Industrial Relations Commission of New South Wales CITATION: Simmons v. Seaplane Safaris Pty Limited [2004] NSWIRComm 1114 APPLICANT James Simmons PARTIES: RESPONDENT Seaplane Safaris Pty Limited FILE NUMBER: IRC 1481 of 2004 CORAM: Connor C CATCHWORDS: unfair dismissal - frustration of contract of employment - third parties - monetary compensation LEGISLATION CITED: Industrial Relations Act 1996 Loty's Case (1971) AR 95 Busways v. Johnson (1994) 55 IR 255 Parker v. Capital Painters Pty Limited (1996) 68 IR 100 Retail Traders' Association of New South Wales v. Shop, Distributive and Allied Employees' Association of New South Wales (1990) 36 IR 38 McCarthy v. Northern Territory Prestressing Pty Limited - unreported Bonnici v. Wormald Security - unreported CASES CITED: Leeds and Northrup Australia Pty Limited v. Hull (1992) 46 IR 11 CCH Australia Limited v. Bowen (1998) 79 IR 206 Oswald v. New South Wales Police Service (1999) 90 IR 42 Hollingsworth v. Commissioner of Police (No.2) (1999) 88 IR 341 Little v. Commissioner of Police (No.2) (2002) 112 IR 212 Maldoc Pty Limited v. Bollard - unreported Tran v. Hallmark Computer International - unreported D and R Commercial Pty Limited v. Flood (2002) 113 IR 344 HEARING DATES: 10/01/2004 DECISION DATE: 11/10/2004 APPLICANT Phil Hayward REPRESENTATIVES: RESPONDENT Raymond Ferrier DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Wednesday, 10 November, 2004 Matter No IRC 1481 of 2004 James Simmons and Seaplane Safaris Pty Limited Application under S.84 of the Industrial Relations Act, 1996 DECISION [2004] NSWIRComm 1114 Preliminary 1 Pursuant to the provisions of Part 6, Unfair Dismissals, of Chapter 2, Employment [Ss.83 to 90] of the 1996 Industrial Relations Act, Mr James Simmons has lodged an application concerning the termination of his services as reservations and operations manager with Seaplane Safaris Pty Limited. Mr Simmons had been prohibited from attending the seaplane terminal at Rose Bay following an altercation he had with Mr John Giddens, the terminal manager, on Monday, 15 December, 2003. According to Seaplane Safaris Mr Simmons' attendance at the terminal was essential to the position he occupied and, consequently his contract of employment was frustrated to that extent. Mr Simmons disputed that was the case. 2 The matter was allocated to me and it was the subject of a conference - a conciliation and directions hearing - before me on Friday, 23 April, 2004 and a mention on Wednesday, 7 July, 2004. Conciliation failed to settle the matter. I set it down for arbitration on Friday, 1 October, 2004. Mr Hayward represented Mr Simmons in the hearing, calling him to give evidence. Mr Ferrier represented Seaplane Safaris in the hearing. He called two witnesses to give evidence: Mr Gary Mitchell, the managing director of Seaplane Safaris, and Mr Aaron Shaw, a fellow director. The Dismissal 3 Seaplane Safaris operated originally out of facilities in a local restaurant - the Rose Bay Afloat Restaurant - but it moved out of those facilities. The booking office was set up in Mr Shaw's residence in Norwich and the seaplane base terminal was situated in Rose Bay less than a kilometre away. The seaplane base comprises floating pontoons which are attached to a floating walkway of approximately 20 metres and a fixed walkway of approximately 4 metres secured by pylons. A shed, about the size of a squash court according to Mr Simmons, is attached. The base terminal is leased by Indian Pacific Contractors Pty Limited from the Waterways Authority. Seaplane Safaris and three other competitors - Sydney Harbour Seaplanes, Sea Wing Airways and Sydney By Seaplane - have commercial agreements for the use of the IPC base terminal and they share it. 4 Mr Simmons commenced employment with Seaplane Safaris on Wednesday, 6 August, 2003 (when the operations were conducted out of the restaurant). He was introduced to Mr Mitchell by an aquaintance and Mr Mitchell offered him the job. His duties, outlined in Mr Mitchell's letter to him at the point when he was offered employment, were: "...primarily...to supervise and run the bookings appropriately. There may be an opportunity to further your seaplane experience, as the opportunity arises..." Mr Simmons holds a commercial pilots license to fly small aeroplanes and what attracted him to the position in the first place was the prospect that he would progress to flying seaplanes. As Mr Mitchell's letter to him suggests, the prospect of flying the seaplanes was being held out to him. But in the meantime, Mr Simmons' work was restricted to bookings. He worked from both the booking office and the seaplane terminal where he checked manifests and took passengers on board the seaplanes. The evidence before me suggests that Mr Simmons was a dedicated and valued employee of Seaplane Safaris and his dismissal flowed entirely out of the incident on Monday, 15 December, 2004. 5 The seaplane base pontoons and floating walkway suffered some damage as a consequence of storms during 2003. The walkway had been broken, with gaps of approximately 40cm in length and slates held temporarily by rope. Mr Simmons understood that the walkway was to be repaired on Wednesday, 10 December, 2003, Thursday, 11 December, 2003 and Friday, 12 December, 2003 but the repairs were not carried out on those days. It would no doubt have been a matter of concern to the management of Seaplane Safaris that the damage to the walkway remained unrepaired since its passengers were continuously using it. It should also have been an issue of concern to IPC, who leased the walkway, as I would expect that they would share with Seaplane Safaris liability if some person injured themselves due to the damage to the walkway. 6 In any event, Mr Simmons approached Mr Giddens on Monday, 15 December, 2003. The conversation that took place between the two men is recorded in Mr Simmons' affidavit which formed the basis of his evidence. Mr Giddens was not called as a witness in this hearing by Mr Ferrier - a point which Mr Hayward submitted should support me in a conclusion favourable to Mr Simmons in this hearing. Mr Hayward claimed that I should draw the inference that, because Mr Ferrier did not call Mr Giddens to give evidence, his evidence would not support the arguments advanced by Seaplane Safaris [Jones v. Dunkel (1959) 101 CLR 298]. But, in fact, Mr Ferrier does not cast any doubts on Mr Simmons' evidence at all in this hearing. He accepts it, as do I. Mr Simmons' evidence is the only evidence of the incident on Monday, 15 December, 2003 in this hearing. That evidence remains unrebutted - and, in the absence of Mr Gittens' version of the incident, essentially unrebuttable - by Mr Ferrier. 7 Mr Simmons claimed that he asked Mr Giddens: "Because I'm responsible for the ferrying of passengers to our seaplane, I am looking for some information about the proposed repair of the seaplane docks." Mr Giddens' response was: "It's none of your business." But, in my opinion, since Mr Simmons was acting on behalf of Seaplane Safaris, it was as much his business as that of IPC. Mr Simmons restated his position: "Look, I simply need to know when it is proposed to perform the repairs." And Mr Giddens replied: "I don't need to talk to you. You're not anybody." 8 The confrontation escalated from that point. Mr Simmons called Mr Giddens an idiot and, according to Mr Simmons, Mr Giddens motioned in a fashion as if to suggest that he was going to push him, saying: "You had better watch yourself." Mr Simmons' subsequent retort did not diffuse the situation, viz: "If you want to size up to me, you had better make it worthwhile because you won't win." Mr Giddens then walked away down the floating walkway and Mr Simmons followed him, asking him for more information about when the repair work was to be done, viz: "I need to know when it is to be done." 9 Mr Simmons fell backwards into a boat moored alongside the dock. He admitted that he was agitated at the time. He got out of the boat and again approached Mr Giddens, who sidestepped and pushed him off the dock into the water. Mr Simmons lost his glasses. The mobile telephone he was carrying, which was the property of Seaplane Safaris, was also damaged in the altercation. Mr Simmons got back up on the walkway and shoved Mr Giddens into the water. He then walked back to the terminal base but returned and apologised to Mr Giddens, saying: "I'm sorry. I would just like to apologise for my part in the incident." Mr Giddens responded: "You're out of here." Which proved to be prophetic because out of that incident Mr Simmons was ultimately to lose his job. Mr Simmons then commented to Mr Giddens: "You have a total lack of communication and people skills." 10 An incident report by IPC management was prepared on Monday, 15 December, 2003 which complained of Mr Simmons' "...consistent, loose cannon, confrontational behaviour..." which had "...embarrassed both the seaplane terminal and Seaplane Safari's image...". The report commented that: "...better behaviour is expected from a person of his age, especially having come from an hospitality background..." And it concluded by banning Mr Simmons from the base terminal, viz: "Although given much assurance of his better conduct in the future if he be permitted back in the terminal, I am not prepared to allow this as the duty managers and myself have not witnessed any improvement in conduct over time. He is detrimental to the seaplane terminal and as such is not permitted on site..." 11 Mr Mitchell discussed the matter with Mr Simmons within a few days and informed him that he was attempting to sort the matter out with IPC management but that: "If we can't sort this out, your future in the company is limited." In the meantime Mr Simmons did not attend the seaplane base. Both Mr Mitchell and Mr Shaw in their evidence indicate that they made attempts to resolve the issue with IPC management but they were unsuccessful. The ban remained in place. 12 Ultimately, on Sunday, 29 February, 2004 Mr Mitchell telephoned Mr Simmons at work to inform him that his services were to be terminated and that a letter would come to him to confirm that position. He was given the option of four weeks pay or, alternatively, to work for a month. Not surprisingly, Mr Simmons was upset by developments and when Mr Shaw approached him to collect some passengers from a city hotel he refused to do so and his services came to an end at that point. 13 The letter from Mr Mitchell was dated Wednesday, 25 February, 2004 and Mr Simmons received it on Thursday, 4 March, 2004. It was in the following terms: "...As you know I have been trying to resolve the issue with IPC regarding your banning from working in the seaplane base terminal following the incident between yourself and Mr Giddens. Despite our appeals to IPC on several occasions, they are quite firm that you will not be allowed to resume your duties in the terminal. This compromises your position somewhat in that your position as operations manager requires you manage operations from the seaplane terminal as well as the office. Unfortunately, this renders your continued employment with Seaplane Safaris untenable and it is therefore with regret that I give you notice of termination of employment with Seaplane Safaris effective from Wednesday, 31 March, 2004. Whilst we are unable to continue your employment, may I take this opportunity to say how much we valued you as a team member during your time with us and how much we enjoyed your company and contribution to Seaplane Safaris during its inaugural days..." The Question of Unfairness 14 My principal task in this hearing is to identify whether or not the termination of Mr Simmons' services by Seaplane Safaris was unfair, ie using the language adopted by Sheldon J of the former State Industrial Commission in Loty's Case (1971) AR 95 at p.99 whether he had received a "fair go". The words used S.84(1), on which any Part 6 application relies, are "harsh", "unreasonable" or "unjust" [Busways v. Johnson (1994) 55 IR 255 at p.261]. But in Parker v. Capital Painters Pty Limited (1996) 68 IR 100 I described the words "harsh", "unreasonable" and "unjust" (at p.104) in the following manner: "...the words 'harsh', 'unreasonable' or 'unjust' contemplate that long established principle of industrial fairness in the State unfair dismissal jurisdiction... which, to my mind, flows naturally out of the ordinary meaning of the words 'harsh' (meaning too severe, having regard to all the circumstances), 'unreasonable' (meaning immoderate, excessive or extravagant) and 'unjust' (meaning unfair, inequitable, undeserved or biased)..." In other words, the "fair go" concept. I hold no doubts that Mr Simmons did not receive a "fair go". 15 In the interests of Seaplane Safaris, I believe that Mr Simmons was well within his rights to ask questions of Mr Giddens concerning the delay in repairs to the damaged walkway. There is nothing in the evidence before me to suggest that his enquiries were not made in a courteous manner. Mr Giddens' response to his enquiries, which it would appear to me was far from courteous, was where the problems started. That is not to suggest that Mr Simmons could not have handled matters better. He does not dispute that he subsequently called Mr Gittens an idiot, threatened him - "...if you want to size me up, you had better make it worthwhile because you won't win..." - and finally pushed him into the water. Mr Simmons apologised for his outburst which culminated in both he and Mr Giddens ending up in the water. But my impression of Mr Simmons whilst he gave his evidence is that he would not have started the altercation, albeit that he may well not have backed down when he was confronted. 16 After this unfortunate incident, I would have expected that a mature response from Mr Giddens and IPC management would have been to move on, resolving their differences with Mr Simmons without placing a ban on him attending the seaplane base terminal. Since that ban led to Mr Simmons' dismissal, it may in itself give Mr Simmons a cause of action against Mr Giddens for depriving him of his livelihood. As an employee of Seaplane Safaris he clearly had a right to attend the terminal under the contractual arrangement IPC had with Seaplane Safaris and I believe that any restrictions imposed on him in that respect were inappropriate, notwithstanding the incident which gave rise to the ban. 17 But the respondent in this hearing is not Mr Giddens. The question is whether or not Seaplane Safaris - not IPC management - acted unfairly to Mr Simmons. Mr Ferrier's submission is that in the circumstances described to me in this hearing Seaplane Safaris really had no choice but to terminate Mr Simmons' employment. I accept that Seaplane Safaris was to some extent the "...meat in the sandwich..." in the altercation between Mr Simmons and Mr Giddens. But, because of the restrictions imposed - improperly to my mind - on Mr Simmons was his continued employment with Seaplane Safaris impracticable, ie was Mr Simmons' contract of employment terminated by frustration, which is essentially Mr Ferrier's claim? I do not believe so. 18 The classic precedent on frustration of an employment contract is the decision of the Full Bench of the former Commission (Cahill J - Vice President, Glynn and Maidment JJ) in Retail Traders' Association of New South Wales v. Shop, Distributive and Allied Employees' Association of New South Wales (1990) 36 IR 38 which dealt with the dismissal of an employee who died after he had been dismissed but before his claim of unfair dismissal could be heard. The Full Bench concluded that it was obviously impossible to restore an employer/employee relationship for a deceased person and therefore, whether or not the dismissal was unfair, reinstatement (which was the only remedy available at that time and which was sought) was not possible. 19 In my unreported decision of Friday, 7 November, 2003 in McCarthy v. Northern Territory Prestressing Pty Limited [Matter No.5838 of 2002] I considered an allegation that a trade union activist employed by a contractor on a construction project had been dismissed because the site management had insisted on his removal from the site. Whilst I concluded that there was no evidence to support that allegation, I made the following observations in my decision (at pp.19 and 20): "...It may well happen that an employee is dismissed by an employer under pressure by a third party. That type of territory was explored in my unreported decision of Friday, 1 September, 1995 in Bonnici v. Wormald Security [Matter No.IRC 1016 of 1995] where I commented (at p.17) that it was fundamental in unfair dismissal applications that '…the unfairness must be inflicted on the employee by the employer and not because of some other person, such as a client of the employer or because of something over which the employer had no real control - the frustration of the contract of employment, in a sense…' On the evidence before me in this hearing, I do not accept that in terminating (the employee's) services, (the employer) was motivated by a desire, dictated by...site management, to be rid of a trade union activist. But, put simply, even if it were established that...site management were creating a situation on the site which effectively outlawed (trade union) involvement, (the employer) was not in any position to exercise any control over the situation..." Mr Hayward does not accept that Mr Simmons employment with Seaplane Safaris had been frustrated in that manner, however. Indeed, he has cast doubts on Mr Ferrier's claim that the problem Mr Simmons had with Mr Giddens was the real reason for Mr Simmons' services being terminated, suggesting that Seaplane Safaris was looking for an excuse to dismiss him. 20 On the basis of the evidence before me in this hearing, I am not satisfied that there was some hidden ulterior motive behind Mr Simmons' dismissal on the part of Seaplane Safaris management. To my mind, that evidence only serves to confirm my view that it was the incident on Monday, 15 December, 2003 alone which led to Mr Simmons' dismissal. If that incident had not occurred I have no reason to doubt that Mr Simmons would have continued in employment with Seaplane Safaris. 21 But, notwithstanding the difficulties which Seaplane Safaris had with IPC over the incident on Monday, 15 December, 2003 - and I recognise the problem that confronted it - I still do not believe that it was fair for it to terminate Mr Simmons' employment in the manner in which it did. It appears to me that the decision Mr Mitchell took to terminate Mr Simmons' services was made without any real discussions with him: Mr Mitchell's letter terminating Mr Simmons' services was dated Wednesday, 25 February, 2004 and yet Mr Mitchell only spoke to Mr Simmons over the telephone about his decision on Sunday, 29 February, 2004. Furthermore, it is one thing to suggest, as Mr Mitchell did in his conversation with Mr Simmons shortly after the incident on Monday, 15 December, 2003, that if he was not able to sort the matter out with IPC, Mr Simmon's "...future in the company is limited...": it is another thing entirely to bring Mr Simmons' contract of employment to an end. Dismissal in cases of this nature should be a last resort for an employer. Mr Simmons had been employed by Seaplane Safaris for over two months whilst the IPC ban on him remained in place. I accept that situation may not have been something which could be preserved for any length of time but, in my opinion, there should have been further discussions between Mr Mitchell and Mr Simmons concerning his future with Seaplane Safaris before his dismissal. 22 I also note that Mr Mitchell's letter to him at the time he commenced employment highlighted that his work was "...primarily...to supervise and run the bookings appropriately...". It was apparently the intention of both Mr Simmons and Mr Mitchell that Mr Simmons progress with Seaplane Safaris until he flew its seaplanes. But his current position was involved with bookings. That would not necessarily confine him to working from the bookings office alone and would involve some activities at the seaplane base terminal but, essentially his work at that time was with the bookings and it would seem to me that he may continue much of that work without actually entering the seaplane base terminal at all. In that respect, one option which was not explored by Seaplane Safaris, and in my opinion could have been, was to retain Mr Simmons in employment for a longer period, possibly with more limited duties which did not take him into the seaplane base terminal (and possibly with reduced remuneration) to allow more time for the issue with IPC to blow over. Mr Hayward also suggested that Seaplane Safari management could have pursued the issue through the dispute resolution procedure to the Waterways Authority, the licensor of the jetty, pontoons and adjacent facilities, in accordance with the licence agreement IPC has with it. The Remedy 23 In his Part 6 application Mr Simmons had originally sought his reinstatement, which under S.89(1) remains the primary remedy for an unfairly dismissed employee. That position that has been consistently confirmed by the Commission [Leeds and Northrup Australia Pty Limited v. Hull (1992) 46 IR 11 at p.15, CCH Australia Limited v. Bowen (1998) 79 IR 206 at pp.217 and 218, Oswald v. New South Wales Police Service (1999) 90 IR 42 at pp.67, Hollingsworth v. Commissioner of Police No.2 (1999) 88 IR at pp.341 and 342, and Little v. Commissioner of Police (No.2) (2002) 112 IR 212 at p.243]. But, Mr Simmons is no longer seeking to return to work with Seaplane Safaris. Approximately one month after his dismissal he obtained alternative employment in the hospitality industry on a salary level commensurate with the salary he received when he worked for Seaplane Safaris. Whilst his new employment takes him away from his ultimate goal of flying a small aeroplane, he is now content for his Part 6 application to be confined to monetary compensation under S.89(5) alone. 24 Mr Hayward has also claimed that Mr Simmons has not to date received all of his entitlements, ie annual leave. That claim is disputed by Mr Ferrier. As I have indicated to the parties during the course of the proceedings, whilst it is common for settlements in conciliation to include all outstanding issues between the parties, including alleged underpayments of salary or other entitlements, once the arbitration of Mr Simmons' Part 6 application commences, he is precluded from pursuing any claim for entitlements of that nature. He would be obliged to pursue claims for such entitlements elsewhere, ie before an industrial magistrate or the local courts. 25 It is open to a trade union to press a small claim over entitlements of that nature, ie a claim not exceeding $10,000.00, under Ss.379 and 380 in Part 6 proceedings but individual applicants are not at liberty to do so. S.380(1) makes that plain, viz: "An industrial organisation may, during any proceedings before the Commission, make an application for an order under this Part and for the application to be dealt with under S.379." The Full Bench of the Commission (Glynn and Hungerford JJ and Connor C) in its unreported decision of Wednesday, 10 February, 1999 in Maldoc Pty Limited v. Bollard [Matter No. IRC 2710 of 1997] confirmed that Ss.379 and 380 was restricted to trade unions and was not available to individual Part 6 applicants. 26 Mr Hayward has nevertheless submitted that the failure of an employer to pay an employee his entitlements would constitute an unfairness and, to that extent, also become an issue before me. As I indicated in my unreported decision of Friday, 8 October, 2004 in Tran v. Hallmark Computer International [Matter No.IRC 4110 of 2004 at p.7] I believe that, independently of any claim for the recovery of an employee's entitlements, it is open to a member of the Commission in Part 6 proceedings to consider an underpayment at the point of dismissal also as an unfairness. It is not a case of double counting. As Mr Hayward suggests, it would be unfair for an employee to be dismissed without receiving all of his due entitlements. But since Mr Ferrier has disputed that claim, I do not believe I may confidently have regard to that issue in this hearing. 27 That having been said, the upper limit for monetary compensation is set by S.89(5) as: "…an amount of compensation not exceeding six months' remuneration of the applicant at the average rate received over the period of six months immediately before being dismissed…" Mr Simmons' claim for monetary compensation must also be considered bearing in mind the provisions of S.89(6), viz: "When assessing any compensation payable, the Commission is to take into account whether the applicant made a reasonable attempt to find alternative employment and the remuneration that would have been payable if the applicant had succeeded in obtaining alternative employment." S.89(5) is concerned with loss of income, not any assessment of damages. It is fairly settled law now in this State that such monetary compensation is neither punitive, punishing an employer for any wrongdoing on his part, nor designed to enrich the dismissed employee at the expense of his former employer. 28 There is still some speculation in determining the appropriate level of remuneration for Mr Simmons. In D and R Commercial Pty Limited v. Flood (2002) 113 IR 344 the Full Bench of the Commission (Wright J - President, Walton J - Vice President and Tabbaa C) alluded to that when (at p.363) it commented that: "…the power in the Commission to make a money order, subject to the limitation on the quantum of compensation and the matters required to be taken into account by S.89(6), is nevertheless within the Commission's discretion. Whilst the Commission is required to take into consideration the matters identified in S.89(6), those matters are not necessarily to be reflected in any particular, arithmetic or definitive way in the money order for compensation made…" Clearly S.89(6) does not provide for a simple mathematical formula in the assessment of monetary compensation - a sum representing the amount of income over the period of six months immediately prior to the dismissal, compared and contrasted with the remuneration received in the alternative employment and considered against the length of time that an employee was out of work. The only jurisdictional limitation is the six month ceiling in S.89(5): the rest is a matter for my discretion and, in my opinion, there are often less tangible issues which should also be considered under Ss.89(5) and (6). 29 For instance, Mr Hayward has highlighted Mr Simmons' disappointment that promises held out to him by Mr Mitchell to progress to flying a seaplane ultimately came to nothing. Mr Simmons was looking for a career as a pilot and joined Seaplane Safaris with that aim in mind - and it would appear to me with some assurances by Mr Mitchell in that respect. Whilst Mr Simmons was not employed as a pilot at the point of his dismissal by Seaplane Safaris, I believe that he was entitled to be reasonably confidence that he would ultimately become one - and with his ambitions achieved, his salary level would be increased accordingly. That is something I believe I should bear in mind when assessing the appropriate level of remuneration for Mr Simmons under Ss.89(5) and (6). 30 In the circumstances, based on the figure of $807.69 which Mr Simmons recorded in his Part 6 application as his average weekly remuneration when he worked for Seaplane Safaris, I propose to order that it pay to him the sum of $4,750.00. O R D E R 1. Seaplane Safaris Pty Limited shall pay the sum of $4,750.00 to Mr James Simmons within 28 days. 2. This order shall take effect on and from Wednesday, 10 November, 2004. P J CONNOR Commissioner 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.