Schleiger v Vicmill Pty Ltd [1996] IRCA 171

DECISION NO: 171/96 INDUSTRIAL LAW - termination of employment - termination unreasonable because employee not given adequate opportunity to respond to failure to comply with a legitimate direction of employer - in circumstances (where employee had performed inadequately on numerous occasions) no remedy appropriate Industrial Relations Act 1988 ss.170DC, 170DE(2), 170EE(1)(a), 170EE(2) CASES: Nicolson and Heaven and Earth Gallery Pty Ltd 1995 1 IRCR 199

Gibson and Bosmak Pty Ltd 1995 1 IRCR 466 SCHLEIGER -V- VICMILL P/L No. VI-2735 of 1995 Before: Judicial Registrar Ryan Place: Shepparton Date: 23 April 1996

INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI-2735 1995 B E T W E E N : ANNETTE SCHLEIGER Applicant AND VICMILL PTY LTD Respondent MINUTES OF ORDERS Judicial Registrar Ryan 23 April 1996 THE COURT ORDERS: The order of the Court is a declaration that the termination of the Applicant's employment advised by the Respondent on 8 April 1995 and effected on 10 April 1995 was: 1. for valid reason connected with the Applicant's capacity and conduct 2. a breach of S170DC and S170DE(2) 3. in all the circumstances of the case inappropriate for an order of reinstatement under S170EE(1)(a) or compensation under S170EE(2) NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.

INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI-2735 of 1995 B E T W E E N : ANNETTE SCHLEIGER Applicant AND VICMILL PTY LTD Respondent Before: Judicial Registrar Ryan Place: Shepparton Date: 23 April 1996 REASONS FOR JUDGMENT (Ex Tempore) The Applicant claims unlawful termination of employment and seeks compensation. She was represented by Counsel. The Respondent was not represented. The director of the Respondent company, Mr Brian Nugent, appeared for the Respondent and was assisted by his wife, Mrs Mary Nugent. The Respondent claims that the Applicant in effect abandoned her employment when confronted with the Respondent's intention to dismiss and that if the termination was caught by S170DE of the Act it was for valid reason and was not harsh, unjust or unreasonable. The Respondent did not put it in those terms but that is the effect of the Respondent's written submission (Exhibit R1). All statutory references in this judgment are to the Industrial Relations Act 1988 as amended. The Applicant claims that she ordered sulphate of ammonia from Port Kembla on the 5 or 6 April 1995 after a truck driver, Mr Mills told her by phone that sulphate of ammonia ordered from Newcastle was unavailable. She immediately told Mr Nugent that there was no sulphate of ammonia available from Newcastle. He did not accept that and told her to get it and get it from Newcastle. There is no dispute on this aspect of the facts. The Applicant then telephoned Miss Julie Pettinella of BHP, (probably in Melbourne) and was told that there was no sulphate of ammonia available in Newcastle and Miss Pettinella suggested that it should be ordered from Port Kembla. The Applicant cannot remember how she ordered the product from Port Kembla but claims that after she did it she told Mr Nugent and recorded the order in a book. Counsel for the Applicant cross-examined Mr Nugent in respect to a written report from Miss Pettinella. This report suggests that the Applicant ordered the sulphate of ammonia via Miss Pettinella and an entry in an order book or on an order sheet and in her hand writing appears in an entry dated 6 April 1995 in Exhibit R4. That entry does not show the source of the sulphate of ammonia and Counsel for the Applicant conceded that the Applicant's initial evidence to that effect was incorrect. Mr Nugent claims that the Applicant told him on the 5 April or the 6 April in response to his questions that she had ordered the sulphate of ammonia from Newcastle. The Applicant claims that on Saturday morning, 8 April 1995, Mr Nugent rang her, swore at her and told her that the sulphate of ammonia had arrived from Port Kembla and that it was shit and that she was a fucking idiot for ordering it and that she was to finish up on Monday. The Court finds it curious that Mr Nugent would have addressed the Applicant in the terms she claims if in fact she had told him on Wednesday 5 April or Thursday 6 April that she ordered the sulphate of ammonia from Port Kembla. The Court accepts that Mr Nugent swore at the Applicant. He admits he swore and that he was annoyed but it is not consistent with her alleged advice to Mr Nugent on the Wednesday or Thursday, 5 or 6 April that Mr Nugent would have expressed annoyance and surprise that she had ordered the sulphate of ammonia from Port Kembla if she had already told him three of four days earlier that this is what she had done. The Court has concluded that Mr Nugent's evidence of the phone call on Saturday 8 April is more consistent with his version of the Wednesday or Thursday discussion, namely that she did not tell him that the load had been ordered from Port Kembla. The Applicant's version of the 8 April telephone conversation is not consistent with her claim that she had told Mr Nugent about the Port Kembla sulphate of ammonia on the Wednesday or Thursday. The Applicant claimed in evidence that she thought that Mr Nugent would have cooled down by Monday 10 April and that by then he might have realised he had made a mistake. The Applicant claimed that on Monday 10 April she worked for between one and two hours and Mr Nugent then said "when are you going to finish up?" She states, and she was questioned on this aspect by the Court as well as by Mr Nugent, that her response was along the lines that "if you are going to be like that I will finish up now thank you". The Court notes that the Applicant admits that at this stage she swore at Mr Nugent and she gave evidence of some of the words she appears to have used. The Court observed the demeanour of the Applicant and Mr Nugent. The latter admits he swore at the Applicant on the telephone on Saturday 8 April and the former admits that she swore at Mr Nugent on Monday 10 April. The Court has concluded that both the Applicant and Mr Nugent were inclined at times to address each other in basic and earthy terms. The Court notes that Mr Nugent's attitude and behaviour throughout the hearing created difficulties for the Court and for Counsel for the Applicant. Mr Nugent on several occasions expressed the view that it was outrageous that he or the Respondent should be subjected to a hearing in the Industrial Relations Court. He did not seem to understand, let alone accept, that the Applicant had a right to make and pursue a claim for remedy for alleged unlawful termination of employment (i.e. a right to pursue such a claim if it was a termination at the initiative of the employer and was not a claim initiated vexatiously or without reasonable cause). Mr Nugent asked the Court for advice as to what termination meant in the context of the Industrial Relations Act 1988 but he did not accept that advice and may not have understood it. He persisted with the view which seemed to amount to a position that an employer who accorded notice under S170DB could not be subject to a successful claim under Division 3 of Part VIA of the Act. Mr Nugent's unwillingness to confine himself to answering questions in examination in chief, or to cross-examine the Applicant with the assistance of the Court, led to a situation in which, with the consent of Counsel for the Applicant, the Court delayed cross-examination of the Applicant or the conclusion of her examination in chief until after the Respondent's evidence had been led. The Court allowed the Respondent to call an officer of the Victorian Department of Business and Employment, Mr Oates and Mr Nugent gave evidence himself. Another employee of the Respondent company, Mr Hill, was called but the Court did not allow him to give evidence because it was not satisfied he could give evidence of the circumstances of the termination or of the circumstances of any warning or counselling of the Applicant for poor performance. Despite the aggressive and at times uncooperative attitude of Mr Nugent, the Court was very mindful that he appeared unrepresented as a director of the Respondent company. Aggression and a lack of cooperation may increase the difficulty which is often present when assessing the credibility of conflicting evidence. However, a witness and a party who is difficult in these terms may still be a credible witness. Such a witness may absolutely or in general terms be a witness of truth even if the assessment of credibility of such a witness is made more difficult because of the aggression and lack of co-operation. Returning to the events of Monday 10 April 1995, Mr Nugent states that he came in about 9:30 am on 10 April and that the Applicant was already working. He further states that after about half an hour he approached the Applicant and said words to the effect of, "we can't go on like this" and "what do you want?" and that he also said words to the effect, "you can have a month or three weeks or two weeks or one week". Mr Nugent implies that he was referring to and asking the Applicant what payment in lieu of notice she wanted and that she in effect told him at this stage (to use his words), "to jam the job" and that she had left about 45 minutes after Mr Nugent had arrived at work. This would put her departure at about 10:15 am and the brief discussion between the Applicant and Mr Nugent at about 10:00 am. Mr Nugent gave evidence that within about an hour the Applicant rang and requested her wages be made up and provided within an hour. The Court notes that this is generally consistent with the Applicant's evidence on this point and it is also consistent with the Respondent's submission (Exhibit R1). The Court has concluded that this was a termination at the initiative of the employer. Mr Nugent admits quite openly that on Saturday 8 April he left the Applicant in no doubt that he intended to dismiss her and that it was only the terms of the dismissal which remained to be settled on Monday 10 April. The Court has concluded that the Applicant walked out before any final terms could be settled but that it was nevertheless very much a termination at the initiative of the Respondent. By and large, despite the obvious difficulties presented by the approach taken by Mr Nugent (that is the approach in the hearing), the Court has concluded that he was a truthful, if stubborn and unco-operative, witness. The Court was less impressed with the evidence of the Applicant and where there is a conflict has preferred the evidence of Mr Nugent. However, in a number of crucial areas there is no conflict. Mr Nugent admits that the Applicant did tell him on the 5 or 6 April that she had been told that sulphate of ammonia was not available from Newcastle. He did not accept that. The Applicant admits that he did not accept that and that she was directed to somehow get the sulphate of ammonia from Newcastle. It is clear, from that part of the report of Ms Pettinella which Mr Nugent accepts, that the Applicant ordered the sulphate of ammonia from Port Kembla via Ms Pettinella although the Applicant's evidence is that she cannot remember how and through whom she ordered the Port Kembla sulphate of ammonia. It is also clear that much earlier, some months earlier, Mr Nugent had told the Applicant not to order Port Kembla sulphate of ammonia. The Applicant admits this but claims that she had forgotten this advice. It is also clear that from time to time Mr Nugent had warned the Applicant about unsatisfactory performance. The Applicant and Mr Nugent do not agree or even recall when all these warnings took place but the Applicant concedes a warning in October 1994 and made a telling admission that she shrugged it off as a joke. The nub of this case is did the Applicant tell Mr Nugent on the 5 or 6 April that she ordered sulphate of ammonia from Port Kembla or did she, as the Respondent claims, assure Mr Nugent on the 5 or 6 April that the sulphate of ammonia had been ordered from Newcastle. Other evidentiary issues are important but Counsel for the Applicant correctly categorised this issue as the crucial conflict in the evidence. The credibility of the Applicant and Mr Nugent is crucial in this and other issues and in determining whether a remedy is appropriate in the circumstances of this case. The Court states immediately that there is a third possibility and that is that the Applicant did not tell the Respondent that the sulphate of ammonia was ordered from Port Kembla or Newcastle and that nothing was said about the source of the sulphate of ammonia after it was ordered from Port Kembla and that Mr Nugent did not extract an assurance from the Applicant that it was coming from Newcastle. However, this matter must be determined on the evidence as presented and using a test of balance of probability. After examination of the documentary evidence, incomplete though it is, and an assessment of the sworn evidence at the trial, I have concluded that the Applicant did not tell Mr Nugent on the 5 or 6 April that she had ordered the sulphate of ammonia from Port Kembla and that he did express the view in earthy terms on 8 April that this admitted breach of his earlier directions not to order sulphate of ammonia from Port Kembla was the last straw. I have concluded that the conduct and performance of the Applicant constituted a valid ground for termination under S170DE(1). However, I do not accept that on the 8 April or the 10 April Mr Nugent gave the Applicant an opportunity to defend herself. On the 10 April, in my view, the Applicant was given some but an inadequate opportunity to defend herself but did not take it. She rightly took the view that Mr Nugent had made up his mind. That is not an adequate opportunity. The opportunity must be given before and not after the termination. The Respondent, through Mr Nugent, breached S170DC and to that extent the termination was unreasonable under S170DE(2). I make no finding that the termination was harsh or unjust under S170DE(2), merely that it was unreasonable because the Respondent did not comply with S170DC. I find that the Respondent complied with S170DB and paid one week in lieu of notice, namely $419. The fact that the settlement of an underpayment of wages claim discounted the week's notice because Mr Oates of the Department of Business and Employment in good faith assumed that the Applicant had abandoned the employment does not alter the fact that the Respondent paid one week in lieu and did not breach S170DB. Given that the Court has found that the Respondent breached S170DC and S170DE(2) the Court may, if it considers it appropriate in all the circumstances of the case, make an order for reinstatement under S170EE(1)(a) or if reinstatement is considered inpractical an order for compensation under S170EE(2). The Court does not consider reinstatement appropriate but, even if it did, the Applicant does not seek reinstatement and the Court considers reinstatement entirely inpractical and has assessed the practicality and the practicability of reinstatement under the criteria outlined by the Chief Justice in Nicolson and Heaven and Earth Gallery Pty Ltd 1995 1 IRCR 199. The Court does not consider compensation appropriate either and has reached that conclusion having taken into account all the circumstances of this case. The Court is satisfied that Mr Nugent warned and/or counselled the Applicant on a number of occasions in respect of inadequate performance. The Applicant admits that she was warned in October 1994 and she stated in evidence that she shrugged that warning off as a joke. Exhibits R2 and R3 are written records of warnings or counselling of the Applicant by Mr Nugent on the 12 December 1994 and the 23 January 1995. In each case the Court is satisfied that Mr Nugent told the Applicant that her performance was unsatisfactory and the Court accepts his evidence that there were other warnings that were either unrecorded or the records of which Mr and Mrs Nugent were unable to locate and produce in the course of the hearing. Warnings do not have to follow any particular format. Warnings do not have to be formal. Nicolson at 209 already cited and Gibson and Bosmak Pty Ltd 1995 1 IRCR 466 are authorities to that effect. In the day to day operations of a demanding but small business such as that conducted by the Respondent company under the leadership of Mr Nugent warnings as recorded in Exhibits R2 and R3 are adequate. The Court accepts that the Applicant's failure to remember or take account of earlier advice that sulphate ammonia from Port Kembla was unacceptable was, for Mr Nugent, the last straw. It was the last straw in the sense that he had told her on a number of other occasions that her performance was below par. In these circumstances Mr Nugent's failure to afford the Applicant an opportunity to adequately respond to his proposition that her employment should be ended after discussion on Monday 10 April was not a breach of S170DC or S170DE(2) which warrants an order for compensation. The Court in reaching that conclusion has also taken the view that the Applicant through her conduct and performance had no real likelihood of retaining her employment. Again, the Court has taken account of the observations of the Chief Justice in Nicolson at 213. ORDER OF THE COURT The order of the Court is a declaration that the termination of the Applicant's employment advised by the Respondent on 8 April 1995 and effected on 10 April 1995 was: 1. for valid reason connected with the Applicant's capacity and conduct 2. a breach of S170DC and S170DE(2) 3. in all the circumstances of the case inappropriate for an order of reinstatement under S170EE(1)(a) or compensation under S170EE(2) Given the declaration made above no further action is required or contemplated as a result of the hearing of the application made yesterday or the findings made today. I certify that this and the preceding 8 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan. Associate: