Industrial Relations Commission of New South Wales CITATION: Clarke v. Godwin [2005] NSWIRComm 1201 APPLICANT Michelle Clarke PARTIES: RESPONDENT Karen Godwin FILE NUMBER(S): 2080 of 2005 CORAM: Connor C termination of employment - casual engagement - claim of unfair dismissal - requirement for warning over unsatisfactory work performance - level of monetary compensation CATCHWORDS: LEGISLATION CITED: Industrial Relations Act 1996 D and R Commercial Pty Limited v. Flood (2002) 113 IR 244 Little v. Commissioner of Police (No.2) (2002) 112 IR 212 CASES CITED: Maldoc Pty Limited v. Bollard - unreported Outboard World Pty Limited v. Muir (1993) 51 IR 167 Ryde-Eastwood Leagues Club Limited v. Taylor (1994) 56 IR 385 HEARING DATES: 11/14/2005 DATE OF JUDGMENT: 12/22/2005 APPLICANT Frank Wilson Bates Collett and Wilson, Lawyers LEGAL REPRESENTATIVES: RESPONDENT Cheryl Welsh and David Cummins Darryl Perkins, Solicitors DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Thursday, 22 December, 2005 Matter No IRC 2080 of 2005 Michelle Clarke and Karen Godwin Application under S.84 of the Industrial Relations Act, 1996 DECISION [2005] NSWIRComm 1201 Preliminary 1 An application has been lodged under Part 6, Unfair Dismissals, of Chapter 2, Employment [Ss.83 to 90] of the 1996 Industrial Relations Act by Mrs Michelle Clarke who had been employed as a driver of a mobile cafe owned and operated by Mrs Karen Godwin, who trades as Doorstop Dinners. She worked on a casual basis. She commenced employment on Wednesday, 14 April, 2004 and her services were terminated on Sunday, 6 March, 2005 when Mrs Godwin had no further work available to her. In her Part 6 application she has claimed that the termination of her services was unfair and she has sought monetary compensation over it. She also contends that she has been underpaid. 2 The matter was allocated to me. I set it down for a preliminary hearing in the Queanbeyan Court House on Thursday, 9 June, 2005. Conciliation failed to settle the matter. I programmed it for arbitration, making the customary directions for the filing of evidentiary material and listing the matter for further mention for that purpose on Wednesday, 17 August, 2005 (also in Queanbeyan). Ultimately, the hearing of the matter occurred on Wednesday, 16 November, 2005 (in Queanbeyan). 3 Mr Wilson represented Mrs Clarke in the hearing, calling her to give evidence. He asserted that Mrs Clarke's dismissal was unfair, essentially on procedural grounds. Two written statements - from Ms Cherylanne Bellchambers, a former employee of Mrs Godwin, and Ms Leeann Collins-Perry, a friend of Mrs Clarke - were also provided by Mr Wilson. He called Ms Collins-Perry for cross-examination but Ms Bellchambers was not available for cross-examination on Wednesday, 16 November, 2005 and Mr Wilson did not press for her written statement to be admitted into evidence. 4 Ms Welsh had originally been briefed to appear in the hearing for Mrs Godwin but an urgent personal commitment meant that she was not able to do so on the day of the hearing. She was replaced at very short notice by Mr Cummins, who called Mrs Godwin to give evidence. In the circumstances, to assist Mr Cummins I proposed that the parties provide submissions in writing later. That suggestion was accepted by the parties and I made directions for the filing of those written submissions. 5 As far as any alleged underpayment of wages is concerned, the matter falls outside my jurisdiction in arbitrated Part 6 proceedings and I explained the position to Mr Cummins. Pursuant to S.380(1): "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." That is a small claim for the recovery of entitlements due to an employee. As the Full Bench of the Commission (Glynn and Hungerford JJ and Connor C) confirmed in its unreported decision of Wednesday, 10 February, 1999 in Maldoc Pty Limited v. Bollard [Matter No. IRC 2710 of 1997] - and as the actual wording of S.380(1) suggests - an individual dismissed employee in Part 6 proceedings is not competent to make such a small claim. That remedy is available only to an "industrial organisation", ie a trade union acting on behalf of a dismissed member. The Evidence 6 Mrs Godwin owns four vans which are set up essentially as mobile shops supplying food - sandwiches, cakes, drinks, filled rolls and candies - and newspapers at different business sites. She occasionally helped with food preparation and was required to have the van washed each week at a local car wash. But generally her job was to load the van and drive it to various business sites in the Queanbeyan region. At each stop she would toot the horn and open the van for business, serving the customers who turned up. She would then close the van and move to the next site. Mrs Clarke had regular runs. She had two runs each day. 7 Mrs Clarke ordinarily commenced work at 7.15am each day for her first run. She estimated that there were 26 stops on that run. She returned to Mrs Godwin's business address at approximately 10.30am and loaded up the van for the second run which commenced approximately 11.15am and covered the same business sites plus 3 additional sites. Upon return to Mrs Godwin's business address, Mrs Clarke cleaned the inside of the van. If there was any food left over, Mrs Godwin permitted her to take what she wanted and to throw away what was left. Mrs Clarke ordinarily ceased work at 2.15pm. 8 There appears to have been some strains which crept into the relationship between Mrs Clarke and Mrs Godwin. Mrs Clarke attributes that strain essentially to a break-in of the business in late 2004 when the contents of bags used to hold floats for each van - approximately $600.00 in all - were stolen. Since there had been no physical signs of entry to the premises, the police who were called in assessed that a key must have been used to gain entry to the premises. Mrs Godwin told her staff that they "...were all under suspicion...". Mrs Godwin asserted that Mrs Clarke particularly was offended by that suggestion and from that point she seemed to Mrs Godwin to be "rebellious", taking exception to whatever she said to her. 9 Mrs Clarke indicated in her evidence that, in fact, Mrs Godwin spoke to her infrequently and only did so to criticise her work. For example, Mrs Godwin complained that Mrs Clarke was not putting enough fruit in the fruit salad when she prepared it. Mrs Godwin indicated in an affidavit which formed that basis of her evidence that: "...when the run was started by a previous employee, it was doing very well. Towards the end of 2004 we noticed that Mrs Clarke's van wasn't doing as well as it had been when it was commenced. Business was dropping away and the run was not paying for itself or the wages we were paying her. When staff are employed to drive the vans we have told them that if they lose a stop on the run they should do what they can to find another stop to replace it..." Mrs Godwin claimed that a number of complaints had been received from customers that Mrs Clarke had been rude to them and would not buy from her. 10 According to Mrs Godwin, Mrs Clarke often had days off work to attend court with her son and daughter. Mrs Clarke also took her daughter in the van on her run with her when she was not attending school. Mrs Godwin had asked Mrs Clarke not to do so as insurance did not cover Mrs Clarke's daughter if the van Mrs Clarke was driving was involved in an accident. Nevertheless, on one occasion when Mrs Clarke was absent from work, and Mrs Godwin arranged a replacement driver (her husband) for the first run and did the second run herself, Mrs Godwin asked Mrs Clarke's daughter to travel on the runs to show them the stops. 11 When Mrs Godwin was cleaning the van after the run on that day, she found a tin with a lot of coins in it. She took the coins and waited for Mrs Clarke to raise the matter with her. Mrs Clarke had formed the view that Mrs Godwin had planted the tin in the van to set her up. Mrs Godwin ultimately informed Mrs Clarke about the tin of coins and Mrs Clarke denied any knowledge of it. No one has ever claimed the tin as their property. 12 All in all, not a particularly healthy employment relationship between the two women. And things deteriorated from there. On Wednesday, 2 March, 2005 the employee who ordinarily prepared the fried food was absent. Mrs Clarke had arrived early that day - 6.30am - as she had received a lift to work and she was asked by the baker, whom she understood to have acted under delegated authority from Mrs Godwin, to prepare the fried foods in place of the absent employee. She claimed that she overheard the baker talking to Mrs Godwin on the telephone and confirming the arrangement. When on Friday, 4 March, 2005 Mrs Clarke asked Mrs Godwin to pay her an extra hour for the work she had performed for the absent employee, Mrs Godwin responded: "I did not ask you to do it." But later agreed to pay her, saying: "Right-o then, but it won't happen again." Mrs Godwin claimed in her evidence that Mrs Clarke frequently come in an hour earlier than her regular starting time on her own accord and, whilst she would help out with some food preparation, she did not do a lot of work. 13 On Sunday, 6 March, 2005 Mrs Clarke was taken to hospital with chest pains. She was released from hospital later that night but was given a medical certificate from the medical practitioner at the hospital for three days and was booked for further tests on Monday, 7 March, 2005. The medical certificate was extended for a week but when Ms Collins-Perry attempted to give Ms Godwin the medical certificate Ms Godwin refused to accept it and handed it back to her. 14 Mrs Clarke became worried that Mrs Godwin was not prepared to accept the medical certificate. She presented herself to work on Thursday, 10 March, 2005 and was informed that she was not required and that she should return on Friday, 11 March, 2005. She was informed that she had not been dismissed by Mrs Godwin's husband with whom she spoke at that time. When Mrs Clarke arrived at work on Friday, 11 March, 2005 she asked Mrs Godwin for her wages and she was given it. Mrs Clarke asked Mrs Godwin: "Do I see you on Monday?" And was told that she was not required for two weeks. Mrs Clarke asked: "Have I lost my job?" Mrs Godwin responded: "That's up to you." Mrs Clarke then asked: "How do I feed my children?" Mrs Godwin shrugged and walked away. 15 Subsequently, Mrs Godwin decided to terminate Mrs Clarke's services. Mrs Godwin's decision was taken, she claimed, because of Mrs Clarke's abusive attitude to her (and also apparently because Mrs Clarke needed confirmation of her position to obtain unemployment relief). On Tuesday, 29 March, 2005 Mrs Godwin wrote to Mrs Clarke that: "...as of today...I am giving you one weeks notice as I no longer require your employment..." And provided a statement of service. It is alleged by Mrs Godwin that after Mrs Clarke was dismissed she attended the workplace and told other staff that "...they should find another job as she was going to have Doorstop Dinners closed down by the end of the day...". 16 Mrs Godwin had placed advertisements in the local newspaper (The Canberra Times) on Saturday, 26 March, 2005 (prior to Mrs Clarke's dismissal) and Wednesday, 30 March, 2005 (the day after she was dismissed). Those advertisements were in the same terms, viz: "...takeaway experience, manual vehicle provided...must enjoy being your own boss...excellent conditions and wages..." Mrs Godwin claimed that neither advertisement related to the position that Mrs Clarke had occupied. She recorded in her affidavit that the advertisement on Saturday, 26 March, 2005 was for a driver to replace another employee who had recently resigned and the advertisement on Wednesday, 30 March, 2005 was for a kitchen hand. The two advertisements are in identical terms and they speak of the need for "...take away experience..." and that a "...manual vehicle (is) provided..." - not the work of a kitchen hand, I would think. Mrs Godwin explained in her evidence that she had been in error in preparing her affidavit and that both advertisements were for the same job - and not the job formerly occupied by Mrs Clarke. Mrs Godwin explained that it was her custom to double up when she placed advertisements for vacant positions in local newspapers to maximise the impact of the advertisements. I accept her explanation. But Mrs Clarke can be forgiven for forming the impression that Mrs Godwin was advertising to fill her position, especially since on Tuesday, 29 March, 2005 she observed another woman who ultimately replaced her accompanying Mrs Godwin's husband in the van on her run. Conclusion 17 Notwithstanding the comments in Mrs Godwin's letter of Tuesday, 29 March, 2005, terminating Mrs Clarke's services that she was "...no longer required in employment...", this case is not one which can effectively be described as a retrenchment. That fact alone does not take the matter outside jurisdiction under Part 6. There is some suggestion current that to provide a retrenched worker who is in receipt of severance payment also with a remedy under Part 6 is a case of double counting. I disagree. A retrenched worker, even one who receives severance payment, may still have been unfairly dismissed and an employer should act fairly when retrenching any staff member [Outboard World Pty Limited v. Muir (1993) 51 IR 167 at p.182]. But it appears to me that Mrs Clarke's dismissal flowed entirely from issues Mrs Godwin saw in her work performance. Mr Cummins indicated in the proceedings on Wednesday, 16 November, 2005 that was, in fact, the position. 18 Also a question remains concerning the actual date that Mrs Clarke was dismissed. The letter Mrs Godwin wrote to Mrs Clarke which actually terminated her services was dated Tuesday, 29 March, 2005. On Thursday, 10 March, 2005 Mrs Godwin's husband informed Mrs Clarke that she had not been dismissed. On Friday, 11 March, 2005 Mrs Godwin shrugged off any suggestion that she had been dismissed. But the reality is that from Thursday, 10 March, 2005 when Mrs Clarke presented herself for work following her absence on medical grounds, she was never employed by Mrs Godwin again. For all practical purposes, I believe that she was, in fact, dismissed on Thursday, 10 March, 2005. 19 In that respect the following comments of the Full Bench of the Commission (Bauer and Hungerford JJ and Murphy C) in Ryde-Eastwood Leagues Club Limited v. Taylor (1994) 56 IR 385 at p.399 are relevant: "…In principle, and using the technical terminology of contract, an enforceable contract may readily be drawn, namely - in consideration of a payment by X to Y, in accordance with the relevant award or enterprise agreement for work actually performed, X agrees to employ Y as a casual employee on work as mutually agreed as and when it arises from time-to-time pursuant to a weekly roster published by X at least seven days in advance of such work and Y agrees to make himself available to perform such work subject to the release of Y allowed by X for illness, holidays and other reasonable cause. Such a contract, in our opinion, would represent an appropriate common law contract of employment to give effect to an on-going or continuing enforceable contract of casual employment. It would not conflict with nor be contrary to the award there. We think that, if the employer to such a contract, X, declined during the course of its operations to offer further work to the employee, Y, then there would be a dismissal from employment of Y in the relevant sense …" 20 Reg.6 excludes from jurisdiction under Part 6 certain classes of employees, including: "…employees engaged on a casual basis for a short period except employees who: (i) are engaged by a particular employer on a regular and systematic basis for a sequence of periods of employment during a period of at least six months; and (ii) would, but for the dismissal, have had a reasonable expectation of continuing employment with the employer…" Mrs Clarke worked regular and systematic hours of work each week for Mrs Godwin for in excess of six months. Reg.6 does not therefore apply to her. 21 Outside the limitations imposed by Reg.6, a casual employee may still pursue a remedy under Part 6 upon her dismissal. The casual nature of the employment, and the fact that a casual loading is usually paid to compensate for the eventuality of the employee's services being terminated at relatively short notice, may still be a relevant factor to take into account when assessing whether the dismissal was fair. But equally the fact that an employee is engaged on a casual basis should not be, and presently is not, a licence for an employer to treat her employee unfairly. 22 If Mrs Godwin had any real dissatisfaction with Mrs Clarke's work performance - which has, in appears to me to have been the real reason for the termination of her employment - then Mrs Clarke should at least have received some warnings that she was not meeting expectations. In that respect, one of the factors a member of the Commission may take into account when assessing the fairness or unfairness of any dismissal, contained in S.88(c), is: "…whether a warning of unsatisfactory performance was given before the dismissal or threat of dismissal…" 23 In my unreported decision of Wednesday, 9 March, 1994 in Watters v. Zig Zag Railway [Matter No.IRC 3126 of 1993] I had this to say (at p.7) over warnings: "...An employee is entitled to be warned in clear terms, preferably in writing, if his work performance is unsatisfactory to the extent that he may be dismissed over it. That is unquestionably an important factor in any assessment of whether or not a dismissal was unfair..." Whilst Mrs Clarke may have been subjected to some criticisms from Mrs Godwin in that respect, to my mind, those criticisms fell well short of what is described by S.88(c). Her dismissal is to that extent unfair. 24 Mrs Clarke found new employment on Monday, 23 May, 2005 on a wage of $314.00 per week, which is less than the wage she received when she worked for Mrs Godwin ($481.00 per week). Nevertheless, she is not seeking to return to work with Mrs Godwin. Whilst reinstatement under S.89(1) remains the primary remedy for an unfairly dismissed employee [Little v. Commissioner of Police (No.2) (2002) 112 IR 212], clearly that remedy is impracticable in this case, confining Mrs Clarke to monetary compensation under S.89(5). And in that respect I am directed by S.89(6) to take into account efforts made by her to mitigate her loss with fresh employment. 25 There remains a certain amount of speculation in determining the appropriate level of remuneration for an unfairly dismissed employee. 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…" 26 In the circumstances, and bearing in mind Mrs Clarke's actual loss of earnings, that her loss of earnings is an ongoing matter for her due to the lower wage she now receives, and the operation of Ss.89(5) and (6), I propose to order that Mrs Godwin pay her the sum of $5,500.00. I make an order to that effect. O R D E R 1. Mrs Karen Godwin shall pay the sum of $5,500.00 to Mrs Michelle Clarke within 28 days. 3. This order shall take effect on and from Thursday, 22 December, 2005. 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.