Chung v Kalinda Downs Pty Ltd [1996] IRCA 212

DECISION NO: 212/96 CATCHWORDS INDUSTRIAL LAW - complaint of UNLAWFUL TERMINATION - whether termination for VALID REASON of CONDUCT AND PERFORMANCE - whether termination for the prohibited reason of RACE - whether HARSH UNJUST OR UNREASONABLE - COMPENSATION - DAMAGES Industrial Relations Act 1988, ss 170EA, 170DF(1), 170DE(2), 170DC, 170DB, 170EE(3), 170EE(5) THIEU KHAI CHUNG v KALINDA DOWNS PTY LTD VI 5690 of 1995 Before: PARKINSON JR Place: MELBOURNE Date: 24 MAY 1996

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 5690 of 1995 B E T W E E N: Thieu Khai CHUNG Applicant A N D KALINDA DOWNS PTY LTD Respondent REASONS FOR DECISION 24 May 1996 PARKINSON JR This is an application made pursuant to s170EA of the Industrial Relations Act 1988. The applicant was employed by the respondent on 30 October 1992 and his employment was terminated on 30 October 1995. The respondent manufactures and installs commercial and retail refrigeration units and employs five full time employees and some casual employees as needed from time to time. The respondent contends that the reason for the termination of the employment was the conduct of the applicant, including his erratic and sometimes aggressive behaviour in the workplace, and in particular an incident which occurred at the workplace in 1995. In this incident it is alleged that the applicant raised a piece of wood and advanced on an employee in a threatening manner, breaking the glasses of another employee who intervened. This incident was not the subject of any report or complaint by the employees involved until 29 October 1995 when an employee, Mr Peter Gladshtein, advised the managing director, Mr Michael Peysack, of ongoing concerns as to the applicant's conduct. The delay in making such a complaint is explained by Mr Gladshtein as a result of concern not to upset Mr Peysack during his convalescence after surgery. I accept this explanation. The applicant denied the incident alleged and contended that the reason for the termination of employment was as a result of his complaints to management about the rate of pay he received in comparison with other employees. The applicant opened by reference to s170DF(1), alleging that part of the reason for the termination of the employment was racially inspired and consequent upon other employees not liking the applicant because he was of Asian race. Unreasonable demands in terms of the applicant's capacity to complete a job were also referred to by the applicant as having motivated the termination of his employment. The applicant denied that the incident referred to by Mr Gladshtein occurred in the manner described, but ultimately did concede that there was an incident involving the lifting of a piece of wood and threatening other persons with it. I accept Mr Gladshtein's evidence as to the extent and nature of the incident. I prefer his evidence to that of the applicant in this regard. I am satisfied that the incident relied upon did occur and was a major part of the reason for the termination of the employment. On that basis I am satisfied that the respondent had valid reason for the termination of the applicant's employment. The other reason relied upon by the respondent was that the applicant did not get on with the other employees. I accept that this was so, although the evidence suggests that there was a degree of taunting of the applicant by certain other employees, and in my view blame could not be attributed solely to the applicant. I accept that the applicant was being subjected to taunts by some of the employees in the workplace, however, I am satisfied that the taunts were not racially inspired, and I am not satisfied that the nature of the conduct or its extent was such as to warrant the extreme response of the applicant. Further, I am satisfied that the reason for the termination of the employment did not include the applicant's race. The respondent's evidence in this regard was that no such matters were taken into account by Mr Peysack when he made the decision to terminate the employment. I am satisfied that the tensions and difficulties between the applicant and other employees arose out of personality differences, and were not consequent upon differences brought about by race or ethnicity. Therefore, in so far as the other employees' dislike of the applicant was taken into account by the respondent in deciding to terminate his employment, this did not involve an element or aspect of racially motivated tension. I am satisfied that the reason for the termination of employment did not include reasons which are prohibited by operation of s170DF(1)(f). I turn now to consider the operation of s170DE(2) and s170DC of the Act. The applicant's employment was terminated in circumstances where he was given no opportunity to respond to any allegations against him, nor to explain the circumstances of his conduct. I am satisfied that the applicant was simply told that his employment was terminated, and that it was terminated because he did not get on with the other employees. There was a failure to give the applicant any opportunity to be heard in relation to the allegations against him, or to put to him precisely the matters complained of. The respondent failed to meet its obligations pursuant to s170DC of the Act. In so far as the circumstances of the termination are concerned, the delay between the incident alleged and the termination of employment was such that to terminate the employment with one week's payment in lieu was harsh and unreasonable. In addition, there were a number of disquieting incidents which had taken place in the workplace directed by other employees to the applicant, which would mitigate in his favour in a consideration of whether the employment ought be terminated. These matters were not considered by the respondent. Further, I am satisfied that the respondent has failed to meet its obligations to the applicant pursuant to s170DB of the Act. The applicant, having been employed by the respondent for three years, was entitled to a minimum of three weeks notice, of which he was paid one. There is an outstanding entitlement of two weeks wages. The applicant did not seek an order for reinstatement. In the circumstances I am satisfied that such an order would be impracticable. This is because of the mutual lack of amity between the applicant and the other employees. I am satisfied that the applicant was not likely to have remained in the employment for any significant period of time, having regard to the breakdown in relations in the workplace. In this case I am of the view that he ought receive compensation in an amount equivalent to a further two weeks employment by the respondent. This amount is in addition to that ordered to be paid in lieu of notice. I have taken the period of notice into consideration in determining the amount of compensation. The Annual Leave Claim I treat this claim as a claim arising in contract and pursued in the accrued jurisdiction of the court. The applicant claimed he was underpaid by an amount of $960.00 for annual leave. This claim was made in the accrued jurisdiction of the court. I am satisfied that there was an underpayment of annual leave at the termination of employment and that this amount remains unpaid by the respondent. The amount of annual leave actually paid by the respondent was calculated by reference to a pay rate of $400.00 per week. The respondent did not provide its employees with any payslip or advice as to the breakdown of their wages. Wages were paid in cash, with a deduction being made on ordinary time earnings for taxation. The evidence is that overtime was paid cash in hand, with no deduction made for taxation. No wages records or details of payments made were provided to the court or made available to the applicant by the respondent. The only evidence as to wages received by the applicant is his evidence as to take home pay and gross rates. The respondent did not contest this evidence. Nor did the respondent contest that it had an obligation to make payment for annual leave. The respondent submitted that it was entitled to pay less than the annual leave accrued by the applicant because the applicant had not worked the full year. I do not accept this was the case. No basis for such an assertion was put before the court. The evidence is that the applicant had been employed for three years. I accept that the amount owed to the applicant in annual leave payments was to be calculated by reference to his actual rate of pay of $480.00 with overtime of an additional $130.00. I do not accept the submission of counsel for the applicant that this sum ought be calculated on a tax paid basis, which would nominally be $730.00 per week. The applicant was entitled to be paid annual leave at the rate of $610.00 per week. He was paid for annual leave entitlements at the rate of $400.00. The actual amount paid was $1600.00. The amount of the entitlement was $2,440.00. The amount underpaid in annual leave upon termination of employment was an amount of $840.00, and the applicant is entitled to damages in this amount. In these proceedings it was agreed that the correct name of the respondent was 'Kalinda Downs Pty Ltd' and that 'Dandy Commercial Refrigeration' was its trading name. Leave to amend by consent is granted. The orders of the court will be: 1. That pursuant to s170EE(3) the respondent pay to the applicant compensation in the sum of $ 1220.00. 2. That pursuant to S170EE(5) the respondent pay to the applicant damages in the sum of $1220.00. 3. On the contractual claim the respondent pay to the applicant the sum of $840.00 in damages. 4. The name of the respondent in the proceeding is amended to 'Kalinda Downs Pty Ltd'. I certify that this and the preceding five (5) pages are a true copy of the reasons for decision of Judicial Registrar Parkinson. Associate: Dated: 24 May 1996 APPEARANCES Solicitors for the applicant: Ryan Carlisle Thomas Counsel appearing for the applicant: Mr N Kenyon Representative for the respondent: Mr M Peysack Date of hearing: 25 March 1996