Industrial Relations Commission of New South Wales CITATION: Shipway and Synergy Plus Training Pty Ltd [2005] NSWIRComm 1196 APPLICANT Kelly-Anne Shipway PARTIES: RESPONDENT Synergy Plus Training Pty Limited FILE NUMBER(S): 5660 of 2004 CORAM: Murphy C Applicant's employment as events manager for 18 months claimed to have come to an end within weeks after announcement of pregnancy and employment of junior employee who took over her role. Employer claimed long term performance issues becoming worse and bullying of junior employee. CATCHWORDS: Employer found to have unfairly dismissed employee following relatively minor problems and failure to properly canvass issues arising from supervision of new employee. Pregnancy of employee either influenced treatment of applicant and/or should have been taken into account in disagreements in weeks prior to dismissal. Costs on party party basis awarded to applicant in view of respondent's unreasonable failure to agree to settlement, where applicant made several offers and at a modest level, having regard to prospects of success and circumstances established by the evidence. LEGISLATION CITED: Industrial Relations Act 1996 Shead Vs Summit Western Pty Ltd (1998) 81 IKR 341 Bankstown City Council Vs Paris (1999) 93 IR 209 CASES CITED: IGA Distrubiton Pty Limited Vs Mosses (No.3) [2001] NSW IR Com 1053 Four Sons Pty Limited Vs Sakchai Limsiripothong (No.2) 2000 100 IR 400 HEARING DATES: 06/16/2005; 09/01/2005 DATE OF JUDGMENT: 12/13/2005 APPLICANT Mr Adams, Solicitor LEGAL REPRESENTATIVES: RESPONDENT Mr Joseph of Counsel and Ms Hunt (self represented on final day) DECISION: - 32 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: MURPHY C 13 December, 2005. Matter No IRC 5660 of 2004 KELLY-ANNE SHIPWAY AND SYNERGY PLUS TRAINING PTY LIMITED Application by Kelly-Anne Shipway re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2005] NSWIRComm 1196 1 Ms Shipway was employed as a Training and Events Manager from the 6th May, 2003 until her dismissal on the 9th September, 2004. 2 The Commission unsuccessfully attempted conciliation of this matter on two occasions when both parties were represented. At the hearing of this matter, which commenced on the 16th June, 2005, the respondent was represented by Mr Joseph of Counsel, but at the final day of hearing the respondent continued the hearing unrepresented. 3 The applicant was represented throughout by Mr Adams, Solicitor. 4 The cornerstone of the applicant's case was that her dismissal arose soon after advising her employer that she was pregnant, and that the central cause of her dismissal was related to that. 5 The respondent denied that the applicant's pregnancy had any caused link to her dismissal, and relied instead on a serious of errors that the applicant allegedly made in the weeks prior to her dismissal, along with the bullying of a new junior employee, to justify her dismissal. 6 The applicant, also generally speaking, relied upon a lack of procedural fairness in her dismissal, denying any warnings to the standard required by employment law, whereas the respondent relied upon conversations she had with the applicant, both orally and in writing by e-mail, particularly in the week before her dismissal, to show that her performance had deteriorated to the extent that the working relationship was no longer viable. The Applicant's Evidence 7 The applicant devoted some time in her witness statements to the background of her employment with the respondent to show that she was a valuable employee, and whilst much of that evidence was contested in one way or another by Ms Hunt, the representative of the respondent, the applicant's case was that there was very little up until the last few weeks of the applicant's employment which could be said to be taken by a reasonable person as warnings of poor performance, as opposed to day to day canvassing of issues arising and needing to be addressed. 8 Some of the landmarks throughout her career were that in February, 2004, when the respondent moved offices from Canberra to Sydney, she was told by Ms Hunt "you can run the Sydney office for me", which was intended to indicate the level of trust delegated to the applicant and regard for her ability. 9 Similarly, in October, 2003, there were discussions about the possibility of starting up a separate business, with the applicant acting as a wedding planner, and then separate discussions were also had as to setting up a recruitment company. 10 In June, 2004, at a time when the applicant was extremely busy, the respondent advised her that additional help would be hired, and thereafter, a Melissa Maddison (a witness in these proceedings) was hired (23rd July) to assist, and the applicant was told that once Ms Maddison settled in, she might be sent to a public relations course, which again, was apparently intended to indicate the intended long term nature of the relationship. 11 Crucial to the applicant's case, as already indicated, was that Ms Shipway contended that the turning point in the relationship came after she informed Ms Hunt on the 9th August, 2004, that she was pregnant and remembers the reaction of Ms Hunt as being: "I guessed that. I went away for the weekend with my girlfriend. I said to her that I bet that little bitch is pregnant". 12 The applicant maintained that she did not know how to take that comment at the time, but that the respondent followed up by talking favourably about the future possible arrangements. She later also received e-mails about her pregnancy from Ms Hunt, which she did not retain. She maintained that up to this point, she had received no warnings, either written or oral from the respondent and had a reasonably good relationship with Ms Hunt. 13 Associated with that claim of a long term satisfactory relationship, the applicant gave evidence of having received three different increases in salary over the relatively short period of employment with the respondent. The details of these increases were that, after an initial trial period of employment, she had her pay increased from $40,000 to $45,000 and from July, 2003 she received an increase to $47,000, which was further increased to $53,182 from April, 2004. 14 From October, 2003, the applicant was given the benefit of an office vehicle, which was also for private use, and which formed part of the claim for lost remuneration in this case. There was also an issue of the circumstances of the applicant being required to return this vehicle following some damage whilst parked at the applicant's residence. This occurred in the weeks prior to dismissal on the 9th September, 2004, and was said by Ms Shipway to have been unfair in itself, and involved a pre-emptive decision by Ms Hunt, which was delivered unexpectedly with a visit to her home by the respondent's sister, with the request for the keys of the car. She maintained that the respondent was unhappy with the accident, despite it happening through no fault of the applicant. 15 In August, 2004, Ms Shipway e-mailed Ms Hunt for assistance in distribution of work between herself and Melissa, the newly arrived employee, recently appointed to assist in the workload. There followed a lunch at the Art House Hotel, where a conversation took place with the respondent, who first enquired as to how she was going with Ms Maddison, and how her pregnancy was progressing. The applicant told the respondent how she was having trouble "letting go of the work to Melissa as I am not confident about her doing it until she is fully trained". 16 According to the applicant's recollection, Ms Hunt replied that she would help, "although I don't think I should have to, but I will". On this aspect the applicant testified that there were no problems at that stage with work or her relationship with Ms Maddison. She also claimed that she had received no written or oral warnings at this stage. 17 However, shortly after that lunch, Ms Hunt spoke to her saying: "I think you should take time off. You have a lot on your mind. Go away and think about the pregnancy. Come back to work fresh on Monday". 18 Having followed that advice and taken the Friday and the Monday off work, the applicant received a phone call from the respondent at home on the 23rd August, 2004, with Ms Hunt advising her of a mistake she was said to have made with a booking of a conference room with the Westin Hotel. Recalling having made the booking, the applicant volunteered to ring the venue to check, but was told by Ms Hunt not to bother and then was asked "are you calling Melissa a liar?" She was told by Ms Hunt that this is what the hotel had told Melissa. She was further told by Ms Hunt that she was making things up and that it was because of such failure to concentrate that she had been told to take time off recently. She was then told to take a further week off. 19 A significant exchange then took place according to the applicant: The Applicant: "I am not happy about getting these phone calls. I am stressed as I've been passing blood and am worried about my pregnancy". The Respondent: "You probably don't realise the effect the pregnancy is having on you. I want you to take some time off to think about it and relax". The Applicant: "I will discuss taking time off with my David (my husband) and let you know". The Respondent: "I don't answer to David". The Applicant: "You are forcing me on leave". The Respondent: "Yes". The Applicant: "Okay I'll see you in a week and thank you for the time off". 20 The applicant testified that she was upset with this conversation and e-mailed Ms Hunt asking her for a list of where she was going wrong so that she could address these things. The e-mail reply by Ms Hunt was attached to the applicant's statement as attachment "A". The relevant e-mails then exchanged on 23rd August, 2004 throughout the day are set out in order of sending and receipt as follows: Sent by Applicant 10.40pm Sue, I thought we were just getting back on track…..now it's like its all up in the air again. Maybe its best if you can make a list of where I am going wrong so that I can fix things? That way I know exactly item by item what I am doing wrong and can fix them item by item. I take pride in my job and work comes home with me that is why I am stressed. I don't want to let you down and I obviously am. Kel. Reply by Respondent 1.50pm "Kelly, I think we both know where the errors have occurred and it is not as though I haven't discussed all of this with you before, but here goes: Hotel Bookings Accommodation Bookings In-house Problems (even Fernwood is impossible to pull off, I am going to have to call the woman) Lack of folders/forgotten programs Calender Problems Lack of Filing or Paperwork Lack of Following up on Creditors Refusal to distribute work to Melissa. I feel as though I have lost control of my business and that you seem to think it unreasonable of me to care. As though I should just take the loses and shut up because you are pregnant and can't be stressed. Also, I do not think it is fair for your to infer that I am the cause of you possible losing your baby and I refuse to be manipulated like that. I find it pretty disappointing that you would even say that. You complained about being called at 9:00 but how do you think I feel when there are no hotel confirmations the day before a program and the Westin said that we didn't have a room. I actually thought that I should be able to relax a little by now but things seem to be more of a mess than ever. I think the best thing all round would be for you to take some holidays. I can then do your job at night, a major drag but at least I won't be feeling like I am a bitch all day and I will know what is going on. Cheers Sue Reply by Applicant 2.30pm (Approx.) Thanks Sue, I had thought that most of these issues were resolved. When I get back next week all of these will be and new procedures and check lists will be put in place so errors are kept to an absolute minimum. I do not think that it is unreasonable of you to care about your business, I think it is unreasonable for you to place all the blame on me. I have worked my butt off - most of the time implementing things myself to ensure a smother process. As the company has grown lots of things have had to change to accommodate this. I did not and do not infer that you could cause me to lose the baby, I am not trying to manipulate you - I have never done that - and would not do that to anyone! I am very offended by this. I was simply stating that I have stress too, maybe I should just shut up and just do my job. Like I have said I don't know what happened today or who said what to who. But I did follow the hotel up who said we always had a room - yes, there was no confirmation in the folder - but they did always have a room for us. In fact one of the staff said that Melissa was told that there would be a room change - not that we didn't have a room. Apparently this was due to the numbers being only 7. Anyways there is a problem here, in that I should have followed up with the hotel last week for the event form - which I will ensure is done every Wednesday from now on. In-houses - Fernwood, Sue again I am running blind - I checked this with you before the quotation and agreement form was sent. I have kept you informed the whole time - because I look to you for guidance on these as they are only new to me. Not once have you said to me we can't do it. Thank you for the break. I hope that when I return all of our issues will be resolved. Kelly. Reply by Respondent 5 p.m. (approx.) Kel, I thought this week was all set before you left on Thursday too. I am frustrated by the same problems coming up, day after day, week after week. We should be at a stage where we are actually following systems. We have even been quiet lately and we have an extra staff member who sits without having any work to do. The hotels have actually been your responsibility for over a year. The Westin definitely said that they didn't have a room and it should never be that the event confirmation isn't signed the day before the program. Re: Fernwood. There was never anytime that I said you could put three 2 day programs together and sell it as a one day. I was actually in Brisbane on the Friday when you sent the proposal and she signed off the sane day. I will take the in houses back myself now along with the booking of hotels etc. Cheers, Sue. as I don't want to spend my days feeling as though I am stressing you out. 21 Upon resuming work on Monday, 30th August, 2004, after her enforced further time off, Ms Shipway approached Ms Hunt, asking her employer if she wanted to discuss what had occurred the week before and received the response: "Yes. I'll get to you when I'm ready". 22 The applicant did not keep a copy of the e-mail response from Ms Hunt. 23 On the 6th September, 2004, she was asked to attend Ms Hunt's office and the following conversation took place: Respondent: "You are not a team player Kelly. I think you are trying to destroy my business. You are not working. Melissa feels outed. You are making funny tutting noises all day. The phone you gave me back doesn't work. You have impersonated me by ringing Optus and closing the account". 24 The applicant replied that the mobile phone had been working at the point of return, and that she was shocked that it was thought that she would have impersonated Ms Hunt and denied doing so. She also volunteered to talk to Melissa, claiming not to have realised that she was unhappy with her. That drew the response from Ms Hunt: "You think I owe you something as you helped me through my nervous breakdown". To which the applicant replied: "No, I don't. You are my employer. If you are unhappy with me you are entitled to give me a warning. If you are still unhappy with me, then you are entitled to sack me". 25 Ms Shipway had lunch with Ms Maddison and discussed Ms Hunt's complaint with her, and at the completion of lunch she reported to Ms Hunt that the pair had "sorted out any problems that may have existed" to which Ms Hunt replied: "See Kelly you are a drama queen. It's not that bad". 26 Between that conversation on the 6th September and the next significant one three days later on Thursday, the 9th September, little appears to have happened between herself and the respondent in that time gap in order to appreciate why the further exchange took place which led to the dismissal. 27 According to the applicant, on 9th September, 2004 she was called into the office of Ms Hunt, who said the following: Respondent: "This isn't working, is it Kelly?" A: "What do you mean?" R: "Come on Kelly, this is not working. The workbooks are not filled out correctly. You are not interested anymore in your work". A: "I did what you told me to do". R: "Give me a break. You've been waiting for this. You are sacked. I'll give you a week's wages in lieu of notice. I would appreciate if you would leave now". 28 The applicant, in the final stages of her evidence gave details of the difficulty of achieving full-time work due to her pregnancy and particulars of her earnings in part-time work were provided to the Commission since her dismissal. The Respondent's Evidence 29 The respondent's evidence was by contrast, denying many of the applicant's recall of events and was replete with a record of incidents showing the applicant as less than the ideal employee. 30 Ms Hunt denied the value of the applicant to her on several fronts, such as that she did not create brochures; did not pay bills or do marketing; that she has misinterpreted joking conversations about future ambitions to her advantage; that the car allocated was a temporary gratuity to overcome travel problems, although the applicant continued to be late. Ms Hunt also denied more direct matters such as the accuracy of the applicant's account of the discussion following announcement of her pregnancy. A raft of other matters were also denied outright or qualified and the Commission has noted these. 31 Also noted in the broad attack upon the applicant's evidence is the myriad of derogatory observations made about the applicant's lack of performance on a number of fronts designed to show a lack of commitment and loss of interest, not just at the end of her employment, but throughout. It included accusations of Ms Shipway running her husband's plumbing business from the office. 32 On the important question of what transpired to merit a dismissal on 9th September, 2004, Ms Hunt's evidence differed on the issue of her treatment of Melissa Maddison, the new employee, and going on to suggest that a direct warning was given in that respect at a lunch at the Art House Hotel around mid August, 2004. At that lunch the respondent claimed to have given an unmistakable message about her handling of Ms Maddison, very different to the applicant's version, which included such statements as: "I don't understand your problem with Melissa….. "you really can't treat her how you have been Kelly. Please take this as a warning. I don't want to fire you, but I don't want to lose my business. If things don't improve, I will have to let you go….." 33 In Ms Hunt's evidence there then following a recounting of an event on 17th August, 2004, involving what she described as an embarrassing omission by the applicant, which led to the applicant asking for the following Friday, 20th and Monday, 23rd off work, apologising for her oversight in the process (shown by e-mails attached to Ms Hunt's statement). 34 Ms Hunt next addressed the applicant's alleged failure to ensure the booking of a conference room at the Westin Hotel on 23rd August, which caused Ms Hunt to ring the applicant about the matter on her day off. During that telephone call, the applicant had said to the respondent: "you are not the only one with problems you know. I am passing blood and I do not have stress at home". 35 Ms Hunt testified as to her frustration again at hearing the applicant use personal problems to excuse her performance, and her belief that the applicant was insinuating that Ms Hunt would be causing harm to her baby. The e-mail's attached to the applicant's statement, exhibit 1, show the full exchanges between the two that day. The applicant was instructed at the end of that conversation to "take the rest of the week off". 36 The applicant returned to work on the following Monday, 30th August, 2005. 37 On 6th September, the respondent claimed to have observed the applicant providing rude and inadequate instruction to Melissa Maddison which caused the respondent to intervene, saying: "Kelly you can't talk to people like that". 38 Soon afterwards Ms Maddison came into Ms Hunt's office telling Ms Hunt that she had approached Ms Shipway in the storeroom and told her she was upset at her treatment at the hands of the applicant. This resulted in Ms Shipway being called in and told: "Kelly you are not a team player" to which the applicant responded by protesting that she was and claiming to have supervised teams of twenty people in her previous position. At that point, the applicant said "alright, I'll leave. We obviously can't work together", and thence proceeded to pack her belongings into plastic bags which she left on the desk, taking her mobile phone and leaving the office. Upon her return to the office she was in tears, and upon being reminded by Ms Hunt that it had occurred because of the way she had treated Melissa Maddison, the applicant then volunteered to apologise to Ms Maddison. A few days later, the respondent observed that the applicant's attitude and efficiency had not improved, manifested by slamming doors, drawers and leaving a mess in the office. She made the reluctant decision to dispense with her services after giving her reasonable chances to improve. CONSIDERATION 39 Before turning to consideration of the substantive evidentiary issues, the Commission should make an observation about the applicant's complaint that she did not receive her superannuation entitlements until well into these proceedings. Whilst not a matter going directly to my consideration under section 84, it was an indication of the attitude of the respondent towards the applicant. That aspect need not be relied upon, except to note that it behoves such respondents not to come to the Commission, defending a dismissal having not complied with their statutory obligations, especially in this case where the issue was raised at conciliation, yet not rectified at least at the time of the applicant's rebuttal statement. 40 This was a highly contested case and the question of comparative credibility of Ms Shipway and Ms Hunt was an essential part of the Commission's appreciation of a situation where a relatively normal relationship could so easily and quickly deteriorate to the point where the respondent felt justified in dismissing this employee on the basis of the alleged need to maintain the efficiency of her small business operation, said to be seriously affected by alleged failures by the applicant. There is no doubt that the relationship had soured, in a situation where the company had been a two person operation and then had become a three person operation in the weeks prior. The question for the Commission was whether the applicant's alleged incompetence and the bullying issue made dismissal necessary, or whether it was influenced or motivated by less worthy reasons. 41 The difficulty apparent in the respondent's case was that when the dismissal option was exercised, not only did it take place over a relatively short period involving what passed for counselling of the applicant, but occurred after the announcement of the pregnancy and when a replacement in the form of Ms Maddison had recently become available. 42 I have found the applicant's evidence was delivered with caution and deliberately stopped short of any embellishment, where at times the opportunity existed to colour the situation in her favour. She also appeared to readily concede a number of matters to her detriment. For instance, although saying that the respondent gave what appeared to be a rather irritated response to the announcement of her pregnancy, she added as to how Ms Hunt quickly went on to talk more positively to her about the future. This was where the opportunity offered itself to present a bleaker picture of her employer's response. The applicant's account of conversations was also very plausible in their content as well as measured. 43 On the other hand, Ms Hunt's attempt to portray previous conversations as warnings, showed a tendency towards exaggeration. The attempted reliance by her legal Counsel on her behalf upon certain invoices and e-mails - not attached to affidavits, and other than some primary ones, was another attempt which not only went nowhere, but showed a certain recklessness in advancing evidence. This included a wildly inaccurate claim of fraudulent conduct over the purchase of tyres for the vehicle allocated to her, shown to have no substance, but persisted with even in final submissions. 44 The applicant's contention that her dismissal was influenced by her pregnancy, was to some extent borne out by the timing of when she started to receive adverse comments from the respondent, i.e. those distinguished by the Commission from day to day banter as shown by the evidence. It was also indicative that the marked deterioration in the relationship between the parties was over a relatively short three week period after advising of her pregnancy in August and her dismissal on 9th September, 2004. 45 The initial reaction of Ms Hunt to the news of the applicant's pregnancy was at least ungracious and capable of being taken as demeaning and dismissive, or more importantly in the Commission's view, an expression of annoyance. Another comment on another occasion testified to by Ms Shipway was "don't you want a career". The applicant maintained that from the day of so advising the respondent "there were issues" and the evidence is weighted in support of that key contention by the applicant. The sheer co-incidence of the sudden accumulation of apparent failures by the applicant raised the reasonable inference that another aspect might have overlayed and influenced the downturn in the employment relationship between the parties, although an element of errors made did come through in evidence, usually through admissions by the applicant. 46 Ms Hunt for her part, unsurprisingly denied any adverse reaction to the news of Ms Shipway's impending confinement, either in the way of what was said or in talking to the applicant about poor performance. It was difficult to decide as to whether the warnings in the last couple of weeks to the applicant were genuinely delivered as a reaction to the adverse effect her relatively minor oversights were having on the business, or were more the manifestations of an employer in a close working environment being annoyed by someone who no longer was regarded as essential, being pregnant and capable of being replaced by the new recruit Ms Maddison. 47 The applicant persuasively dealt with the alleged earlier warnings, or at least those claimed to have been given prior to the advice of the pregnancy, on the basis that they were not of the seriousness or delivered in a way that she should have considered them to be anything other than day to day observations of the respondent. Her claim that she knew this from the way a person "holds themselves", or what is more commonly called body language, was a reasonable observation to make on the standard of the reasonable person test. Neither did she consider that it was necessary for her to be receiving warnings as such over those matters, although acknowledging that she made errors from time to time. 48 The extent to which the respondent followed through matters and her robust language involving the pursuit of the booking errors of 17th August and 23rd August, which were not, after all, dismissible offences, makes it hard to believe that the respondent would have put up with very much from the applicant of the type of things contended by the respondent. 49 The Commission is satisfied that the evidence of warnings prior to the crucial time of the applicant's advice of pregnancy was much thinner on the ground, so to speak, than the more concrete instances in the final weeks of the employment. In those latter instances, Ms Shipway made some concessions as to mistakes made, firstly on 17th August and then another instance being that she overlooked the usual practice of seeking and writing confirmation of the booking of a conference room at the Hotel Westin, mentioned earlier. She contended, however, that in the latter case the room had actually been booked and the respondent did not bring evidence to suggest otherwise, apart from the original broad accusation of Melissa Maddison being told by the Hotel that the booking had been overlooked. 50 This acknowledged (but limited) oversight had led to the respondent ringing the applicant at home on the Monday, 23rd August, over an issue concerning her booking of the Hotel conference room. She was at home at the time of the call, the day before her return to work after taking that Monday and the previous Friday off work, following the previous error on 17th August for which she had apologised unreservedly and even self deprecatingly (as contained in the e-mail of that date). 51 Her time off was suggested also following a lunch, where the issue of the difficulties that the applicant had advised Ms Hunt that she was having in delegating work to Ms Maddison were discussed, but which was followed with the suggestion of some time off on the basis as advised to her "you have a lot on your mind. Go away and think about the pregnancy. Come back to work fresh". 52 The applicant was told in that phone conversation of 23rd August, 2004 "you have failed to book a training room for tomorrow", i.e. at the Westin Hotel. 53 The Commission has found it significant that the applicant had been accused of actually not booking the room, whereas she claimed her error had been confined to not following up with confirmation to note on the file. Given my findings of credit in this case, I have accepted this important qualification to the level of fault attributed to her in the call from Ms Hunt, who was apparently relying upon advice given her by Ms Maddison from the Hotel, and when Ms Shipway, in response to the accusation offered to ring the Hotel to check, she was roundly asked "are you calling Melissa a liar". 54 This demonstrates that the respondent was at that stage being prepared to be seen as taking sides with Ms Maddison, against an employee of longer standing and seniority. It is not quite evident as to why this might have been so, although one explanation might be that the respondent, despite what the Commission has found to be the paucity of evidence as to the alleged previous warnings, had by this time lost faith in the applicant. At least just as likely, the respondent may have set her face against continuing the contract and at this stage, was setting the scene for Ms Shipway's departure, with the advantage of having Ms Maddison to replace her, perhaps at a significantly reduced rate. 55 That however, belongs in the realm of speculation and the real issue out of the confrontations over the last days of the applicant's employment was whether the applicant's conduct deserved dismissal and allied to that, whether she had been given sufficient time and opportunity to repair any shortcomings as she promised to do in her e-mail at the time - having regard to the gravamen of the alleged shortcomings. 56 Given the doubts in this case, the issue of procedural fairness became important. 57 The Commission has found that the accusation by Ms Hunt of the applicant of returning the mobile phone when it was not working and of impersonating Ms Hunt to the phone company was ill founded. 58 Part of the reasons given to the applicant, at least when being dismissed, was that she was "not interested anymore in her work". This was also not sustained. 59 The only indication of that was the recent errors picked up by Ms Hunt. However, as already determined, the extent of the oversight in respect to the Westin Hotel conference room booking was successfully challenged by the applicant, when the respondent failed to convince the Commission that absolutely no booking had been made (as opposed to failure to confirm). Accordingly, it was less a question of Ms Maddison's truthfulness, but very likely the hotel simply failed to properly record Ms Shipway's earlier booking. The applicant should not have been judged and accused of making things up, she should have been given the benefit of the doubt. 60 The respondent's other profound statement upon dismissal was that "this is not working out", is more the type of comment following a trial or probationary period of employment, not after some sixteen (16) months of relative smooth sailing, except for the final weeks. This is especially so given that the Commission has been unconvinced of earlier warnings and failures claimed by Ms Hunt, who apart from anything else, rewarded the applicant with several wage increases and allowed her the use of her car. 61 Ms Shipway was there long enough before things apparently started to go wrong for her to deserve greater caution in the way she was treated when her performance was alleged to have reached the stage where dismissal was justified. This was particularly so, given that she was pregnant and even advised the respondent of some complications, probably from stress, during the exchange over the telephone over the Westin Hotel booking. The advice of medical complications with the pregnancy drew a harsh uncompromising reaction by e-mail from Ms Hunt, commented upon later in this decision. 62 Perhaps the most extraordinary aspect of the timing of the applicant's dismissal was that three days before her dismissal, after she had gone to lunch with Ms Maddison to iron out any differences, Ms Hunt had said to her, when advised that things were sorted out between her and the junior employee, "See Kelly, you are a drama queen. It's not that bad". Given that I have preferred the evidence of the applicant, and apart from the fact that the respondent did not refute the applicant's account of that conversation, this demonstrated that the issue of the differences between Ms Maddison and the applicant, at least, should not have been a very live issue, were it not for Ms Maddison giving an adverse report of the lunch, in which case it is relevant that Ms Shipway was not informed of anything of the kind, which again is dealt with in more detail later in this decision. 63 Her dismissal then on 9th September, 2004, must therefore be said to have been mistimed and premature in terms of what the applicant was supposed to be addressing in terms of any outstanding shortcomings, particularly her supposed poor handling of the junior employee. 64 The relationship with Ms Maddison, who can reasonably be described as the office junior, given the limited type of work she was undertaking, was obviously a big issue for the respondent. Whether Ms Hunt had been even-handed enough in her raising of the issue with the applicant, was something about which the Commission was less than convinced. Ms Maddison's evidence of the applicant's treatment of her had to be viewed in the light that she had to be mindful that the respondent had in effect sided with her against the applicant. She was hardly viewed as an independent witness, and in any event, her account of her treatment at the hands of the applicant, should not weigh significantly against Ms Shipway, at least not to justify dismissal because of an alleged irretrievable breakdown in the relationship with Ms Hunt. Consideration of Respondent's Final Submissions 65 As alluded to by Mr Adams, solicitor for the applicant, the Commission was presented with a raft of matters included within the final written submissions from the respondent, which had no foundation in the evidence. Whilst the respondent was self-represented on the final day of hearing, it is nonetheless surprising that she did not glean a better understanding of evidentiary matters from the fairly extensive prior involvement of her lawyers, both during two comprehensive conciliation sessions and during arbitration. Her attempt to introduce new evidence for instance, has had to be discounted by me. Her affidavit and final submissions showed astuteness and were otherwise articulate and sophisticated. 66 In respect of other matters raised by the respondent, the Commission has considered the reply by the applicant and now makes findings in an appropriate sequence. 67 The respondent made a series of other claims as follows; that the applicant became impossible to work with; that the respondent was attempting to salvage the relationship by, inter alia, providing an environment to enable the applicant to improve; but that the respondent decided that the applicant had no desire to improve. In respect to all of those contentions, the Commission has not been convinced that any one of them can be founded in fact. Likewise, the claim that the respondent currently engages the services of a pregnant, so-called contractor as an illustration of her tolerance towards the applicant, merely begs the question as to whether the very fact that that person is designated as a contractor, might merely indicate an unwillingness to actually employ in that condition. 68 The Commission finds that the respondent more likely adopted a course of action which allowed her to seize upon some relatively ordinary issues and to blow them up into a conflict situation with the applicant beyond what they deserved. The respondent's approach from the outset over the series of matters raised in the last weeks, bore the hallmarks of an attempt to unsettle the applicant beyond what the situation merited over a small number of oversights which should not have been fatal to a continuing positive relationship if handled differently. Far from any attempt to salvage the relationship or providing an environment where things might be sorted out, the respondent for instance drove the issue of the fallout over the new employee Ms Maddison in a way which was not conducive to repairing any division, but appeared more attuned to bringing about a termination of Ms Shipway. At the point where the applicant attempted to initiate a rapprochement with Ms Maddison, she received the somewhat curious retort from Ms Hunt when the results of the fence-mending lunch were reported; "See Kelly I told you it would be okay. You're a drama queen". The fact that the applicant had made that attempt three days before her termination indicated that she did desire to "improve" and such was far from impossible. 69 The evidence of Ms Maddison was that at that lunch, the applicant had described the respondent as a "bitch". The evidence was that Ms Maddison had reported the comment at the time to Ms Hunt, and goes a long way towards explaining why the applicant was dismissed a few days later so emphatically by Ms Hunt, when the central issue between them had according to the evidence, been settled just days before. 70 The Commission cannot agree with the respondent that a reasonable person would have understood that her job was in jeopardy over the level of so-called earlier warnings delivered by Ms Hunt. No such warnings existed except in the final stages of the applicant's employment and the exchanges in e-mails certainly showed a level of impatience by Ms Hunt, but the evidence did not show it as being the result of a long period of tolerance of prior unreasonable behaviour by the applicant as maintained by Ms Hunt. Rather it was more consistent with a sudden souring of a previously valuable relationship, gone bad for reasons that otherwise might belong somewhat in the realm of speculation, given the lack of logical explanation from the evidence, unless the applicant is right in her contention that the change was the result of her advising of her pregnancy. 71 There was a distinct shortfall of convincing detail or direct speech as to the claim that the applicant bullied Ms Maddison, although there were sufficient issues between her and Ms Shipway for the latter to take her to lunch, to remedy what was obviously a tense situation. But the respondent and her witness, Ms Maddison, failed to establish anything beyond the fact that things were not as they should have been. But the generality of the accusation of so-called bullying, left the Commission unable to say whether it was much more than Ms Shipway being seen as the ogre by the younger more impressionable and relatively new employee, when the applicant offered some displeasure at the way work was being performed or where as claimed by the applicant, she was at times too busy to stop and explain in detail. On the other hand, there was every indication that the respondent failed to back-up Ms Shipway, and she would be seen as the one on the outer so to speak, by her more junior colleague, and therefore more vulnerable and expendable. 72 Apart from the fact that the Westin Hotel incident was not as big a failing as claimed, and that the applicant was wrongly accused over the mobile phone incident, the final incident of the print run included in Ms Maddison's statement, was one of the few tangible errors. Curiously, the respondent herself made very little of that incident. Ms Maddison's Evidence 73 The relationship with the new employee Ms Maddison was apparently the catalyst for the applicant's departure, especially made plain by the evidence of Ms Maddison of her telling the respondent of her intention to resign over the applicant's treatment of her. 74 The independence and therefore the reliability of the evidence of Ms Maddison was important because the difficulties between herself and the applicant featured prominently in the applicant's dismissal. This was despite that Ms Hunt laid a great deal of emphasis upon the mistakes in bookings involving the applicant in the last couple of weeks of her employment, and unsuccessfully attempted to show a continual stream of warnings and shortcomings throughout, which were not convincing, especially given the salary rises and motor vehicle benefit provided. 75 The other characteristic of Ms Maddison's evidence was the almost obsessive nature of her witness statement, but whilst very articulate, it need not necessarily have been the result of coaching by Ms Hunt, as suggested by Mr Adams. Rather, it reflected an over exuberance beyond the mere recording of incidents and conversations. In short, she appeared to have approached her task as a witness with unusual zeal not commensurate with the actual content or seriousness of what was actually involved, which was more reflective of a personality clash with Ms Shipway. Her complaints to Ms Hunt lacked serious substance in the absence of detail of conversations. 76 There is a reasonable inference to be drawn that, having regard to the timing of the applicant's dismissal, the report by Ms Maddison to Ms Hunt of the applicant not apologising at the café meeting on 23rd August, 2004 and saying to her that Ms Hunt was a "bitch" instigated the dismissal three days after that lunch between Ms Maddison and Ms Shipway. 77 It was implausible that the applicant did not use the luncheon to repair fences as she reported to Ms Hunt. 78 Also affecting Ms Maddison's independence and reliability as a witness, was the claim of actually hearing the respondent, Ms Hunt, and the applicant "discussing the possibility of Kelly taking a further week off to help Kelly cope…" In fact, the applicant was forced onto additional leave during the contentious conversation when the applicant was not present in front of Ms Maddison, and the applicant's evidence was that she had said in response to Ms Hunt telling her to take another week off, "so you're forcing me to take leave". It is a relatively minor point, but the slant placed on that issue by Ms Maddison was indicative of an attempt to colour the situation, in favour of the respondent. General Matters 79 To now turn to deal in greater detail with the events just prior to dismissal, the Commission has had the opportunity to carefully examine the wording of the e-mails exchanged between the parties around that time. The ones arising from the Westin Hotel issue are most instructive and are reproduced at pages 6 and 7 of this decision. 80 The context of the first e-mail sent by the applicant, marked (1) in the attachments to her affidavit Exhibit 1, was that she had just had a very terse conversation in a phone call to her home on the last day (Monday) of two work days leave sought by the applicant, following a difficulty in booking accommodation on 17th August. As observed earlier in the decision, the applicant had been thoroughly contrite over whatever oversight was involved with the 17th August booking (it having never been properly clarified), admitting that the supervision of Melissa Maddison had been stressing her out "a bit", and saying quite openly "I think I'm going through a mid life crisis or something weird". Adding "Thanks for putting up with me'. A bit over an hour later she asked for the following Friday and Monday (23rd August) off, to gather herself. 81 On 23rd August, the applicant received the very contentious phone call from her boss about the alleged failure to book the room at the Westin Hotel. I have already found that the shortcomings in respect to that booking was restricted to the failure to confirm the booking and that the information provided by Ms Maddison was either exaggerated by her or the respondent, or wrongly assessed by Ms Hunt to be a bigger mistake than it was, when I have accepted that the hotel had given the applicant advice that she had actually booked, but not confirmed. 82 That aside, and even if the larger mistake had been involved, the respondent from that moment on in that phone call and in the e-mails which followed, took a very hard line with the applicant. It appeared to commence with the confrontationist question "Are you calling Melissa a liar". The applicant then e-mailed the respondent for a list of things she needed to do as to "where I am going wrong". 83 Things went from bad to worse in the exchanges of the e-mails earlier set out at the opening pages of this decision. The respondent can be said to have thence gone on the offensive over the applicant complaining in that phone call back to Ms Hunt that she was having some complications with her pregnancy with some bleeding. The respondent, far from any sympathy, took that as an accusation that she was being held responsible for the possible loss of the baby. The tone of Ms Hunt's e-mails were particularly forthright at best, but to someone already being stressed over receiving a stiff rebuke over the alleged failure to book the Westin Hotel, Ms Hunt's messages showed only one interest - that of the efficiency of the business and no regard for the fact that the applicant's fairly recent pregnancy might require some leeway, such as a gentler approach. 84 It is clear from all the conversations by e-mail and otherwise after that, that no allowance was to be made for the applicant's condition. The only point in the comparatively short period until dismissal that any let up was shown, was after the luncheon between the applicant and Melissa Maddison on 6th September, when Ms Hunt heard that things had gone well between the pair, which resulted in the fairly mild observation by Ms Hunt "See Kelly you're a drama queen. It's not that bad". 85 The Commission has preferred the applicant's account of how events escalated, which leads to the conclusion that the differences between her longer serving key staff member and the much more junior, more recent appointee, Ms Maddison, should have been handled differently. 86 There was a curious lack of understanding which should have manifested itself in a more detailed discussion of whatever problems were between the two, and even a round table discussion so to speak. Instead, it was apparent that the employer took a much more hands-off approach, preferring to simply pressure Ms Shipway. 87 The Commission has had to recognise two general weaknesses in the case mounted by the respondent. The first was that nothing occurred in the last couple of weeks of the applicant's employment meriting what is often termed, the last resort action of dismissal. The second general flaw was that the actions taken before dismissal were not only inadequate, but executed over a very short period of time from the point where the Commission could actually be convinced that problems of any genuine concern surfaced. It is more likely than not that her treatment was at least influenced by her pregnancy, but if not, it behoved the respondent to be more careful in her decision making against Ms Shipway's longer term interests. 88 Accordingly, the applicant's dismissal has been found to be harsh, unjust and unreasonable. REMEDY 89 In assessing what compensation should be paid to Ms Shipway, I have been required to have regard to, inter alia, the length of her employment along with the statutory obligation to take into account her efforts to procure other employment and her earnings in alternative employment since dismissal - Section 89(b) refers. I believe I should in the process draw the reasonable inference that her marketability during that period would likely be affected by her new status as a dismissed employee who is also pregnant. 90 In fact, Ms Shipway proved to be very industrious in obtaining casual work, for a time, from the Australian Taxation Office, with not inconsiderable earnings, which she has freely disclosed to the Commission. Section 89(6). 91 In respect to that part of her remuneration in the six months prior to dismissal arising from the use of a motor car, (whilst I have earlier recognised that as another indication of the value of Ms Shipway's services), I have had difficulty not only assessing its value with any accuracy, but also as to its status. Usually the provision of a motor vehicle is regarded as remuneration, which is a point made clear by the Full Bench of this Commission, as well as the Australian Industrial Relations Commission at a relatively early stage of the unfair dismissal provisions legislation. Cases such as Shead Vs Summit Western Pty Ltd t/as Blacktown Mitsubishi (1998) 81 IR 341 are relevant. 92 The respondent gave evidence that the vehicle used by Ms Shipway was Ms Hunt's own car, but not in use due to problems with her licence at the time, was merely given to the applicant on a loan to ease her transport difficulties and not as part of any salary arrangement, and this was not seriously challenged by Ms Shipway. Certainly, the vehicle was returned without protest by Ms Shipway, after an accident which was not the fault of the applicant, and indeed, from the tone of the e-mail, there was a ready acceptance by the applicant of the fact that it was best that the car was returned because of the financial drain on the respondent as she put it. Whilst that was not intended as an acknowledgement that the car was merely a gratuity returned in appropriate (but still unpleasant) circumstances, I believe that the provision of the car was by loan and not intended as part of remuneration. 93 Also, for the purpose of compensation, I have excluded mobile phone use not quantified in the evidence. 94 In respect to the length of service and statutory considerations under Section 89(6), I have decided that a fair outcome for the applicant is that she should be compensated at the rate of eighteen (18) weeks of her salary of $1,000 (gross) per week, totalling $18,000 gross to be paid within twenty-one (21) days of this decision. C O S T S 95 The question of costs primarily arises in unfair dismissal cases in terms of Section 181 2 (c): " 181(2) [Commission not in Court Session] However, the Commission when it is not in Court Session may award costs only in the following cases: (c) the Commission may award costs against a party to proceedings under Part 6 of Chapter 2 (Unfair dismissals) who, in the opinion of the Commission, unreasonably failed to agree to a settlement of the claim or whose application was frivolous or vexatious." 96 The Commission has been required to analyse the various offers made by the applicant's solicitor to settle this matter throughout the conciliation phase and also at the first day of hearing. There are two main features of those various offers which commenced immediately after dismissal in 2004 and continued until 30th August, 2005. 97 One aspect was that the applicant sought reinstatement, together with quite modest monetary compensation, but that she abandoned her claim for reinstatement prior to hearing, and instead sought only modest monetary settlement. 98 Significantly, the Calderbank offer made in writing on 6th December, 2004, sought only a settlement of six weeks, repeated at the 17th December, 2004 second conciliation conference and again at the 18th April, 2005 report back which was to be a hearing, but vacated due to the applicant's then confinement. On 16th June, 2005 and 30th August, the offer was again repeated. The fact that the applicant originally claimed reinstatement was not persevered with and no counter offer to test that issue was made. 99 The other remarkable feature was that no response was forthcoming from the respondent. 100 I have therefore been required to consider that factual situation against the authorities established in the consideration of costs under Section 181(2)(c). 101 Those authorities make clear the obligation of parties to properly respond to offers made and to make offers and counter offers if appropriate. Here it was appropriate where there was a number of offers over an extended period of the case by the applicant's solicitor and which from hindsight, were pragmatic and quite reasonable, especially from hindsight. 102 It is appropriate to refer to some relevant extracts of those landmark decisions on the question of whether costs should be awarded: 103 In Bankstown City Council Vs Paris, the Full Bench held at p.218: "Section 181(2)(c) on its face is a provision which is designed to apply only to unfair dismissal proceedings. It is the only provision designed to be applied specifically in that context. Also, when read in terms of the other provisions in the Act as to costs, it is one of only three provisions which may have application to unfair dismissal proceedings. The other provisions are paragraphs (a) and (b) of s 181(2). However, those provisions apply to many other proceedings before the Commission and, unlike the particular limb of s 181(2)(c) relied on in this application, they are designed to operate where the Commission considers either the application itself, or the institution of the proceedings, was affected by considerations which made it manifestly inappropriate for the proceedings to have been commenced. The relevant part of s 181(2)(c), on the other hand, does not require the Commission to focus upon the circumstances of the commencement of the proceedings, or to consider only the situation of the applicant. Instead the Commission is required to consider in a more general way, the conduct of the party in respect of which an application for costs is made; and, in that regard, to consider the conduct of the party in relation to the question of settlement of the claim. Construing the relevant part of s 181(2)(c) in its overall statutory context, we conclude that the evident purpose of the provision is to encourage the settlement of proceedings to which it applies. The criterion set out in the provision is to be applied objectively and requires a consideration of the whole of the conduct of the party against whom the order is sought, or some discrete part of that party's conduct, with a view to ascertaining whether it unreasonably failed to agree to a settlement of the claim. We also consider that on the proper construction of the provision, an affirmative conclusion may be reached on at least two bases. First, where there was a proposal put by a party which could be described as a reasonable settlement of the claim and that was not agreed by the other party. The second situation in which the criterion could be satisfied is where the course of conduct of the party over a relevant period could be said to amount to conduct inconsistent with an intention to settle the proceedings on any basis that could be considered reasonable. We emphasise that, although the legislature has clearly intended that there be strict limits on the power of the Commission to award costs in unfair dismissal proceedings, the legislature has clearly intended that there be strict limits on the power of the Commission to award costs in unfair dismissal proceedings, the legislature has also evinced a clear intention that costs orders be available in circumstances where there has been a failure on the part of a party to properly conciliate proceedings to the extent that they have failed reasonably to facilitate a potential settlement of them. Further, the Commission is obliged to consider all relevant circumstances in deciding whether such failure has occurred. Once the statutory criterion has been met, the Commission's broad powers and discretions under s 181(1) are available for exercise. The further observations of the Full Bench at page 220 are also relevant to the circumstances here: We emphasise that there will be many circumstances in which parties to litigation, including unfair dismissal proceedings, may appropriately take a firm position generally, including on the question of conciliation or settlement. Nevertheless, such a position runs significant risks in terms of the exercise of the power and discretion under s 181(2)(c). This is particularly so where such a position is assumed without due regard to the policy of the Act which requires parties to take seriously their obligation to attempt to settle the proceedings. That in turn involves an obligation to consider in an objective way the strengths or limits upon the case that they will be propounding should the matter proceed to arbitration. Also apposite are the Full Bench remarks in Four Sons Pty Ltd Vs. Sakchai Limsiripothing (No 2) where this was said: [11] The obligations imposed on parties to proceedings under Section 84 of the Act, as identified in the Full Bench judgment in Bankstown City Council v Paris, require parties to such proceedings to undertake a responsible and careful assessment of the prospects of the litigation, in the absence of which an unsuccessful party may realistically face the prospects of a costs order being made against it. In those circumstances, it may often be appropriate for a party to consider making an offer to settle, even if the offer could be seen, either with the benefit of hindsight or otherwise, to be at a rather low level. However, the making of such an offer on "the low side" does not exhaust the responsibilities of a party to reasonably attempt to settle the claim. 104 Finally, in respect to the clarification of the costs provisions under S181(2)(c), what the Full Bench had to say in IGA Distribution Pty Ltd Vs Mosses (No.3) (2003) NSW IR Comm230 at paragraph 102/103 is also relevant here: "The appellant contended that there was evidence that it was prepared to consider putting a "commercial settlement of the claim", that is, in relation to the investigations it made with its insurer and the like. A similar observation may be made as to the approach the appellant adopted in the conciliation before the Vice-President. Whilst these steps may well have been done with an intention to settle proceedings, they are not of themselves sufficient. There was lacking a fundamental element or ingredient in this situation. That is, an offer, indeed any offer, actually communicated to the respondent for his consideration. In any event, the nature of a "commercial settlement" in contemplation fell well short of that required to meet the appellant's obligation as described in Paris at the time that it was raised with the respondent. This is to be contrasted with the repeated offers of the respondent, albeit with the continued desire for reinstatement. We consider the conclusion is even clearer in respect of the appeal proceedings having regard to the relatively poor prospects for success of the appellant and its failure factor into its approach the policy of the statute as to relief and the particular form of the order for reinstatement made by Cambridge C are very significant. 105 In this case the applicant's solicitor made a succession of offers which it can be said required the applicant to in effect bid against herself in order to attract a reasonable offer from the respondent. The respondent had the advantage of experienced industrial lawyers, as well as a comprehensive canvassing of the prospects of success of this claim in two conciliation conferences. 106 Costs are awarded against the respondent. O R D E R S 107 (1) The respondent Synergy Plus Training Pty Limited in Matter No. IRC 5660 of 2004 is to pay to the applicant, Kelly-Anne Shipway an amount of eighteen thousand ($18,000) within twenty-one (21) days of this decision. 108 (2) The respondent is to pay the applicant's costs, to be agreed or as assessed for the preparation and conduct of the hearing of this matter on 16th June and 1st September, 2005. J P Murphy 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.