BLUM v NORTHERN HERD DEVELOPMENT CO-OPERATIVE LTD [1997] IRCA 150

DECISION NO:150/97 C A T C H W O R D S INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - RESIGNATION - whether termination of employment at the initiative of the employer - REMEDY - whether reinstatement impracticable - absence of evidence from either party on this question Workplace Relations Act 1996 ss 170EE(1), 170EE(2) Sinclair v Anthony Smith & Associates Pty Ltd (unreported, Industrial Relations Court of Australia, von Doussa J, 1 December 1995) Black v Danka Datakey Pty Ltd (unreported, Industrial Relations Court of Australia, Millane JR, 4 March 1997) Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200 VANESSA BLUM - v - NORTHERN HERD DEVELOPMENT CO-OPERATIVE LTD No. VI 1104 of 1997 Before: Judicial Registrar Millane Place: Melbourne (heard in Bendigo) Date: 13 May 1997 INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 1104 of 1997 B E T W E E N : VANESSA BLUM Applicant A N D NORTHERN HERD DEVELOPMENT CO-OPERATIVE LTD Respondent MINUTES OF ORDERS Judicial Registrar Millane 13 May 1997 THE COURT DECLARES THAT: 1. On 20 November 1996 the respondent terminated the employment of Vanessa Blum in contravention of the provisions of the Workplace Relations Act 1996. AND THE COURT ORDERS THAT within 21 days of the date of making these orders: 2. The respondent reappoint Vanessa Blum to the position in which she was employed immediately before her termination on 20 November 1996. 3. The employment of Vanessa Blum be deemed to have been continuous for all purposes from 20 November 1996 to the date of reinstatement. 4. The respondent pay to Vanessa Blum the remuneration lost by her because of the termination less: (a) any income earned since the termination date; and (b) any amount payable to the Commissioner of Taxation pursuant to the Income Tax Assessment Act 1936 and actually paid. 5. In default of agreement on the sum to be paid, there be liberty to either party to apply to the Court on reasonable notice in respect to the calculation of the amount of the remuneration lost referred to in the preceding order. 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 1104 of 1997 B E T W E E N : VANESSA BLUM Applicant A N D NORTHERN HERD DEVELOPMENT CO-OPERATIVE LTD Respondent Before: Judicial Registrar Millane Place: Melbourne (heard in Bendigo) Date: 13 May 1997 REASONS FOR JUDGMENT By an application filed on 28 November 1996 the applicant seeks compensation from her former employer alleging that on 20 November 1996 her employment as a herd improvement co-ordinator was terminated in contravention of the unlawful termination provisions of the Workplace Relations Act 1996 (the Act). The applicant's case was opened to the Court on the basis that she did not seek reinstatement. This was so even though as the evidence was called it became apparent that she loved her job and devoted long hours to it. Moreover, the position she occupied was one of only two such positions in the country region in which she resides and since the cessation of her employment she has been unable to find any full-time employment much less employment in the area of her true vocation. Other than assuming that she has some obvious reluctance to return to an employer, who she says gave her no option but to resign, there was no attempt to call evidence to establish the impracticability of reinstatement. Not surprisingly, the respondent in its opening agreed, without providing a basis for doing so, with the proposition that if the Court made a finding that there was termination at the initiative of the respondent then reinstatement was impracticable and nominal compensation was the only appropriate remedy. Sections 170EE(1) and (2) of the Act provide the following remedies: "170EE(1) In respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, the Court may, if the Court considers it appropriate in all the circumstances of the case, make the following orders: (a) an order requiring the employer to reinstate the employee by: (i) reappointing the employee to the position in which the employee was employed immediately before the termination; or (ii) appointing the employee to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination; and (b) if the Court makes an order under paragraph (a): (i) any order that it thinks necessary to maintain the continuity of the employee's employment; and (ii) an order requiring the employer to pay to the employee the remuneration lost by the employee because of the termination. 170EE(2) If the Court thinks, in respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, that the reinstatement of the employee is impracticable, the Court may, if the Court considers it appropriate in all the circumstances of the case, make an order requiring the employer to pay to the employee compensation of such amount as the Court thinks appropriate." Once contravention of the Act is established if the Court considers it appropriate in all the circumstances of the case it may order reinstatement. However, if reinstatement is impracticable and subject to the qualification that the Court considers it appropriate in all the circumstances of the case, the Court may order the payment of compensation. It is not the intention of the Court to press a remedy on a successful party, however, the Act clearly requires the Court to consider a number of matters as well as the question of whether reinstatement is impracticable. As would be expected, all of these matters are determined objectively and by reference to the evidence. In the case of impracticability, the onus rests on the party who seeks to establish the impracticability of reinstatement (see Sinclair v Anthony Smith & Associates Pty Ltd (unreported, Industrial Relations Court of Australia, von Doussa J, 1 December 1995) and Black v Danka Datakey Pty Ltd (unreported, Industrial Relations Court of Australia, Millane JR, 4 March 1997)). Because of my findings on the facts set out below, I have concluded first that it is appropriate in all the circumstances of this case to order reinstatement and, secondly, that in the absence of evidence to suggest otherwise, reinstatement is practicable. The applicant simply gave no evidence on this issue other than to demonstrate to the Court her distress at losing a job she obviously enjoyed. In these circumstances I propose to make appropriate orders reinstating the applicant to her former position as well as orders for payment of the remuneration lost to the date of reinstatement. Such orders contemplate that the sum of less than $1,000 received from casual employment since the termination be offset against the amount payable to the date of reinstatement. Had there been evidence called to demonstrate the impracticability of reinstatement, this is a case where the payment of compensation would be appropriate as an alternative remedy. Because of the ongoing nature of the loss suffered and the unlikelihood of the applicant gaining permanent full time employment of the kind she performed with the respondent, her remunerative loss exceeds the ceiling of $18,500. Accordingly, in my view the appropriate sum payable by way of compensation would be $18,500. THE WITNESSES The applicant gave evidence and called one other witness, Aaron Paul Wight (Wight), the applicant's boyfriend. Valentine Joseph Salakowski (Salakowski), the respondent's manager, gave evidence on behalf of the respondent. THE EVIDENCE By a letter dated 20 November 1996 the applicant tendered her resignation to Salakowski relevantly stating (Exhibit R2): "I wish to resign from the possition (sic) of Herd Improvement Co-Ordinator for Northern Herd Development." The events immediately preceding that unequivocal action on the applicant's part require close consideration because the applicant relies on the authority of the Full Court of the Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200 to say that she was forced by Salakowski to resign and, consequently, the termination of her employment was at the employer's initiative. In effect, what she says is that it was the act of the employer that directly or consequentially resulted in her tendering her written resignation and this was not a voluntary resignation on her part. The applicant's position was one where she worked with farmers assisting them in artificial insemination techniques with their herds as well as herd testing. In effect, she worked long hours and travelled extensively around the local region trying to ensure that the farmers were aware of the employer's products and promoting its products and services where she could. The applicant commenced her employment in February 1995 having been interviewed and engaged by Salakowski's predecessor. There was a written contract of employment and individual conditions (Exhibit R1) containing, amongst other things, dispute and grievance procedures as well as a procedure for providing notice of termination (clauses 2.14 and 3.4 respectively). Relevantly the termination procedure required either party to give two weeks' written notice and, in the case of the respondent, a right to make payment of time in lieu of notice if termination was sought. In late March 1996 Salakowski assumed the role of the manager who had previously engaged the applicant. In mid to late 1996 it appears that some farmers had concerns about some aspects of the service they were receiving from the respondent. After a meeting in late August 1996 attended by the applicant and run by Genetics Australia, the applicant was told by Salakowski that she had upset some farmers. Salakowski did not tell her who had complained. To address the problem the applicant set about making her own enquiries which on 25 October 1996 led to her sending out correspondence and a questionnaire to all the farmers in the area. She had not by the date of termination received the replies she sought to her survey. According to the applicant October/November was a busy time because artificial insemination was underway and, during that time, she worked from 6.30am to 7.00pm or 8.00pm as well as working on Saturdays and Sundays for part of each of those days. On Friday 15 November 1996 she was very busy and had arranged an appointment with a farmer at 5.00pm. She had asked Nigel, the technician responsible for this, to ensure that the tanks and equipment for artificial inseminations be ready early that afternoon for her to deliver. She was asked by another employee, Karen, to visit another farm that same afternoon but, because of her own very busy schedule, indicated that she could not do this; offering instead to see the farmer on Saturday or Sunday, which she did do on Sunday between 11.00am and 4.00pm. As well as meeting her own commitments that day she was asked by Nigel to do three other deliveries. The applicant was then concerned because Nigel had not completed the preparation of the tanks and equipment she needed for her own appointment by 3.00pm. She did, nonetheless, relent and fitted in the extra three deliveries, which made her some ten minutes late for her own appointment. On Saturday, 16 November she worked from 6.30am and, as I have already noted, devoted most of her Sunday to the additional appointment with the farmer she could not see on Friday. On the Monday she travelled to another area with Karen and addressed the farmers in that area about the respondent's programs as well as assisting them with their queries on their computer programs. To meet this commitment they were away until Tuesday afternoon returning for the applicant to attend a meeting of the respondent's board that evening. As a senior staff member the applicant was required to address the board on at least one occasion and Tuesday, 19 November was the applicant's turn. She was informed by Salakowski that the board were interested in knowing what was happening and what plans she had for promotional work the next year. It was the applicant's uncontested evidence that she spoke to Salakowski at about 6.00pm and he indicated he would see her at 8.00pm. However, before she left he rang her and informed her that the board had a lot to discuss and her address had been moved to the next board meeting. She attended work as usual on Wednesday, 20 November and that morning at approximately 11.00am had a cattle club meeting to attend. Because her vehicle was being serviced she asked Salakowski for his vehicle for the day. As she was leaving Salakowski stopped her and indicated he wanted to speak to her even though she expressed concern because she was running late for her appointment. They both went into his office and it is the discussion that ensued that represents the principle area of conflict between the two witnesses. The applicant's allegation is that Salakowski told her he had discussions with the board and they were unhappy with her. Furthermore, he had spoken to other staff who were not supportive of the applicant; they found her unco-operative. In response to her questions the applicant claims that Salakowski told her that the board was unhappy with her approach. He also referred to her refusal to see the farmer on the previous Friday as requested by Karen and her reluctance to undertake the additional deliveries as requested by Nigel. The applicant alleges that she asked Salakowski if she was being sacked and was told she was not, however, he said to her that she had three options: 1. to stay and do nothing about the problem; although Salakowski indicated that realistically this was not an option; 2. Salakowski could fire her; and 3. she could resign and look for alternative employment. Salakowski indicated that the last option was preferable because it would be better for her in seeking other employment if she resigned. As she was upset by what had happened the applicant asked for time to think. Salakowski indicated to her that he wanted a decision that day and in response to her urging allowed her to go home to write out her resignation. She took Salakowski's car to do this and when at home consulted her boyfriend, Wight, who told the Court that she had arrived home upset and, amongst other things, reported to him that Salakowski told her the board of directors had no faith in her and he required her to hand in her resignation or be sacked. Wight was with her when she wrote the letter of resignation returning to her place of employment approximately one hour later with the document. It was Salakowski's evidence that he had no direct problem with the applicant's general performance, nevertheless, from time to time he needed to deal with reports made to him and follow up on them. I understood this to mean matters such as complaints or queries from farmers. Salakowski was particularly vague about the board meeting on the evening preceding the termination. He at first said there had been no direct discussion about the applicant but did then note that various directors had mentioned complaints received from farmers. Although his evidence clearly indicates that there were discussions at the board meeting about complaints involving the applicant, he said there were no minutes kept pertaining to those matters and, as far as Salakowski was concerned, as manager it was up to him to resolve any of the problems raised. Salakowski claims that on the morning of 20 November 1996 when he met with the applicant he explained to her the source of the complaints and indicated that the directors were not interested in apportioning blame but were more interested in solving any problems. He agreed that he offered three options the first of which was to do nothing, however, he agreed that that was not an option. The second was, as he put it, to go into damage control and go and see farmers where possible with a view to redressing the problems and, the third was for the applicant to resign. Salakowski claims that the applicant asked him if he wanted her to resign to which question he responded by saying he did not wish to push her into anything. It was Salakowski's recollection that the applicant asked for a few days to think about it. He responded by telling her there was no value in delaying and that it was no good for the company and her credibility if there was delay. After receiving her written resignation Salakowski recalled that the applicant questioned him about her entitlements at which time he told her she was entitled to two weeks' pay in lieu of notice. As is apparent from the termination provisions of the contract and the individual conditions applying to the applicant's employment, if she resigned there was no entitlement to pay in lieu of notice. Salakowski sought to overcome the obvious inference to be drawn from his conduct in indicating to her that she was entitled to two weeks' pay in lieu of notice by suggesting that this was something of an ex gratia payment and this characterisation of the payment had been conveyed to the applicant at the time. This was certainly not put to her in cross-examination and in my view the evidence was a transparent attempt to counter the suggestion that the payment was made because the applicant was, in fact, terminated by the respondent. When he was cross-examined Salakowski elaborated on the source of and nature of the alleged complaints made by farmers, however, it was clear from the answers given by Salakowski that some of the complaints related to matters occurring in July and August and these matters had already been discussed with the applicant when meetings were held with staff to deal with concerns as they arose. Essentially, it appears that there were no new issues to do with farmers' complaints when Salakowski met with the applicant on 20 November. Salakowski agreed that the applicant was a good and valued employee, nevertheless, there were problems with clients that he had to review. He agreed that the applicant, in his words, had asked him if he was "finishing" her up and he had responded by saying "no". He also agreed that had he not raised resignation as an option the applicant probably would not have resigned on that day and, even though he held her in high regard and was impressed by the breadth of her experience, he did not seek to dissuade her once she returned with her written resignation tendered in accordance with the third option put by him to her. Salakowski conceded that he may have said to the applicant something to the effect that it was better to resign than be dismissed because of the effect on her ability to be re-employed. Notwithstanding the significance of this concession, Salakowski did deny making this statement before the applicant's resignation was handed to him. I was impressed by the applicant as a witness who recounted her evidence clearly and who gave the impression of having a detailed recollection of the events surrounding what she considered to be a traumatic episode. In contrast, Salakowski's evidence suffered from the inconsistencies I have already highlighted and lacked plausibility. The employer's intention if it can be gleaned from the evidence is relevant but not decisive of the question of whether it was the act or acts of the employer which led to termination. In this case, it was Salakowski who introduced the notion of resignation into what appeared to be an impromptu interview following a board meeting where some concerns generally about complaints from farmers had been expressed. The inference I draw from the third option to resign offered to the applicant at the time it was offered was that Salakowski hoped and intended that the applicant would take this option to enable him to act decisively in trying to address concerns that had been relayed to him through the board at its meeting. If he only intended to redress and solve any difficulties the company had with its customers there was no plausible reason for raising the option of resignation unless he wanted the employee to take this course. The first option was no option at all and he had no difficulty in saying this at the time. In my view on the evidence it is more probable than not that the second option was a sacking and Salakowski was offering the applicant a way out at the same time as attempting to relieve the employer of its obligations to provide valid reasons and afford procedural fairness should it decide to invoke the termination process. Accordingly, my finding is that on 20 November 1996 the respondent terminated the applicant's employment and in the absence of any valid reason or reasons for doing so, the termination contravened the unlawful termination provisions of the Act. At the date of termination the applicant's remuneration package was $37,000 per annum and this according to her contract included an amount of $7,000 for the value of a vehicle provided to her. In assessing the remuneration lost to the date of reinstatement it will be necessary for the parties to calculate the appropriate amount payable less both the amounts received from income earning activities since the termination and any income tax payable and actually paid to the Commissioner of Taxation. Because on the evidence before the Court I am not in a position to quantify the amount to be paid, liberty is granted to the parties to apply to the Court on this matter on reasonable notice if the parties are unable to agree on the sum to be paid. MINUTES OF ORDERS THE COURT DECLARES THAT: 1. On 20 November 1996 the respondent terminated the employment of Vanessa Blum in contravention of the provisions of the Workplace Relations Act 1996. AND THE COURT ORDERS THAT within 21 days of the date of making these orders: 2. The respondent reappoint Vanessa Blum to the position in which she was employed immediately before her termination on 20 November 1996. 3. The employment of Vanessa Blum be deemed to have been continuous for all purposes from 20 November 1996 to the date of reinstatement. 4. The respondent pay to Vanessa Blum the remuneration lost by her because of the termination less: (a) any income earned since the termination date; and (b) any amount payable to the Commissioner of Taxation pursuant to the Income Tax Assessment Act 1936 and actually paid. 5. In default of agreement on the sum to be paid, there be liberty to either party to apply to the Court on reasonable notice in respect to the calculation of the amount of the remuneration lost referred to in the preceding order. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. I certify that this and the preceding eleven (11) pages are a true copy of the reasons for judgment of Judicial Registrar Millane. Associate: Dated: 13 May 1997 Solicitors for the Applicant: Anthony Petersen & Co Appearing for the Applicant: Tony Petersen Representative for the Respondent: VECCI Appearing for the Respondent: Mr R. Ironmonger Date of hearing: 24 April 1997 Date of judgment: 13 May 1997