BISHOP v EMORA PTY LTD [1997] IRCA 56

DECISION NO:56/97 TERMINATION OF EMPLOYMENT - UNLAWFUL TERMINATION - REMEDY - Applications by husband and wife - REINSTATEMENT of husband refused because of effect on replacement employee - Claim for reinstatement not pressed by wife - COMPENSATION - Method of assessment. Workplace Relations Act 1996, s 170EE ANNE BISHOP v EMORA PTY LIMITED No. NI.96/1600 and GRAHAM BISHOP v EMORA PTY LIMITED No. NI.96/1602 CORAM: WILCOX CJ PLACE: SYDNEY DATE: 7 FEBRUARY 1997

IN THE INDUSTRIAL RELATIONS COURT) OF AUSTRALIA ) No. NI96/1600 NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: ANNE BISHOP Applicant AND: EMORA PTY LIMITED Respondent CORAM: WILCOX CJ PLACE: SYDNEY DATE: 7 FEBRUARY 1997 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The respondent pay to the applicant compensation in the sum of $21,740.64. 2. The said sum is to be paid into Court within 14 days. 3. Not later than the date of payment into Court of the said sum the respondent is to forward to the District Registrar a letter setting out the calculated taxation and send a copy of that letter to the applicant's solicitors. 4. If the applicant's solicitors do not, within 14 days thereafter, forward to the District Registrar a letter contesting the calculated tax, the District Registrar shall pay the amount thereof to the Australian Taxation Office and pay the balance to the applicant. 1. Note: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.

IN THE INDUSTRIAL RELATIONS COURT) OF AUSTRALIA ) No. NI96/1602 NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: GRAHAM BISHOP Applicant AND: EMORA PTY LIMITED Respondent CORAM: WILCOX CJ PLACE: SYDNEY DATE: 7 FEBRUARY 1997 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The respondent pay to the applicant compensation in the sum of $12,000.00. 2. The said sum is to be paid into Court within 14 days. 3. Not later than the date of payment into Court of the said sum the respondent is to forward to the District Registrar a letter setting out the calculated taxation and send a copy of that letter to the applicant's solicitors. 4. If the applicant's solicitors do not, within 14 days thereafter, forward to the District Registrar a letter contesting the calculated tax, the District Registrar shall pay the amount thereof to the Australian Taxation Office and pay the balance to the applicant. Note: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules. IN THE INDUSTRIAL RELATIONS COURT) OF AUSTRALIA ) No. NI96/1602 NEW SOUTH WALES DISTRICT REGISTRY) BETWEEN: GRAHAM BISHOP Applicant AND: EMORA PTY LIMITED Respondent and No. NI96/1600 BETWEEN: ANNE BISHOP Applicant AND: EMORA PTY LIMITED Respondent CORAM: WILCOX CJ PLACE: SYDNEY DATE: 7 FEBRUARY 1997 EXTEMPORE REASONS FOR JUDGMENT (No.2) WILCOX CJ: The only issue I have to determine in connection with these applications is the quantum of compensation. The applicants allege unlawful termination of their employment with the respondent. Unlawful termination is conceded. Although reinstatement was sought, counsel for the applicants made clear to me that reinstatement is pressed only if both applicants are to be reinstated to their former positions. During discussion about the matter, I indicated my view that it would not be a proper exercise of discretion for the Court to order the reinstatement of Graham Bishop to his former position . He was previously the manager/licensee of the Sutton Forest Hotel, a business owned by the respondent. After his dismissal he was replaced by another person who is apparently working in a satisfactory way and is now the licensee. Although the effect of a reinstatement order on a third party is not a conclusive consideration, I think the Court ought to hesitate before making an order that forces the dismissal of a person who has taken a specialised position such as this and, no doubt, organised her life around that position. The respondent appointed the new manager before it learnt of Mr Bishop's unlawful termination claim. It is no criticism of Mr Bishop to make the observation that a period of almost four months elapsed between the date of his termination and the date when the application was filed. The respondent had to do something about replacing him as licensee/manager during that time. Before Mr Bishop filed his application, he knew this had been done. There is no element of punishment in my conclusion: it simply would not be an appropriate course to order reinstatement in his case. Counsel for the respondent said his client would be prepared to have Mrs Bishop restored to her former position. But she, understandably, does not wish to take that course if her husband is not also to return to the hotel. Consequently the only issue is compensation. The affidavits sworn by the applicants set out details of their earnings since termination. There is no challenge to the correctness of these figures or the arithmetical conclusions at the end of the affidavits. Before termination, each applicant earned at the rate of $43,481.29 per annum. In addition, they were entitled to free accommodation at the hotel. This must have had material value although there is no evidence about its quantum. In the absence of such evidence, I must take the maximum available compensation, having regard to the terms of s 17EE(3) of the Act, as one half of the pre-termination annual cash earnings, that is $21,740.64 in each case. Had there been evidence of the money value to be attributed to the accommodation, this could have been taken into account to increase that figure. But there is not, and I do not think I should resort to speculation about it. Accordingly, I will consider the matter of compensation on the basis that it is open to the Court to award up to $21,740.64 in each case. The computation set out in the affidavits compares the amount actually received by each applicant in the six months immediately following termination with what he or she would have earned in that period if not dismissed. In the case of Mr Bishop the relevant figure is $15,265; for Mrs Bishop, $20,792.64. The Court does not, of course, assess compensation merely by calculating the earnings lost by an unlawfully terminated employee over the ensuing six months. That figure may be an inadequate measure of the compensation required to make good, so far as money may do, the loss suffered by the employee. On some occasions it may exceed the proper amount. The figures are useful to be taken into account, but they are the beginning of an assessment rather than its conclusion. I have found them helpful in these cases, but not determinative. I will deal first with Mr Bishop's position. As I say, he lost the benefit of earnings of $15,265 in the first six months. He also lost the free accommodation he and his family had enjoyed at the hotel. I have no evidence as to the cost of alternative accommodation. The applicants are apparently now living in rented accommodation in Bundanoon. Having some knowledge of the area, I assume the rent is not an extremely high figure but it obviously adds to the monetary loss. The termination was a traumatic event for both applicants. It occurred because of an incident at the hotel for which they were not to blame. Moreover, it was sudden. It is true they were each paid two weeks' termination pay and allowed to stay at the hotel for about three weeks until they could obtain other accommodation. Nonetheless, the dislocation of their lives must have been considerable. It is highly likely that everybody in the small Sutton Forest community knew they had been terminated. Having said this, it seems to me Mr Bishop did not take all the steps one would have expected him to take if he wished to minimise his monetary loss. His evidence is that, within a few days of termination, he was offered a job, apparently by somebody he knew, with a house-removal company called Mega Moves. He was employed on a casual basis but given to understand that work would be constant. In fact it turned out not to be constant, and gradually fell away. Mr Bishop agreed in cross-examination that he made no attempt to seek work at any of the hotels in the district, notwithstanding that he had had considerable experience in the hospitality industry and had been successful in that area. He gave two reasons. The first was that he had accepted the position with Mega Moves. He thought this would be successful; it was some time before he realised that the income he would earn in that job would be significantly less than he had earned at the hotel. The other reason was that he took advantage of the opportunity to do something different. He wanted a change from being involved in the serving of alcohol, and to engage in some hard physical labour. I find both these reasons understandable. It was probably a combination of the two factors - a feeling of obligation to Mega Moves, and enjoyment of the change in lifestyle - that caused him not to seek employment in the hotel industry after his termination. Whether he would have been successful in obtaining such employment is unknowable. There are, I gather from the evidence, a number of hotels within reasonable commuting distance of Bundanoon. But I know nothing about their sizes or turnover of staff. If Mr Bishop had wished to minimise his earnings loss, he would have been well advised to inquire about employment at these hotels; but whether he would have been successful is a matter for speculation. Particularly because of Mr Bishop's failure to pursue the possibility of employment in the hospitality industry, I do not think it is appropriate to take into account any earnings loss he may have suffered after the expiration of the first six months. My view is that I should take into account the money actually lost in the six months immediately following termination and allow something for the loss of accommodation and disturbance of his life, but substantially discount the resultant figure to allow for the fact that Mr Bishop did not pursue the possibility of more remunerative employment when it became obvious to him that Mega Moves was not going to return him anything like the wages he had been earning at the hotel. Balancing all these factors, the appropriate amount of compensation in his case is $12,000. In the case of Mrs Bishop, there is no suggestion that she failed to search for other work. It is true she did not immediately look for work. According to a letter from the Bundanoon Hotel, it was late in March when she did so. She was then able to obtain only casual work. The extent of that work has gradually increased and Mrs Bishop is hoping now to get permanent work. Following her termination from the Sutton Forest Hotel, Mrs Bishop looked for work as quickly as it was reasonable to expect she would. She is the mother of four young children; their present ages apparently range from 14 to six. The re-organisation of the family and their accommodation understandably occupied her attention for some weeks after the terminations. I do not think there can be criticism of her for not seeking work until late March. Thereafter, she apparently took whatever work she could get at the Bundanoon Hotel. There is no suggestion that she neglected any opportunities. As I mentioned, in Mrs Bishop's case the calculated first six months' loss is $20,792.64. This is very close to the maximum permissible award. When I take into account that there is no reason to discount that figure, and I also add the loss of free accommodation and the dislocation of her life, I am of the opinion that the proper award in her case exceeds the statutory cap. Accordingly, the appropriate course is to allow her the amount which I have to use as the statutory cap, namely $21,740.64. The orders that I make are as follows: 1. In the case of Graham Bishop, I order that the respondent pay to the applicant compensation in the sum of $12,000. 2. In the case of Anne Bishop, I order that the respondent pay to the applicant compensation in the sum of $21,740.64. As I understand the position, tax will be payable on those amounts. The appropriate course, I think, is for the amounts to be paid into Court and the employer to notify the District Registrar of the amount of tax that the employer believes, if necessary after inquiring of the Australian Taxation Office, to be payable on them. The employer should notify the applicants of its calculations and give them an opportunity to check or contest them. The two sums must be paid into Court within a period of 14 days; that is, by 21 February. Not later than the same day, the employer should forward to the District Registrar a letter setting out the calculated taxation deductions and send a copy of the letter to the applicants' solicitors. If the applicants' solicitors do not, within 14 days thereafter, forward to the District Registrar a letter contesting the calculated tax, the District Registrar should pay the calculated tax to the Australian Taxation Office and pay the balance to the applicants. I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment of the Honourable Chief Justice Wilcox. Associate: Dated: 7 February 1997 APPEARANCES Counsel for the Applicant: K Chamberlain Counsel for the Respondent: J Davidson Solicitors for the Respondent: Ashton Steadman Date of hearing: 7 February 1997