Industrial Relations Commission of New South Wales CITATION: Gorman & McCord [2008] NSWIRComm 1038 APPLICANT PARTIES: Ms Kim Gorman RESPONDENT Sarah McCord FILE NUMBER(S): 2190 of 2007 CORAM: Ritchie C Claim for unfair dismissal. Applicant had phoned respondent to advise that she was sick-could not come to work. CATCHWORDS: Respondent's husband phoned applicant and terminated her employment. Reasons for termination found by Commission to be not based on fact. Awarded compensation. LEGISLATION CITED: Industrial Relations Act 1996 HEARING DATES: 16/04/08 DATE OF JUDGMENT: 14 May 2008 APPLICANT Mr J. Clements(solicitor) LEGAL REPRESENTATIVES: RESPONDENT Mr J. McCord DECISION: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: Ritchie Commissioner 14 May 2008 Matter No IRC 2190 of 2007 IN THE MATTER OF: Kim Louise Gorman and Sarah McCord. Application by Kim Louise Gorman re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2008] NSWIRComm 1038 Background. 1 An application for unfair dismissal under section 84 of the Industrial Relations Act 1996 (the Act) was filed on 12 December 2007 by Ms Kim Louise Gorman (the applicant) against Ms Sarah McCord (the respondent). 2 The application was made as a consequence of the applicant being dismissed by the husband of the respondent by telephone on 22 November 2007. The applicant was employed by the respondent as a hairdresser in the respondent's salon located at Umina. 3 The applicant stated in her affidavit that she commenced employment on 6 March 2007. This date of commencement was disputed by the respondent who stated it was 23 May 2007. 4 The respondent is a sole trader. 5 The application came on for Conciliation and Direction on 10 January 2008 before Commissioner Stanton but failed to settle. The matter was reallocated to the Commission as presently constituted with the hearing being held on 16 April 2008 in Newcastle. At the end of the hearing the Decision was reserved. 6 The applicant was represented by Mr Jamie Clements (solicitor)of Central Coast Business Lawyers and the respondent by Mr Phillip McCord husband of the respondent. 7 A Form 11 was filed by the applicant on the day of the Hearing. Applicant's case 8 Both the applicant and her boyfriend a Mr Darren Ferguson provided affidavits and were subjected to limited cross- examination. 9 The applicant stated that she was a qualified hairdresser and had run her own salon in Tasmania prior to moving to the NSW central coast. The applicant said she was paid award wages. She stated she believed she did not get paid for overtime worked. 10 She said in weeks leading up to her termination she believed that the respondent was very stressed due to outside issues. She also had outside issues to deal with, as her ex-husband had demanded maintenance from her, which caused her to be stressed out. As a consequence of these issues she admitted she wasn't as chatty and bubbly as she normally was. The salon was therefore a little quieter than usual. She said she received a phone call from the respondent trying to ascertain if everything was okay because she had become a little snappy with her at one stage. The day prior to termination they spoke with each other as the respondent did her hair for her. No negative issues were raised by the respondent at that time. 11 In the week of her termination Ms Shane Steel, who worked in the Salon as a contractor had suffered from gastroenteritis, which kept her running to the toilet whilst at work. 12 The applicant stated that when she woke up on 22 November 2007 she did not feel well and had the symptoms of gastroenteritis. Her son had recently had the same illness. She said that there was no way that she could go to work. She therefore rang the respondent at around 7.50am and advised her of her illness and that she would not be at work that day. 13 About ten minutes later she received a phone call from Mr McCall husband of the respondent. He stated that both he and the respondent had decided to let her go. He also said that his wife had not been happy going to work anymore and that there had been tension in the salon. The applicant advised him that she had an issue with her ex-husband with respect to maintenance. The applicant also raised an issue over the non- payment of overtime that she had worked but not been paid. Mr McCall stated that she was not owed anything. 14 Later the next day she spoke with the respondent and sought a meeting with her. The respondent responded that it had not been fun lately. 15 The applicant said that during her period of employment she had never been subjected to any disciplinary action, be it formal or informal. 16 Much of the applicant's affidavit in reply went to an issue of contention between the two parties with respect to unpaid monies. She did state she was sick on 22 November 2007. She rejected the inference that her not being at work was due to her boyfriend being back in town. Her boyfriend worked in the mining industry in Cobar New South Wales where he worked a roster of two weeks on and one week off. To her recollection she was only sick once when her boyfriend was back at the central coast. 17 She also denied that her father had set up a salon in her garage or that she had commenced her own business prior to January 2008. She also denied inspecting vacant properties in Ettalong Beach in June 2007. She also denied trying to entice Ms Steele from the respondent's business. 18 She accepted that she had sent text messages to ex–clients of hers after she had been terminated as she was trying to get a feel for whether or not a future business would be viable. She denied stealing any client information from the respondent. She stated that she obtained the phone numbers from the phone book or clients had given their numbers to her during her employment with the respondent. 19 After her termination the applicant decided to set up her own salon, which she stated commenced in January 2008. She said that her business was running at a loss. 20 Documents to that effect were placed into evidence. 21 The applicant sought only compensation as she did not believe she could work with the respondent or her husband due to the animosity that now existed between the two parties. 22 A claim for non- payment of wages filed by the applicant is being handled in another jurisdiction. 23 The applicant stated that she did receive a phone call from the respondent asking what was wrong with her. She replied that she had some personal problems. She also stated that she received a text message from Ms Steele inquiring if she was okay. She said that she had an agreement with the respondent that if she was sick to call her in the morning. 24 She also said that she was advised by her accountant to set up an ABN number in October 2007 as part of her separation from her husband. She believed that whilst she had problems with respect to her ex- husband, she did not believe that it affected her whilst she was at work. 25 In answering questions from the Commission she said she found out why she had been terminated when she received her separation certificate. She also advised she was never spoken to by the respondent with respect to excessive sick leave. She denied trying to commence a business prior to be terminated. 26 Mr Darren Ferguson gave evidence and stated that he is employed as a driller with a company called Boart Longyear Pty Ltd. An annexure to his affidavit outlined particular dates, between February 2007 and June 2007, when he was either at work, on jury service or travelling back home. By this evidence Mr Ferguson sought to show that there was no connection between the absences from work by the applicant and he being back at home. 27 In final submissions Mr Clements sought compensation at the higher end of the scale notwithstanding that the applicant had only been in employment since, in his submission March 2006. The reasons given by the respondent for terminating the applicant had been shown to be without foundation. The reasons had no basis of fact. He stated that the applicant had received Centrelink payments post her termination. The Commission was not advised when such payments commenced, the quantum or if they were still ongoing. Respondent's Case. 28 Mr Phillip McCord stated that he and his wife moved into a brand new home on 17 November 2007 but he did not believe his wife was stressed out about the move. 29 He said that his wife received a phone call from the applicant on the morning of 22 November 2007 to say that she was sick and she would not be at work. After the brief phone call had ended his wife was in tears lying on their bed. He said that his wife was upset that the applicant was sick again and she would have to cancel a whole day's bookings to unhappy clients. He said this was the eighth time this had occurred in the last nine months. 30 It was then decided by his wife (and he agreed) that they would terminate the applicant's services. He then left for work and spoke to the applicant when he got to work. He said that the phone call lasted six and one half minutes. He told the applicant of the situation she had left his wife in and the recent difficulties she had caused. The applicant questioned whether he believed she was sick and that she had recent problems with her ex- husband. He told her that both his wife and Ms Steele had tried to find out what was wrong, but their attempts were rejected by her. The applicant sought more time to fix her problems and wanted the opportunity to talk later on as she was sick. 31 He then terminated the applicant because they could not take it anymore, his wife was at home in tears and he had had enough. The applicant then claimed that she had not been paid for her overtime, which he rejected. He then said that his wife would call her that afternoon. 32 It was his view that his wife counselled the applicant on several occasions but her attempts were rejected. In cross- examination Mr McCord said that he did not dispute that the applicant had been sick on that day but disputed the lack of notice. He agreed that he would be hard to get to work when one was suffering from gastroenteritis. He agreed that he had rung the applicant to terminate her. He had been told by a real estate agent that the applicant had been inquiring about the leasing of premises. He himself had not been there at the time nor had he himself seen the applicant's father allegedly build a salon in the applicant's house. He had only been told about it. 33 Ms Sarah McCord is the owner of Sarah O Hair. At the time that she employed the applicant she had no other employees. A Ms Shane Steele rented space at the salon to carry out nail work for clients. The respondent said that she employed the applicant who commenced employment on 23 May 2006. 34 It was her view that the applicant would have her hair and nails done, free of charge, the day before her boyfriend came home from his mining job. Copies of the salon's daily work sheets were attached to her statement. She stated that on Saturday 2 June 2007, the applicant told her that her boyfriend was coming home. On the next working day Tuesday 5 June 2007, the applicant advised that she could not come to work because she had a sore back. She did not come to work the following day but did come in on 7 June 2007 but went home early complaining of a bad back. Her boyfriend both dropped her at work and picked her up. 35 On the following day 8 June 2007, the applicant again went home early complaining of a sore back. The respondent rang her later that day to ascertain whether she would be at work on the next day? She was told by the applicant that she would not know until that morning. The respondent said that she told the applicant that she was running a business and that the late notice was becoming a pain in the neck and that clients were being let down by the late notice. The phone then went dead and when she rang back the applicant advised that she had kicked the plug out of the wall socket. The respondent told the applicant that she would be cancelling all her Saturday appointments and that she would be seeing her on the following Tuesday. 36 The respondent denied that she was in a stressed state in the weeks leading up to the applicant's termination. 37 It was the respondent's view that the applicant's father converted her home garage into a salon in September 2007. 38 The respondent rang the applicant on 9 November 2007 to ask if she had done anything to upset her as she had been acting in a grumpy manner towards herself and Ms Steele during the previous days. The applicant did not wish to talk about the issues that were upsetting her but did advise that she would try to act in a friendly manner in the future. 39 On Wednesday 14 November 2007 the applicant had an emergency phone call from the school her son attended and she borrowed a client's car to go the school to pick him up. It was the respondent's view that this was unprofessional to take a client's car instead of one of ours. 40 The applicant had her hair and nails done on 21 November 2007. 41 The following day the respondent phoned the applicant at 7.49am and advised that she would not be coming to work as she had gastroenteritis. The respondent's husband saw her reaction to this phone call and said to her that he would ring the applicant when he got to work as he had had enough of this. 42 The respondent sought to contact the applicant during the morning on her home phone and mobile phone but was unsuccessful. 43 The respondent finally contacted the applicant on Friday morning 23 November 2007. She told her that she was deliberately letting her down and the way she had been behaving for the last couple of weeks created tension in the workplace. They then went on to discuss the issue of non- payment of overtime and time off in lieu. The respondent denied ever saying to the applicant that "it hasn't been fun lately". 44 It was the respondent's view that the applicant commenced her own business as a hairdresser prior to January 2008 (annexure 30). Her ABN was activated on 1 October 2007. Also around 20 December 2007 a client of the respondent received a flyer in her mail and dropped it around to the respondent's salon (annexure 35). The flyer advertised "Kim's Cutting Edge Hair &Beauty" and stated that she (the applicant) "is now at 17 Kingsley Ave". 45 A BUSINESS NAMES EXTRACT –New South Wales showed that the name of the business "Kim's Cutting Edge Hair & Beauty" had been registered on 27 November 2007. The date commenced was also 27 November 2007 with the address being 17 Kingsley Avenue, Woy Woy. 46 That is the home address of the applicant as expressed in her Application For Relief in Relation to Unfair Dismal. 47 The respondent stated that she received numerous complaints from clients stating they had received TEXT messages and phone calls on 30 November 2007 from the applicant. Clients complained that they were disappointed that their personal and confidential information had been stolen from the salon. 48 The respondent then phoned the applicant and told her to stop ringing clients as it was the respondent's view that the applicant had taken phone numbers from the respondent's data base. 49 It the respondent's evidence that she felt bullied by the applicant. She said that the applicant was a strong character and she was not. In fact she sought to avoid confrontation. That was why she rang the applicant to raise work issues rather than speak to her face to face. In her view the applicant had access to the respondent's customer details when she worked alone on Melbourne Cup Day and used that opportunity to steel information. 50 She said that the applicant's absences from work showed a pattern that most of the time the absences coincided with her boyfriend back in town. Notwithstanding this concern she never asked for medical certificates to be produced for sick leave absences. 51 She also said that she had been told by people that they now went to the applicant's salon. 52 In contacting the applicant by phone the respondent said that she was trying to find out what the applicant's problem(s) was and if she could help her or get her to snap out of it. At no stage did she raise the issue of terminating the applicant during these conversations. 53 The respondent said that the applicant would call her in the morning to say she was running late and that would cause problems. She said she found out that the applicant had been looking to start up her own business a couple of weeks prior to her termination but did not raise it with her because the applicant was already cranky at her enough and did not want to upset her more. She only raised it with the applicant when the text messages sent to the respondent's clients were being reported back to her. The respondent admitted that she is not good at confrontation. 54 Ms Shane Steele stated that she leased an area of the respondent's shop where she ran her own business. She said in June/July 2007 she said the applicant approached her to rent space in a shop she was going to lease in Ettalong. Ms Steele said she rejected this offer. She did not tell the respondent of this approach until after the applicant had been terminated. 55 She also stated that that clients of hers had told her that the applicant had set up a business at her home. Her father had done the work to convert a room into a salon. 56 She thought that the applicant had commenced in March 2006 but admitted she was not good at dates or times. She confirmed that she had seen the applicant get paid cash by the respondent on a Saturday. 57 She herself had approached the applicant to try and find out what was wrong with her but was advised that it had nothing to do with her. 58 In his final submissions Mr McCord believed that they had treated the applicant fairly during her employment and had good reason to terminate her services. He said that the applicant's gross wage was $595 per week and about $760 per week including commission. I note that a copy of the Employment Separation Certificate, attached to the applicant's affidavit states that the applicant was paid $744 per week and that she commenced on 23 May 2006. Consideration and Decision. 59 Included in the Employment Separation Certificate was an area entitled Reason for separation. The squares along side Misconduct and Other were crossed. Under the area of Please give reason was written: 3. Nasty attitude to colleagues 1. Took regular sickdays(sic) when boyfriend returned from workaway. 2.Suspicion of theft of client Data Base (later confirmed). The same reasons expressed in a more general form were included in the respondent's Employers Reply form. Also included were the allegation that the applicant had taken for granted the flexibility of hours worked at the salon, the suspicion that the applicant was going to start up her own salon and conspiring to turn work mates against the respondent. 60 The issue of the applicant taking sick leave when Mr Ferguson, her boyfriend returned home after being away I believed is answered in Mr Ferguson's evidence, in the applicant's favour. Applicant was sick on 28 February 2007. Mr Ferguson attended jury duty on that day. Applicant was sick on 16 and 17 May 2007, Mr Ferguson was on night shift on those two days. Applicant was sick on 5,6 and came in late on 7 June 2007. (The applicant had a medical certificate, dated 5 June 2007, covering her absence from 5 June until 9 June 2007 inclusive.) Mr Ferguson was on night shift on 5 and 6 June 2007 and then left Cobar on 7 June 2007. 61 The issue of the applicant's attitude towards the respondent and Ms Steele in the weeks leading up to her termination was raised as an issue. She was not her bubbly self and did not speak to the other two ladies. That whilst she may have been withdrawn as a consequence of personal issues, she did communicate this to the other people. There was no evidence that she used bad language or lost her temper towards clients or fellow workers. That she had personal issues that were not work related should have been recognised and accepted as such by her fellow workers. 62 The claim that the applicant stole data from the respondent's salon is a serious claim. Where an employer makes such a claim would constitute misconduct on behalf of the employee. In such cases the onus falls on the employer to prove beyond the balance of probability that such misconduct did take place. This has to be done by the employer bringing such evidence before the Commission that would satisfy the Commission that such action did take place. The claim that the applicant stole information on Melbourne Cup Day was not proven as there were no witnesses to this alleged action. Whilst there was evidence from both the respondent and Ms Steele as to what other persons had told them I am not prepared to make a positive finding on a claim of stealing on such hearsay evidence. To do so would be unfair on the applicant. 63 There was the issue that the applicant may open up her own salon. In giving evidence Mr McCord was asked the following questions by the Commission: Q. Had you put that accusation to Ms Gorman that she was proposing to open up a salon prior to 22 November 2007 ? A. No, we hadn't, because again we didn't you know, it was very busy. On the same token, we didn't want Kim to walk out on us, between then and Christmas is chocker block. Q. So you didn't put that accusation to her on the basis that you didn't want to lose her prior to Christmas ? A. Pretty much, yes. Make of it what you like, it's the truth. It is somewhat difficult for the respondent to now use such a claim as a reason for termination when they had the opportunity to ask the applicant prior to her termination but failed to do so for commercial reasons of their own. 64 It is clear that the respondent did have difficulty in confronting the applicant face to face about issues that may result in a negative reaction. That was why she used the phone when trying to assist the applicant. The use of the phone is not the way to conduct a counselling. Confronting an employee is something that a boss on occasions has to do. Whilst I recognise that the respondent ran a very small business it is only fair that the applicant be given the opportunity to understand what the respondents concerns were and be given the opportunity to respond. If the respondent had an issue with the applicant then she should have sat down with the applicant and clearly expressed what her concerns where and what corrective action she sought from the applicant. 65 On the day of her termination she rang the respondent approximately one and one half hours prior to her commencement. The applicant stated that she was suffering from gastroenteritis and could not attend work. The applicant gave evidence that one of her children had experienced the same illness earlier in the week, as did Ms Steele. The respondent knew that the applicant not coming to work that day would mean a number of customers would be inconvenienced. The decision was then made by the respondent to terminate her. Mr McCord later rang the applicant and whilst not questioning that she was genuinely sick, highlighted that she was letting the respondent down. I am unsure as to what the respondent wanted the applicant to do as a consequence of her sudden illness and her inability to come to work that day. She had rung the respondent giving one and one half hours notice of her inability to attend work and gave the reason why she could not attend. It is my view that Mr McCord on behalf of the respondent should not have terminated the applicant in this manner over the phone and for the reasons given. Procedural fairness for the applicant did not take place. Reasons given in this matter for the termination of the applicant in my determination were not based on fact. It is my view that the decision to terminate the applicant was made as a consequence of the tearful reaction that the respondent had to the phone call made by the applicant on the morning of 22 November 2008, and the sympathetic reaction by her husband to his wife's upset state. 66 An issue arose between the parties as to the correct date of commencement of the applicant with the respondent. I note the Group Certificates attached to the respondent's statement showed the applicant commenced on 23 May 2006. The applicant did not raise at the time with the respondent the claim that this date was incorrect. It was only raised during these proceedings. The applicant did not strike me as a person who would not bring such an issue to the respondent's attention if she believed it was wrong. I note the accusation of Mr Clements made to the respondent that the applicant had commenced in March 2006 but that the respondent had kept the tax of the applicant's earnings and had not declared same. The respondent denied this claim and I accept her evidence. I find that the applicant commenced with the respondent on 23 May 2006. 67 In summary it is my finding that the termination of the applicant by the respondent was harsh, unjust and unreasonable. 68 The applicant has sought an Order for compensation as opposed to reinstatement. I agree that there would be no benefit to either party in awarding reinstatement. The applicant stated that after her termination she commenced the process of ascertaining whether she would open up a salon of her own. She did this by contacting clients from the respondent's salon and the dropping of leaflets in letter boxes in the area. She said she commenced business in January 2008 and has been running at a loss. That she decided to open her own business as opposed to seek employment either in or out of her particular trade was her decision. She has previously run her own business and would be aware that most small businesses take a considerable period of time to become a profitable concern. I accept the evidence of Ms Steele that the applicant had sought for her in June/July 2007 to leave the respondent sometime in the future and work with her. I am also not completely convinced that the applicant only commenced cutting hair from her home address in January 2008 and not some time earlier. Taking into consideration all of the above, I make the following Order: ORDER 1. That the respondent Ms Sarah Lynette McCord, pay to the applicant Ms Kim Louise Gorman the sum of ten thousand dollars ($10,000). 2. That this payment must be paid to Ms Gorman within 28 days of the date of this Decision. D.RITCHIE 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.