DECISION NO:176/97 CATCHWORDS INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - whether termination at the initiative of the employer - application dismissed - application for costs against employee - whether proceedings instituted without reasonable cause - application dismissed Workplace Relations Act 1996 (formerly Industrial Relations Act 1988) ss 170 EA, 347 Moahazab v Dick Smith Electronics (1995) 62 IR 200 Thompson -v- Hodder (1989) 21 FCR 467 Kanan -v- Australian Postal and Telecommunications Union (1992) 42 IR 257 Strachen -v- Liquor Land (Australia) Pty Limited, (Unreported), IRCA, Moore J, 6 February 1996, IRCA, No. 48/96 COLMER -v- DMA RECRUITMENT PTY LTD NI 2139 of 1996 Before: TOMLINSON JR Place: SYDNEY Date: 26 FEBRUARY 1997 IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NI 2139 of 1996 BETWEEN: Joanne COLMER Applicant AND DMA RECRUITMENT PTY LTD Respondent BEFORE: TOMLINSON JR PLACE: SYDNEY DATE: 26 FEBRUARY 1997 MINUTES OF ORDERS THE COURT ORDERS THAT: 1. The application of Joanne Colmer be dismissed. 2. The application for costs against the applicant by the respondent DMA Recruitment Pty Ltd 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 NEW SOUTH WALES DISTRICT REGISTRY NI 2139 of 1996 BETWEEN: Joanne COLMER Applicant AND DMA RECRUITMENT PTY LTD Respondent BEFORE: TOMLINSON JR PLACE: SYDNEY DATE: 26 FEBRUARY 1997 REASONS FOR DECISION Delivered ex tempore This is an application brought under the Industrial Relations Act 1988 (now the Workplace Relations Act 1996), for compensation allegedly arising out of an unfair dismissal. The applicants statement was tendered and marked exhibit 1. The evidence of the applicant was that she commenced work on 25 September 1995, as an employment consultant with the respondent. The applicant stated that prior to obtaining that position she worked as a recruitment consultant with an employment agency named High Tech Personnel. The applicant stated that she had seen an advertisement in "The Australian" for a position as a employment consultant with the respondent with suggested earnings of up to $100,000 per year. In cross examination the applicant told the court that she first came into contact with the respondent when she responded to an advertisement in relation to another position which the respondent was advertising and then told the court that she was then offered the position being the subject of these proceedings. In order to get that first position the applicant produced to the respondent her curriculum vitae where she listed under education the fact that she had a Bachelor of Science degree from the University of New England and also a Diploma in Education in Teaching. Exhibit F was the curriculum Vitae of the applicant which stated; "Education: University of New England, Armidale, NSW 2351 Batchelor of Science; Diploma of Education - Teaching." The applicant gave some evidence about a graduate course she had undertaken and studied part towards a Diploma of Education, but I am uncertain as to how she gained entry into that course bearing in mind she did say it was a graduate course. Paragraph nine of the applicants statement provides; "9. My Curriculum Vitae stated that I have completed some subjects towards a Bachelor of Science. The holding of a degree did not seem to me to have any consequence in relation to the job. The advertisement did not mention any requirement of university qualifications. The job is basically sales and the letter offering me the job did not require university qualifications." In her oral evidence the applicant admitted that she possessed neither a Batchelor of Science Degree nor a Diploma of Education and that in putting forward those statements she said she was "clumsy". I found the applicant to prevaricate and to evade the issue concerning the incident of the degree and her qualifications that her attitude in giving evidence in that manner set the tone for the whole of these proceedings. I found the applicant wished to create the impression of naivety when she stated that her conduct had been clumsy when in fact it was calculated to deceive. In her written statement the applicant by way of justification assumedly says the job for which she was applying did not need qualifications in science, so one could therefore conclude the fact that she did not mean to be deliberately dishonest. On the one hand the applicant told the court she was inexperienced in the personnel industry and on the other hand she stated that she had previous experience before coming to work for the respondent. There was some evidence as to the terms and conditions of the employment of the applicant in which she stated she did not know that she was employed on a purely commission basis. The applicant is now employed by "Open Technology Resources" and stated she earns approximately $60,000 a year. The applicant commenced employment with the respondent as an employment consultant on 25 September 1995 and after a time the relationship between the parties deteriorated. As a result of that deterioration on 24 May 1996 the applicant had two meetings with the respondent. The first with Mr Martin. It was put to the applicant that it had come to the attention of Mr Martin that the applicant had been disloyal to management and openly critical of Mr Moffat, her senior manager. Mr Moffat had recently joined the respondent in a senior position and had instituted training sessions for consultants before and after work. In her giving of evidence about her recollections of the meeting with Mr Martin, together with a fellow employee, I found the applicant again to dissemble and to be evasive. The applicant said she could not remember being told her attitude was negative. I was unable to place weight on her evidence in that regard. At a subsequent meeting with Mr Moffat and Mr Martin again on 24 May the meeting opened with Mr Moffat allegedly saying words to the effect that he "could fire her." Again the applicant could not recall specifically what was said and in cross-examination she said "Mr Moffat was bullying towards her." It is clear that at that point the respondent had reservations and concerns about the future employment prospects of the applicant. The applicant said she became ill and was absent from work from approximately 6 June 1996 until 17 July 1996. Whilst away from work the respondent forwarded a letter to her indicating that it would not tolerate further dishonesty such as the misrepresentation of academic qualifications. In the circumstances I found such a letter to be most appropriate. The applicant said towards the end of May she became friendly with another person in the same field of endeavour, that of personal recruitment, and that she had discussed the meetings of 24 May with that person. As a result it was put to the applicant that if she ever thought she would leave the respondent then she should let that person know, view her future employment. It was the evidence of the applicant that after the meetings on 24 May 1996 the applicant returned to the office of the respondent and removed all her personal belongings from the building. The applicant recovered from her illness and produced to the Court the various medical certificates that indicated the applicant was suffering from a "medical condition." The evidence tendered on behalf of the respondent by way of sworn statements indicated that those certificates were supplied by the applicant to the respondent after the respondent had sent a courier to the applicant to fetch the certificates. There was no evidence that these were proffered with an accompanying explanation. The applicant returned to work on 15 July 1996 . That day was pay day. Upon being questioned by her employer as to why she had not kept in touch and why she had not been able to answer her telephone, according to the respondent's witnesses the applicant said she was ill and she had to move back with her parents. Then again in another note that is annexed to a statement of a person in the employ of the respondent, the applicant makes reference to the fact that her mother in fact moved in with her. There was no evidence that the applicant at this stage wanted otherwise than to continue her employment and that the matters that had arisen between the applicant and the respondent were not contentious. During the course of the absence of the applicant it appears there was an office reorganisation and the applicant was allocated a different workplace. The applicant said 16 July 1996 she returned to work for one day and attended to her normal functions placing applications in jobs. The next day the applicant attended a meeting with Mr Moffat and other members of the respondent. The applicant said she was offended with the manner of Mr Moffat as "it seemed like he was trying to get something out of her." It was put to the applicant in cross-examination that hypothetically Mr Moffat asked her that if one could assume an employee had absented himself or herself for some six weeks, then cleaned out her office, then reappeared on pay day that then that would leave a question mark as to the intentions of the employee. The applicant said she could not recall that scenario being put to her. The applicant said that she had never stated at that meeting "that she would resign." There was no evidence placed before the Court as to the nature of the illness of the applicant that would allow her to return for one day and then disappear for a further fortnight. The applicant agreed that while on sick leave that she had in fact made the inquiries for other employment which she subsequently took up. It was then the evidence of the applicant that two days after ultimately ceasing to work for the respondent she was in fact in employment with the person with whom she had had earlier discussions. The applicant told the Court she was expecting a child in approximately one week and that she was presently taking maternity leave from her current employment and that she did not know she was pregnant at the time of the interview held on 16 July 1996. On behalf of the respondent the Court heard from Mr David Moffat. It was put to Mr Moffat that various consultants had left shortly after he joined the firm, being people who would not fit into the team. Although a few people seem to have been identified in that regard I find that evidence not to be relevant. Mr Moffat's evidence was that he became suspicious of the applicant's expertise and abilities and he checked with the University of New England and found that the applicant possessed no tertiary qualifications and that that knowledge that he gained was only one of the reasons for the meeting with the applicant on 24 May 1996. It appeared, to use the vernacular, that the applicant had developed an "attitude problem" to management and that it was Mr Moffat who took it upon himself to get to the bottom of that problem. The purpose of the letter of 24 May, (which was typographically noted as being 24 June) was to inform the applicant that such gross and blatant dishonesty would not be tolerated and that in effect that letter was giving a second chance. The thrust of the evidence of Mr Moffat to my mind was that even if the applicant had owned up to the dishonesty involving her curriculum vitae, that that would not have altered the stance of Mr Moffat, in reacting the way he did to such a crucial matter. The court heard from a former employee, a Mr Neal Lee, whose evidence supported that of Mr Moffat's. I found Mr Lee to be a credible and reliable witness and he said that referring to the meeting of 16 July that it was obvious that the applicant intended to resign. The court heard from Mr Alistair Martin whose witness-statement was admitted into evidence. Upon consideration of the whole of the evidence I agree with the submission of Mr Nolan that the respondent has no case to answer. I find that the applicant resigned and I agree with Mr Nolan that the criteria laid down by the court in Moahazab v Dick Smith Electronics (1995) 62 IR 200 have not been met. There has been no termination at the initiative of the employer. The application of Joanne Colmer is dismissed. The respondent has made application to the court that costs be granted following the ex-tempore decision being handed down. In support of that application the respondent said that the above finding severely impugned the credit of the applicant and that in the absence of a termination of the employment at the initiative of the employer no basis could be advanced to justify Ms Colmer in seeking a remedy under the Industrial Relations Act. Section 347(1) of the Workplace Relations Act 1996, states; "A party to a proceeding (including a appeal) in a matter arising under this Act shall not be ordered to pay costs incurred by any other party to the proceedings unless the first mentioned party instituted the proceeding vexatiously or without reasonable cause." The respondent conceded that an applicant will be ordered to pay the costs of a respondent "in exceptional circumstances", Thompson -v- Hodder, FCA-FC, Keely, Gray, Ryan JJ, (1. 1989) 21 FCR 467 at 470 point 5. The respondent conceded the section is construed strictly so as to protect a plausible yet unsuccessful application, a court will never the less award costs where the claim is made vexatiously or without reasonable cause "at it's inception". [Thompson -v- Hodder, supra]. The respondent submitted the decision in this case compelled such a conclusion. Further reliance was placed upon a test propounded in Kanan -v- Australian Postal and Telecommunications Union, (1992) 42 IR 257 at 264 (per Wilcox CJ); "It seems to me that one way of testing whether a proceeding is instituted "without reasonable course", is to ask whether, upon the facts appearing to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being without reasonable cause. But where, on the applicant's own version of the facts it is fair that the proceeding must fail, it may properly be said that the proceeding lacks reasonable cause". The respondent applied this test to the case of Ms Colmer and observed but for the applicant's deliberate endeavours to mis-state the true position, that - to paraphrase the test in Kanan - "upon the true facts apparent to the applicant at the time of instituting the proceeding, there could have been no substantial prospect of success". It is submitted that this is not a case where it is arguable that the applicant's employment was terminated for invalid reasons. There was a threshold of fundamental issue which turned on the issue of termination. In Strachen -v- Liquor Land (Australia) Pty Limited, (Unreported), IRCA, Moore J, 6 February 1996, IRCA decision No. 48/96, stated that; "Proceedings were instituted without reasonable cause as it could have been apparent from the out set that the applicant had no real prospect of obtaining an extension of time which was likely to be the necessary first step in presenting his claim" (page 18). In the case of Ms Colmer there was no clear evidence before the court that she ever uttered the words, either verbally or in written form "I wish to resign my employment". The fact of resignation was a conclusion drawn from the observable conduct of the applicant. The applicant in her submissions regarding costs stated that from the behaviour and statements and actions of Mr Moffatt at the meeting of 16 July 1996, she believed that if she was to receive the money due to her and which she should have been paid to her on 16 July 1996 she would have to resign and that if she did not resign her employment would be terminated. Secondly, the applicant told the court that Mr Moffatt at that meeting stated to her that he wished her to resign. It is common ground that Mr Moffatt said to the applicant "he could fire her". I agree with the submission of the applicant that the fact that the court found that those circumstances did not amount to a constructive termination of employment is not sufficient to characterise the applicant as vexatious as bringing proceedings as she did. I dismiss the application by the respondent for costs in this case. I certify that the preceding nine (9) pages are a true copy of the reasons for decision of Judicial Registrar Tomlinson. Associate: Dated: 4 June 1997 APPEARANCES Solicitor for the applicant: Mr M Shehadie Michie Shehadie & Co Solicitors Counsel appearing for the respondent: Mr J Nolan Solicitors for the respondent: Turtons Solicitors Date of hearing: 26 February 1997 Date of Submissions: 26 February 1997