Capay Holdings Pty Ltd v Slattery [1996] IRCA 601

DECISION NO:601/96 CATCHWORDS INDUSTRIAL LAW - complaint of UNLAWFUL TERMINATION - respondent engaged as nominated authorised supervisor of new child care centre - whether EMPLOYMENT RELATIONSHIP existed from the date of engagement and prior to centre opening or contract for future employment - performance of intermittent preparatory work an inextricable part of position as authorised supervisor - whether preparatory work was CASUAL EMPLOYMENT Workplace Relations Act 1996 ss 170CA, 377 Industrial Relations Act 1988 ss 170CA, 377 Report of the Committee of Experts, Report III (Part 4B) International Labour Conference, 2nd Session 1995, General Survey on the Termination of Employment Convention (No. 158) and Recommendation (No. 166), 1982 Strachan v Liquorland (Australia) Pty Ltd (unreported, IRCA, Moore J, 6 February 1996) Reed v Blue Line Cruises Limited (unreported, IRCA, Moore J, 26 November 1996) Teachers (Non-Government Early Childhood Service Centres Other than Pre-Schools) (State) Award cl 14 CAPAY HOLDINGS PTY LTD (trading as CUDDLES LONG DAY CENTRE) v MAREE SLATTERY NI 2214 of 1996 CORAM: WILCOX CJ, MOORE & MARSHALL JJ Place: SYDNEY Date of hearing: 9 DECEMBER 1996 Date of judgment: 11 DECEMBER 1996

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NI 2214 of 1996 B E T W E E N : CAPAY HOLDINGS PTY LTD (trading as CUDDLES LONG DAY CENTRE) Appellant A N D MAREE SLATTERY Respondent CORAM: WILCOX CJ, MOORE & MARSHALL JJ PLACE: SYDNEY DATE: 9 DECEMBER 1996 MINUTES OF ORDERS THE COURT ORDERS THAT: 1. The appeal be 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 NEW SOUTH WALES DISTRICT REGISTRY NI 2214 of 1996 B E T W E E N : CAPAY HOLDINGS PTY LTD (trading as CUDDLES LONG DAY CENTRE) Appellant A N D MAREE SLATTERY Respondent CORAM: WILCOX CJ, MOORE & MARSHALL JJ PLACE: SYDNEY DATE: 11 DECEMBER 1996 REASONS FOR JUDGMENT THE COURT At the conclusion of oral argument the Court dismissed this appeal and announced that reasons would be published at a later date. The reasons of the Court now follow. This matter is an appeal against the judgment of Madgwick J ("the trial judge") of 18 October 1996 in which he dismissed an application for review by the appellant, pursuant to s377 Industrial Relations Act 1988 (now known as Workplace Relations Act 1996) ("the Act"), against the exercise of power by Judicial Registrar Locke and confirmed the orders made by the Judicial Registrar. The Judicial Registrar had held that the appellant had unlawfully terminated the employment of the applicant, Ms Slattery, and ordered that the appellant pay $13000 compensation to Ms Slattery. BACKGROUND FACTS The appellant, Capay Holdings Pty Ltd, is a company which conducts a child care centre. The directors of the appellant are Ms Gleeson and her mother, Ms Booth. Before the events the subject of this case neither woman had any experience in the conducting of a child care centre. The Department of Community Services of the New South Wales Government ("DOCS") is responsible for the licensing of child care centres in the State. By letter dated 20 December 1994, Ms Booth applied to DOCS for a child care licence for the proposed "Cuddles Child Care Centre" ("Cuddles") at Lake Haven on the New South Wales central coast. In the letter accompanying the documents required by DOCS, Ms Booth stated that:- "At this stage I have not engaged my supervisory staff but will also have that information and copies available within the next month." On 3 January 1995, Ms Slattery was walking past the proposed site of "Cuddles" when she noticed a banner which advertised that the site would be used for a child care centre. Ms Slattery telephoned the telephone number mentioned on the banner and spoke to Ms Gleeson about possible employment. Ms Slattery had considerable experience as an early childhood teacher and had previously worked as an authorised supervisor in a child care centre. Ms Gleeson informed Ms Slattery that she would speak to her mother about the possibility of employing Ms Slattery and took Ms Slattery's telephone number. On 17 January 1995, Ms Gleeson attempted to contact Ms Slattery. Ms Slattery returned her call on 18 January 1995. During that telephone conversation an interview was arranged for her at Ms Gleeson's home on 20 January 1995. The interview lasted about three hours. The discussion at the interview included a reference to the Teachers (Non-Government Early Childhood Service Centres Other than Pre-Schools) (State) Award, ("the award") an award of the New South Wales Industrial Relations Commission applying to teachers employed at child care centres. On 21 January 1995 Ms Gleeson telephoned Ms Slattery and said words to the effect that:- "We would like you to take the position as teacher at the child care centre." Ms Slattery accepted the offer, stating that she was looking forward to working with Ms Gleeson and Ms Booth. Ms Slattery was informed that the centre was expected to open between late February 1995 and early March 1995. The position which Ms Slattery accepted was the position of "authorised supervisor" at the child care centre. The authorised supervisor is the person who is in charge of the day to day operations of a centre. The responsibilities of such a person include the task of ensuring that all staff engaged by the centre are appropriate people to care for children. They also include the purchasing and maintenance of equipment, programming of activities, meeting parents and enrolling children into the centre. DOCS officers usually advise the proprietors to engage an authorised supervisor at least six weeks prior to the opening of a new child care centre. This is because there is a large number of tasks which must be attended to by the authorised supervisor in order for the centre to receive a licence. This preliminary work includes purchasing of equipment, selecting of books, ensuring that there are no safety problems and a range of other matters. Advice of the kind referred to in the preceding paragraph was given to Ms Booth and Ms Gleeson by Ms Beer, an officer from DOCS. Ms Beer gave evidence that unless somebody who is qualified to be an authorised supervisor has done all the preliminary work, it would be difficult to start a new child care service. On 23 January 1995, Ms Booth signed an application form in which Ms Slattery was nominated as the authorised supervisor for the centre. Ms Slattery attended selection interviews for other members of staff. Ms Slattery's evidence was that Ms Gleeson asked her to attend the interviews. Ms Gleeson's evidence was that Ms Slattery volunteered to attend. Either way, given that it was part of Ms Slattery's duties to ensure that other staff were suitable to work with young children, it might be expected that she would be involved in their selection. Ms Slattery was an active participant in the interviews. She took notes and gave advice about candidates to the directors of the appellant. The staff interviews on 23 January 1995 occurred from 10.15 am until 4.15 pm. At the conclusion of the interviews it was agreed that Ms Slattery would contact DOCS to obtain information regarding all that had to be done to secure a licence. It was also agreed that Ms Slattery would contact the Department of Housing with reference to a sandpit. The relevant officer of DOCS, Ms Beer, was on leave until 31 January 1995. Contact with Ms Beer's office was established by Ms Slattery on that day. By letter dated 31 January 1995, Ms Booth on behalf of Cuddles wrote to Ms Beer in the following terms: "ATTENTION: TRACEY BEER. RE: CUDDLES CHILD CARE CENTRE - GOROKAN Dear Tracey, I would like to advise that we are looking at opening our centre on March the 6th 1995. My supervisory staff is as follows: Early Childhood Teacher - Maree Slattery CCC Teacher - Karen Hinton. Should you require to speak with me my private home number is ... and my fax is also that number. I dont (sic) recall on my application whether I applied for a 45 place centre or 39, but would like to apply for a 45 place as we have sufficient area space required." On 3 February 1995, further staff interviews were conducted at Ms Gleeson's home. Due to a family medical problem Ms Slattery was unable to attend these interviews until late in the afternoon and assisted in the last of them. When that interview concluded, Ms Slattery and Ms Gleeson discussed the contents of a list of requirements for supplies for the centre. Ms Slattery did not leave Ms Gleeson's home until 8.15 pm that evening. Ms Slattery performed general intermittent preparatory work in connection with the licensing of the centre from the following Monday, 6 February 1995 through to about 16 February 1995. Not much further preparatory work was performed by Ms Slattery from 17 to 24 February 1995. At this stage the proposed start date for the centre was 6 March 1995. On 25 February 1995, Ms Slattery drafted a pamphlet advertising the centre which would be handed to parents at forthcoming parent interviews. Later on that day, and also on 26 and 27 February 1995, Ms Slattery spent time preparing a booklet which was intended to provide more detail about the operation of the centre. It had been anticipated that Ms Slattery would commence full time duties on 6 March 1995. However on 1 March 1995, Ms Gleeson telephoned Ms Slattery and asked her if she would work only three days that week in advance of the opening of the centre. (Ultimately the centre did not open until 3 April 1995). More preparatory work in connection with the purchase of stock was performed by Ms Slattery on 4 March 1995. A discussion occurred on that day between Ms Slattery, Ms Gleeson and Ms Booth about the provision of letters of appointment to all staff. Clause 14.1 of the award provided that:- "The employer shall provide all full-time and part-time teachers with a letter of appointment on engagement stating the classification and rate of salary on appointment, the hours of operation of the Centre, the employee's entitlements to personal leave, annual leave and long service leave, the procedure as to alteration of days of attendance and notice on termination." Ms Slattery requested a letter of appointment. Ms Gleeson and Ms Booth then raised for the first time the issue of a probationary period for all staff of three months. Ms Slattery said that she would contact her union about the matter. On 4 March 1995, Ms Slattery was requested to attend at the centre on 8 March 1995 to conduct parent interviews. The interviews lasted most of the day. On 9 March 1995, Ms Slattery had about two hours of discussion with Ms Beer in relation to formal administrative and licensing matters. A further day of parent interviews occurred on 10 March 1995. Ms Slattery attended the centre on that day from 9.00 am until 5.30 pm. After the interviews on 10 March 1995, Ms Booth informed Ms Slattery that further parent interviews would be conducted after the centre opened. Ms Booth asked how much money Ms Slattery wanted for conducting the parent interviews. No discussion had previously occurred regarding payment in respect of preparatory work in advance of the opening of the centre. Ms Slattery suggested $100 a day or $200 in total for the interviews. She also suggested that that sum be added to her first pay packet after the opening of the centre. Ms Booth insisted on payment being made immediately and wrote a cheque to Ms Slattery for $200. On 11 and 12 March 1995 (a weekend), Ms Slattery attended a first-aid course in order to up-date her first-aid qualifications for licensing purposes. The course was arranged at a time when the anticipated opening of the centre was 13 March 1995, but by 9 March 1995 it was clear that the centre would not open on 13 March 1995. Inclement weather had delayed certain building operations required to obtain the licence. On 14 March 1995 Ms Booth invited Ms Slattery to the centre to look over a draft employment contract. An arrangement was made for a meeting on 20 March 1995 involving a union representative, Ms Willems, and an industrial consultant representing the appellant, Mr White. On 20 March 1995, Ms Slattery met with Ms Beer for two hours in the early afternoon for a final inspection of the centre for licensing purposes. Ms Beer gave evidence that she had requested all staff of the centre to be present so that she could meet them. At about 3.40 pm the meeting about the employment contracts took place. Ms Willems and Ms Slattery were concerned about the probation clause and a clause which provided for a twelve month fixed term contract. Ms Willems asked if she could take a copy of the contract away for further consideration. Mr White advised the appellant not to grant that request, saying: "The contract is the property of Capay Holdings. I advise my client not to allow you to take a copy of it." Mr White then stated that no formal offer of employment had been made to Ms Slattery by the appellant. In evidence he said that the appellant had so instructed him. He also gave evidence that Ms Willems seemed surprised by those instructions. Ms Willems and Ms Slattery then left the centre after Ms Slattery had collected her belongings. The next day the appellant submitted a new application to DOCS for an authorised supervisor, this time in the name of Ms Hinton. Because of the intermittent nature of the preparatory work performed by Ms Slattery for the appellant in advance of the opening of the centre, the continuing delay in completion of building works and the fact that she was a sole parent, Ms Slattery performed some casual work as a teacher in the Technical and Further Education ("TAFE") sector on 28 February 1995 and 15 March 1995. She was also in receipt of a job search allowance but had notified the Department of Social Security about the prospect of having to repay at least some of that allowance. Ms Slattery had arranged a part-time teaching load with TAFE for 1995 which would have provided her with eighteen hours of work per week. On 31 January 1995 she advised TAFE that she would not be available to perform that work. The wages she would have earned at Cuddles under the award were $39000 per year. WAS MS SLATTERY EMPLOYED AND TERMINATED BY THE APPELLANT? The nature of the position of "authorised supervisor" was such that preparatory work was required to be performed by the occupant of the position prior to the opening of a centre. On 21 January 1995 Ms Slattery was engaged to be an authorised supervisor, which included the performance of such preparatory work. The preparatory work was intermittent. In respect of much of it, it appears that Ms Slattery had no expectation of payment. But it was work nonetheless that was an inextricable part of being employed as an authorised supervisor at a new child care centre. We do not accept the submission that Ms Slattery was not employed until the centre actually opened. We have no doubt that on 21 January 1995 an employment relationship was established between Ms Slattery and the appellant. The appellant terminated that relationship when it insisted that no such relationship existed and demanded that such a relationship could only exist if it included a fixed term contract and a probationary period. By such conduct engaged in at the meeting of 20 March 1995 the appellant terminated the employment of Ms Slattery. The appellant accepted that a contract concerning employment was entered into between the parties on 21 January 1995. But it contended that this was only a contract for future employment, so the employer-employee relationship would not commence until the centre opened. We do not accept that analysis of the situation. It may well be the case that Ms Slattery did not expect payment for her services, at least payment on a regular basis, until the centre opened. But that does not mean that no employment relationship came into existence on 21 January 1995. There was a mutual expectation that, in the meantime, Ms Slattery would carry out significant, although intermittent, preparatory work in her role as nominated authorised supervisor. It must be borne in mind that Division 3 of Part VIA of the Act is designed in part to give effect to the Termination of Employment Convention ("the Convention"). (See s170CA of the Act.) The Convention is concerned with employment relationships and not the existence or otherwise of a contract of employment. It is more precisely concerned with termination of the employment relationship. See para 9 of Report of the Committee of Experts, Report III (Part 4B) International Labour Conference, 2nd Session 1995, General Survey on the Termination of Employment Convention (No. 158) and Recommendation (No. 166), 1982. It is that topic that the Convention addresses and not whether or not a contract of employment has been terminated. For example, a contract of employment may be terminated by the demotion of an employee without the employment relationship terminating. See Strachan v Liquorland (Australia) Pty Ltd (unreported, IRCA, Moore J, 6 February 1996). WAS MS SLATTERY ENGAGED ON A CASUAL BASIS? Ms Slattery was engaged as the authorised supervisor. It is inconsistent with the role of such a person that the duties of that position be performed on a casual basis. It is inappropriate to characterise the preparatory work as casual employment prior to the licensing of the centre. To do so is to fail to grasp the nature of the duties of an authorised supervisor engaged to work in a new child care centre. There was no suggestion made to Ms Slattery on 21 January 1995 that she was engaged on a casual basis. We adopt something said by Moore J in Reed v Blue Line Cruises Limited (unreported, IRCA, Moore J, 26 November 1996). Moore J said:- "In my opinion, what is intended by Article 2((2)(c) is that the regime embodied in the Convention should not apply to employment where the employment is known to the parties at the time of engagement to be informal, irregular and uncertain and not likely to continue for any length of time. It is accepted that it would not be reasonable to impose that regime on employment of that character." The evidence in this case does not demonstrate that Ms Slattery's engagement as an authorised supervisor was to be informal, irregular, uncertain or not likely to continue for any length of time. COMPENSATION As referred to earlier in these reasons, the trial judge (and Locke JR before him) assessed compensation in the sum of $13,000. The appellant raised the issue of the receipt by Ms Slattery of "unemployment benefits" during the employment as relevant to the level of compensation. That point is without merit. Such payments do not bear on the quantum of compensation which is designed in the main to overcome the future effects on an employee of an unlawful termination of her or his employment. We are not satisfied that the award of $13000 compensation was an inappropriate exercise of the trial judge's discretion. I certify that this and the preceding 16 pages are a true copy of the Reasons for Judgment of the Court. Associate: Dated: APPEARANCES Counsel for the Appellant: A. Moses Solicitor for the Appellant: Dunhill Madden Butler Counsel for the Respondent: R. Reitano Solicitor for the Respondent: R.L. Whyburn and Associates Date of hearing: 9 December 1996 Date of order: 9 December 1996 Date of publication of reasons: 11 December 1996