SPROAL v FABRILINE AUST PTY LTD [1997] IRCA 85

DECISION NO:85/97 CATCHWORDS

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - Applicant's employment terminated by his abandonment of employment, done in the mistaken belief that his employer had dismissed him - No termination of employment at the initiative of the employer - APPLICATION DISMISSED

Workplace Relations Act,1996; s 170 CB

APESMA v- David Graphics Pty Ltd, Industrial Relations Court of Australia,, Wilcox CJ, 12 July 1996, unreported Mohazab -v- Dick Smith Electronics Pty Ltd (No2) (1995) 62 IR 200 Rheinberger -v- Huxley Marketing Pty Ltd (1996) 67 IR 154

SPROAL v FABRILINE AUST. PTY LTD. DI 1268 of 1995

BEFORE: PATCH JR PLACE: SYDNEY (Heard in Darwin) DATE OF JUDGMENT: 25 MARCH 1997

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NORTHERN TERRITORY DISTRICT REGISTRY

DI 1268 of 1995

BETWEEN:

ROBERT JOHN SPROAL Applicant

AND

FABRILINE AUST. PTY LTD. Respondent

BEFORE: PATCH JR PLACE: SYDNEY (Heard in Darwin) DATE: 25 MARCH 1997 MINUTES OF ORDERS

THE COURT ORDERS THAT: 1. The application 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 NORTHERN TERRITORY DISTRICT REGISTRY

DI 1268 of 1995

BETWEEN:

ROBERT JOHN SPROAL Applicant

AND

FABRILINE AUST. PTY LTD. Respondent

BEFORE: PATCH JR PLACE: SYDNEY (Heard in Darwin) DATE: 25 MARCH 1997 REASONS FOR DECISION

The applicant claims that his employment was terminated at the initiative of the respondent, and that that termination was unlawful. He does not seek reinstatement, but seeks compensation. The respondent claims that there was no termination of employment at the initiative of the employer. In the alternative, if the Court were to find that the applicant's employment had been terminated at the initiative of the employer, the respondent asserts that that was lawful. BACKGROUND FACTS The applicant was employed by the respondent from 19 March 1995 to 21 November 1995, inclusive. For the bulk of that time the applicant worked as a skipper/crew member aboard the vessel "Spirit of Darwin". This vessel cruised Darwin harbour conducting sightseeing tours. The applicant occasionally worked on other vessels owned by the respondent. In about July or August 1995, the respondent became aware that two former employees (two casual female bar attendants) had been responsible for not ringing up cash sales from the bar of "Spirit of Darwin", in the total amount of about $10,000. That matter was not reported to the police, but the two employees were not re-employed. A short time after that, Mr Blums (the principal of the respondent company) warned staff that stock had gone missing, and that staff were to pay for any stock that they themselves consumed, on penalty of being dismissed. There is some dispute about whether or not the applicant had been present when this general warning was given to staff, but the Court is satisfied that the applicant was aware of the policy, whether or not he was at that particular meeting. The Court is also satisfied that, whether or not the applicant was at that particular meeting, he was aware that Mr Blums regarded missing stock as a serious matter, and that staff had to pay for any drinks they themselves consumed. WAS THE APPLICANT'S EMPLOYMENT TERMINATED AT THE INITIATIVE OF THE RESPONDENT? The terms "termination" and "termination of employment" as used in the Workplace Relations Act, 1996, have, by virtue of section 170 CB of the Act, the same meaning as they have in the Convention concerning the Termination of Employment at the Initiative of the Employer (schedule 10 of the Act). In the Convention those terms are defined as meaning "termination at the initiative of the employer". The meaning of the phrase "at the initiative of the employer" was discussed by the Full Court of this Court in Mohazab -v- Dick Smith Electronics Pty Ltd, (No 2) (1995) 62 IR 200. The Court said, at page 205: "It accords with the purpose of the Convention to treat the expression 'termination at the initiative of the employer' as a reference to a termination that is brought about by an employer and which is not agreed to by the employee. Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship." The Court went on to say, at pages 205 to 206: "In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employee relationship." The Court also said this, at 206: "When an employee has no effective or real choice but to resign, it can hardly be said that the termination of his or her employment is truly at the employee's initiative". The Court also said, at 207: ".....industrial tribunals and courts have long accepted that an employee who resigns from his or her employment can and should be treated as having been dismissed by the employer if the dismissal is one where the employee did not resign willingly and, in effect, was forced to do so by the employer". The Court then noted what Wilcox CJ had said in APESMA -v- David Graphics Pty Ltd, Industrial Relations Court of Australia, Wilcox CJ, 12 July 1995, unreported. At page 5 of that judgment, his Honour said: "I agree with the proposition that termination may involve more that one action. But I think it is necessary to ask oneself what was the critical action, or what were the critical actions, that constituted a termination of the employment". In Rheinberger -v- Huxley Marketing Pty Ltd (1996) 67 IR 154, his Honour, Moore J, discussed Mohazab. He said, at page 160: "However, it is plain from these passages that it is not sufficient to demonstrate that the employee did not voluntarily leave his or her employment to establish that there had been a termination of the employment at the initiative of the employer. Such a termination must result from some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect. I leave open the question of whether a termination of employment at the initiative of the employer requires the employer to intend by its action that the employment will conclude. I am prepared to assume, for present purposes, that there can be a termination at the initiative of the employer if the cessation of the employment relationship is the probable result of the employer's conduct". His Honour went on the say: "Mohazab (supra) illustrates a case where not only did the employer create the environment in which an employee tendered his resignation but also exerted pressure on the employee to follow the course he did. In this case there is no real basis for suggesting that the Company, through Mr Wilson, exerted any such pressure or took any step which was intended to cause the applicant to say what she did about her resignation or would probably have that result". The crucial event in relation to the question of whether the applicant's employment was terminated at the initiative of the respondent was a conversation on the "Spirit of Darwin" on 21 November 1995. The persons present during that conversation were Mr Tony Blums, Mr Troy Pickard (also a skipper/crewman employed by the respondent) and the applicant. In the days prior to that conversation, Mr Blums had been informed by Mrs Alida Atkinson, a part-time bar attendant who worked on the "Spirit of Darwin", that she had, for the last two weeks or so, been keeping a record of drinks which had "gone missing" from the bar fridge on the vessel, after she had filled the fridge in the evening in preparation for the next cruise. She said that some $57 or so of drinks had gone missing. In addition to that information, Mr Blums and his wife, Mrs Gail Blums, had done a stocktake. The conclusion that had been drawn from that stocktake was that in excess of $700 worth of stock (mainly soft drinks and alcohol) was missing, presumed stolen. I am satisfied that Mr Blums suspected that the applicant was the person responsible for stealing that stock. Mr Pickard had been eliminated because, during the period of the stocktake, (commencing 1 November and ending 20 November, 1995) Mr Pickard had been absent, on holidays. Mrs Atkinson had been eliminated by Mr Blums because he did not believe that she, a long serving employee, would have taken the goods. Furthermore, she, unlike both the applicant and Mr Pickard, did not have a master key. As a consequence of the above events, Mr Blums attended the "Spirit of Darwin" at the end of the evening cruise on 21 November 1995. Mr Pickard and the applicant were on the dock, about to leave, and Mr Blums asked them to return. He asked them to empty their bags, which they did. Mr Pickard had a beer and a soft drink in his bag and the applicant had a bottle of ginger beer. Mr Blums asked them if they'd paid for them. Mr Pickard replied that it was normal to pay on Friday (by implication, answering no, not yet). Mr Blums says that he then said to the applicant and Mr Pickard that he'd done a couple of stocktakes, one on the 1 November and another on the 20 November 1995 and that there was about $800 in stock missing. He then asked both Mr Pickard and the applicant if they had any idea what had happened to the stock, whether anyone else could have taken it and whether Mrs Atkinson could have been responsible for the theft. Mr Blums says that both the applicant and Mr Pickard said that it couldn't have been Mrs Atkinson, because she didn't have a master key. The applicant's evidence and Mr Pickard's evidence was broadly in agreement with what Mr Blums said up to this point. However, the evidence given by Mr Blums and the evidence given by the applicant differed significantly at this point. Mr Blums says that the applicant kicked his bag and then said something like "I don't want to work in a place where I am accused of being a thief" and that he, Mr Blums, responded by saying words to the effect of "all I want to know is what happened to the stock." Mr Blums them said that the applicant bent down and picked up his bag and that he, Mr Blums then thought something like this "If he does not want to work for me, then I won't let him leave with the keys". As a result of that Mr Blums then asked the applicant for the keys to the boat, which were then handed over. Mr Blums gave evidence that he'd thought that the applicant had resigned by saying the words "I don't want to work in a place where I'm accused of being a thief". The applicant said in his evidence that he did not say the words "I don't want to work in a place where I'm accused of stealing" until after he had been asked for the keys, as he was leaving the vessel. Mr Pickard's evidence as to the crucial sequence of events (ie. whether the demand for keys was made before or after the applicant had said he didn't want to work in a place where he was accused of being a thief) supported Mr Blums version. I regard Mr Pickard as the most objective person present during the conversation. He was called by the applicant and did not, at any stage, lose his temper. Therefore, on balance, I accept the respondent's version of the sequence of events in that particular conversation on 21 November 1996. However, it does not necessarily follow that the applicant had resigned in that conversation. True it is that Mr Pickard gave evidence that he thought that the applicant had "packed it in" (ie. resigned) by his words and actions on that day. It is also true that Mr Blums believed that the applicant had resigned. Nonetheless, in my opinion, the applicant did not resign. He thought that his employment had been terminated by the demand for the keys. But this was a twist that he had given to Mr Blums words in the heat of the moment, and which was generated by his anger at having been confronted with what was, in effect, an accusation of theft. Nor do I accept that, in demanding the keys, Mr Blums was terminating the employment of the applicant. But, in saying that, I do accept that Mr Blums genuinely believed that the applicant had resigned - that is why he asked for the keys. In my opinion, the applicant's employment came to an end by his abandonment of his employment, that abandonment taking place on the basis of an incorrect belief that his employment had been terminated by Mr Blums. In my opinion, the applicant's employment was not terminated at the initiative of the respondent. The enquiries that Mr Blums were making, even accepting that they were made in the belief that the applicant was probably the person responsible for stealing the missing goods, were reasonable in the circumstances. The manner of making them was, in my opinion, not such as to cause a person in the position of the applicant to believe that his employment was being terminated. There is no real basis for suggesting that Mr Blums exerted such pressure on the applicant that he was forced to resign, or for saying that Mr Blums intended to cause the applicant to resign. As the applicant has not proven that his employment was terminated at the initiative of his employer, the application must be dismissed. ORDER That the application be dismissed. _____________________________________