Industrial Relations Commission of New South Wales CITATION : Ward v Mobile Innovations Limited [2002] NSWIRComm 28 APPLICANT Judith Ann Ward PARTIES : RESPONDENT Mobile Innovations Limited FILE NUMBER: 5699 of 2001 CORAM: Grayson DP Whether resignation amounted to constructive dismissal - whether employer by its conduct compelled or unduly influenced resignation - whether employer acted in good faith as a contractual partner CATCHWORDS : Held, employer entitled to raise with the applicant and pursue ongoing concerns as to work performance - applicant not constructively dismissed - intervention of Commission not warranted - application dismissed. LEGISLATION CITED : Industrial Relations Act 1996 s 84 Allison and Bega Valley Council (1995) 63 IR 68 David Jones Ltd and the Australian Workers Union, Re, Re Levette [1978] AR 206 Health and Building Surveyors' Association (NSW) v Strathfield Municipal Council (1987) 25 IR 359 Imperial Group Pension Trust Ltd & v Imperial Tobacco Ltd [1991] 1 WLR 589 CASES CITED : Lewis v Motorworld Garages Ltd [1986] ICR 157 Malik v Bank of Credit and Commerce International S.A. [1997] 3 WLR 95 Michaelis Bayley Trading Co and New South Wales Sales Representatives and Commercial Travellers' Guild, Re, Re Dismissal [1979] AR 392 R v Prince Alfred College (1979) 46 SAIR 598 Woods v WM Car Services (Peterborough) Ltd [1981] ICR 666 HEARING DATES: 02/05/2002; 02/06/2002; 02/25/2002 DATE OF JUDGMENT: 03/12/2002 APPLICANT Mr J de Meyrick of counsel John Peetz Solicitors LEGAL REPRESENTATIVES: RESPONDENT Mr C J Leggat of counsel Ashton Stedman Solicitors JUDGMENT: - 9 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: GRAYSON, DP Tuesday, 12 March 2002 Matter No IRC 5699 of 2001 JUDITH ANN WARD V MOBILE INNOVATION LIMITED Application by Judith Ann Ward pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2002] NSWIRComm 28 1 Following unsuccessful conciliation on 17 September 2001, hearing dates were set and a timetable fixed for the filing and exchange of evidentiary material, allowances in that regard being made at the applicant's request, for her absence overseas for a period of time. 2 At hearing on 5 February 2002 and 6 February 2002, Mr J de Meyrick of counsel appeared for the applicant and Mr C J Leggat of counsel for the respondent. 3 The applicant was called and cross-examined on her affidavit as was Ms K Liebke who was at the relevant time, the respondent's sales manager. 4 Further affidavit evidence was taken in the respondent's case from: § Mr C Piercy, general manager, customer services § Ms C Statham, general manager, marketing and § Ms A Dixon, human resources manager 5 These witnesses were not required for cross-examination. 6 The applicant does not seek reinstatement or re-employment to another position and limits her claim in the event of succeeding, to the remaining statutory remedy namely, monetary compensation. 7 By way of background, the evidence discloses that at the time of her resignation on 11 August 2001, the applicant had been employed by the respondent for approximately 5½ years as a telemarketing sales representative. She had worked in similar sales positions with other employers for approximately 15 years prior to that. 8 Her job with the respondent was to sit at a telephone console and take calls from existing and potential customers and in turn, to deal with queries, complaints and other matters with the predominant purpose of making sales in mobile phones, various types of contracts and in other products offered by the respondent called "V-mobile SIM-only connections." I was not told what that terminology meant. 9 At various times throughout the period of her employment with the respondent, notably in the earlier rather than the latter stages, her salary was reviewed and increased and she was promoted to level 2 in the relevant salary/performance structure. 10 In March 2001, she was spoken to and formally warned about lateness, a problem which both sides agree was resolved and did not recur once it had been drawn to attention. In June 2001, she was both spoken to and two days later, served with a formal written warning in the following terms: This letter is to serve as formal warning in regards to overall failure to improve the quality of work in the Sales Department. Below are listed some of the issues discussed with you, Jonas and myself on Wednesday June 13th. § Your call handling is consistently the highest in the department § Your calls taken per day are consistently the lowest percentage of the team § Your sales per month are consistently in the lowest percentage of the team § You have advised a customer that a base stn listed as 'future' would be active in a 'couple of months' § Incorrect notes in Selcomm § Not checking 'any' ID before speaking with the customer § Calling another department for information on Migrations when it is available from any of the sales management team and the contracts manual We also discussed the lack of faith in your ability to provide the correct solutions and the fact you confuse the customers with an overload of information. My biggest concerns Judy are that after 5 years, you are still on Level 2 and your call handling time, calls taken and sales made have not improved. You have been counselled about these problems many times in the past with no improvement. As discussed, I am looking for an improvement by Wednesday June 20th. I expect your call handling times to be greatly reduced, by at least 1 minute 30 sec. Previously, it has been an average of 7 mins. At least 7 calls per hour and I also expect no avoidable mistakes in that time. Failure to make these improvements will result in a second written warning resulting in dismissal. Judy, it has been made clear many times that you need to improve this standard of work to come in line with the rest of the department. You, Jonas and myself will revisit this on Thursday June 21st . 11 In July 2001, a further document was served upon the applicant in the following terms: Judy, This is written confirmation of the conversation both Kathy and myself had with you on Monday 23rd July 2001. In the meeting we made specific reference to a call monitoring that came through with a number of areas missing, no security details checked, no notes to confirm the conversation you had with the customer and the fact that you sounded lost and unconfident throughout the call. We also discussed your call handling time and the fact that no real improvement was apparent and that your AHT is approximately double that of the team average. Kathy also expressed her concern that you may not be keeping on top of the high volume of knowledge required to work within the Sales Department. In conclusion, Kathy has allowed you one more week to improve your AHT. This needs to drop from an average of 6:20 mins to an average of 5 mins in view of further improvement to at least 3:30mins to bring you into alignment with the rest of the team. Also, no more unforced errors are brought to our attention. We shall meet next Monday 30th July to review the situation. 12 On 31 July 2001, the applicant was called into a meeting to discuss performance issues and shortly thereafter, yet another document was handed to her. The contents of that document are as follows: July 31, 2001 Judy Ward Judy, This letter serves to give written confirmation of a meeting between you, Craig Piercy, Kathy Liebke, Dannielle Stead and Jonas Rundback. Craig listened to issues raised about you by Kathy, Dannielle and Jonas. Some of the issued discussed in the meeting include: § The feeling that you sounded 'lost and unconfident' during a call § Not putting a Seconds Nokia on hold to be forced through the showroom § Appearing to talk a customer 'out' of a sale when she advised niece was Global Roaming § Advising a customer you 'thought' we had higher plans § Average Call Handling time had reduced to 4:54 (under the 5:00 requested) Craig has also set some guidelines before the next meeting on August 7, 2001. We will put in place the following things: § Calls monitored and recorded each day by Shane (to be replayed at next meeting) § Calls monitored and notes made by Dannielle, Jonas and /or Kathy What you need to achieve: § No avoidable errors identified in call monitoring § Your Average Call Handling time needs to come down to 3:30, in line with the average… Craig also advised you had the option to take a test designed by Sales Management. This would give you the opportunity to demonstrate you had the knowledge in question. You declined this offer, opting for call monitoring. You were clearly advised that failure to meet these criteria by next Tuesday August 7th would result in another warning… Kathy Liebke Graig Piercy Sales Manager GM Customer Service Mobile Innovations Mobile Innovations Innovations 13 By this time the applicant whose average call-handling time as can be seen from the foregoing had reduced to below the 5 minute mark set by the respondent, was becoming increasingly insecure and feeling as she described it: that perhaps all my calls were being listened into with the intention of finding fault with me in order to justify my dismissal 14 She said she was also under considerable personal pressure at the time with her elderly mother gravely ill in hospital. She had become anxious and tense and found it difficult to sleep. On the evidence as it stands, there is no doubt that the respondent was focussing more closely than at any time previously on the applicant's work performance at this time and, whereas in the past, only three calls per month for each telemarketing sales representative were monitored, it had reached the stage in the applicant's case, where she had three calls monitored in one day on 11 July 2001. 15 Each monitored call that day was the subject of a sales monitoring report (SMR), two of them assessing her performance at the consistently high levels she had achieved in the past, and one which the applicant said related to a very difficult caller "was my worst ever SMR of 55 percent". 16 Ms Liebke said the applicant had been spoken to on numerous occasions about certain unsatisfactory aspects of her work performance and although prior to March 2001 none of those occasions had given rise to formal warnings or to the prospect of dismissal being canvassed with her, there had nonetheless been a pattern of such unsatisfactory performance which the respondent sought to remedy by less formal means. 17 The applicant resisted the notion that her performance in certain aspects of her work had been unsatisfactory and although she did recall Ms Leibke mentioning such matters to her from time to time, she had not understood Ms Leibke to have been expressing dissatisfaction at a level which put her job at risk prior to mid-2001. 18 Moreover, there were other aspects of her work which Ms Liebke agreed were exemplary such as her manner of dealing with customers. 19 It was just as I understood the position, that the applicant was regarded or at least came to be increasingly regarded in the middle stages of 2001, as someone who perhaps over-indulged customers at the expense of call-handling time, call volume and numbers of sales by comparison with other members of the sales team. 20 The applicant candidly admitted to feeling, if not resentful, then certainly uncomfortable about the criticism of her call-handling time, call volume and number of sales, considering her many years of experience in sales and her preference to give what I might call quality service rather than quick service. She said she was also conscious of the requirements of the Australian Competition and Consumer Commission to give full information to customers. 21 Nevertheless, and as the respondent acknowledged in its letter of 31 July 2001 (above), the applicant had reduced her call handling time to under the 5 minute target set for her a week or so previously. Again as the letter of 31 July 2001 reveals, she was then given a week to reduce the call handling time to 3 minutes and 30 seconds which was said to be the team average at the time. Failure to do so would result in a further warning. She was also to be more closely monitored in her work including a procedure called "double headsetting" which involved the sales trainer, Jonas Rundback, sitting with her at the console. 22 The applicant went home on 31 July 2001 feeling ill. She consulted a medical practitioner the following day with the result that she was put off work suffering with hypertension. In the course of the next week or so, she remained medically unfit with additional diagnoses of stress and anxiety being made in subsequent or follow-up visits to the doctors. Her partner urged her to resign which she did by letter of 11 August 2001. 23 The letter of resignation set out the applicant's account of the sequence of events described above, made reference to her mother's life threatening illness at the time and to her own hypertension and anxiety for which she was being treated. The letter further described her feeling at the time that she was the victim of unjust and unsubstantiated criticisms by the respondent and to her belief that she had been targeted for dismissal. 24 The letter indicated that the resignation which was tendered with "a great deal of reluctance", had regard to the adverse state of her health and to the "enormous pressures related to my working conditions", matters which together led the applicant to the belief that her continuing work in the respondent's employ was untenable. 25 For it's part, the respondent categorically denies that it had formulated an intention to dismiss the applicant at the same time maintaining that its attempts to assist and encourage the applicant to improve her work performance were both fair and reasonable given the applicant's consistently poor statistics by comparison with others in the team. 26 The respondent resisted the notion that the comparison of the applicant's performance with others was in some way tainted by a disproportionately high number of products or services she was required to sell, maintaining instead, that the applicant's duties were no different to those with whom she was routinely compared and I am bound to say as one among no doubt many who may wish there were more with time and a greater degree of courtesy to extend in the course of their customer relations, that it is nonetheless a matter for an employer to determine its policy and procedures in that regard provided that in so doing, unreasonable burdens are not being imposed upon employees in the process. 27 In this case there is nothing to suggest that the applicant was incapable of meeting the targets set for her by the respondent and, at least in respect of her average call handling time she was actually doing so at the time of her resignation. To the extent that she may have experienced a sense of resentment at being subjected to the close scrutiny and to the persistent requirement to meet such targets, neither the targets themselves nor the respondent's conduct are thereby made unreasonable or unfair. 28 With every respect to the applicant's counsel who submits that the respondent may have condoned the situation and waived its right to complain about it by not taking the applicant to task some years earlier, it seems to me that the respondent cannot be criticised for coming slowly rather than hastily to the point where it felt it necessary to remedy what it clearly felt was an ongoing problem by more rather than less formal means. Ms Leibke after all had spoken to the applicant about such matters prior to the formal warnings in 2001. 29 For the applicant to succeed she must first demonstrate that the circumstances in which, and the means by which, the employment contract came to be terminated amounted to a dismissal. That is what the applicant here alleges. In cases such as this where the employment contract is terminated by the resignation of the employee, it can be held depending on the facts of each case, that the employee has been constructively dismissed. 30 Although not a term of strict legal application, "constructive dismissal" is commonly referred to in the textbooks and the decided cases, to describe circumstances where the act of resignation by an employee is a consequence of the conduct of an employer, who may compel or unduly influence an employee to resign. 31 In Allison and Bega Valley Council (1995) 63 IR 68, the Full Commission as it then was, described the position in this way: Although the term "constructive dismissal" is quite commonly used it can deflect attention from the real inquiry. That inquiry should involve an analysis of what occurred. Did the employer behave in such a way so as to render the employer's conduct the real and effective initiator of the termination of the contract of employment and was this so despite on the face of it the employee appears to have given his or her resignation. It is obvious that a consideration of these matters must be made on a case-by-case basis and that an attempt to formulate general principles in the absence of particular facts will not assist in the overall determination of the issue. In order to undertake the necessary analysis it is necessary to look carefully at all the relevant facts. It is necessary to determine whether the actual termination was effectively initiated by the employer or by the employee particularly where the dynamics within a factual situation may change. For example, an employer may demand a resignation with a threat of dismissal, negotiations may then ensue and the employee may ultimately be genuinely pleased with the outcome of those negotiations to the extent that any resultant resignation may be said to be given freely and without any undue influence being brought to bear by the employer. Where an employee initiates the termination of the contract of employment it is necessary to consider whether that ostensible act of termination was given freely and without undue pressure. If the ostensible resignation is, in effect, a response to and consistent with a desire by an employer that such resignation be forthcoming, then what has occurred may be that the termination has been brought about by the employer and that in this way the employee has been dismissed. 32 It was observed by the Full Commission that those general principles were consistent with those adopted in decided cases (see for example Re Michaelis Bayley Trading Co and New South Wales Sales Representatives and Commercial Travellers' Guild Re Dismissal [1979] AR 392; Health and Building Surveyors' Association (NSW) v Strathfield Municipal Council (1987) 25 IR 359; Re David Jones Ltd and the Australian Workers' Union; Re Levette [1978] AR 206; R v Prince Alfred College (1979) 46 SAIR 598). 33 In my opinion and bearing in mind the totality of the evidence, the respondent's conduct was not, and should not on an objective view of the evidence, be characterised as having compelled or unduly influenced the applicant's resignation and I am not persuaded, although earnestly contented by Mr de Meyrick, that the respondent's practice of monitoring the applicant's performance and imposing guidelines for such performance was along with other elements of the respondent's conduct, evidence of an employer conducting itself in a manner consistent with a desire that a resignation on the applicant's part be forthcoming. 34 The fact is, as the evidence discloses, that the applicant and other telesales representatives were aware that their calls were remotely monitored and the applicant took some pride in the fact that the sales monitoring reports thereby generated were by and large, favourable to her. 35 The further fact is, as Ms Liebke said, that call monitoring was only one of the criteria by which performance was measured and as Mr Leggat for the respondent submits with some persuasive force, the applicant and other telesales representatives were given written guidelines going to average call handling times, sales volume, product and network knowledge and various other things. It is not contended by the applicant that the monitoring of calls was a distraction for her or that it caused any downturn in her performance. It is more the case on her own evidence that she approached her telephone duties on one view commendably, with the primary human objective of keeping the customer happy rather than meeting those aspects of the respondent's guidelines which required her, for commercial reasons to, among other things, limit her call-handling time. 36 I focus on that aspect of the applicant's work performance because clearly on the evidence it was the source of the most visible or prominent concern to the respondent, but it was not the only area of improvement requested of the applicant. 37 For all of that, and doubtlessly minds may differ on whether such a working environment was from the employee perspective likely to be productive or counterproductive, rewarding or unrewarding, it is nonetheless the case as I am disposed that the respondent was not acting unreasonably in setting the guidelines it did and having done so consistently and transparently, in then expecting adherence to them. 38 In that regard, I bear in mind and with respect agree with Mr de Meyrick's submission that contracting parties should conduct themselves in their contractual relationships on the basis of mutual good faith (Lewis v Motorworld Garages Ltd [1936] ICR 157; Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] 1 WLR 589) and further, that there is an implied term in every contract of employment that neither an employee nor an employer will, without reasonable and proper cause, conduct itself in a manner calculated or likely to destroy or damage the relationship of confidence and trust between that employer and employee (Malik v Bank of Credit and Commerce International S.A. [1997] 3 WLR 95. I do not think those principles have been offended here because among other things, the respondent on my view of the evidence was within its rights to raise with the applicant and to pursue its ongoing concerns as to her work performance and being "good and considerate" (Woods v WM Car Services (Peterborough) Ltd [1981] ICR 666) does not, it seems to me, require an employer who perceives the need to manage unsatisfactory work performance, necessarily to desist for fear of giving offence to or otherwise upsetting the employee/s concerned. 39 Having regard to the evidence and to the submissions of opposing counsel I am not persuaded that the applicant was constructively dismissed. It is more the case as I am disposed, that she made a conscious decision in her own interests and after consultation with her partner, to terminate the employment relationship. This is not a case, on balance, which warrants the intervention of the Commission and I dismiss the application accordingly. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.