Industrial Relations Commission of New South Wales CITATION: Smith v Paddington Osteopathic Centre [2009] NSWIRComm 1003 APPLICANT PARTIES: Angela Mary Smith RESPONDENT Paddington Osteopathic Centre FILE NUMBER(S): 1366 of 2008 CORAM: Cambridge C CATCHWORDS: Unfair dismissal - termination of employment - summary dismissal - oral dismissal made in the heat of the moment - absence of proper substantive basis - procedural errors - substantive basis not sufficiently connected to employment - dismissal held as harsh, unreasonable and unjust - reinstatement or re-employment impractical - further proceedings to determine compensation. LEGISLATION CITED: Industrial Relations Act 1996 [NSW] Leanne Jarvis and Sam Costandi [2005] NSWIRComm 311 Smith v Director General of School Education, (1993) Industrial Relations Court of NSW, [Fisher CJ Bauer & Hungerford JJ], 51IR @ 204. CASES CITED: Li and Oocl Australia Pty Ltd [2002] NSWIRComm 167 Qi v Nice Shoes Australia Pty Limited [2005] NSWIRComm 1149 Luszczynski v Cement Australia Package Products Pty Ltd [2005] NSWIRComm 1180 HEARING DATES: 1 and 2 December 2008 DATE OF JUDGMENT: 6 February 2009 APPLICANT Ms L Tucker, solicitor Kingsford Legal Centre LEGAL REPRESENTATIVES: RESPONDENT Mr P Strain, barrister Solicitors for respondent Gibson Howlin Lawyers DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES COMMISSIONER CAMBRIDGE 6 February 2009 Matter No IRC 1366 of 2008 Angela Mary Smith v Paddington Osteopathic Centre Application by Angela Mary Smith re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996. DECISION [2009] NSWIRComm 1003 1 This matter involves a claim for unfair dismissal made pursuant to the provisions of Part 6 of Chapter 2 (sections 83-90) of the Industrial Relations Act 1996 [NSW], (the Act). The claim was filed on 18 August 2008, and made by Angela Mary Smith, (the applicant). The claim initially named the respondent employer as Ross C Partington. Subsequently, during conciliation proceedings conducted by Bishop C, the respondent employer was identified as the Paddington Osteopathic Centre (the respondent). 2 The Conciliation proceedings conducted before Bishop C were unsuccessful and the matter has proceeded to arbitration by way of a Hearing conducted on 1 and 2 December 2008. BACKGROUND 3 The applicant is a woman who was some forty four years of age at the time of her alleged unfair dismissal on 29 July 2008. The applicant had worked for the respondent for a period in excess of seventeen years. The applicant had performed a variety of administrative, clerical and associated tasks which were broadly encompassed under the description of Practice Manager. 4 The applicant worked for the principal of the respondent, Mr Ross Partington. Mr Partington is the sole proprietor of the respondent having established the business in 1976. As is often the case with small business operations, Mr Partington as employer, and the applicant developed a close working relationship over the extensive period of the applicant's employment. 5 Regrettably the close relationship that had developed between the applicant and Mr Partington was severely damaged by events that occurred on 29 July 2008. The applicant has claimed that on 29 July 2008 she was summarily dismissed from her employment by Mr Partington. The events of 29 July were most unfortunate and require some detailed examination. 6 Although there was some dispute regarding particular details of the events of 29 July, a broadly consistent picture of the primary events can be ascertained from the evidence. In early 2006, Mr Partington separated from a relationship with his de facto partner Ms Deborah Limb. Much earlier (about 1996), Mr Partington and Ms Limb had jointly purchased a dog named Jordy. When Ms Limb separated from the relationship with Mr Partington, she did not take Jordy with her. After the separation between Mr Partington and Ms Limb an informal arrangement developed whereby Ms Limb would from time to time seek access to the dog Jordy. 7 From about March 2008, Ms Limb contacted the applicant at the respondent's Osteopathic Clinic and made arrangements for access to the dog Jordy. The arrangements generally involved Mr Partington bringing Jordy to the Clinic and then the applicant would take Jordy to meet with Ms Limb usually during a lunch time meeting. The lunch time meetings involved the applicant taking the dog Jordy to meet with Ms Limb. However the relationship between Mr Partington and Ms Limb remained strained and the visitation rights for Ms Limb to see Jordy were specifically not extended to allow for any overnight stay or further contact between Ms Limb and Jordy, outside of the lunch time meetings. 8 On the morning of 29 July 2008, Ms Limb rang the respondent's Clinic and asked if she could arrange a lunch meeting involving the applicant bringing the dog Jordy. The applicant conveyed this request to Mr Partington who indicted that the dog would be available for meeting during lunch but that Ms Limb could not have access to Jordy overnight. 9 The applicant took Jordy to the lunch time meeting with Ms Limb. During the meeting Ms Limb told the applicant that she was entitled to take Jordy overnight and that the dog would be returned the following day. Further, Ms Limb said that these arrangements were going to be confirmed by way of a solicitor's letter. The applicant accepted this proposition and released the dog to Ms Limb. The applicant then sent an SMS text message to Mr Partington advising that Ms Limb had taken Jordy home with her. 10 The applicant then returned to the respondent's Clinic without the dog. Mr Partington had become very upset and emotional as he feared that Ms Limb had abducted Jordy. Mr Partington confronted the applicant in a highly agitated state and accused the applicant of betraying his trust particularly as he had earlier indicated that the dog was not to be released to Ms Limb overnight. Although the applicant told Mr Partington that Ms Limb had said that a solicitor's letter would confirm the access to Jordy, Mr Partington became very upset at what he believed to be the applicant's betrayal. At this point Mr Partington said words which would ordinarily be construed to represent an immediate dismissal from employment. The applicant was instructed to immediately leave the respondent's Clinic and she did so. 11 Shortly after the applicant had left the respondent's clinic, a series of communications commenced between the applicant, Ms Limb and Mr Partington. These communications extended over the remainder of that day 29 July, and were continued on the following days. These communications included some telephone discussions but in large part were made by way of SMS text messages. These communications sought to, inter alia, clarify the position of the applicant's employment. Despite suggestions that the event on the afternoon of 29 July did not involve the termination of the applicant's employment, the position was not successfully clarified. The applicant has maintained that she was dismissed on 29 July, and that her dismissal was harsh, unreasonable and unjust. THE EVIDENCE 12 The applicant and two other witnesses were called to provide evidence in support of the claim. The determination of this matter has not required resolution of significant factual contests and therefore it has been unnecessary to record detailed observations of the various witnesses. 13 The applicant presented as an emotional person as did the only witness called on behalf of the respondent, Mr Partington. The evidence clearly established that the applicant's actions in allowing Ms Limb to take the dog Jordy overnight on 29 July 2008, had ruined what had been a long term working relationship. Consequently the totality of the evidence presents a sad depiction of the destruction of a long standing working relationship caused by the intrusion of personal issues relating to the relationship between Mr Partington and his former partner Ms Limb. 14 There were two particularly strong and remarkable aspects of the evidence provided by Mr Partington. Firstly he displayed a genuine and continuing belief that the actions of the applicant on 29 July 2008 represented a personal betrayal. Secondly, and perhaps as a consequence of the depth of Mr Partington's belief in the applicant's betrayal, he acted irrationally in rejecting the applicant's offer to return to work at the Clinic for a short period to train other staff and then resign from her employment. This evidence was particularly disturbing because if the applicant's proposition had been accepted by Mr Partington, there would have very likely been an acceptable, albeit not amicable, separation and these proceedings would have been avoided. THE CASE FOR THE APPLICANT 15 The applicant was represented by Ms L Tucker, solicitor. Ms Tucker submitted that the applicant's contract of employment had been repudiated by the behaviour of Mr Partington on 29 July 2008. Ms Tucker submitted that the evidence clearly established that the applicant believed that she had been dismissed by the words and actions of Mr Partington when he had said words to the effect "you have betrayed me, you can no longer work here, leave immediately". 16 Ms Tucker acknowledged that there had been further communication between Mr Partington and the applicant both later on the 29th and the following days, and that these communications inter alia, suggested that the applicant's employment might be continued. However Ms Tucker submitted that the applicant was entitled to accept the repudiation of the employment contract as demonstrated by the actions and words of Mr Partington on 29 July. 17 Ms Tucker also submitted that if there should be an opportunity for the employer to reconsider the hasty dismissal, that such opportunity would logically involve some retraction or apology of the words and actions which had been treated by the applicant to constitute her dismissal. Ms Tucker said that at no stage did Mr Partington ever provide any apology about what had occurred on the afternoon of 29 July. 18 In further submissions regarding the communication exchange that occurred after the dismissal event of 29 July, Ms Tucker stated that the applicant had made conciliatory offers to Mr Partington including that she would be prepared to return to work for a short period to train replacement staff. Ms Tucker said that these conciliatory actions on the part of the applicant should assist the claim and that the absence of an apology from Mr Partington acted as the obvious impediment to there being any restoration of the employment relationship, even if only for a short period to permit the training of replacement staff. 19 Ms Tucker further submitted that the suggestion that the applicant may have been held to have abandoned her employment should be firmly rejected. Ms Tucker submitted that the actions of the applicant in communicating in a conciliatory fashion with Mr Partington clearly demonstrated that there was no abandonment of employment. Ms Tucker sought to rely upon the decision of Sams DP in the case of Leanne Jarvis and Sam Costandi [2005] NSWIRComm 311 (Jarvis). Ms Tucker said that the approach that was evident from the case of Jarvis should lead the Commission to conclude that the actions of Mr Partington were the true and real initiator of the termination of the contract of employment. 20 Ms Tucker submitted that the Commission should make an essential finding that there was a dismissal of the applicant by virtue of the words and actions of Mr Partington on the afternoon of 29 July. Further Ms Tucker submitted that the dismissal satisfied all three of the provisions contained within section 84 of the Act. 21 Ms Tucker submitted that the dismissal was harsh, unreasonable and unjust. Ms Tucker mentioned that the applicant had been engaged for over seventeen years and was subject to a summary dismissal during an emotional and erratic outburst by Mr Partington on 29 July 2008. Ms Tucker submitted that the issue that acted as the catalyst for Mr Partington's outburst did not involve any reasonable and lawful direction towards the applicant but instead was a matter relating to the respondent's personal life and as such it had no relevance in respect to the employment of the applicant. Ms Tucker also submitted that the employer had not undertaken any proper investigation or inquiry regarding the detail of the incident, nor was the applicant offered a proper opportunity to respond. Consequently according to the submissions of Ms Tucker, the applicant's dismissal should be held to be unfair, and that as remedy the applicant sought monetary compensation. THE CASE FOR THE RESPONDENT 22 The respondent was represented by Mr P Strain, barrister. Mr Strain commenced his submissions by stating that the employment relationship was a "two way street". Mr Strain stated that the actions of Mr Partington on the afternoon of 29 July must be treated as being similar to a heat of the moment resignation from employment. Mr Strain submitted that there was a well established caution to be attached to any heat of the moment resignation, and there should similarly be caution attached to any heat of the moment dismissal made by an employer. 23 Mr Strain submitted that it was possible to construe the actions and words of Mr Partington on the afternoon of July 29 2008, as a heat of the moment dismissal of the applicant. However Mr Strain submitted that a number of factors operated so as to permit a finding that it would be open to the employer, Mr Partington, to retract any heat of the moment dismissal. 24 Mr Strain submitted that the communications made by Mr Partington after the dismissal incident of the afternoon of 29 July, clearly provided basis for the applicant to be under no misapprehension that she could maintain her employment, and accordingly the actions of that afternoon should not be construed to represent her dismissal. 25 In further support of the prospect that Mr Partington had capacity to retract any suggestion of dismissal, Mr Strain said that there were important special circumstances that need to be considered. In particular Mr Strain said that there was clear evidence that Mr Partington had been disposed to emotional outbursts in the past. Mr Strain said that the applicant was aware of the emotionally charged personality that Mr Partington often displayed. Consequently according to the submissions made by Mr Strain, the applicant was familiar with the particular emotional character of Mr Partington, and that when combined with his subsequent indications of retraction of any termination of employment, she was clearly in a position that allowed her to maintain her employment. Mr Strain said that the applicant had clear opportunity to reject any ongoing treatment of the incident on 29 July as representing her summary dismissal. 26 Consequently according to the submissions made by Mr Strain, Mr Partington had retracted any summary dismissal if there be one, and had clearly given the applicant the opportunity to continue in employment. In such circumstances Mr Strain submitted that the true and effective initiator of the termination of the contract of employment became the applicant, rather than Mr Partington. Mr Strain stressed that Mr Partington's open offer to the applicant to continue employment was made time and time again, and that the applicant refused to take up that offer. Consequently the employment was terminated when the applicant refused to return to work, rather than when Mr Partington made a heat of the moment outburst on the afternoon of 29 July. 27 Mr Strain further submitted that there was a line of well established authority regarding the caution that should be attached to heat of the moment resignations. Mr Strain referred to Decisions such as Li and Oocl Australia Pty Ltd [2002] NSWIRComm 167 and Qi v Nice Shoes Australia Pty Limited [2005] NSWIRComm 1149 and the case of Luszczynski v Cement Australia Package Products Pty Ltd [2005] NSWIRComm 1180. Mr Strain said that these and various other cases established that an employer should treat a heat of the moment resignation of an employee with caution. Similarly, according to Mr Strain, as the contract of employment was a "two way street" an employee should treat any heat of the moment dismissal with caution. 28 The applicant had attempted to rely upon the heat of the moment outburst by Mr Partington and ignore the subsequent offers of continued employment that had been made. Consequently Mr Strain submitted that the employment was terminated by the actions of the applicant rather than by the actions of Mr Partington, and therefore he said that the application should be dismissed. CONSIDERATION 29 This case has involved very sad circumstances of the destruction of a seventeen year employment relationship. If the evidence of the incident on the afternoon of 29 July 2008 was considered in isolation, there could be little doubt that the words and actions of the respondent, Mr Partington, represented the summary dismissal of the applicant. The hasty and emotional actions of Mr Partington on the afternoon of 29 July could not be justified. 30 Even if Mr Partington believed that the applicant had betrayed him, there was no calm and sensible inquiry as a means to verify the apparent betrayal. The absence of any proper process was compounded by the underlying basis of the apparent betrayal. Mr Partington had allowed the circumstances of his personal life to intrude significantly into the workplace. Although in many small workplace environments it becomes difficult to separate personal issues from workplace matters, in circumstances involving termination of employment there needs to be clear separation between private and work lives. 31 Mr Partington may have been very upset at the potential for the dog Jordy to have been abducted by his former partner. However he should have taken care to distinguish those personal and private issues from matters relating to the employment relationship. 32 To some extent the subsequent communications made by Mr Partington contained implied acknowledgements that the personal issues regarding the apparent betrayal should not have been permitted to intrude into the employment relationship. Statements such as "your job was never in question" were to some extent, a belated acknowledgement that his actions on 29 July should have been restricted to an apparent problem with a personal relationship as opposed to an issue that would provide any basis for dismissal. The essential problem for Mr Partington was that having allowed the apparent personal betrayal to intrude into the employment relationship any retraction became a matter of attempting to "unring the bell". 33 In this case the respondent has properly raised the suggestion that the actions of the employer, Mr Partington, should be given the same caution that is often provided for employees who provide heat of the moment resignations. Mr Strain described this submission as part of the recognised "two way street" of the employment relationship. Although Ms Tucker rejected the notion on the basis that there was an inherent imbalance between the power and position of employer vis-a-vis employee, there must be some underlying industrial fairness that should be provided. 34 Perhaps as part of the notion of "a fair go all round" there could be opportunity for an employer to retract a heat of the moment dismissal and that in certain circumstances an employee's attempted reliance upon the heat of the moment action could establish that there was in fact, no dismissal. It would seem only fair and reasonable that the subsequent actions of an employee who was the subject of apparent but hasty dismissal, should be open to examination and careful consideration. An approach of this nature is reflected in the provisions of section 88(e) of the Act, where it is mentioned that when determining an unfair dismissal claim the Commission may take into account: "(e) whether or not the applicant requested reinstatement or re-employment with the employer," 35 It is not difficult to contemplate circumstances where an employee might find that a hasty heat of the moment dismissal by the employer represented an opportunity to circumvent a contemplated resignation and obtain benefit by way of claim for compensation for unfair dismissal, notwithstanding the employer's genuine attempts to retract the hasty dismissal. In such instances there needs to be careful examination of the employee's opportunity that arises from the heat of the moment dismissal together with the genuineness with which the employer seeks to retract hasty actions. In such circumstances therefore it would seem conceivable that an employee who unreasonably rejects the genuine offers of an employer to completely disregard an earlier heat of the moment dismissal would be held not to have been dismissed at all. 36 Consequently in this particular case the potential for there to have been no dismissal of the applicant clearly existed. 37 The subsequent inquiry has therefore involved two particular issues. Firstly, was there some opportunity that the applicant was availing herself of by ongoing reliance upon the heat of the moment dismissal made by Mr Partington on 29 July? The second aspect of inquiry involves the question of whether the employer's repeated offers of ongoing employment were made with the degree of sincerity that would be needed in order to overcome the heat of the moment dismissal. 38 There was no evidence that the applicant was reacting to opportune circumstances by relying upon the heat of the moment dismissal on 29 July. On the contrary, there was evidence that the applicant made genuine and reasonable suggestions that she return to work for a short period to train a replacement employee or others. These are hardly the actions of an employee that is attempting to take advantage of the circumstances of Mr Partington involving his emotionally charged actions on the afternoon of 29 July. 39 In respect to the further offers of restoration of the employment relationship made by Mr Partington, the evidence unfortunately suggests that the underlying personal betrayal question had not diminished in Mr Partington's mind. It appeared, even during the Hearing, that Mr Partington maintained a genuine belief that the applicant had personally betrayed him by releasing the dog Jordy to Ms Limb on 29 July. 40 Consequently when Mr Partington sent an SMS message that included the words, "your job was never in question" he then added the words "and you betrayed me". These words reflect that the offer of restoration of the employment relationship was not made with sufficient underlying sincerity for any proper re-establishment. In simple terms, the offer of continued or restored employment to a person who you believe has personally betrayed you represents no genuine offer of employment at all. 41 Therefore by way of application of the notion of "a fair go all round" the Commission has carefully considered the prospect that the applicant may have unreasonably refused genuine efforts by the employer to restore the employment relationship. However the circumstances in this instance provide no basis for the employer to legitimately overcome the heat of the moment dismissal of the applicant. 42 When considering the actions taken by the respective Parties after the heat of the moment incident on 29 July, the applicant has presented as providing sincere and practical propositions for redressing the unfortunate circumstances of 29 July. Conversely the actions of Mr Partington have been driven by the enduring belief that the applicant had deliberately sought to harm him by allowing the dog Jordy to stay overnight with his former partner. 43 Consequently the applicant is entitled to rely upon the words and actions of Mr Partington on the afternoon of 29 July 2008, whereby she was summarily dismissed. That dismissal was absent any proper procedures as the applicant was given no proper opportunity to provide explanation or make out a defence regarding the release of the dog to Ms Limb. In addition, the underlying basis for the dismissal relating to the dog Jordy and the respondent's former partner, does not provide for proper substantive basis upon which to dismiss an employee. Essentially the matters that give rise to the reason for dismissal are matters that should not have intruded into the employment relationship. 44 Therefore the dismissal was procedurally deficient and improperly based. The dismissal of the applicant is accordingly found to be harsh, unreasonable and unjust. The applicant has not sought reinstatement or re-employment and in any event the circumstances of the close working relationship would clearly rule out any prospect of re-establishment of the employment relationship. The Commission is prepared to provide for relief to the applicant by way of monetary compensation. 45 During the course of the Hearing of this matter, the Parties had accepted that in respect of the determination of any monetary compensation a further opportunity would be provided for the Parties to provide further evidence particular concerning remuneration received in alternative employment by the applicant. Therefore the Commission will make arrangements for re-listing of the matter for the issuing of Directions regarding provision of evidence or any other material going to the question of the proper assessment of compensation for the applicant. The Parties are requested to confer regarding any agreed procedure for dealing with further proceedings concerning the determination of the quantum of compensation that would be made in this matter by way of a further Determination. 46 Accordingly the primary Determination of this mater is that the applicant's claim has been made out. Her dismissal was harsh, unreasonable and unjust and further proceedings regarding appropriate Relief will be arranged in due course. oooOOOooo 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.