Industrial Relations Commission of New South Wales CITATION : Nicholson v Tomago Discount Self Storage [2004] NSWIRComm 357 PARTIES : Sharon Nicholson Tomago Discount Self Storage FILE NUMBER: IRC 1056 of 2004 CORAM: Harrison DP CATCHWORDS : Application re unfair dismissal pursuant to s 84 of Industrial Relations Act 1996 - Question of redundancy due to poor financial performance - conduct of Applicant prior to termination - question of responsibility for financial performance Held - conduct of Applicant post termination prevented discussion - termination not harsh, unreasonable or unjust. LEGISLATION CITED : Industrial Relations Act 1996 HEARING DATES: 11/15/2004 DATE OF JUDGMENT: 12/16/2004 APPLICANT Mr F Austin Counsel Solicitors Lyons and Lyons LEGAL REPRESENTATIVES: RESPONDENT Solicitors Mr J Palmieri Palmieri Lawyers JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: HARRISON DP Thursday, 16 December 2004 MATTER NO IRC 1056 OF 2004 SHARON NICHOLSON AND TOMAGO DISCOUNT SELF STORAGE Application re unfair dismissal pursuant to s84 of the Industrial Relations Act 1996 ("the Act") DECISION [2004] NSWIRComm 357 1 Ms Sharon Nicholson was employed by Tomago Discount Self Storage ("the Company") from 20 November 2002 until 10 February 2004 in the capacity of Manager. Ms Nicholson's remuneration was $576.92 per week plus an average $50 per week car allowance. Ms Nicholson was afforded full responsibility and almost complete autonomy in developing the business on behalf of the owners, represented by Mr Keith Howard. 2 Mr Howard's evidence is that Ms Nicholson was an effective and competent manager who built the business up in the early stages of her employment. Mr Howard deposed that the nature of the business required long term investment and was characterised by gradual growth. In August 2003 Mr Howard congratulated Ms Nicholson on achieving the milestone of 100 customers, which was indicative of the growing strength of the business. 3 During the course of the expansion Ms Nicholson sought the employment of a part-time assistant on the basis that business activity was more than she could adequately deal with on her own. Mr Howard agreed to this initiative and Ms Stacy Carnley was employed as a casual office clerk in June 2003. 4 Mr Howard's evidence is that the business and Ms Nicholson's application to it declined from this point, resulting in a lack of growth and an increase in bad debt arising from non-payment of storage fees by existing customers. 5 Mr Howard's evidence is that the business declined to the point where it failed to generate the cash flow required to meet the wages bill. Mr Howard's evidence is that Ms Nicholson was made aware in the period from September 2003 to February 2004 that revenue had to increase or the facility would close. Mr Howard deposed that in January 2004 he undertook a review of the business with Ms Nicholson which revealed that 25 percent of clients were more than two months in arrears and that the number of clients continued to diminish. 6 Mr Howard's evidence is that in the week of 10 February 2004 the business reached a financial crises in that insufficient funds were available to meet the wages that week. Mr Howard deposed that it became apparent to him that the facility was not going to succeed and that he should take over management as a cost reduction measure whilst he closed it down and wound up the Company. 7 On 10 February 2004 Mr Howard visited the facility and informed Ms Nicholson that the Company had run out of money and her employment would be terminated in order to cut costs. There was an exchange concerning the future of Ms Carnley, Mr Howard informing Ms Nicholson that it was undecided. Mr Howard further informed Ms Nicholson that she could cease employment immediately and would be paid one week's wages in lieu of notice. 8 Ms Nicholson was most upset at this development and in her evidence conceded that she "lost it". Mr Howard's version of events, which is largely uncontested and supported by Ms Carnley's evidence, is that Ms Nicholson shouted abuse at him and then drove off in her car. Ms Nicholson refused to take subsequent telephone calls from Mr Howard. Mr Howard received threatening telephone calls from Ms Nicholson's then husband, whom it is said in the emotion of these events informed Ms Nicholson that she was no longer able to reside with him at their then place of residence. 9 Mr Howard deposed that there was some difficulty in the return of office keys and a mobile telephone which was eventually achieved. 10 Mr Howard's evidence, supported by that of Ms Cheryl Hesketh, Mr Howard's bookkeeper/secretary, is that after assuming management of the business it became apparent that the facility had been left unattended by Ms Nicholson and that the failure of some tenants to pay their rent was caused by inability to locate Ms Nicholson for that purpose. Mr Howard deposed that he reached the conclusion that Ms Nicholson had become more interested in her personal business and problems than managing and growing the business at the storage facility, which resulted in the run down in liquidity and the termination of her employment. CONSIDERATION 11 There is room for some criticism of the level of consultation between Mr Howard and Ms Nicholson, however, there was, on the evidence, adequate notice given to Ms Nicholson of jeopardy to her employment due to declining business circumstances. 12 Ms Nicholson's conduct at the time of termination and subsequently prevented any further discussion, negotiation or resolution of the matter in any positive way. 13 Having regard to all of the circumstances and in particular Ms Nicholson's conduct, I am unable to conclude that the termination of employment was harsh, unreasonable or unfair. 14 I decline to intervene in the application for relief. Matter No IRC 1056 of 2004 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.