GRAHAM v ERSKINE INVESTMENTS PTY LTD [1997] IRCA 137

DECISION NO:137/97 C A T C H W O R D S INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - whether a period of PROBATIONARY employment was determined in advance Workplace Relations Act 1996 ss 170DC, 170DE(1), reg 30B(1)(c) CFMEU & Hornett v Borg Manufacturing Pty Ltd (unreported, IRCA, Moore J, 6 February 1997) Davis v Portseal Pty Limited (unreported, IRCA, Full Court, 10 April 1997) RICHARD GRAHAM and ASSOCIATION OF PROFESSIONAL ENGINEERS, SCIENTISTS AND MANAGERS OF AUSTRALIA - v - ERSKINE INVESTMENTS PTY LTD No. VI 2717 of 1996 Before: Judicial Registrar Millane Place: Melbourne (heard in Bendigo) Date: 30 April 1997 INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 2717 of 1996 B E T W E E N : RICHARD GRAHAM and ASSOCIATION OF PROFESSIONAL ENGINEERS, SCIENTISTS AND MANAGERS OF AUSTRALIA Applicants A N D ERSKINE INVESTMENTS PTY LTD Respondent MINUTES OF ORDERS Judicial Registrar Millane 30 April 1997 THE COURT DECLARES THAT: 1. On 1 November 1996 the respondent terminated the applicant's employment in contravention of the Workplace Relations Act 1996. AND THE COURT ORDERS THAT: 2. Within 21 days of the date of making these orders the respondent pay to the applicant compensation in the sum of $16, 037.50, less any amount payable to the Commissioner of Taxation pursuant to the Income Tax Assessment Act 1936 and actually paid. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 2717 of 1996 B E T W E E N : RICHARD GRAHAM and ASSOCIATION OF PROFESSIONAL ENGINEERS, SCIENTISTS AND MANAGERS OF AUSTRALIA Applicants A N D ERSKINE INVESTMENTS PTY LTD Respondent Before: Judicial Registrar Millane Place: Melbourne (heard in Bendigo) Date: 30 April 1997 REASONS FOR JUDGMENT By an application filed on 8 November 1996 the applicant seeks compensation from his former employer alleging that on 1 November 1996 his employment as a mechanical engineer was terminated in contravention of sections 170DE(1) and 170DC of the Workplace Relations Act 1996 (the Act). The respondent defended the proceeding on two bases. First it argued a jurisdictional point; namely, an allegation that the applicant was at termination a probationary employee and precluded from the benefits conferred by the unlawful termination provisions of the Act by reason of the exclusions contained in regulation 30B(1)(c) of the Industrial Relations Court Regulations. Relevantly that regulation provides as follows: "30B(1) Subject to subregulation (2), for the purposes of section 170CC of the Act, the following employees are excluded from the operation of Subdivision B, C, D and E of Division 3 of Part VIA of the Act: (a) ... (aa) ... (b) ... (c) an employee serving a period of probation or a qualifying period of employment, if the duration of the period or the maximum duration of the period, as the case requires: (i) is determined in advance; and (ii) is reasonable, having regard to the nature and circumstances of the employment; (d) ..." The respondent did not call any evidence on the issue of whether any period of probation determined in advance was reasonable having regard to the nature and circumstances of the employment. The respondent did not seek to justify the termination but did attempt to call evidence which it says established that the applicant could not have anticipated a long period of permanent employment as a result of performance considerations which led his supervisor and the general manager to terminate the applicant's employment on 1 November 1996 less than three months after he commenced that employment. Neither party directly addressed the question of the practicability of reinstatement should the applicant succeed on the jurisdictional question. Nevertheless, it was clear from the applicant's case and his evidence that he did not seek nor did he consider reinstatement to be a realistic option for him. The respondent called no evidence on this issue. THE WITNESSES The applicant gave evidence on his own behalf. The respondent called the following witnesses: - Martin John Rollins (Rollins), a personnel consultant employed by Smith Reid; - David Leslie Walker (Walker), the respondent's senior projects manager; and - Gary Herd (Herd), a project manager with the respondent. Prior to the hearing commencing I heard and determined an application filed by the respondent seeking to adjourn the hearing date because a witness and the chief executive officer of the respondent company, Donald James Erskine, was absent overseas on business. That application was refused because, amongst other things, it was apparent that Erskine left Australia after he had notice of this proceeding and the dates fixed for hearing with the intention of returning to Australia during the week of the circuit hearing but not for the first hearing date. Having been delayed in Asia on his journey to Europe Erskine proceeded with that journey fully understanding that he would not return to Australia during the hearing week. The applicant was ready to proceed with his case as the first case in the list and in these circumstances I determined that it was just and convenient for the matter to progress to a hearing. As will be seen from the analysis of the evidence below, it became clear that Erskine's evidence would not have greatly advanced the question of whether there was a discussion between the applicant and the respondent's employment consultant, Rollins, during which discussion it was alleged that the applicant was informed that the employment would be for a trial period of three months. THE EVIDENCE The twenty-five year old applicant impressed me as a straight forward witness who did not seek to embellish his evidence and who demonstrated a clear and detailed recollection of the events leading to his employment as a mechanical engineer from 26 August 1996. The applicant graduated with a Bachelor of Mechanical Engineering from the University of Ballarat in late 1994. He undertook work experience for twelve weeks and in April 1995 commenced employment in Melbourne with Burdett Engineering, which company monitors the condition of engines and engages in preventative maintenance for companies operating machinery. The applicant comes from the Bendigo area and has family and a home in this region. In April 1996 he saw and responded to an advertisement placed by the respondent offering a number of positions including that of mechanical engineer at Bendigo. The newspaper advertisement gave Rollins as the contact. It made no reference to any terms or conditions other than referring to a negotiable salary range of $33,000 to $55,000. It was the applicant's evidence that another position available at the same time had been rejected by him because he did not want to give up his secure employment in Melbourne for a position which did not guarantee him work beyond six months' employment. An interview was arranged with Rollins at Bendigo on 17 July 1996. During this interview the applicant explained his desire to return to Bendigo and discussed his duties with his current employer. It was common ground that there was discussion of his current salary of $29,500 and the full use of a company vehicle as well as Rollins indicating to the applicant that the position was a permanent one. Where their evidence diverged was on the question of whether or not at that initial interview Rollins informed the applicant that the position involved a period of three months' probation or trial employment. At the conclusion of the interview the applicant claims that there had been no offer of employment and no indication of what salary would be offered, however, Rollins did indicate that he would recommend the applicant for interview by Erskine. This second interview took place in the morning on Saturday, 20 July 1996 between only the applicant and Erskine. The applicant's uncontested evidence is that during his interview with Erskine there was no mention of any probationary period. He did indicate that at one stage Erskine informed him that it would take "... at least six months to get up to speed". I understood this to be a reference to the applicant establishing himself in the new position with a view to accepting project management work in the longer term. According to the applicant Erskine also indicated that the position was a permanent one but did not then make an offer to the applicant; informing the applicant that he should contact Rollins on the following Monday. The applicant claims that during the following Monday Rollins contacted him at his place of work at Melbourne and offered him the position on a $34,000 per annum salary. He accepted this offer and then rang Rollins again seeking the offer in writing before giving notice to his present employer. On that occasion he was assured by Rollins that the offer was a genuine one. As a consequence he gave one month's notice. On the following day Rollins contacted him and it was agreed that during a further discussion between the two men there was discussion about how his salary was made up. It was the applicant's understanding that the salary offered was $34,000 plus the employer's superannuation contribution. However, Rollins' enquiries with Erskine revealed that this payment was included in the $34,000 figure. Although the applicant was not happy with this he accepted it on the understanding that on 23 July 1996 Rollins mentioned that there would be a salary review within three months. According to the applicant in discussions with Erskine on or about 9 September 1996 when the question of the confusion over the six per cent superannuation payment arose again, Erskine reiterated that there would be a salary review within three months. The applicant commenced his employment on 26 August 1996. The only matters put to the applicant concerning his performance during the currency of his employment involved some late attendances at work and a suggestion that at times he asked more than one person for the same information and thereby wasted time. What is apparent is that at no time during his employment did he receive any counselling, warnings or cautions concerning his performance or behaviour which would have in any way alerted him to his employer's concerns and have allowed him an opportunity to respond and improve his performance as well as putting him on notice that his job was in jeopardy. It was said by Walker, the applicant's immediate superior, that in late October 1996 he and the general manager, John Stafford, determined that the applicant was unsuitable for the position. It was not contested that Walker spoke to the applicant on 1 November 1996 and terminated his employment with one week's notice. Walker gave no evidence of any discussion about any probationary period allowing him to terminate the employment in the way he did, yet he did indicate to the Court that had he believed that the applicant's employment was not probationary employment, he would have followed the procedures required for counselling, offering warnings and giving an opportunity to respond to the performance related allegations. The applicant in contrast claimed that at termination he was told that he was a probationary employee and when he protested, Walker referred to a letter dated 22 August 1996 from the respondent to the applicant confirming his appointment. The letter contains the following statements (Exhibit A2): "We are pleased to confirm your appointment as Mechanical Engineer with Industrial Conveying (Aust) Pty Ltd commencing Monday August 26, 1996. Your annual salary will be $32,075.00, the weekly proportion of which will be deposited to a Bendigo Bank Limited account nominated by yourself. In addition an annual superannuation amount equal to 6% of the above salary will be credited, on a pro-rata monthly basis, to a Sandhurst Trustees Limited Superannuation Fund in your name. Your employment is subject to a review at the completion of three months service. May we take this opportunity to congratulate you on your appointment and welcome you to what will hopefully be an enjoyable and mutually beneficial association." Unfortunately the matters the applicant alleges were addressed at the termination interview were not put to Walker in cross-examination; although it was quite apparent from his evidence that he said he acted in the belief that the applicant was a probationary employee. In relation to the statement in the letter to the effect that the applicant's employment would be reviewed at the completion of three months' service, the applicant claims that because of Rollins earlier representations to him concerning a salary review, he understood that statement to mean a salary review. Moreover, this understanding was reinforced because there had been no mention of any other review or probationary period. It was the applicant's uncontested evidence that the letter dated 22 August 1996 was not received by him until he emptied his letter box after commencing work on 26 August 1996. In my view the Court can make no reliable assumption about the timeliness of the postal deliveries in the Bendigo area, bearing in mind that the envelope was marked as having been posted at 6.00pm on Thursday, 22 August and the applicant conceded having received it after emptying his letter box on the afternoon of Monday, 26 August 1996. If the letter is to be relied on as proof of a period of probationary employment determined in advance, then it fails to do this because I am not satisfied that it can be said that it was received before the applicant commenced his employment (see generally CFMEU & Hornett v Borg Manufacturing Pty Ltd (unreported, IRCA, Moore J, 6 February 1997)). In order to decide the preliminary jurisdictional question it is necessary to determine whether the applicant's evidence regarding the first interview with Rollins is to be preferred to that of Rollins who claimed that he discussed a three month trial period with the applicant during that interview. I have already observed that the applicant appeared to demonstrate a detailed recollection of the events surrounding his appointment. In contrast Rollins' evidence in part relied on reconstruction of events as well as his assertion that as a personnel consultant, in his industry, he generally spoke to interviewees about "trial" and "qualification" periods. He recalled what he referred to as a brief discussion with the respondent as to the need for a three month trial period, but so far as his recollection of any actual conversation with the applicant on this subject was concerned, I was not persuaded that his evidence was of a specific statement made by him to the applicant. During the interview with the applicant Rollins made some notes and had a document he referred to as a "matrix prompt" on which he recorded certain responses against a number of headings relevant to the position being considered. He made no record of or any reference to a trial or probationary period. This, to my mind, is not surprising in circumstances where the interview appeared to be one where he was assessing and analysing the applicant's suitability to be referred with any other potential candidates to Erskine for a final interview and selection. Rollins gave no evidence to suggest that when he made an oral offer of employment there was any detailed discussion of any terms other than the salary package. On balance I am satisfied that there was no probationary period determined in advance and, therefore, the applicant is entitled to the benefit of the unlawful termination provisions of the Act. The respondent did not call any evidence seeking to justify the termination. Accordingly, I find that the respondent contravened the provisions of the Act when it terminated his employment on 1 November 1996. REMEDY