HOLMES v GALLAGHER trading as GALLAGHER GRAPHICS [1997] IRCA 76

DECISION NO:76/97 CATCHWORDS INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - complaint of UNLAWFUL TERMINATION - OPPORTUNITY TO RESPOND to allegations - VALID REASON Workplace Relations Act 1996 (C'th) (formerly Industrial Relations Act 1988 (C'th)) Ss 170DC, 170DE(1), 170EA STEPHANIE CHRISTINE HOLMES v IAN GALLAGHER and BELINDA GALLAGHER trading as GALLAGHER GRAPHICS WI 1010 of 1997 Before: BOON JR Place: PERTH Date: 7 MARCH 1997

IN THE INDUSTRIAL RELATIONS COURT ) OF AUSTRALIA ) WESTERN AUSTRALIA DISTRICT REGISTRY ) WI 1010 of 1997 B E T W E E N: STEPHANIE CHRISTINE HOLMES First Applicant A N D: IAN GALLAGHER and BELINDA GALLAGHER trading as GALLAGHER GRAPHICS Respondent MINUTE OF ORDERS 7 MARCH 1997 PERTH BOON JR

THE COURT ORDERS THAT :

1. The action 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 ) WESTERN AUSTRALIA DISTRICT REGISTRY ) WI 1010 of 1997 B E T W E E N: STEPHANIE CHRISTINE HOLMES Applicant A N D: IAN GALLAGHER AND BELINDA GALLAGHER trading as GALLAGHER GRAPHICS Respondent REASONS FOR DECISION 7 MARCH 1997 BOON JR INTRODUCTION The applicant, Ms Holmes, has applied under section 170EA of the Workplace Relations Act 1996 for compensation arising out of the alleged unlawful termination of her employment by the respondent, Ian and Belinda Gallagher trading as Gallagher Graphics. Ms Holmes alleges that the provisions of the Act have been breached in a number of ways. In the first place, she alleges that there was no valid reason connected with her conduct or performance for the termination of her employment as required by section 170DE(1) of the Act. In the second place, she states that she was not given an opportunity to respond to allegations against her conduct or performance as required by section 170DC. Mr and Ms Gallagher deny these allegations. BACKGROUND Ms Holmes is a 45-year old woman who upon leaving university as a young woman stayed at home to raise her children for many years. In 1990 she started a two-year computer graphics course at TAFE. She had 15 months in the workforce after that and then went back to TAFE to study for a further certificate in pre-press design. She also did two units at Curtin University in pre-press design. The respondent is a partnership carrying on business as graphic designers and printers. The business comprises two partners, Ian and Belinda Gallagher, and together they employ a graphic designer and a printer. Ms Holmes answered an advertisement in the newspaper in April 1996. She went to an interview with Belinda Gallagher and then attended for a second interview with both Belinda and Ian Gallagher. Ms Holmes said that she was frank about her lack of work experience but admits that at the interview, when she was shown the type of work she would be asked to do, she told Mr and Ms Gallagher that she would have no problem doing that kind of work. Gallagher Graphics has several large clients, the most important one of which is Atkins Carlyle. The work from Atkins Carlyle represents well over half of the partnership's turnover. Gallagher Graphics also has a number of smaller clients. Gallagher Graphics was established in 1980 in Melbourne. Mr and Ms Gallagher moved to Perth in 1985. Mr Gallagher used to work full time in the business but was injured in an industrial accident in November 1995 from which he is still recovering. He now works part time in the business. Mr and Ms Gallagher have a young child and Ms Gallagher advised Ms Holmes at the interview that she wanted to commence part-time work to spend more time with her child once Ms Holmes had become used to the work. Mr Gallagher contends that he told Ms Holmes at the interview that for her position to be viable she should produce a minimum of three pages for printing per day. Ms Holmes was eligible for a job start subsidy at the rate of $200 per week for 26 weeks. For Gallagher Graphics to receive that subsidy they had to pay Ms Holmes at least award rates. Ms Holmes accepted payment of $420 per week which is above the award rate of pay. Ms Holmes started work on 7 May 1996. Ms Holmes gave evidence that when she started work there were no problems in the first week. Ms Gallagher showed her around and Ms Holmes was shown the general record keeping of the business. Ms Holmes gave evidence that the record-keeping system for Gallagher Graphics was complex. She also said that the filing system of Gallagher Graphics was a mess. This was denied by Mr and Ms Gallagher. Mr and Ms Gallagher contend that Ms Holmes was far too slow at most, if not all, of the work she was given to do. In addition, it is alleged that she failed to do the work in a competent manner and that she failed to follow instructions from her employers. Many examples were given, and it is not necessary for me to set out each incident in full. As an example of Ms Holmes' poor work performance, Mr and Ms Gallagher point to her work on the Atkins Carlyle catalogue. Ms Holmes as the graphic artist was required to produce at 72-page catalogue on the computer. Ms Gallagher said that she gave Ms Holmes the catalogue to do shortly after she started her employment. It is common ground that Ms Holmes would have been given that job at the latest by the end of May. Although Ms Holmes states that she was never told when the catalogue was due to be finished, Ms Gallagher states that she did tell Ms Holmes that it was due by July 26. In any event, it is clear from the face of the document that it was a catalogue for August, September, October and November 1996. Gallagher Graphics would be paid $50,000 for producing that catalogue. Ms Gallagher said that to produce a catalogue like that, one has to be highly organised and know exactly what work has been done. Ms Gallagher said that Ms Holmes was so slow at the work that Ms Gallagher herself had to produce 17 out of the 72 pages. In addition, they had to get a week's grace from Atkins Carlyle. There were problems with Ms Holmes' work on the cover and Atkins Carlyle's representatives expressed some dissatisfaction about it. In relation to the cover, Ms Holmes admits that she did not check the proofs but says that she assumed, as the proofs were to be finished over the weekend, that Ms Gallagher herself would check them. Ms Gallagher's evidence was that this was absurd as it was the graphic designer's job to check the proofs. Ms Holmes admits that she did on average less than three pages per day on the catalogue, but says that this was because the work was very difficult. She said that there were problems with the computer system used by Gallagher Graphics and because of this the work was very time consuming. Because of problems with the computer's memory she had to cut up the work and put it on different disks. This was what slowed her down. On another occasion, Ms Holmes had to take some photographs of black shovels for printing. When she had the photographs developed, she could see that the shovels had come out blue on the film but, because of shortness of time, she decided to print the shovels as blue in any event. She did not consult either Mr or Ms Gallagher about this problem. The client was extremely unhappy because his competitor sold blue shovels and he did not. Ms Gallagher states that Ms Holmes should have asked her for advice about this before sending it off for printing. Ms Holmes said that there was no point in saying anything to Ms Gallagher as she would have made the same decision and printed the blue shovels anyway. Ms Holmes contends that a primary reason for the termination of her employment was that she refused to tell lies on behalf of Ms Gallagher. As an example, she said that the representative from Atkins Carlyle became very angry when she saw that the cover for the Atkins Carlyle catalogue had a grey area in it and this was contrary to her instructions. Ms Holmes admitted to this representative that she had not seen the proofs before the cover was printed and Ms Gallagher told her she should not have volunteered this information. On another occasion, Ms Holmes had done some work for a client including the design of a masthead. When Ms Holmes had seen the completed work she realised that one of the colours on the page was not the colour that she had originally intended. Ms Gallagher told her it did not matter as the picture looked good and the client would probably be happy with the finished work. Ms Gallagher said that she had problems trying to prevent Ms Holmes from ringing the client to explain that she had made a mistake. It was this kind of incident which Ms Holmes pointed to as saying that Ms Gallagher wanted her to tell lies for her. Mr and Ms Gallagher and another employee, Kandina Wrightson, all gave evidence that Ms Holmes had an abrupt and cold telephone manner to Gallagher Graphics' clients, which was not good public relations. This was of some concern to Mr and Ms Gallagher because until Ms Wrightson was employed on 23 September 1996 Ms Holmes was the primary person who dealings with the partnership's clients. Ms Holmes denies that she had a cold or abrupt manner but she did admit to being involved in a few incidents which eventually led to complaints from the partnership's clients. Although Ms Holmes provided explanations for those incidents, I am satisfied on the weight of the evidence that there were some problems with her conduct or performance in this area which caused some concern to Gallagher Graphics. Mr Gallagher gave evidence that long before Ms Holmes' employment was eventually terminated he discussed with his wife the question of Ms Holmes' performance. Mr Gallagher wanted to terminate her employment much earlier. However, Ms Gallagher wanted to keep her on and give her another chance. I am satisfied that both Mr and Ms Gallagher spoke to Ms Holmes on a number of occasions about the speed of her work and her public relations skills. Ms Gallagher said that she told Ms Holmes that she had received a number of complaints from clients but after the first time when she identified the client she did not tell Ms Holmes any more who those clients were. On the first occasion when she told Ms Holmes a client had complained, Ms Holmes asked Ms Gallagher for the client's phone number and she said that she would phone the client and check with her that what Ms Gallagher was saying was correct. Mr and Ms Gallagher both deny that they asked Ms Holmes to lie for them. Mr and Ms Gallagher both say that Ms Holmes' attitude to her work deteriorated over time. Ms Holmes refused to follow their instructions. Ms Holmes denies that this was so, but does admit to certain instances put forward as examples by Mr and Ms Gallagher. In one instance, Mr Gallagher told her on a number of occasions to change the font size on a catalogue page and it took Mr Gallagher several attempts over a few hours to get Ms Holmes to change it to the size he had instructed her to use. Ms Gallagher said that she became so concerned about losing clients that she decided to employ Ms Wrightson as an extra graphic artist. According to both Mr and Ms Gallagher, they only had enough work for one graphic artist but Mr Gallagher was prepared to go out and actively seek more work for the partnership if Ms Holmes was prepared to change her performance and attitude. In the meantime, Ms Wrightson was employed to head the art department and deal with all of the partnership's clients. On 20 September 1996 Ms Gallagher spoke to Ms Holmes at a meeting. Ms Gallagher handed Ms Holmes a letter setting out the areas of concern. That letter reads in part as follows: "Dear Stephanie, Ian and I have reviewed your position here at Gallagher Graphics for nearly four months and we feel that if you want to pursue your career in the graphics industry regardless of working here or elsewhere, your attitude and the following areas must be addressed: · working and adhering to time frames and schedules of in-coming jobs · show more initiative · reluctance to listen to constructive criticism · organisation skills improved · public relations with clients improved · negative attitude towards work and clients · able to work more in a team situation. We shall be reviewing your position again in the near future but the emphasis is on that you should show some concern towards Gallagher Graphics' reputation and image and inputting your best effort to retaining our current or prospective clients." According to Ms Gallagher, she outlined the problem areas set out in the letter but Ms Holmes gave no reaction. Ms Holmes asked no questions or clarification from Ms Gallagher and was silent the whole time. Ms Holmes said that she did not consider that their letter of 20 September was bona fide. She said that she thought that it was something that the Gallaghers did to legally be able to fire her. She opened the letter when she got home. She said that she looked at the issues raised in the letter, and assessed their fairness. As she considered that she was making a conscious effort all along to improve, she did not consider that the letter was fair. She said that she destroyed the letter because she did not consider that the criticism was valid. Ms Holmes' evidence was that she considered that it would not matter how much initiative she showed or how much she improved it would not be enough for Mr and Ms Gallagher. She said that they were so hostile to her that they just wanted to get rid of her. Ms Gallagher said that she did not consider Kandina Wrightson to be a competitor from the start, although "the reality was there whether one admits it or not". Ms Gallagher said that after Ms Wrightson started on 23 September 1996 she and Ms Holmes did not work together as a team. They did not get on very well. When Ms Wrightson needed help, Ms Holmes was reticent in providing the help. Ms Gallagher spoke to Ms Holmes on or about 11 October. She had concerns about Ms Holmes' work performance and attitude and in particular her blatant refusal to help Ms Wrightson. Ms Holmes' response was that she wanted $80 or more per week to train Ms Wrightson. Ms Gallagher said that she told Ms Holmes that she did not train Ms Wrightson but Ms Holmes insisted that she did. Ms Holmes' evidence in relation to this was that she wanted to paid the same as Ms Wrightson. Her evidence was that her skills had cost her dearly in that she had spent several years training to acquire the qualifications. Ms Holmes said that she told Ms Gallagher that as she was passing on skills to Ms Wrightson and was required to train her, it was reasonable that she be paid the same as Ms Wrightson. Ms Holmes' evidence was that she and Ms Wrightson were competitors in the same job market and she should therefore not be required to pass on the skills that she had acquired to Ms Wrightson. On 14 October 1996 Ms Gallagher had a further meeting with Ms Holmes. At this meeting she gave Ms Holmes a further letter setting out the fact that there had been little or no improvement in her work and that her attitude was totally undesirable and unacceptable. The letter listed a number of concerns, including "an inability to complete work as scheduled, adhering to time frames and unable to ascertain when incoming jobs would be finished; unable to work in a team situation; reluctance to follow instructions or listen to constructive criticism, blatantly uncooperative, organisation skills, lack of initiative, negative attitude towards work and clients and an insolent manner". As Ms Holmes did not have anything to say in her own defence at that meeting, Ms Gallagher handed her a letter of termination. Ms Holmes' evidence is that she did not consider that there was anything that she could say because they had already made up their minds to sack her. CREDIBILITY OF THE WITNESSES To some extent the evidence of Ms Holmes conflicts with that of Mr and Ms Gallagher and Ms Wrightson. To the extent that there is some conflict of evidence, I prefer the evidence of Mr and Ms Gallagher and Ms Wrightson over that of Ms Holmes. I make the judgment partly based on the demeanour of the witnesses, but also because I found Ms Holmes' evidence to sometimes be vague and inconsistent. In many respects, however, the evidence of Ms Holmes on the one hand and the evidence of the witnesses for the respondent on the other hand does not conflict. I consider that even if Ms Holmes' evidence was accepted in its entirety, the outcome of this case would be the same. WAS THERE A VALID REASON FOR THE TERMINATION On behalf of the respondent it was submitted that the reasons for the termination of Ms Holmes' employment have to be viewed in the context of a family business built up over 17 years. It is an extremely competitive industry and has a small number of large clients. It was submitted that it was not unreasonable to expect the one person to have contact with clients should listen to what her employer says. It was submitted that there was ample evidence that Ms Holmes was too slow at her work and that her attitude to both the clients and her employers left a lot to be desired. Ms Holmes contends that Gallagher Graphics failed to provide an adequate computer system and blamed her for the consequences. She said that in some instances the clients of the partnership provided inadequate instructions. She said that each of the operators did the work in a different way and that it was not valid to compare her performance with that of previous or subsequent employees. She contends that she did the job without anyone to train her and that she still managed to do all the work. She still maintains her contention that Mr and Ms Gallagher expected her to lie on their behalf. I completely reject that submission. There is a big difference between Ms Gallagher asking Ms Holmes to not go out of her way to tell clients that she had made mistakes or to ask her to tell "white" lies about finished work being on its way when instead it was still waiting for the courier to arrive, and asking Ms Holmes to tell blatant lies on their behalf. Ms Holmes appeared to me to be very naive about modern business practices. Despite Ms Holmes' submissions, I am satisfied that her conduct and performance at work was such as to justify the termination of her employment. She was too slow, she failed to follow instructions and she chose to disregard what her employers told her. Further, I found it incredible that she looked upon a fellow employee engaged to work with her as part of a team as a competitor in the industry. Ms Holmes seems to have failed to comprehend that she had a duty to serve her employers and not just her own interests. WAS THERE A BREACH OF SECTION 170DC Ms Holmes contends that there has been a breach of the provisions of section 170DC in that she was not warned ahead of time that her job was in jeopardy. I reject that submission. Ms Holmes was warned verbally on a number of occasions prior to 20 September 1996 that her work performance and conduct left something to be desired. Further, she was given clear written warning on 20 September 1996 that her job was in jeopardy if certain specified areas of her conduct or performance did not improve. Finally, she was told at meetings on both 11 October and 14 October that of the allegations against her conduct and performance and she chose not to say anything in her defence. In these circumstances, I am satisfied that there has been no breach of section 170DC. The order is that the application is dismissed.