Industrial Relations Commission of New South Wales CITATION : Scott v Centre Staffing Sydney [2001] NSWIRComm 67 PARTIES : Elissa Jane Scott Centre Staffing Sydney Pty Ltd FILE NUMBER: IRC 4920 of 2000 CORAM: Harrison DP at 1 CATCHWORDS : Unfair dismissal - contract of employment - procedural fairness - warning of unacceptable behaviour - refusal of offer of reinstatement Intervention declined LEGISLATION CITED : Industrial Relations Act 1996 Antonakopoulos v State Bank of NSW 91 IR 385 CASES CITED : Newton v NSW Police Service 87 IR 66 Johnson v Catholic Education Office 87 IR 57 Jupiter General Insurance v Ardeshir 1937 3 ALL ER 67 HEARING DATES: 02/12/2000 DATE OF JUDGMENT: 04/10/2001 Mr A Duc as Agent for applicant LEGAL REPRESENTATIVES: Mr J Anthony Solicitor of Braye Cragg Solicitors JUDGMENT: - 12 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: HARRISON DP Tuesday, 10 April 2001 Matter No IRC 4920 of 2000 Elissa Scott & Centre Staffing Sydney Pty Ltd Application re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION 1 The application in this matter was filed on 10 October 2000 and subject to proceedings for the purpose of directions and conciliation on 20 October 2000 at which time there was no appearance by the applicant. The matter was again subject to directions and conciliation on 15 November 2000. 2 Mr A Duc appeared with and on behalf of the applicant, Mrs Scott. Mr J Anthony, solicitor of Braye Cragg Solicitors, appeared on behalf of Centre Staffing Sydney, the respondent employer, with Ms K Eilich. 3 These proceedings established that the matter could not be resolved by agreement between the parties. Directions were issued to bring the matter to arbitration on 12 February 2001. 4 On hearing Mr Duc brought evidence from Mrs Scott and Mr Michael Scott, the applicant's husband. Mr Anthony brought evidence from Ms Kaylene Eilich, a Director of the respondent; and Ms Pauline Cameron, employed by the respondent as Branch Manager of its Gosford office. THE EVIDENCE 5 Ms Scott commenced employment with the respondent on 6 March 2000 at its Hornsby office. She deposed that from the commencement of her employment she observed conflict between other members of staff, identified as Lynda Davidson, Branch Manager, Freya Derrick and Pauline Stuzzi, Accounts Clerk, concerning office systems and files. 6 Ms Scott deposed that in mid-April 2000 she put a complaint to Ms Eilich concerning the behaviour of Ms Davidson and Ms Derrick, to which she testified that Ms Eilich responded "who am I going to believe now all of your stories are so different". 7 Ms Scott describes in her evidence several verbal altercations between Ms Davidson and Ms Derrick in which she deposed she had also been a target for abuse by Ms Derrick. Ms Scott's statement of evidence attributes the use of profane language to Ms Derrick, in particular on an occasion when Ms Derrick was late for an appointment and blamed Ms Scott and Ms Davidson for this due to their absence from the office until 4.30pm on a client call. 8 These circumstances led to a meeting of staff held by Mr Eilich on 27 April 2000, setting out policy and directions for the Hornsby Branch. 9 Ms Scott deposed that in June and July 2000 she received congratulations, praise and a pay increase from Ms Eilich. Ms Scott's evidence is that during this time Ms Derrick left and returned to England. 10 Ms Scott deposed that Ms Davidson put a proposition to her involving investment of $10,000 by Mrs Scott and her husband to set up a consultancy in opposition to the respondent. Ms Scott's evidence is that she was not keen on the business proposal and when Ms Davidson came to understand this, conflict arose between them, which she says manifested itself in many ways detailed in her statement of evidence (ex 1); the common theme being of irrational, domineering behaviour by Ms Davidson, including foul language, verbal abuse and direction to undertake duties not associated with the respondent's business for the benefit of Ms Davidson which the applicant describes as "out of control office politics". 11 Ms Scott deposed that she sought a meeting with Ms Eilich to address these issues, which was arranged for 22 August 2000. During the course of this meeting Ms Eilich requested both the applicant and Ms Davidson to sign what the applicant described as a "new confidentiality agreement". 12 It is Ms Scott's evidence that Ms Davidson signed the document and that she requested time to review the original confidentiality agreement held on her file in Newcastle. Ms Scott deposed that Ms Eilich gave her to 5.00pm on 23 August 2000 to sign "or else". She further deposed that she received a copy of her original conditions of employment document on 1 September 2000 with a demand to sign the new confidentiality agreement. On Sunday, 3 September 2000 a further written request to sign the new confidentiality agreement arrived on the facsimile machine at the Hornsby office. Ms Scott's evidence is that a further request was made by Ms Davidson on 5 September 2000 that she sign the new agreement. 13 Ms Scott deposed that on 6 September 2000 she wrote to Ms Eilich declining to sign the new agreement, informing Ms Eilich that she was content with the original and had no plans to leave her employment. It is her evidence that Ms Eilich responded in writing some two hours later on 6 September 2000 informing her that she was not to take documents home from the office. 14 Ms Scott deposed that on the morning of 19 September 2000 she put a request for leave to Ms Davidson and was referred to Ms Eilich to approved her request. 15 Ms Scott deposed that at 2.00pm on 19 September 2000 she was given a warning letter (attach. J to ex 8) which stated: "Dear Elissa Your meeting with Kay Eilich on 27.4.2000, and a further discussion on 29.8.2000 with Kay and myself in an attempt to resolve the breakdown in the working relationship between you and I within the Hornsby branch of Centre Staffing which continues to exist, this letter refers: The behaviour you display towards me as your Manager is unacceptable and will no longer be tolerated. You are rude, your language is uncouth and in many instances you have flatly refused to listen to any instructions. The manner in which you address me has no regard for my position as the Manager of Branch as you tell me that I do not know what I am doing or contribute anything to the bottom line. Coordinating the temps is presently your function. It is confusing to our Customers, as clients and applicants alike, if they hear their consultant repeatedly emphasise her dislike of the function. This results in their being drawn into an internal problem, which will ultimately turn them away from Centre Staffing. I have repeatedly tried to address these situations as they arise, and appealed to you to curb your anger, over reactive manner, unkind and often very spiteful way of talking to me, but with minimal success. It is inevitable therefore that your unacceptable behaviour and angry manner will continue to impact upon both the internal operational workings of the Branch and its longer term successful growth in the market place. This is your final warning to address your behaviour immediately otherwise it will result in dismissal." 16 Ms Scott deposed that she acknowledged the letter and undertook to provide a written response that evening. Her evidence is that Ms Davidson insisted on discussion and became angry. She deposed at paragraph 45 of her statement (ex 1) that: "I resumed back at my computer to finish my work and was screamed at by Linda Davidson who insisted that 'I get back to my chair at her desk as she wasn't finished with me.' I kept quiet and continued working. Lynda Davidson called my name 3 or 4 times and I said to her again 'that I would respond to her letter in writing tonight'. She then came up to me at the computer yelling "you must look at me when I'm speaking to you and if you don't look at me, you are dismissed, as your behaviour is unacceptable, get your bag and get out of the office, your fired." 17 A written report of events of 19 September 2000 was provided to Ms Eilich by Ms Davidson (attach. K to exhibit 8, Ms Eilich's affidavit) which attributes aggressive and violent behaviour to Ms Scott with frequent use of profane language. Ms Scott denies this conduct and that she uses such language. 18 Ms Scott deposed that she then phoned Ms Eilich who arranged for Pauline Cameron, then at the Gosford office, to go to the Hornsby office. Ms Scott's evidence is that Ms Cameron spoke with Ms Davidson and herself separately, informing Ms Scott to take the next day, 20 September 2000, off and return on 21 September 2000. Ms Scott deposed that she asked Ms Cameron whether she would still be employed on 21 September 2000 and was assured that she would be. 19 Ms Scott provided a written response to the warning letter of 19 September 2000 (attach. O2 to ex 8). This correspondence asserts that Ms Davidson was jealous of the success achieved by Mrs Scott and was vindictive toward her due to the refusal of the business proposition and issues of commission. Mrs Scott states, in part: "Instead of helping me in my endeavours you constantly strive to undermine my success, even to the point of impersonating me on the telephone. … .. Despite my efforts and long hours (I often work to 7pm or 8pm at night and on very rare occasions take my entitled lunch break), *I have had no support from this company whatsoever since joining. Over the last six months I have continually requested that you hire somebody to at least answer the phone on a full time basis. Your response to this request is to offer so little salary that nobody is put on and on the rare occasion where somebody has joined us i.e. Michelle Tipper they soon leave for more money. The situation is becoming intolerable. I'm being asked to do more and more as I increase the size of the business. However, instead of letting me get on with my work you are constantly at me, I believe because you have nothing else to do. I make 90% of the permanent and temporary placements, and all the necessary paperwork, I do all the paperwork for the payment of the temporaries, I write 90% of the ads appearing in the local paper. Not only that, if I have any spare time, I go out and cold call and bring in new clients. … …As you can appreciate I have been patient to the nth degree as I love working in this business and as evidenced by my performance witnessed by you and the owner. I would have thought it prudent for not only the owner of the business, but especially yourself to encourage and support my efforts rather than trying to undermine my performance due to your own feelings of insecurity and inadequacy." 20 Ms Scott's evidence is that on 21 September 2000 she was met by Ms Eilich, Mr Paul Eilich (Ms Eilich's son) , Ms Cameron and Ms Davidson. Ms Scott deposed that Ms Eilich informed her that Ms Davidson denied any offer of going into business with her, produced monthly reports stating that she had always been honest with the commission and had nothing to hide, and reiterated her request that a new confidentiality agreement be signed. 21 Ms Scott further deposed that Ms Eilich told her that she was the best consultant they had ever had and that she would have no problem getting a job elsewhere. Ms Scott's evidence is that Ms Eilich maintained a position of support for the manager at all time. 22 Ms Scott's evidence is that a detailed discussion of issues ensued, at the conclusion of which she was informed that her services were no longer required and that she could resign or be dismissed. She deposed that she was initially refused a request to call her husband but was subsequently allowed to do so. Her husband then sent a handwritten letter by facsimile to the respondent (attach. 8 to ex 1) advising that she had informed him that she did not wish to leave and was not resigning. 23 The termination of employment was then effected. 24 Ms Scott deposed that she requested a copy of notes taken by Ms Cameron and was refused. 25 The evidence of Ms Eilich is that she has been in the business of personnel recruitment since January 1970 and now operates businesses in Newcastle, Gosford and Hornsby, the latter being a separate business entity to the Newcastle and Gosford operations. She deposed that she is a director of Centre Staffing Sydney Pty Ltd which she commenced in 1998. 26 Ms Eilich deposed that a meeting took place on 27 April 2000 concerning Ms Scott's demeanour, including dress, language, general grooming and professional relationships with other staff, resulting in correspondence directed to Ms Scott (attach. D to ex 8) which states, among other things: "A need for a harmonious working relationship with team members." "Clear lines of communication, through the right channels must be followed. Your direct contact is Lynda and you should be guided by her previous experience in the industry. I am available to assist with any day-to-day decisions but will not enter into any conversations concerning other staff members or their work." "I am confirming that the working arrangement will continue for a further two weeks - a period to ascertain whether this arrangement will be satisfactory to all parties. " 27 Ms Eilich deposed that the final paragraph was meant to be and does express a warning to the applicant as she was within the probationary period. 28 Ms Eilich deposed that on 21 August 2000 she received a written complaint concerning Ms Scott's behaviour from Julie Malouf, manager of the Gosford Branch (attach. E to ex 8). She deposed that at about the same time she received a complaint from Ms Davidson concerning Ms Scott's attitude and behaviour. She deposed that she held a meeting with Ms Scott and Ms Davidson on 29 August 2000 to address these issues, resulting in correspondence to the applicant dated 31 August 2000 (attach. F to ex 8). This correspondence recognised the applicant's ability in sales and marketing and expressed satisfaction with the financial results, prior to stating: As agreed, please adhere to following: · Show respect for each other · No swearing · No criticism · Work together for the common goal · Do not hold a grudge · Record messages accurately" 29 Ms Eilich deposed that some time after 31 August 2000 she became aware that Ms Scott had taken confidential company financial papers home with her. It is Ms Eilich's evidence that this caused her to request all staff to sign a confidentiality agreement, which all agreed to other than Ms Scott. 30 Ms Eilich's evidence is that shortly before 18 September 2000 she received a telephone complaint from Ms Davidson concerning Ms Scott's behaviour which was confirmed by Ms Davidson in writing on 18 September 2000 (attach. H to ex 8). This correspondence informed Ms Eilich that the issues were: · Rude language and uncouth behaviour in the office · Minimal respect towards myself as her manager · Refusal to obey reasonable work related instructions · On going harassment and discriminatory comments with regard to my health, intellectual capacity, epileptic condition and Christian beliefs. 31 The memo of two pages details conduct alleged in regard to each of the issues. 32 The warning letter of 19 September 2000 referred to in the evidence of the applicant was subsequently issued leading to termination of Ms Scott's employment. Ms Eilich's description of these events does not materially differ from Ms Scott's evidence. 33 Ms Eilich's evidence is that she wrote to the applicant on 6 September 2000 (attach. G1 to ex 8) raising the issue of taking home confidential company information in the following terms: "You may be happy with your original contract, but in view of your actions, I wonder whether you fully understand the confidentiality clause when you took my confidential monthly figures out of the office for your husband to peruse. Whether you sign the new agreement or not, you must fully understand the implications of taking information out of the office. Only managerial staff have access and authority with monthly figures and client databases leaving the office." 34 The applicant provided a written response to this letter on 6 September 2000 (attach. G3 to ex 8) in the following terms: "Thank you for your fax I just received. I'm fully aware of my responsibilities and obligations to this company. Please be advised with regards to the monthly figures mentioned in your fax, I was instructed by your manager Lynda Davidson to take these monthly figures to Michael Scott and it would appear from your fax that she is authorised to do same. However, in relation to this matter, let me make it clear once and for all that your Manager requested that Michael look at the figures and as a courtesy he did so: a. Michael explained to Lynda that the figures were incorrect. b. Michael explained to Lynda that he did not have time for this and was not interested in the workings of your business at that time or at any other time. c. I suggest that you speak to your Manager regarding this incident and other breaches of confidentiality with regards to documents that she only has access to i.e. monthly figures. d. Furthermore, other employee's husbands and friends are often in this office and have seen the confidential workings of this company on more than (one) occasion." 35 The evidence of Ms Cameron details her experiences with Ms Davidson and the applicant on 19 September 2000, and her report to Ms Eilich. 36 Ms Cameron further provided evidence of a complaint by a Ms Malouf, an employee of the respondent engaged at the Gosford office, concerning the Mrs Scott's attitude towards her and the use of bad language by Mrs Scott. 37 Neither Ms Davidson, Ms Derrick nor Ms Malouf were called to give evidence. SUBMISSIONS 38 Mr Duc submitted that the applicant had been denied substantive and procedural fairness in the termination of her employment. 39 Mr Duc put that a case had not been made out that the applicant was guilty of profane or foul language in the workplace, submitting that the use of terms "hag" or "tart" had been substantiated but nothing more. 40 Mr Duc put that the failure to call Ms Davidson or Ms Derrick invoked the Jones v Dunkel (101 CLR 298) inference that their evidence would not help the respondent. 41 Mr Duc relied upon the decision of the Privy Council in Jupiter General Insurance v Ardeshire Bomanji Schroff ((1937) 3 ALL ER 67) where at page 74 the Privy Council said: "… a single outbreak of bad temper, accompanied it may be, with regrettable language, is a sufficient ground for dismissal. Sir John Beaumont, C.J. was stating a proposition of mere good sense when he observed that in such cases one must apply the standards of men and not angels and remember that men are apt to show temper when reprimanded." 42 Mr Duc further relied upon a judgement of a Full Bench of this Commission in Johnson v Catholic Education Office, Diocese of Parramatta (87 IR 57) , in particular at page 63 where the Bench held a denial of procedural fairness had occurred in circumstances where a decision to dismiss on reports had been taken prior to the reports being made available to the employee or representative union. 43 Mr Duc further relied upon a Judgment of a Full Bench of this Commission in Antonakopoulos v State Bank of New South Wales (91 IR 385) and Newson v New South Wales Police Service (87 IR 66). 44 Mr Duc submitted that warnings required by s88(c) of the Act were not given to the applicant in any effective form until 19 September 2000 and that she was not afforded adequate time after that communication to address the issues raised. 45 Mr Duc submitted that termination of Mrs Scott's employment was harsh, unreasonable and unjust and sought the maximum compensation, less earning of $5,137.18 by the applicant since termination. 46 Mr Anthony submitted that the evidence of Ms Eilich of the conflict within the Hornsby office was not refuted. 47 Mr Anthony submitted that the respondent had acted fairly in all the circumstances, in particular arranging for a neutral investigation of events by Ms Cameron on 19 September 2000. 48 Mr Anthony submitted that following termination of employment, the respondent was prepared to consider reinstatement, subject to undertakings as to conduct and was rebuffed by the applicant. 49 Mr Anthony submitted that the Jones v Dunkel inference arising from the absence of Ms Davidson to give evidence is equally available to the respondent in respect to evidence of the applicant concerning the business proposition. 50 Mr Anthony submitted that the respondent was confronted with an intolerable set of circumstances directly attributable to the behaviour and attitude of the applicant and dealt with that situation in a fair and reasonable manner. CONSIDERATION 51 The attitude and conduct of Mrs Scott evidenced by her written response to the allegations of 19 September 2000 give credibility to the evidence of the respondent which lead to the conclusion that the applicant made a significant contribution to the conflict and disharmony of the Hornsby office. 52 I accept the submissions advanced by Mr Anthony. 53 Refusal of an offer of reinstatement subject to undertakings in respect to required behaviour is both a failure to mitigate and further indicia of unacceptable conduct by the applicant. 54 On the facts so held the termination of Mrs Scott's employment cannot be found to be harsh, unreasonable or unjust. 55 I find no lack of procedural fairness. I find that there was sufficient and adequate communication from the respondent to Mrs Scott concerning behaviour and the need for correction from early in the employment, which went unheeded. 56 I decline to intervene. 57 Matter No IRC 4920 of 2000 is so concluded. oo0oo 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.