis. In an unchallenged affidavit filed in Court by the respondent, Ms Kyrkilis said as follows, at paragraphs 4 to 8 thereof: "4. I first met Desmond Teh on 11 May 1994. He had been referred to me by the RMIT Union solicitor. Mr Teh came to me in order to seek advice as to options he had in relation to alleged harassment he had experienced at the hands of a Mr Rigby. Mr Teh said to me that he had lost an opportunity for a position at the International Services Unit because of a relationship he had with Mr Rigby. Mr Teh also alleged that he had been assaulted by Mr Rigby during the course of the relationship between he and Mr Rigby. Mr Teh asked me to tell him his options. 5. My response to Mr Teh at this stage was that he had four options as follows: (a) go directly to the RMIT Equal Employment Opportunity Officer; (b) follow the RMIT sexual harassment procedures; (c) make a formal complaint to the Equal Opportunity Commission; and (d) do nothing. At this stage Mr Teh advised me that he did not wish to pursue the matter, but that he simply wanted to assess his options. During the meeting he was very distressed and crying. 5. On 12 July 1994 I telephoned Mr Teh. I contacted Mr The [sic] because I was concerned at the level of distress he had demonstrated during the meeting between him and myself on 11 May 1994. 6. Sometime during October 1994, Mr Teh came to see me again. He said that he had recently (and accidentally) bumped in to Mr Rigby in the street. Mr Teh said that this meeting had caused him some distress. In addition to talking about the accidental meeting with Mr Rigby we also again discussed his options. At this meeting, Mr Teh also told me that he was extremely concerned about the effect on his academic performance due to stress he had experienced as a result of matters he had reported to me involving Mr Rigby. 7. In or around November 1994, Mr Teh came to see me at his instigation. At this meeting, he said to me that he had reason to believe that Mr Rigby was going to attempt to cancel or stop his visa. He was very distressed and quite angry. When we spoke of the options referred to above in paragraph 5, he said that he was ready to speak to the RMIT Equal Employment Opportunity Officer. He said to me that the situation had reached a point where he felt that his academic future was at risk. 8. As a result of the meeting in November 1994, I referred Mr Teh to the Equal Opportunity Officer at RMIT. I attended a meeting on or around 23 November 1994 with Mr Teh and the Equal Employment Opportunity Officer." In October 1994, the applicant and Mr Teh passed each other in Swanston Street, Melbourne. Mr Teh ignored the applicant. The applicant said words to the effect that "can't we say hello to each other when we meet in the street". Mr Teh replied that he was "busy". In November 1994, Mr Teh went to the ISU to receive assistance regarding an application to extend his visa. He spoke to a Mr Poon and a Ms Lim. He testified that Ms Lim left a message on his telephone answering machine that the applicant "wanted a letter from my future employer before he would allow the visa to be approved and that if I did not produce that, he would cancel my visa". As indicated earlier in these reasons, Mr Teh had originally enrolled for a three year course and on changing streams switched to a four year course. He needed a one year extension of his visa to complete his final year which also happened to be his co-operative year in which he would be engaged in full time employment. The applicant testified that Mr Poon had sought his advice regarding the extension of Mr Teh's visa. He said he advised Mr Poon that a letter from Mr Teh's employer should be sent to the Immigration Department. This instruction or advice was ultimately not followed by Ms Lim. The applicant denied that he was trying to find out where Mr Teh was working. He said the letter was necessary because Mr Teh's circumstances were unusual and without a letter from his employer there would be no evidence to show that Mr Teh was fulfilling the relevant course requirements. A student rights officer, Mr Crowley, testified that without such a letter doubts may have arisen "in the minds of some immigration officials" whether Mr Teh was enrolled in a course. On 9 December 1994, the applicant was advised by the Managing Director of the respondent, Mr Cronin, that he, Mr Cronin, had received a complaint that made allegations which, if proven, were serious enough to warrant dismissal or to call upon him to ask for the applicant's resignation. The applicant asked for details of the complaint. Mr Cronin said that he wasn't in a position to give the details but that if the applicant resigned "the whole thing would disappear". On 12 December 1994, the applicant met with Mr Cronin and was advised that Mr Teh had made the allegations referred to in their meeting of 9 December 1994. Mr Cronin suggested that the complaint be handled internally, within the respondent, and investigated by an appropriate, independent person. Ms Fay Marles was subsequently appointed to conduct the investigation. The applicant asked to be legally represented at the investigation and to have the right to cross examine witnesses. Mr Cronin agreed that that was the fairest way to conduct the investigation. On or about 14 December 1994, Mr Cronin and the applicant had another meeting. At that meeting Mr Cronin gave an extremely brief description of the allegations of Mr Teh. The applicant asked for a copy of the complaint. Mr Cronin told him that he didn't think it appropriate to provide him with a copy. On 15 February 1995, the applicant met with Ms Marles, in her office, for the first time. Ms Marles is the principal of Fay Marles and Associates Pty Limited, a company which specialises in equal opportunity and workplace dispute resolution. On 16 December 1994, Ms Marles was appointed by the respondent by letter in the following terms: "Ms. Fay Marles, 51 Gipps Street, EAST MELBOURNE, Vic., 3002 Dear Ms. Marles, Thank you for meeting with me this morning. As I mentioned, I have recently been notified of a claim of sexual harassment by an RMIT student against a Technisearch employee. Technisearch is a subsidiary company of RMIT, but my staff are not subject to the same procedures as apply to RMIT employees. I have decided to appoint a person to independently enquire into the veracity of the allegations, and I thank you for agreeing to handle the brief. The complaint is outlined in the attached papers, and the brief is essentially to enquire into the complaint as confidentially as possible, and to provide me with a report as to the veracity or otherwise of the allegations. I will formally advise both the complainant and the respondent of your role, and leave it to you to approach both parties. I understand that the allegations will be vigorously contested, and each party should ideally have the opportunity to be legally represented, to bring forth witnesses, and to cross examine. I can be reached at the office by phone on ........ or fax on ........., but expect to be overseas between 4 January and 15 February. My secretary, Mrs. Judy Wilkinson, can be reached on the above number, and can advise you of my contact details should you wish to reach me. No-one else in Technisearch is appraised of the complaint, and any dealings should be direct with me. Yours faithfully, BERNARD T. CRONIN MANAGING DIRECTOR" Mr Teh had returned to Malaysia for the Christmas vacation and did not come back to Australia until February 1995. Ms Marles took the view that she was not able to usefully progress the investigation until Mr Teh had returned to Australia. In the 15 February 1995 meeting, Ms Marles informed the applicant about the way she was proposing to undertake the investigation but did not speak to him about any matters of substance concerning the complaint. The applicant asked for a copy of the complaint. Ms Marles said that she didn't think it appropriate to give him a copy at this stage. Ms Marles first interviewed Mr Teh on or about 20 February 1995. Ms Marles requested that he provide a further written complaint setting out what precisely he was complaining about in lieu of his initial "verbatim account". On 15 March 1995, Ms Marles had a lengthy interview with Mr Teh. On 20 March 1995, Ms Marles provided the applicant with the written complaint of Mr Teh setting out his precise complaints. On receipt of the complaint, in the mail, the applicant telephoned Ms Marles and organised an appointment with her for 6 April 1995. His evidence was that he understood the meeting to be a "preliminary chat" about the complaint. He said he intended to have legal representation when the "formal process" began. He had not even read the contents of the written complaint prior to 6 April 1995. He said that he did not think that he was to be asked to give a detailed response to the allegations on 6 April 1995. The applicant told Ms Marles that he was not prepared to talk about "the specifics" of the allegations until he had legal advice. The interview on 6 April 1995 was lengthy. Ms Marles went through the complaints with the applicant. She read out portions of the complaint to him and he responded. Although the applicant was not prepared to discuss "the specifics" of the complaint, he replied "in general terms". The applicant informed Ms Marles that Mr Teh's allegations required a detailed response. However, she did not see fit to ask the applicant to return for another interview to expand on the April interview. Ms Marles interviewed 22 people during her investigation. Many of those people would only co-operate with her provided that she gave assurances that the information they gave would be treated in confidence by her. A consequence of Ms Marles' approach was that she saw and heard many people during the course of her investigation without revealing their identity to the applicant and without informing him of the contents of their statements. Under cross-examination, Ms Marles conceded that the applicant "was kept in the dark quite a bit as to what was going on". In early May 1995, the applicant telephoned Ms Marles to inquire as to what happened during the course of her putting to Mr Teh certain matters raised by the applicant. During the conversation, Ms Marles told the applicant that the only way to resolve the issue was "to bring the two parties together". Ms Marles and the applicant agreed that such a meeting should occur in mid-June 1995. She suggested that Mr Teh may be represented by Ms Kyrkilis and that the applicant may be legally represented. No such meeting took place. Mr Teh would not agree to it occurring. In fact, the interview process concluded on or about 20 May 1995. As part of the investigation process, Ms Marles interviewed a Mr Toh, a former employee of the respondent. Mr Toh made certain allegations against the applicant to Ms Marles. None of those allegations were ever put to the applicant by Ms Marles. Ms Marles did not inform the applicant that she had interviewed Mr Toh. Ms Marles said that it was possible that she may have raised such matters with the applicant "if matters hadn't suddenly taken a turn as they did, with a solicitor's letter and phone calls to Mr Toh". The solicitor's letter and phone calls referred to by Ms Marles arose in the following way. The applicant telephoned Mr Toh on 9 May 1995. He asked Mr Toh if he was aware of Ms Marles' investigation. Mr Toh replied affirmatively and told the applicant that he had been interviewed by Ms Marles. He further told the applicant that he had informed Ms Marles that the applicant had "treated him monstrously" in the last month of Mr Toh's employment with the respondent. In the telephone conversation Mr Toh accused the applicant of stalking him by driving his motor vehicle up and down Mr Toh's street. The applicant denied the stalking allegation. On 16 May 1995, the applicant's solicitors wrote to Mr Toh in the following terms:- "Mr Eric Toh ... EAST ST KILDA 3183 Dear Sir PAUL RIGBY We act for Mr Rigby, who has informed us of the allegations made by you in the telephone call of 9 May 1995. The allegations made by you are ludicrous, and without any foundation. In passing, we would point out that it is perfectly legal for members of the public to use any public street for the purpose of passing and repassing, and no resident living in that street can complain if they do so, subject to the usual restrictions about excessive noise and the like. However, since our client has not used your street for even these ordinary purposes for many months, your complaint is quite misguided. However, the aggression which you have exhibited and the lack of a factual basis for your allegations enable us to form a clear picture of your lack of honesty and truthfulness, which we have recorded for future reference. Yours faithfully TUSZYNSKI HAMILTON LINACRE SACKS" The last paragraph of the letter was most unfortunately expressed and obviously led Ms Marles to believe that her investigation had been compromised and one of her witnesses victimised. It had the effect of abruptly ending her investigation in circumstances where the applicant had not had a full opportunity to meet the allegations levelled against him. From 12 May 1995 until the date of the termination of his employment, the applicant was absent from work on extended sick leave as a result of stress. His evidence was that he was feeling "increasingly stressed, unhappy and traumatised by the whole process". In May 1995, Mr Boyce was the respondent's General Manager, Corporate and ISU. He reported to Mr Cronin and the applicant reported to him. On or about 20 May 1995, Mr Boyce telephoned the applicant and requested a meeting to talk about the applicant's employment future. The applicant said that he "wasn't up to it". On or about 29 May 1995, Mr Boyce contacted the applicant once more. A meeting was arranged for 3.00 pm on 31 May 1995 at the Novotel Hotel in St Kilda. Mr Boyce gave evidence that he:- "... attempted to put the point to him (the applicant) that it was not possible, in my view, for him to be able to continue on in the role (at work) and that the best way of getting rid of the stress was to make a ...clean break ... basically to resign". (transcript p.170) The applicant refused to resign, saying that he had done nothing wrong. Mr Boyce told the applicant at this meeting that Ms Marles' investigation "had taken a life of its own" and that "Mr Teh and the applicant should have been brought together early on so that conciliation could occur". Mr Boyce agreed with Mr Bourke that he told the applicant that:- "... you did not have to be Einstein to realise that the investigation is going to go against you" (transcript p.186). Mr Boyce also agreed with Mr Bourke that the applicant replied with words to the effect that:- "... how can that be right. Fay Marles had indicated it is one word against another and there is going to be a meeting scheduled to resolve this issue." (transcript p.186). In early June 1995, Ms Marles provided to the respondent alone her "preliminary report on the investigation of a complaint of Desmond Teh against Paul Rigby, employee of Technisearch Limited". The preliminary report commenced in the following terms:- "On 16 December, 1994, Mr Bernard Cronin, Managing Director, Technisearch Limited, requested me to investigate a claim of sexual harassment by Mr Desmond Teh against Mr Paul Rigby. Since then I have interviewed 22 people including several on more than one occasion and have formed a preliminary view that there is the likelihood of sexual harassment and also of other possible misconduct which I believe could need further investigation. During my inquiries one person interviewed has received a solicitor's letter (attached) hinting at the possibility of future legal action being taken against him concerning statements that were included in the information given to me. For this reason I believe that protection against legal action should be provided to those who have been interviewed either by Technisearch itself or by a formal complaint being lodged under the Commonwealth Sex Discrimination Act or the Victorian Equal Opportunity Act." The preliminary report recommended the need for further investigations into allegations of sexual harassment and victimisation of Mr Teh. On 15 June 1995, Ms Marles met with Mr Cronin and solicitors acting for the respondents and discussed the preliminary report. Ms Marles was instructed by Mr Cronin to prepare a report on matters which were capable of being substantiated. Ms Marles then, without interviewing anyone else or otherwise investigating any matter, prepared her "final report" which was given to the respondent on 22 June 1995. Early in the final report, Ms Marles observed that:- "... It became clear early during the investigation that there was considerable fear of Mr Rigby amongst those interviewed and that generally people wanted assurances that what they said would be kept in confidence. For this reason, the present report is confined to those matters where there is evidence that does not rely on revealing those confidences." Ms Marles reported that:- "... there was a professional relationship created by the ISU duty of care towards its client group - overseas students for whom it organised course enrolments with RMIT and Australian resident student status with the Immigration Department - that was breached in relation to Mr Teh. I have concluded this on these grounds: 1. The vulnerability of Mr Teh created by his work relationship within Technisearch on which his course depended and his direct dependency on Mr Rigby as head of the unit, both for his continuing education and through his visa status his continued residence in Australia. 2. The vulnerability of Mr Teh created through the power differential in his relationship with Mr Rigby derived from Mr Rigby's age, social status and personal ability to dominate and instill [sic] fear through his use of intimidation and his force of anger. 3. The vulnerability for [sic] Mr Teh created through Mr Rigby's constant contact with him in Singapore in circumstances where a suspicion of a gay relationship between him and Mr Rigby could have jeopardised his relationship with his family and where any evidence of such a relationship occurring in Malaysia could have placed him in conflict with the law. 4. The striking of Mr Teh by Mr Rigby in circumstances where, by his own admission, Mr Rigby knew that Mr Teh did not wish to let him into his flat and where he entered the premises in anger. 5. The pursuit of Mr Teh by Mr Rigby first in Singapore after Mr Teh had formally resigned as an employee and subsequently in Australia when by Mr Rigby's own admission Mr Teh was not reciprocating any of his advances. 6. Contacting Mr Teh both in Singapore and Australia without Mr Teh's invitation and in circumstances where it was not necessary for professional purposes and where Mr Teh had not provided him with either addresses or telephone numbers to enable him to do so." After the respondent's receipt of the final report, Mr Boyce wrote to the applicant on 26 June 1995 in the following terms:- "Mr Paul Rigby ... ... ST KILDA VIC 3182 Dear Mr Rigby I require you to attend at my office at 10.00 a.m. on Friday 30 June 1995, for the purpose of conducting an interview with you relating to your employment with Technisearch Ltd. I will be asking you questions regarding allegations about your conduct as an employee about which I have been informed which indicates that you may have committed misconduct at a level which would justify your dismissal. I enclose for your attention a report regarding the allegations. In your interests I invite you to bring with you to the interview any documents relating to the hiring or dismissal of the following persons: 1. Desmond Teh: and 2. Eric Toh. You may bring with you any other documents in relation to your involvement with these persons. You are entitled to be accompanied by a representative of your choice at the interview should you wish to do so. I should indicate to you that Technisearch will have the assistance of its solicitors at the interview. Yours faithfully JOHN BOYCE General Manager Corporate and International Services Technisearch Ltd" Notwithstanding that the applicant was on sick leave, Mr Boyce believed that it was reasonable to seek his attendance to discuss the matters raised in the letter of 26 June 1995. On 29 June 1995, the applicant's solicitors replied in the following terms:- "The General Manager Corporate and International Services Technisearch Ltd. P O BOX 12058 A'BECKETT STREET MELBOURNE 3001 BY FACSIMILE TRANSMISSION: 9650 9096 Dear Sir PAUL RIGBY We refer to your letter of 16 June 1995, and to your letter to our client of 26 June 1995. The attitude expressed in your letter of 16 June 1995 completely ignores the fact that he is on sick leave, and that your communications relate to a serious matter under investigation. Your recent uninvited visits to his residence taken with your earlier letter, if continued, will amount to harassment. Mr Rigby will not attend the interview mentioned by you in your letter of 26 June 1995. Until he has recovered from his present condition, he is neither obliged to discharge his normal duties, nor to comply with any requirements made by you. We have reviewed the report provided to Mr Rigby. It is plain that the rules of natural justice have not been observed. A number of statements are referred to which have been 'kept in confidence' so that our client has had no opportunity to consider the evidence against him in any proper way, nor to make a reply to it. It goes without saying that in any other proceedings such as those contemplated by the report at page 10, all evidence would have to be given in circumstances allowing Mr Rigby an opportunity to test it by cross examination as well as to answer it. Our client is not obliged to meet allegations of which he is not aware. It appears that you have decided on a course of action on the basis of this informal report (and the undisclosed allegations which have been kept in confidence) without first giving our client a proper opportunity to answer it. Even if he had been fit to attend your meeting, we should have advised him against doing so until adequate time had been allowed to enable him to consider the report and to obtain from you copies of all of the statements on which you intend to rely. In addition, since the letter raises for the first time the question of Eric Toh, and since there are no documents before us at this stage relating to any kind of complaint in relation to him, full details are required of the allegations that are intended to be made, and copies of all statements or complaints in that connection must be provided. Neither has Mr Rigby nor have we been provided with the documentary basis on which Fay Marles was appointed. The report is expressed to be confidential, and does not state either the basis on which she was appointed or the manner in which she was to conduct the investigation. If it is intended to rely on her report in any way, the legal foundation for her appointment must be established. We have no doubt that Mr Rigby will cooperate to the fullest extent when he has recovered, and is fit to address all of the issues which we have now asked you to raise openly and fairly with a view to reaching a reasoned conclusion without pre-judging the matter. Yours faithfully TUSZYNSKI HAMILTON LINACRE SACKS" On 30 June 1995, Mr Boyce responded to the applicant's solicitors' letter of 29 June 1995 in the following way:- "Tuszynski Hamilton Linacre Sacks 115 Hawthorn Road CAULFIELD VIC 3161 Dear Sirs PAUL RIGBY I refer to your facsimile transmission dated 29 June 1995 and respond as follows. In my opinion, the factual basis of the allegations are stated in sufficient detail in Fay Marles' report to allow Mr Rigby a fair opportunity to respond to the allegations. It is irrelevant whether Eric Toh has made any complaint or not. If an employer becomes aware of any allegations of misconduct by one of its employees, an employer is entitled to investigate and act on the allegations if substantiated. Fay Marles was appointed to inquire into certain allegations made against Mr Rigby concerning his conduct as an employee. Fay Marles was at all times an agent of Technisearch Ltd. She conducted thorough investigations and her report speaks for itself. Mr Rigby's attendance at my office was requested for the purpose of asking him questions regarding the allegations made about his conduct as an employee about which I was informed and which shows that he may have committed misconduct at a level which would justify his dismissal. The meeting was arranged to give Mr Rigby the opportunity to hear and respond to the specific allegations made in order to resolve this matter. Owing to his failure to attend the scheduled meeting, I now enclose a copy of the allegations I proposed to put to him. I require Mr Rigby to provide me with a written response to these allegations by 5.00 p.m. on Friday 7 June 1995. Following receipt of that response, or if no response is forthcoming, I shall make a decision about whether Mr Rigby should remain an employee of Technisearch Ltd. In addition, the response should also address a further five questions, which I am obliged to put to him in the event that following consideration of his response, a decision is taken by me that dismissal is appropriate. These questions are: 1. How will dismissal impact upon Mr Rigby financially? 2. How will dismissal impact upon Mr Rigby's superannuation? 3. How will dismissal impact upon Mr Rigby's personal circumstances? 4. Is there any other remedy or action which Mr Rigby would like me to consider instead of dismissal? 5. Is there anything Mr Rigby can put to me which might indicate that dismissal in the circumstances is harsh, unjust or unreasonable? I appreciate that Mr Rigby is currently on sick leave, but this matter is serious and its resolution cannot be delayed indefinitely. I expect that with your assistance Mr Rigby will be able to respond adequately to the allegations. Yours sincerely JOHN BOYCE GENERAL MANAGER CORPORATE AND INTERNATIONAL SERVICES" Accompanying the letter of 30 June 1995 was a document which specified the allegations made against the applicant which were said by the respondent to amount to misconduct such that "summary dismissal" was justified. The allegations were as follows: "1. That in November 1993 you breached your duties of care and good faith owed to Technisearch Ltd by appointing Desmond Teh to the International Services Unit in improper circumstances. 2. That in December 1993 you breached your duties of care and good faith owed to Technisearch Ltd by dismissing Desmond Teh from the International Services Unit in improper circumstances. 3. That in December 1993 or January 1994 you breached your duties of care and good faith owed to Technisearch Ltd by obtaining Desmond Teh's home telephone number in Malaysia by improper means. 4. That in the period December 1993 to November 1994 you breached your duty of care owed to Desmond Teh: (a) in his capacity as on ongoing client of the International Services Unit of Technisearch Ltd; (b) in his capacity as a current enrolled student of RMIT, in respect of which students Technisearch Ltd provides an ongoing relationship of pastoral care; and (c) in his capacity as a fellow employee of Technisearch Ltd, by subjecting Desmond Teh to harassment and assault. 5. That in the period 2/9/1991 to 13/12/1994 you breached your duty of care owed to Eric Toh in his capacity as a fellow employee of Technisearch Ltd by subjecting Eric Toh to harassment." The document concluded in the following way:- "The facts relied upon in support of the allegations are primarily the findings of fact contained in the Report of Fay Marles dated 22 June 1995, a copy of which has been provided to you." On 3 July 1995, Mr Boyce wrote to the applicant's solicitors, correcting the time and date given for the applicant's response to 5.00 pm on 7 July 1995. As the respondent had received no response from the applicant or his solicitors by 10 July 1995, it decided to terminate the applicant's employment. Mr Boyce wrote to the applicant on 10 July 1995 in the following terms:- "Mr P Rigby ... ... ST KILDA VIC 3182 Dear Paul I refer to my letters dated respectively 30 June and 3 July 1995, sent by facsimile to Phillip Hamilton of Tuszynski Hamilton Linacre Sacks on your behalf. I am disappointed that you did not avail yourself of the opportunity to provide me with a written response to the allegations made against you, a written copy of which was attached in my letter of 30 June 1995. Given your failure to respond by 7 July 1995, as requested, and your failure to communicate with me, I have had to deal with the allegations. Having considered the totality of the information available to me I am satisfied the allegations are made out. I am also satisfied the allegations are sufficiently serious to justify your dismissal. I have considered all the alternatives to this course of action and believe it is fairest to you to terminate with notice. I would have liked to have given you the opportunity to resign, but that is not possible given your failure to communicate with me. I therefore advise that your employment with Technisearch is terminated effective today. I enclose cheque for $13,642.48 comprising your salary up to and including 10 July 1995, an additional 4 weeks pay in lieu of notice, plus your accrued leave entitlements. Deductions have been made for expenses on your Diners Club account. These deductions may be reimbursed on your substantiating those expenses. We will make superannuation payments for the notional period of your accrued annual leave, unless you advise us to the contrary. We also require you to return the following items to Technisearch immediately: 1. Diners Club card; 2. building access and car park access cards; 3. door key; and 4. mobile phone. Yours faithfully JOHN BOYCE GENERAL MANAGER CORPORATE & INTERNATIONAL SERVICES" The applicant did not receive the letter of 10 July 1995 until 13 July 1995. He had become aware of the allegations of 30 June 1995 by 6 July 1995. At the time he was staying with a friend at Marysville in country Victoria as part of his recuperation. He received a message to urgently contact his solicitor. He then returned to Melbourne on 6 July 1995. He told his solicitor that he was not well enough to consider the issues raised. He believed that it was significant that he had a current medical certificate which expired on 31 July 1995. Mr Boyce's letters of 30 June 1995 and 3 July 1995 were replied to by the applicant's solicitors on 11 July 1995 in the following terms:- "General Manager Corporate International Services Technisearch P O BOX 12058 A'Beckett Street MELBOURNE 3001 BY FACSIMILE TRANSMISSION: 9650 9096 Dear Sir PAUL RIGBY I apologise for the delay in responding to your correspondence, however my personal involvement in a major court case has kept me out of the office for most of the last week, and although it became apparent by Friday that it would be impossible to respond to your request within the time limited by you, I did not have time within which to let you know that this would be the case. Paul Rigby, is, as you know, on sick leave. His medical certificate no doubt gives some detail of his condition, but the combination of his condition and the medication on which he has been placed mean that it is impossible for me to get instructions from him to respond to your letter, and I do not believe that I will have proper instructions for some time. It would be unrealistic and misleading of me to suggest that any particular time can be relied upon as a realistic prediction, but it is to be hoped that as Paul accommodates to his medication, both the side effects and his condition will ameliorate. I can only say that I will be in touch with you with instructions as soon as I have them. Yours faithfully TUSZYNSKI HAMILTON LINACRE SACKS" When this letter was sent, the applicant's solicitors were unaware of the contents of the respondent's letter of 10 July 1995. On 13 July 1995, Mr Boyce wrote to the applicant's solicitors in the following manner:- "Mr P Hamilton Tuszynski Hamilton Linacre Sacks 115 Hawthorn Road CAULFIELD 3161 Dear Sir PAUL RIGBY We acknowledge receipt of your correspondence of 11 July 1995. We wrote to Mr Rigby on 10 July 1995 and mailed the letter and final salary cheque on 11 July 1995 prior to the receipt of your correspondence. Yours faithfully John M. Boyce General Manager Corporate & International Services" Mr Boyce testified that he took each of the five allegations in the "allegations" document of 30 June 1995 into account in deciding, with Mr Cronin, to terminate the applicant's employment. Mr Boyce was concerned that the conduct attributed to the applicant by Ms Marles was effectively going to hurt the business of the respondent. He said that critical considerations of "trust", which were enshrined in the relationship between overseas students and the respondent were put at risk by "the events that had occurred". Mr Boyce believed that "summary dismissal" was justified but overly harsh in the circumstances. It was for this reason that four weeks pay in lieu of notice was given to the applicant. He also testified that he believed the applicant would not command the respect within the respondent's office that he previously enjoyed. This was said to be because of "the nature of the incident and the fact that it had become widely known". SECTION 170DE(1) - VALID REASON Section 170DE(1) of the Act provides that:- "170DE(1) [Termination must be for valid reasons] An employer must not terminate an employee's employment unless there is a valid reason, or valid reasons, connected with the employee's capacity or conduct or based on the operational requirements of the undertaking, establishment or service." Pursuant to s170EDA(1) (a) of the Act, the respondent bears the onus of proving that there was a valid reason or reasons of the kind referred to in s170DE(1) of the Act. See Thomas Fischer v Commonwealth of Australia & Another, Industrial Relations Court of Australia, NI 3630 of 1995, 16 April 1996, Moore, Beazley and Marshall JJ, as yet unreported, 19. Mr Ginnane submitted that there were valid reasons for the termination of the applicant's employment. To test whether or not that submission is made out, it is imperative to return to the actual "allegations" in the 30 June 1995 correspondence which were alleged to justify "summary dismissal" 1. Appointment of Teh to the ISU in improper circumstances Mr Ginnane's written outline of argument contained no reference to this subject as a valid reason for the termination of the applicant's employment. Indeed the evidence does not bear it out. There are no facts relevant to this allegation which form the basis for any conclusion in Ms Marles' final report. The evidence on this issue is that Mr Teh applied for a position with the respondent in the ordinary way at a time when he had previously had very little to do with the applicant. It appears that appropriate administrative details were not completed by the respondent in respect of Mr Teh's employment but I am not satisfied that this was entirely the fault of the applicant. The better view is that immediate responsibility for such issues lay with Ms Adamson who was the responsible manager for the Marketing department where Mr Teh was employed. I find that allegation 1. in the list of allegations of 30 June 1995 is without any substance. I conclude that the respondent has not discharged the onus of proving that it was a valid reason for the termination of the applicant's employment. 2. Dismissal of Teh in improper circumstances The evidence before the Court does not satisfy me that the applicant terminated the employment of Mr Teh on 20 December 1993. If Mr Teh's employment was terminated on the evening of 20 December 1993 one might validly ask, why did he go to work as usual on 21 December 1993 with the very person alleged to have terminated his employment? Why also would he have found it necessary to resign on 3 January 1994 if in fact his employment was terminated on 20 December 1993? In his written submissions on the topic of "valid reason for termination", Mr Ginnane did not attempt to justify the termination of the applicant's employment on this ground other than to say in general terms in paragraph 9 thereof that:- "Rigby's conduct towards Teh on 20 December in itself constituted ground for dismissal". I also note that in his oral submissions, Mr Ginnane said, of Mr Teh, that:- "it is ... far more likely that the most unfortunate events of the night of 20 December caused his decision not to pursue that job". Further, in relation to the submissions at paragraph 5 of his written submission that Mr Teh had suffered stress as a result of the loss of his job, Mr Ginnane conceded that he may have put the matter "a little bit highly". I find that this allegation did not constitute a valid reason for the termination of the applicant's employment. 3. Obtaining Teh's home telephone number in Malaysia by improper means The applicant's testimony was that he was unable to recall how he obtained Mr Teh's telephone number in Malaysia. He conceded that it may have been obtained through the respondent's data base. In my view, as referred to earlier in these reasons, it is most likely that the number was obtained in that way. It was clearly inappropriate for the applicant to use the respondent's data base for private purposes. However I do not believe that this particular incident was of sufficient importance of itself to justify termination of the applicant's employment. Apart from his personal reasons for telephoning Mr Teh, I accept that the applicant as manager of the ISU had a legitimate interest in knowing whether Mr Teh intended to return to Australia and take up an offer of re-employment with the respondent. It would not be improper to use the data base to contact Mr Teh for that purpose. I find that the respondent has not discharged its onus of proof regarding this allegation. It did not constitute a valid reason for the termination of the applicant's employment. 4. Subjecting Teh to harassment and assaults (a) The alleged assault In my view the alleged assault of Mr Teh by the applicant was not intended to be a violent act. Although unfortunate, it can only be seen as a reflex response on the part of the applicant which sought to bring Mr Teh to his senses after he had forcefully pushed the applicant into a door-knob causing him pain and bruising to his lower back. Having closely observed the demeanour of the witnesses in the giving of their evidence, I prefer the account given by the applicant regarding the events of the night of 20 December 1993 to the account given by Mr Teh. Further, Mr Crowley gave evidence of having observed a large bruise on the applicant's lower back in early January 1994. The location of the bruise and its size is consistent with the evidence of the applicant regarding being violently pushed into a door-knob by Mr Teh. I also believe that Mr Teh over dramatised the state of his health on that evening. I find to be inconsistent with his allegation that he was assaulted, his subsequent plea to the applicant to spend the night with him. I am not satisfied, on the evidence, that the respondent has proved that the applicant assaulted or intended to assault Mr Teh on the night of 20 December 1993. The incident, therefore, did not provide the respondent with a valid reason for the termination of the applicant's employment. It has not discharged its onus of proof in respect of this ground relied upon by it for the termination of the applicant's employment. (b) Harassment Mr Ginnane contended, in his written submission, that the applicant's conduct in pursuing the relationship with Mr Teh after Mr Teh had returned to Malaysia before Christmas 1993 constituted harassment. Paragraph 7 of those submissions stated that:- "Rigby's conduct thereafter in pursuing the relationship constitutes harassment. Whilst some phone calls were accepted or made by Teh, Rigby's pursuit of the relationship with Teh was seriously inappropriate." Seriously inappropriate behaviour does not necessarily amount to harassment. It is clearly an understatement to say that "some phone calls were accepted or made by Teh". The fact is that all of the phone calls to and from Malaysia, with the exception of one on 22 January 1994 and another on 1 February 1994, involved cordial and friendly discussions, in many instances lasting for very lengthy periods as disclosed in the references to those conversations earlier in these reasons. The applicant acknowledged that, with hindsight, it was unwise to continue with the relationship after the events of 20 December 1993. He now understands that continuation of the relationship was not in his best interests, let alone those of Mr Teh. The applicant also now acknowledges that Mr Teh had a tendency towards erratic and immature behaviour and that the relationship had an adverse emotional effect on Mr Teh. The applicant further acknowledged with hindsight, that he was unable to act in Mr Teh's best interests. I accept the evidence of the applicant that he only attempted to resume contact with Mr Teh in late February 1994 on the basis of a platonic friendship. I believe that ultimately Mr Teh was unable to keep up a friendship with the applicant on that basis. Whilst I agree that the applicant's contact with Mr Teh after 20 December 1993 was inappropriate, I would not venture as far as Mr Ginnane and find that it was "seriously inappropriate". I certainly do not have the view that it constituted harassment. I do not believe the evidence of Mr Teh regarding his assertion that he fled to Malaysia out of fear of the applicant or that the applicant's phone calls to Malaysia were mostly unwelcome. Such evidence, especially in relation to the phone calls to Malaysia, is inconsistent with the thrust of most of the other evidence. I was also impressed with the straightforward manner in which the applicant gave his evidence. Unlike Mr Teh and Mr Toh (to whom I shall come later) he did not seek to overdramatise the relevant events. The allegation of harassment of Mr Teh is not made out. The respondent had no valid reason for the termination of the applicant on the basis of that allegation. 5. Harassment of Toh from 2 September 1991 to 14 December 1994 I am far from satisfied that the respondent has proved that Mr Toh was harassed by the applicant at all, let alone during the time set out above. Mr Toh did not impress me as a witness of the truth. The evidence of Mr Toh was in stark contrast to that of other witnesses called to give evidence in this case. Of particular note is Mr Toh's assertion that he didn't think the applicant did much work. This is to be compared with the evidence of Mr Boyce, (whose evidence on this point I prefer), about the applicant's work performance and his reputation as an "excellent operator". I accept the following evidence of the applicant:- a) he did not intervene to attempt to stop Mr Toh resigning from the respondent; b) he did not intervene to undermine Mr Toh's attempts to obtain a job with Monash International; c) he did not usually telephone Mr Toh overseas before 8.00 am; d) he did not stalk Mr Toh by continually driving down Mr Toh's street; e) he did not tell Mr Toh that Mr Toh's accounts with the respondent were not in order and that the respondent was about to sue him; f) he was not obsessed with Mr Toh when Mr Toh worked with the respondent; g) his friendship with Mr Toh only soured towards the conclusion of Mr Toh's employment with the respondent. Mr Toh's evidence that the applicant continually harassed him and imposed himself socially on Mr Toh is inconsistent with the evidence of the applicant and Mr Crowley. Mr Crowley had work dealings with Mr Toh virtually every working day. He gave evidence of a professional relationship between Mr Toh and the applicant which was very amicable and co-operative. Mr Crowley saw no sign of animosity between Mr Toh and the applicant prior to Mr Toh's resignation from the respondent in December 1994. He confirmed the evidence of the applicant, contrary to that of Mr Toh, that Mr Toh had visited the applicant in his presence on several occasions. The respondent has not, in my view, discharged the onus of proving that the applicant subjected Mr Toh to harassment. As a result, I do not believe that allegation No. 5 of the "allegations" of 30 June 1995 has been substantiated. The respondent has not discharged the onus of proving that the termination was for a valid reason based on the allegation concerning Mr Toh. CONCLUSION The five allegations in the 30 June 1995 list of allegations were the only matters alleged against the applicant which were said to justify the termination of his employment. The facts relied upon in support of the allegations were primarily those referred to in the formal report of Ms Marles. I place no weight on the alleged facts referred to in Ms Marles report. Ms Marles did not have the benefit of seeing the relevant witnesses cross-examined. It would be entirely inappropriate to place any weight on her findings. This is especially so as I have formed a different view to the one taken by her as to the credibility of the applicant as against the credibility of Mr Teh and Mr Toh. In my view, having regard to the abovementioned matters, the applicant's employment was terminated by the respondent for reasons which were not valid reasons connected with the applicant's capacity or conduct or based on the operational requirements of the respondent's undertaking. I find that in terminating the employment of the applicant, the respondent contravened s170DE of the Act. SECTION 170DC Section 170DC of the Act provides as follows:- "170DC An employer must not terminate an employee's employment for reasons related to the employee's conduct or performance unless: (a) the employee has been given the opportunity to defend himself or herself against the allegations made; or (b) the employer could not reasonably be expected to give the employee that opportunity." The allegations of 30 June 1995 were the matters which the applicant was required to be given an opportunity to defend himself. At the time the allegations were forwarded to the applicant he was on sick leave as a result of stress. I accept his evidence that he was in no state to give adequate instructions to his solicitors to defend himself against the allegations. At the time of the forwarding of the allegations to him, the applicant was in possession of a medical certificate which provided that he was not sufficiently well to attend work until 31 July 1995. There was no particular reason for urgent action by the respondent to deal with the applicant's future employment situation. It would have been more appropriate for the respondent to have engaged in either of the following two courses:- (a) wait until 31 July 1995 before pressing the applicant for a response to the allegations; or (b) seek the applicant's consent to his going on leave without pay until he was well enough to respond to the allegations. Although the medical certificate gave no details of the applicant's condition, it was well known to Mr Boyce that the applicant was suffering from stress. Mr Boyce testified observing as much at the meeting of 31 May 1995 at the Novotel Hotel. I believe that if the applicant had been afforded more time before being required to answer the allegations, he would probably have answered each of them to the satisfaction of the respondent, given that in contested proceedings before the Court he has so responded. In my view the respondent acted in breach of s170DC of the Act in terminating the employment of the applicant. Mr Ginnane sought to rely on Ms Marles' investigation in support of a contention that s170DC of the Act was complied with. I reject that submission. Ms Marles' investigation, in my view, was seriously flawed. She abruptly concluded it having regard to the unfortunate letter of 16 May 1995 which is set out earlier in these reasons. She failed to disclose to the applicant what was being alleged against him by the persons to whom she spoke. She did not interview the applicant again after the 6 April 1995 meeting at which he said that the written allegations of Mr Teh would require a detailed response. In rejecting the conclusions of the Marles report I intend no criticism of her or her professionalism. The investigation that she was commissioned to undertake involved allegations of a most serious kind. The task was made even more arduous by the requirement that a number of those from whom she took evidence desired that their evidence remain confidential. In circumstances such as these significant difficulties confront a respondent when it seeks to establish an appropriate forum through which an applicant can respond to such allegations. REMEDIES Reinstatement Section 170EE(1)(a) of the Act provides as follows 170EE(1) [Orders] In respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, the Court may, if the Court considers it appropriate in all the circumstances of the case, make the following orders: (emphasis supplied) (a) an order requiring the employer to reinstate the employee by: (i) reappointing the employee to the position in which the employee was employed immediately before the termination; or (ii) appointing the employee to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination; and" The above provision was amended by Industrial Relations and Other Legislation Amendment Act 1995 ("Act 168 of 1995") by clause 14 of Schedule 2 thereof on 15 January 1996. The effect of the relevant amendment was to place into the sub-section the words emphasised above. Clause 14 of Schedule 2 of Act No 168 of 1995 has the effect of applying the amendments to s170EE(1) and s170EE(2) of the Act to applications such as this one which had been made to the Court before 15 January 1996 but in respect of which the Court had not pronounced final judgment before that day. I do not believe it to be appropriate in all the circumstances of the case to require the respondent to reinstate the applicant. The applicant, as referred to earlier in these reasons, acknowledged that many aspects of his behaviour in the context of his relationship with Mr Teh were inappropriate. In my view the applicant, by pursuing his friendship with Mr Teh, should have known after 20 December 1993 that a continuation of any relationship with Mr Teh was not in Mr Teh's best interests. It was incumbent upon the applicant to consider the best interests of Mr Teh, given that Mr Teh was an international student, studying at RMIT. There is a special relationship between the respondent and international students in relation to whom the respondent has a role somewhat akin to a fiduciary one in that the respondent had a special opportunity to exercise a power or discretion to the detriment of the Mr Teh. The submissions of Mr Ginnane regarding the alleged valid reasons for the termination of the applicant's employment, whilst rejected by the Court for the purposes of s170DE of the Act do have some force when considering the issue of reinstatement. The fact of the applicant's inappropriate conduct whilst not a sufficient basis to render his termination lawful, leads me to find that in all the circumstances it would not be appropriate to order that he be reappointed to the position in which he was employed immediately before the termination. However, there are more fundamental difficulties which militate against a reinstatement order. The respondent is no longer engaged in the work it performed at the time of the termination. That work is now performed by a company called RMIT International Proprietary Limited as a result of a restructure within RMIT and its associated corporations on 1 January 1996. The respondent still exists but only performs a small part of the work it previously performed. The respondent now employs about 20 people who are engaged, in the main, in providing engineering and scientific services. There is no like position within the respondent to that formerly held by the applicant. Further, there is no position that may be fashioned to suit a person of the applicant's skills. See Anthony Smith & Associates Pty Limited v Gary Sinclair, Industrial Relations Court of Australia, RR 1260 of 1995, 22 April 1996, Wilcox CJ, Moore and Marshall JJ, as yet unreported, 8-10. There is no evidence that the restructure within RMIT and its associated companies was a sham designed to remove from the applicant the remedy of reinstatement. An order as envisaged by s170EE(1)(a)(i) of the Act is impossible in this case. An order as envisaged by s170EE(1)(a)(ii) is possible given the respondent is still an employer. However, it is inappropriate in all the circumstances given the nature of the work now performed by the respondent. For the same reasons as I have determined that it would be inappropriate in all the circumstances of the case to order the reinstatement of the applicant, I am of the view that it would also be impracticable to do so as it would create serious problems for the respondent given the nature of the work that the applicant is suited for varies considerably from the nature of the work now performed by the respondent. COMPENSATION Section 170EE(2) of the Act provides that: "170EE(2) [Reinstatement impractical] If the Court thinks, in respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, that the reinstatement of the employee is impracticable, the Court may, if the Court considers it appropriate in all the circumstances of the case, make an order requiring the employer to pay to the employee compensation of such amount as the Court thinks appropriate." Having found that the respondent contravened ss170DE and 170DC of the Act and having found that the reinstatement of the applicant is impracticable, I now turn to consider whether it is appropriate in all the circumstances of the case to make an order requiring the respondent to pay compensation to the applicant. Given that the respondent has acted unlawfully in terminating the employment of the applicant, it would be manifestly unjust to deny him any compensation. I therefore find that it is appropriate in all the circumstances of the case to make an order for compensation. Section 170EE(3) and (4) of the Act provides as follows:- 170EE(3) [Calculation of compensation] In working out the amount of the compensation for the purposes of subsection (2), the Court is to have regard to the remuneration that the employee would have received, or would have been likely to have received, if the employer had not terminated the employment, but the amount of compensation: (a) must not exceed, in respect of any employee, the amount of the remuneration that would have been received by the employee in respect of the period of 6 months that immediately followed the day on which the termination took effect if the employer had not terminated the employment and the employee had continued to receive remuneration in respect of the employment at the rate at which he or she received remuneration immediately before the termination took effect; and (b) must not exceed, in respect of an employee who is not employed under award conditions, the applicable amount on the day on which the termination took effect." "170EE(4) [Amount for non-award employee] The applicable amount for the purposes of paragraph (3)(b) is: (a) subject to paragraph (b), $30,000; or (b) if regulations made in accordance with Subdivision CA prescribe a formula for the annual indexation of the amount referred to in paragraph (a) - the amount worked out using that formula as it applies from time to time." But for the termination, the applicant, in my view, would have recovered from his stress condition and returned to active employment. There is nothing in the evidence to suggest that such employment would not have continued for a long period of time. In these circumstances, it is not appropriate to deduct from the amount of compensation to be ordered, an amount equivalent to the four weeks' salary paid to the applicant at the time of his termination. See Christine May v Lilyvale Hotel Pty Limited ("May"), Industrial Relations Court of Australia, NI 95/1963R, 1 December 1995, Wilcox CJ, as yet unreported, 14; Messervy v Maldoc Pty Limited ACN 001 091 596 t/as Toongabbie Hotel, Industrial Relations Court of Australia, NI 882 of 1995, 30 June 1995, Wilcox CJ, as yet unreported, 14-15. The applicant was not employed under award conditions. In those circumstances the maximum amount of compensation which can be ordered by the Court is the amount referred to in s170EE(4)(b) of the Act. That amount is to be calculated in accordance with Regulation 30DA of the Industrial Relations Regulations. The result of the calculation conducted in accordance with that provision is $31,100.00. The applicant earned $59,000 per annum and $5,000 per annum was paid into a superannuation fund in respect of him by the respondent. In May, the Chief Justice held (at 11-12) that non pecuniary benefits can be included as "remuneration" under s170EE(3). I agree with the view of the Chief Justice therein contained, at least in the context of superannuation which is the relevant matter for present consideration. Superannuation contributions by employers are in the nature of payments in respect of work performed by employees. The Australian Conciliation and Arbitration Commission, in its June 1986 National Wage Case, adopted a national wage principle dealing with superannuation. See (1986) 14 IR 187, 212-219. The principle permitted awards to be varied to provide a requirement for employer contributions on behalf of employees to superannuation funds which "(did) not involve an equivalent wage increase in excess of 3% of ordinary time earnings of employees" (see at 219). The claim for a superannuation payment was made by the Australian Council of Trade Unions as a claim in lieu of a claim for a 3% wage increase (see at 213). Superannuation is unquestionably, in my view, when paid into a fund by an employer on behalf of an employee, part of the remuneration of the employee. Award superannuation has grown since 1986 and in addition, the Superannuation Guarantee Scheme underpinned by the Superannuation Guarantee Charge Act 1992 and the Superannuation Guarantee (Administration) Act 1992 has extended compulsory superannuation coverage to employees not employed under award conditions. I agree with the analysis of Wilcox CJ in May at 11-12 where his Honour said: "That Parliament intended 'remuneration' in s.170EE(3) to cover more than salary and wages is suggested by the Act itself. The amending legislation that inserted the present s.170EE (Act no. 97 of 1994) also inserted s.170CD. That section excludes from Subdivisions B, C, D, E and F of Division 3 employees whose 'relevant wages' exceed particular amounts. Plainly, the word 'remuneration' was chosen, for s.170EE(3), in order to denote a concept wider than wages. Non-monetary benefits are not wages: see Ardino v Count Financial Group Pty Limited (1994) 1 IRCR 221 at 228-229. But they fall within the concept of remuneration." Consistently with the views expressed above, it is appropriate to order that the respondent pay compensation to the applicant in the sum of $31,100.000. WRONGFUL DISMISSAL - REASONABLE NOTICE Mr Bourke contended that the applicant should have been paid a sum reflecting reasonable notice of the termination of his employment. It was submitted that two years' notice was appropriate in the circumstances. The applicant did not take up employment with the respondent until 1 September 1993. At that time his contract of employment with RMIT was terminated and his secondment ceased. He received approximately $61,000 from RMIT, which included a payment of two weeks' salary for each year of service and four weeks' salary in lieu of notice. At the time of his termination the applicant had been employed by the respondent for almost two years in a middle management position and was a man in his early 40s. It is clear that what is reasonable notice will depend on the particular circumstances of the case. Given the highly specialised nature of the applicant's employment and the responsibilities involved in his position, I am of the view that notwithstanding his relatively short period of time on the payroll of the respondent, the appropriate period of notice was four months. As the applicant has been awarded a sum of compensation in excess of four months' salary, it is not appropriate to award him any damages as a result of the failure of the respondent to pay him an additional three months' salary at the time of termination. PERSONAL INJURY ARISING FROM WRONGFUL DISMISSAL Mr Bourke submitted that the applicant has suffered substantial psychiatric reaction and distress as a consequence of his wrongful dismissal. Evidence of this was said to be illustrated by the applicant's:- · stress · social withdrawal · incapacity to look for work · sexual dysfunction · sleeping problems and irritability · depression · lack of self esteem Professor James Ball is a psychiatrist by profession. He was called to give evidence on behalf of the respondent. He testified that he had interviewed the applicant in February 1996 and saw no evidence that the applicant was under any particular stress or distress. He said that the applicant's reactions were appropriate to what had occurred, i.e.: loss of career, loss of position. He said that the applicant would get over it as one eventually gets over a bereavement. He said that the applicant's problems have been compounded by on-going issues associated with this litigation and by the loss of a relationship and a career. He also testified that the applicant had received inadequate medication from his "family doctor" for treatment of depression. He conceded that a lengthy and traumatic process leading up to the termination would further compound the applicant's problems. Professor Ball considered the applicant to be suffering from "some reactive anxiety and perhaps some reactive minor degree of depression" of a non-permanent character. Mr Watson-Munro is a consultant psychiatrist. He was called to give evidence on behalf of the applicant. He testified that the applicant was suffering from depression and anxiety. He said that losing his job was a significant factor leading to the applicant's psychological reaction which has been exacerbated by the length of time taken to resolve the issues concerning his employment. His evidence was that "the manner of the investigation" by Ms Marles contributed significantly to the applicant's condition. Mr Watson-Munro agreed, under cross examination, a person in a managerial position whose employment is terminated will typically become depressed and anxious. Having considered the totality of the medical evidence, and observed the applicant in the witness box, I believe that Professor Ball's assessment of the nature of the applicant's illness is to be preferred. The applicant gave his evidence in a straight forward and impressive manner, to such an extent that I prefer his evidence to that of Messrs Teh and Toh on issues of credibility. In my opinion, the anxiety he has suffered was no more than what would be expected by the termination of the employment of a person in his position. The contribution to the applicant's condition by Ms Marles' investigation was, in my opinion, overstated by Mr Bourke in his submissions. The applicant had an interview with Ms Marles on 6 April 1995. It was the first contact between the applicant and Ms Marles of any substance and viewed by the applicant as preliminary. Ms Marles' reports were delivered a relatively short time thereafter. I do not believe that the so-called drawn out nature of the investigation by Ms Marles had the contributory effect on the applicant's mental state attributed to it by Mr Bourke. I reject the applicant's claim for damages for personal injury arising out of his wrongful dismissal. DAMAGES FOR BREACH OF DUTY OF CARE OWED BY THE RESPONDENT TO THE APPLICANT IN THE CONDUCT OF THE INVESTIGATION Mr Bourke submitted that the respondent owed a duty of care to the applicant to investigate his conduct so as not to negligently cause him loss or injury. It was not so much the investigation which the respondent conducted, but the rumours circulating amongst the respondent's workforce and within the staff of other like employers that caused distress to the applicant. It was exceedingly difficult for the respondent to contain the "rumour mill". The applicant's involvement in the investigation in any material way stemmed from his first and only substantial interview on 6 April 1995 and lasted until the termination of the investigation by Ms Marles on 20 May 1995. If such a duty of care as alleged by Mr Bourke to exist did exist, as to which I am by no means certain, I believe that it was not breached in this case. The conduct of the investigation was in many respects inadequate as referred to earlier in these reasons. However, I do not accept that it contributed in any significant way to the applicant's state of mind. It was rather the rumour-mongering which arose from the investigation, as distinct from the investigation itself, which was a contributing factor in exacerbating the applicant's anxiety. This occurred in circumstances where the applicant was already depressed about the breakdown of his relationship with Mr Teh and the death of two of his close friends. DAMAGES FOR BREACH OF AN IMPLIED CONTRAVENTION FOR FAILURE TO TAKE ALL PROPER AND REASONABLE STEPS TO AVOID INJURY TO THE APPLICANT'S HEALTH OR REPUTATION This ground of relief was claimed to arise as a result of the existence of an implied term in the applicant's contract of employment that investigation procedures not damage an employee's health. Assuming such a term was implied into the applicant's contract of employment, I do not believe it was breached in the instant circumstances. I do so for the same reasons I rejected the applicant's claim for damages for an alleged breach of the respondent's duty of care to the respondent in the conduct of the investigation. ORDERS In the circumstances, the Court makes the following orders:- 1. It is declared that in terminating the employment of the applicant the respondent contravened ss 170DE and 170DC of the Industrial Relations Act 1988 ("the Act"). 2. Pursuant to section 170EE(3) of the Act the respondent shall pay the applicant, within 21 days hereof, compensation in the sum of $31,100.00. 3. The application be otherwise dismissed. I certify that this and the preceding (59) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Marshall. Associate: Date: 3 M ay 1996 Counsel for the Applicant: J. Bourke Solicitor for the Applicant: Feingold Partners (incorporating Tuszynski Hamilton Linacre Sacks) Counsel for the Respondent: T. Ginnane Solicitor for the Respondent: Clayton Utz Date of hearings: 6, 7, 8, 9 February & 5, 8 March 1996 Date of judgment: 3 May 1996