WATSON -V- BAXTER CAKES BAKEHOUSE [1997] IRCA 164

DECISION NO:164/97 CATCHWORDS INDUSTRIAL LAW - complaint of UNLAWFUL TERMINATION - VALID REASON - whether OPERATIONAL REQUIREMENT - COMPENSATION - DAMAGES - whether NOTICE OF TERMINATION - Workplace Relations Act 1996 ss170DB, 170EA, 170EE(3), 170EE(5) WATSON -V- BAXTER CAKES BAKEHOUSE VI 2457 of 1996 Before : PARKINSON JR Place : MELBOURNE Date : 7 MAY 1997 IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 2457 of 1996 B E T W E E N: Robyn Maree WATSON Applicant A N D BAXTER CAKES BAKEHOUSE Respondent MINUTES OF ORDERS 7 May 1997 PARKINSON JR THE COURT ORDERS THAT: 1. The respondent pay to the applicant the sum of $2,635.00 in compensation pursuant to Section 170EE(3) of the Workplace Relations Act, 1996. 2. The respondent pay to the applicant the sum of $ 527.00 in damages pursuant to Section 170EE(5) of the Workplace Relations Act, 1996. 3. Time for payment is 14 days from the date of this order. 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 VICTORIA DISTRICT REGISTRY VI 2457 of 1996 B E T W E E N: Robyn Maree WATSON Applicant A N D BAXTER CAKES BAKEHOUSE Respondent REASONS FOR DECISION (delivered ex-tempore) 7 May 1997 PARKINSON JR This is a decision in relation to an application made pursuant to Section 170EA of the Workplace Relations Act 1996.('the Act') At the outset of these proceedings I informed the parties that I had occasion briefly to engage in conversation with the applicant in the course of her present employment. Neither party sought to make any application as a consequence of that information and I have proceeded to hear and determine this matter. The respondent, by its proprietors, Mr and Mrs Stead, conduct a bakery business, the registered business name of which is Baxter Cakes Bakehouse. They operate the business out of 2 locations, at Seaford and Baxter in Victoria. The applicant commenced her employment at the respondent's bakery premises at Seaford on 7 May, 1996. She was employed as a consequence of a conversation between her and the proprietor of the business, Mr Stead. There is dispute in the proceedings as to the basis upon which the employment was entered. Mr Stead contends that the applicant was engaged to work full time as the manager of a bakery which he proposed to commence operating at Blairgowrie in Victoria. His evidence was that this was the intention of both parties and that the applicant knew her employment at the Seaford Bakery was only an interim arrangement until the Blairgowrie Bakery opened. The applicant's evidence is that she was engaged to work for the respondent at its Seaford Bakery and in the event that the Blairgowrie premises opened she would be transferred to that location as manager. Her evidence is that two other employees engaged by the respondent after she commenced the employment, were engaged on a part time basis to provide relief for her day off and additional assistance in busy or peak periods. Her evidence is that until the date on which the applicant's hours were reduced by the respondent, these employees worked the hours as set out above. Her evidence is that in the first week of her employment commencing at Seaford, Mrs Stead approached her and asked her to agree to go on a traineeship, at a wage rate of 85% of the rate she was at that time receiving. The applicant did not agree to the traineeship. Her evidence was that aside from the wages reduction, she was an experienced bakery worker and therefore a traineeship was not appropriate. Her evidence was that she told Mrs Stead this. Mrs Stead was not called to give evidence in the proceedings. In the second week of the employment, the applicant's hours of work were reduced from full time, hours at commencement of employment, to 10.00 am to 2.00 pm, weekdays. When the applicant saw the proposed roster she approached Mr Stead as to the hours. According to the applicant, Mr Stead's response was " oh well shit happens, that's life." No evidence to the contrary was given and it was not contested that no explanation was given to the applicant at the time for the reduction of her hours of work. On 25 May, 1996 the applicant noticed that she was not rostered to work any hours for the new roster. On approaching Mr Stead she queried the fact that she had no more days allocated and asked whether that meant she was "finished". She was advised that this was the case. The applicant's evidence, not contested by the respondent, was that this was all that was said in that conversation. The applicant ceased the employment on 25 May 1996. I am satisfied that the applicant's employment was terminated by the respondent without warning and without notice. Further, I am satisfied that she was engaged generally and not only in anticipation of the Blairgowrie store opening. I am not satisfied that the respondent had a valid reason for the termination of the applicant's employment based upon an operational requirement. This is because the applicant was employed prior to the two other employees at the Seaford store, yet only her hours of work were reduced. Further the respondent's evidence was that Mr Stead did not consider the applicant for the more certain continuing work at Seaford because it would not have been convenient to find other employees to work at Blairgowrie, when and if, that shop commenced to trade. In approaching the issue of the applicant's employment in this manner the respondent had no regard to the possible options or alternatives available to it in respect of the applicant's ongoing employment. According to the respondent's evidence the final decision as to the Blairgowrie shop not proceeding was not made until after the applicant's employment had been terminated, however I accept the applicant's evidence and that of Mr Van Oss, that it was apparent that there were problems with the Blairgowrie arrangements as early as the date of the applicant's employment. In particular I am satisfied that the applicant and Mr Van Oss, inquired of the respondent as to her employment status and were both informed, prior to her commencing the employment, that she was a full time permanent employee and I am satisfied that the employment was not contingent upon the Blairgowrie shop being operated by the respondent. Consistent with the Blairgowrie shop not being the principal consideration in the agreement between them, the applicant commenced employment immediately the premises at Seaford were available to the respondent to operate. She cleaned and prepared the premises and staffed them, initially on her own and then with the additional employees hired after the shop opened. Her status as a permanent employee was confirmed by the respondent in Exhibit A1, the Employment Declaration provided to the Australian Taxation Office. This exhibit is inconsistent with Mr Stead's evidence that the initial employment of the applicant was on a casual basis. I prefer the evidence of the applicant in these proceedings. However it ought be noted that the outcome of this proceeding is not merely dependant upon the version of events preferred. This is because the termination of the employment occurred in circumstances and in a manner which does not satisfy me that there existed an operational requirement to terminate the applicant's employment. This is because of the failure of the respondent to consider any alternatives to reducing the applicant's hours. Further the manner in which the respondent terminated the employment, by removing and reducing the applicant's hours in the absence of any explanation and by replacing her with another employee, hired as late as 19 May, 1996 establishes the termination of the employment as not being sound or well founded. In determining the most convenient manner of operating, the respondent paid no regard to the interests of the employee, an employee who had accepted employment in good faith and, I am satisfied, without any knowledge that her ongoing employment was contingent upon the respondent commencing to trade at Blairgowrie. I am not satisfied that the respondent had valid reason for the termination of the applicant's employment. Consequently the termination of the applicant's employment contravened s170DE(1) of the Workplace Relations Act 1996. Further the respondent failed to comply with the obligation to accord notice pursuant to s170DB (1) of the Act. There has been a contravention of that section. I turn now to consider the question of remedy. The applicant has obtained alternative, now permanent employment. I am satisfied that an order for reinstatement in such a circumstance would not be practicable. I am fortified in this view as a consequence of the respondent's evidence as to his intentions to take steps in relation to the business. The applicant is entitled to compensation. The applicant was not employed between the 25 May, 1996 to 1 September, 1996. Her evidence was that she made numerous attempts in that period to find alternative employment, including undertaking unpaid training work. I am satisfied that the applicant is entitled in all the circumstances to an order for compensation pursuant to s170EE(3) of the Act. I am satisfied that the applicant is entitled to compensation equivalent to an amount of 5 weeks wages being the sum of $2,635.00. In settling upon this amount I am conscious of the length of the unemployment, however I am also conscious that the employment was for a relatively short period and in view of the incidents between the parties, I find it difficult to anticipate that the employment would have lasted for a significant length of time. An order will also be made for an amount in damages of $527.00, being an amount equivalent to the payment required pursuant to s170DB(3) of the Act and not paid.