Allison v Bega Valley Council

JUDGMENT: - 14 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP 21 May 2004

Matter No IRC03/4675 Jacqueline Sally McNicol and Westco Jeans Pty Ltd Application by Jacqueline Sally McNicol re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2004] NSWIRComm 111

1 The applicant in this matter, Ms Jacqueline McNicol had worked varying weekly hours for about ten months at the Warringah Mall retail store of Westco Jeans Pty Ltd ('the respondent'). The applicant claimed she was taken off the store's roster around early August 2003 as a consequence of her mother making inquiries about her rate of pay.

2 Believing she had been unfairly dismissed, the applicant filed a claim pursuant to s84 of the Industrial Relations Act 1996 ('the Act') on 22 August 2003. The matter first came before the Commission for conciliation on 29 September 2003. Ms McNicol appeared for herself assisted by her mother. The respondent's Chief Financial Officer, Mr A Hart represented the respondent by telephone hook up from Melbourne. It was Mr Hart's submission that the applicant had placed restrictions on her availability to work because of her Higher School Certificate (HSC) commitments. He believed that the applicant left her employment of her own accord.

3 The Commission chaired private conferences with the parties. However, no settlement of the claim was able to be reached. The Commission made a finding of unsuccessful conciliation, pursuant to s87 of the Act and set the matter for arbitration. In doing so, the Commission issued directions for the filing and service of affidavit material.

4 The matter was relisted for further directions following the respondent's failure to comply with the Commission's directions. The matter proceeded to hearing on 29 March 2004.

5 It is necessary for the Commission to state from the outset that I was dismayed and appalled at the respondent's dilatory and unprofessional approach to these proceedings. A number of matters of varying weight gave cause for this concern. When viewed in totality the respondent's conduct disclosed a pattern of behaviour which I found to be most alarming. I intend to highlight some of these matters.

6 At no time had the respondent filed an employer's reply to the applicant's claim in accordance with the Commission's procedures. After the conciliation conference the respondent was in default of the Commission's directions. This necessitated a relisting of the matter.

7 At the relisting referred to above, the respondent was represented again by telephone hook up, by the Payroll Manager, Ms Popovska. With all due respect to her, Ms Popovska was in no position of authority and had no understanding of the nature of the proceedings.

8 The respondent's evidentiary material consisted of a one page affidavit from Ms Socrim Yeap (Sales Manager) and a one page letter from Ms Popovska which attached a number of documents and payroll records. Neither of these two persons attended the hearing on 29 March 2004, despite Ms Popovska informing the Commission on 24 February that witnesses would be in attendance.

9 At the hearing the respondent was represented by Mr Deepak Dhingra, the National Sales Manager. Not only did Mr Dhingra have no direct knowledge of the applicant's employment, but he was not even employed by the respondent at the time of the applicant's termination of employment. It was soon apparent that Mr Dhingra, with all due respects, had little or no understanding of how to conduct the respondent's case.

10 To throw Mr Dhingra into this case was all the more surprising in that the respondent acknowledged membership of the Retail Traders' Association. There was no explanation as to why it chose not to seek the advice of, or be represented by its industrial organisation. When it became obvious that Mr Dhingra had no idea of the procedure for the admission and testing of evidence, he requested an adjournment of the proceedings. Not surprisingly, Mrs McNicol opposed the adjournment.

11 The Commission then suggested that the parties seek to negotiate a settlement of the matter. The Commission said at the time: I have implored your company to do something about this case in a proper way. I have told your representatives on numerous occasions that since you are a member of the RTA, you should go and get their advice, and no-one took any notice, apparently. If the case is to proceed today and that is if I refuse to grant the adjournment, the likelihood is that your case will be severely prejudiced by the actions or inactions of the company in defending its position.

12 The negotiations proved unsuccessful and the proceedings resumed. Mr Dhingra again requested an adjournment. The Commission refused to adjourn the proceedings.

13 The applicant deposed that in September 2002 she was offered a permanent part time job working Thursday nights and five hours on Saturdays and Sundays. These hours increased over the Christmas period. In early 2003, all the respondent's casual hours were cut. This suited the applicant as she was in her HSC year.

14 The applicant said that when she wanted to work more hours, they were not offered to her. No one had ever told her that the respondent was unhappy with the hours she had worked. In fact, she was told she was a good employee who always made budget. The applicant said she was a conscientious worker and had lost her job unfairly.

15 The applicant said that in 2003 her store managers, Nicki Lesley and Melinda Nizeti, verbally authorised her taking two weeks off for her HSC trials in July and three weeks in October for the HSC. She said it was agreed that she would work full time over the busy Christmas period at the end of 2003.

16 In oral evidence the applicant reaffirmed that there was a verbal agreement with her managers to take leave for her HSC commitments. She had not filled out any form; nor was she asked to. Two other student employees had also been granted leave for the same reason.

17 In July 2003, the applicant had cause to query her sick leave entitlements with the Department of Industrial Relations. She discovered that she was being incorrectly paid as a part time employee when she should have been paid the casual rate as she mostly worked less then twelve hours a week.

18 The applicant deposed that on 4 August 2003, Ms Nizeti phoned her and said: You are no longer on the roster as your mother is querying the wages and we don't want any more problems.

19 Mrs McNicol then phoned Ms Nizeti and asked for confirmation of this statement in writing. No letter was ever received. The applicant said that Ms Nizeti told her that she had been instructed by the Area Manager to take her off the roster. A letter from Ms Nizeti tendered in the proceedings confirmed this. The applicant said she had made numerous attempts by phone, fax and letter to resolve the matter. No one from the company had ever replied.

20 In oral evidence the applicant observed that her contract of employment contained no reference to an annual leave form being completed and signed off by the manager. The applicant said she had not resigned and had never received a letter from the respondent explaining why she had been taken off the roster.

21 In addition, the applicant was seeking underpayment of wages of $3508.95 and had initiated other proceedings for recovery of this amount.

22 Ms Yeap's affidavit dealt with the details of the applicant's hours of work during ten months of employment. She said the applicant was unable to work the twelve hours a week the company had offered her.

23 Ms Popovska's letter claimed that the respondent always had in excess of twelve hours of work available for the applicant. She said it was the applicant who could not work the hours. Ms Popovska believed that the respondent had never terminated the applicant's employment.

24 Mrs McNicol (for her daughter) submitted that the applicant was a valued employee. Over ten months of employment, including the first three months on probation, the applicant had worked hours agreed to by the management. Rosters were prepared in advance and she was never questioned about her hours of work. In forty weeks of employment, Mrs McNicol observed that the applicant only worked more than twelve hours a week on fifteen occasions.

25 Mrs McNicol said that the applicant's request to reduce her hours due to her HSC commitments had always been approved by her manager. She had never resigned and had never been told she was dismissed.

26 Mrs McNicol said the applicant was taken off the roster after she had been promised work over the Christmas period. She had been unfairly treated. The applicant was seeking compensation for the lost wages promised to her over the Christmas period which amounted to $3500.00. The applicant had not worked during that period despite seeking alternative employment. She had commenced work at a coffee shop in March 2004.

27 Mr Dhingra submitted that the applicant's study leave had not been approved because she had not sought written approval. The respondent had not dismissed the applicant as she was not given a separation certificate. Mr Dhingra said the respondent removed her from the roster when she didn't turn up for work.

28 Mr Dhingra answered the fact that the applicant had frequently worked less than twelve hours a week, by suggesting that the respondent was "probably being too flexible."

29 Mr Dhingra accepted that the applicant's contract of employment did not prescribe written approval for leave. Mr Dhingra said the applicant could not ask for the payment of hours not worked over the Christmas period. She could have worked and would have been given work if she had asked.

30 I turn now to develop my findings in this matter.

31 The applicant claimed she was unfairly dismissed when she was told by Ms Nizeti that she had been taken off the roster. The corollary of this proposition leads inexorably to consideration of the concept of constructive dismissal. I note that both parties were unrepresented. Understandably, neither of them addressed the Commission as to the principles of constructive dismissal by reference to the relevant authorities of the Commission. However, in order for the parties (particularly the respondent) to properly understand the basis of the Commission's decision in this matter, I propose to refer to the relevant case law.

32 The lead judgement which is often referred to is Allison v Bega Valley Council (1995) 63 IR 68. There the Full Bench said at pp72 and 73: It is a trite observation that a contract of employment like any contract can come to an end in a number of ways. Termination can be "by" the employer where an employee is "dismissed" either with notice in accordance with the provisions of the contract or without notice in the event of serious and willful misconduct. Both the employer and the employee may mutually agree that the contract of employment should come to an end. In other cases the employee may bring about the termination by resigning In some cases the circumstances in which the termination comes about makes it difficult to determine whether there was termination "by" the employer or the employee. There are cases where the courts, after analysis, have determined that although on the face of it an employee has resigned and brought about the termination of the contract of employment, in reality the conduct of the employer has compelled or unduly influenced the employee to resign. The most quoted example is an assertion by an employer to an employee to the effect that the employee must resign or he or she will be dismissed. This situation is commonly referred to in the text books and decided cases as a "constructive dismissal", that is in effect the employer has brought about the termination of the contract of employment.

Although the term "constructive dismissal" is quite commonly used it can deflect attention from the real inquiry. That inquiry should involve an analysis of what occurred. Did the employer behave in such a way so as to render the employer's conduct the real and effective initiator of the termination of the contract of employment and was this so despite on the face of it the employee appears to have given his or her resignation?

It is obvious that a consideration of these matters must be made on a case-by-case basis and that an attempt to formulate general principles in the absence of particular facts will not assist in the overall determination of this issue.

In order to undertake the necessary analysis it is necessary to look carefully at all the relevant facts. It is necessary to determine whether the actual determination was effectively initiated by the employer or by the employee, particularly where the dynamics within a factual situation may change. For example, an employer may demand a resignation with a threat of dismissal, negotiations may then ensue and the employee may ultimately be genuinely pleased with the outcome of those negotiations to the extent that any resultant resignation may be said to be given freely and without any undue influence being brought to bear by the employer.

Where an employee initiates the termination of the contract of employment it is necessary to consider whether that ostensible act of termination was given freely and without any undue pressure. If the ostensible resignation is, in effect, a response to and consistent with a desire by an employer that such resignation be forthcoming, then what has occurred may be that the termination has been brought about by the employer and that in this way the employee has been dismissed. See also Clark v Pittwater RSL Club Ltd (1998) 84 IR 309, Claric 218 Pty Ltd t/as Sanity Music v Meldrum (1998) 91 IR 296, St Vincents Hospital Sydney Limited v Harris (unreported Peterson , Schmidt JJ, O'Neill C, Matter IRC97/5932, 28 May 1998), Britton v Riverstone Public School (unreported, Schmidt J, Sams DP, McLeay C, Matter IRC99/5504, 6 May 1999), Bates v Gundagai District Services Club (unreported, Walton VP, Sams DP, Redman C, Matter IRC99/4710, 14 April 2000) and Police Service of New South Wales v Batton (2000) 98 IR 154.

33 To these authorities may be added the weight of a recent Full Bench decision reaffirming the principles discussed in Allison. In Ward v Mobile Innovations [2002] NSWIRComm 287 the Full Bench made these observations at para [4]: The Commission has authoritatively addressed the question of constructive dismissal in Allison v Bega Valley Council (1995) 63 IR 68 (although the Full Bench in Allison expressed the need for caution in the use of that expression). Hence, the principles for determining whether a termination constitutes a "constructive dismissal" are now well settled, in our opinion, and do not require revisiting in this appeal. In particular, Allison makes clear (at 72) that the proper approach in this context involves an identification of whether the employer was the true initiator of the termination of employment. Each such inquiry must relate to the facts and circumstances of a particular case. This matters represents no exception in this respect. And at para [6] said: It may be that the conduct of an employer is so onerous or unreasonable prior to a termination that a termination will be found to lay in the hands of an employer, even where the employer has not expressly required an employee to offer resignation or threatened dismissal in lieu of such an offer. However, this notion merely accords with that which has already been formulated in Allison .

34 While the majority of the authorities on constructive dismissal focus on whether a resignation had been freely given, in this case the applicant vigorously denied she had resigned or abandoned her employment. It was the respondent's submission that the applicant had abandoned her employment by being unavailable to work the hours it required.

35 That being said, the same principles apply to this scenario as discussed in the above mentioned authorities; namely, was the termination of employment at the initiative of the employer or the employee? One is able to answer this question by reference to the ordinary definition of dismissal.

36 Like its statutory predecessors, the Industrial Relations Act 1996 does not define the term "dismissal." However the approach which has consistently been applied by the Commission is a test of the ordinary meaning of the word "dismiss." In this regard I refer to the helpful definition discussed in Smith v Director General of Education (1993) 51 IR 204. At p219 the Full Bench of the then Industrial Court of New South Wales said: The Industrial Relations Act does not define "dismissal", but, as we have said, s245(5)(a)includes in the concept the Crown's dispensing with the services of an employee. It is to the ordinary meaning of "dismiss" that assistance may be obtained; the Oxford English Dictionary, 2nd ed (1989) defines the word in appropriate respects as follows: "2.a. … To send away (a person); to give permission to go; to bid depart. b. … 3.a. … To send away or remove from office, employment, or position; to discharge, discard, expel. b. ... 4. To deprive or disappoint of or from some advantage." We apprehend no real issue may be taken with the ordinary meaning of the word "dismissal" as so applied to s 245, and, indeed, it seems to us that it is in that defined sense of an employee being sent away from employment that unfair dismissal cases in industrial jurisprudence have been concerned. The terms of s 245 of the Industrial Relations Act would suggest no latent limitation in that respect. Therefore, we find no difficulty in accepting the ordinary meaning of "dismissal" suggested by Brereton J in Ex parte Wurth as being "the termination of services by the employer without the employee's consent"; we would add that where an employee does not freely consent to the termination, understood in a broad sense, then the circumstances may still amount to a dismissal by the employer as a constructive dismissal: see Willis (at 136, 137) , Ex Parte Wurth (at 59, 60) , Re Michaelis Bayley Trading Co and New South Wales Sales Representatives and Commercial Travellers Guild Re Dismissal [1979] AR (NSW) 392 at 393 and Western Excavating (ECC) Ltd v Sharp [1978] 1 CR 221 at 225, 226.

37 If the Commission accepts that the applicant was removed from the roster by decision of the employer and against her will, then I think the answer to the earlier question is pellucidly clear. Such a termination of employment will be a dismissal within the ordinary meaning of the word, with particular reference to the Oxford Dictionary definition to "remove from office, employment or position."

38 It must therefore be beyond doubt that such a dismissal was at the initiative of the employer, thereby fulfilling the test of what constitutes a constructive dismissal. I shall return shortly to these principles in the context of the evidence adduced in the case.

39 There was no serious challenge (nor, I think, could there have been) to the applicant's evidence that: a) She had a verbal agreement with her store manager to take leave during her HSC commitments. b) For the majority of the weeks worked over ten months the applicant worked less then twelve hours. c) Management had never expressed any dissatisfaction with the applicant's hours of work or her request to take leave. d) Her contract of employment did not require a written request for leave. e) She was a good and conscientious worker.

40 Viewed against this factual matrix and having found the applicant was constructively dismissed, it is reasonable to conclude that the real reason for the applicant's termination of employment was because of her mother's inquiries about her wages. I am fortified to this conclusion by the respondent's failure to rebut what the applicant said she was told by Ms Nizeti on the 4 August 2003 (see para 18). Ms Nizeti did not give evidence in the proceedings. That being so, I accept the applicant's contention that she had been taken off the roster following her mother's inquiries about her wages.

41 It was also plain that the applicant was given no notice of her removal from the roster and no opportunity to respond or give an explanation for her situation. These matters give rise to obvious considerations of procedural unfairness in accordance with the particular provisions of s88 of the Act.

42 It was claimed that the respondent did not dismiss the applicant, in that there was no letter of dismissal. It was said the applicant had abandoned her employment. These claims were nonsense and disingenuous. The respondent's attitude demonstrated what I believe was its fervent wish - that by not engaging in any dialogue with the applicant and her mother, they would simply 'go away.' It has proven to be not that simple. I am troubled by the respondent's apparent disinclination to respond, at any time, to the applicant's entreaties to settle both this matter and the underpayment claim.

43 The Commission is satisfied that the applicant has established a sound basis for a finding that she was constructively dismissed on 4 August 2003. I am further satisfied that the applicant's dismissal was manifestly unfair in that it was totally unrelated to her attitude, performance or conduct.

44 In addition, the applicant was given no warning of her dismissal and no opportunity to defend herself. The dismissal was thus both substantively and procedurally harsh, unjust and unreasonable within the terms of Pt 6 ch 2 of the Act. I find accordingly.

45 In view of the respondent's conduct and its apparent reluctance to entertain any dialogue with the applicant concerning the termination of employment, I do not consider it practical to restore the employment relationship. Further, I note that an outstanding underpayment claim is yet to be resolved. I have also had regard for the applicant's submission that she does not seek reinstatement and has, in fact, secured another part time position. The Commission therefore determines that reinstatement or re employment would be impractical. In the alternative, I propose to order compensatory relief.

46 The applicant sought $3500.00 as compensation for her unfair dismissal. Mrs McNicol said that this figure was calculated on an estimated loss of earnings for the promise of full time work over the Christmas 2003 period.

47 The Commission is limited by s89(5) of the Act to make orders of "compensation not exceeding the amount of remuneration of the applicant during the period of six months immediately before being dismissed." Having reviewed the applicant's wages schedule, I have ascertained that in the previous six months of employment prior to dismissal on 4 August 2003, the amount earned by the applicant was $1890.23. That amount would be the maximum amount the Commission could award having regard for s89(5) of the Act. Having considered all the relevant circumstances in this case including, inter alia, the applicant's age, the degree of hardship she has faced and her future job prospects, I consider that the full amount of compensation available should be awarded. I so order.

48 The Industrial Relations Commission of New South Wales orders that: 1) Pursuant to s89(5) of the Industrial Relations Act 1996, the respondent, Westco Jeans Pty Ltd, shall pay to the applicant, Jacqueline McNicol, the sum of $1,890.23. 2) The amount so ordered shall be paid within 14 days. 3) These proceedings are now concluded.

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