Allison v Bega Valley Council, 63 IR 68

JUDGMENT: - 2 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP

Application by Sarah Jo Heape re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996

1 The Commission has been moved by General George Carpets Pty Ltd ("the respondent") to dismiss, for want of jurisdiction, an unfair dismissal claim brought pursuant to s84 of the Industrial Relations Act 1996 ("the Act"), by Sarah Jo Heape ("the applicant") as a consequence of her alleged unfair dismissal on 24 July 2001.

2 The respondent raised two jurisdictional grounds which, it was said, prevented the applicant from proceeding with her claim. Firstly, the applicant had no standing to bring an unfair dismissal claim by virtue of reg 5B of the Act. This regulation excludes various classes of employees from the unfair dismissal provisions of the Act. It was said the applicant fell within one of two classes of exempted employees, namely:

· an employee engaged under a contract of employment for a specific task; reg 5B(1)(b), or

· an employee engaged on a casual basis for a short period - not falling within the exceptions; reg 5B(1)(d).

3 Secondly, the respondent maintained that the termination of employment was by mutual agreement. The applicant accepted the difficulties of remaining in the employ of the respondent, in light of her husband's physical altercation with the respondent's General Manager, three days earlier. It followed that, as there was no dismissal, Pt 6 ch 2 of the Act could not apply as a matter of jurisdiction.

4 Conciliation proceedings commenced on 28 August 2000, in which the applicant represented herself and Mr D Legg, Solicitor, appeared for the respondent. Notwithstanding the jurisdictional issues raised in the proceedings, the parties were directed to confer and the Commission chaired private conferences with them. The matter could not be settled through conciliation and by consent the respondent's jurisdictional arguments were listed for hearing. Directions were issued for the filing and service of evidentiary material.

5 Before reviewing the applicant's period of employment it is pertinent to note that the applicant's husband, Mr Dennis Heape, had been working for the respondent, as a contract carpet measurer, for some time prior to his wife commencing employment. The respondent's Managing Director, Mr Eric Hodges, deposed that from about April 2001, Mr Heape's performance and behaviour deteriorated. It is unnecessary for the purposes of this decision to detail these matters. However, it is relevant that it was alleged Mr Heape physically assaulted the respondent's General Manager, Mr Swords on Friday, 20 July. As a consequence, Mr Heape was summarily dismissed.

6 The applicant commenced employment on, or about, 22 January 2001. It is not entirely clear from the evidence as to who initiated the offer of employment; Mr Hodges said that the applicant approached him at the staff Christmas Party in December 2000, seeking work as her family was experiencing financial difficulties. In any event, in a phone conversation between Mr Hodges and the applicant sometime in mid January, Mr Hodges offered her three days' work a week, to be paid in cash at $90 a day. This arrangement was agreed to by the applicant.

7 Mr Hodges deposed that the applicant was employed to reduce the company's bad debts from $200,000 to $100,000. The applicant acknowledged she performed this role (and with some success), but said she performed other administrative duties.

8 The applicant said that sometime in March, she gave a tax declaration form to Mr Hodges. Mr Hodges denied receiving it and said it was not in the company records. However, little turns on this issue.

9 In mid-March, Mr Hodges sought to formalise the applicant's employment. He discussed with her husband an arrangement whereby the applicant would be paid through an entry on her husband's invoices for his contract carpet measuring work. It is not clear who proposed that the applicant's pay be itemised as an "administration charge" on Mr Heape's invoices. What is significant is that the arrangement was made by Mr Heape and Mr Hodges - the applicant accepted the arrangement as a matter of convenience.

10 The applicant's employment continued uneventfully until 23 July 2001. On this day, three days after her husband had been dismissed, the applicant spoke by phone to Mr Hodges. She said that he asked whether she wanted to continue working. She replied "yes". When she queried how she would now be paid, in light of her husband's invoice arrangement, Mr Hodges said they would discuss the matter the next day.

11 When the two met the next day, an amicable conversation ensued. While the precise detail is disputed, it would seem the general thrust of the conversation was that it would be difficult and uncomfortable for the applicant to continue working after her husband's dismissal. The applicant said she had expected this would be the outcome. However, she said she did not consent to her termination of employment. Mr Hodges deposed that the applicant agreed her continued employment would be very difficult and thought it best, for all concerned, if she left. Mr Hodges had merely agreed to the applicant's assessment.

12 Mrs Heape, in representing herself, relied on an affidavit and her oral evidence. She was granted leave to adduce additional oral evidence from her husband. Her case may be summarised in this way: 1) She had never been employed for a specific task and had performed a variety of administrative tasks including typing and filing, relieving absent staff, attending to customers and debt recovery.

2. She had been employed on an arrangement whereby her daily rate of $90 would be itemised through her husband's invoices and paid to her from him.

3. The applicant had expected she would not have a job after the altercation involving her husband and Mr Swords. She did not resign, or leave willingly of her own accord.

13 Mr Hodges deposed that the applicant was employed for a specific task; namely, the debt recovery job. It was acknowledged she did perform other duties. He denied offering the applicant permanent employment and agreed that he had entered into an arrangement to pay her through her husband's invoices. Mr Legg, for the respondent, acknowledged that an employment relationship had existed. However, he submitted it was a contract of employment for a specific task. As a result, the applicant was a class of employee exempted from the unfair dismissal provisions of the Act.

14 Further, Mr Legg submitted that the applicant left the employment of her own accord, by acknowledging the difficulty of remaining in employment after her husband's dismissal. It was a regrettable outcome, but one which was mutually arrived at. Appropriately, I should say, Mr Legg made two concessions: 1) One would not have expected the applicant to have left voluntarily. 2) A constructive dismissal might be found to have occurred. However, he submitted that because there was no animosity between the applicant and Mr Hodges and due to the time lapse from her husband's incident to the applicant's resignation, it is less likely that a constructive dismissal had occurred.

15 Mr Legg reserved his client's rights to argue the merits of the applicant's claim should the respondent's jurisdictional arguments fail.

16 The Commission appreciated the helpful admissions and concessions of the respondent's solicitor during the course of the proceedings. In light of the applicant's self representation, it had the effect of significantly reducing the length of the proceedings and enabled the applicant to present her case, without the respondent taking procedural or technical objections. The Commission commends Mr Legg's co-operation and candour which also assisted the Commission in reaching a determination of the matter.

17 It is unnecessary for the Commission to undertake a comprehensive analysis of the evidence or make findings of witness credit. It is sufficient to make findings on the agreed matters of fact.

18 I turn then to consider each of the jurisdictional issues.

19 The first proposition advanced by the respondent was that the applicant was employed on a contract of employment to undertake a specific task; namely, to chase up bad debts and reduce the overall debts to the respondent from $200,000 to $100,000.

20 It is plain from the evidence that this indeed was the primary task she undertook - I hasten to add, not without some success. There was a dispute as to whether the applicant was first employed to replace another employee on leave. However, little turns on this conflict. What is relevant is the range and extent of duties actually performed by the applicant.

21 The applicant gave evidence that she performed a range of administrative duties including answering the phone, typing letters, stocktake, invoice matching and serving customers. Mr Legg wisely conceded that the applicant, in addition to debt recovery, performed other duties.

22 It is significant that there is no evidence that the applicant was exclusively employed to undertake the specific task of debt recovery. There is no written contract of employment or letter of appointment; nor is there any evidence that when the task was completed her employment would end. Moreover, the evidence is to the contrary. Mr Hodges deposed that he was reviewing the applicant's employment in light of financial considerations in the new financial year.

23 In my opinion, the applicant was employed to do more than the specific task of debt recovery and performed a variety of administrative duties. In light of Mr Legg's concession and a practical assessment of the work performed by the applicant, I find no basis for a finding that the applicant was exempt from Pt 6 ch 2 of the Act by virtue of Reg 5B(1)(b).

24 There was no evidence that the applicant was engaged on a casual basis for a short period. She worked regular hours and did so for many months. There was no casual loading and none of the usual features of casual employment which fit within the conventional definition of that class of employee.

25 Notwithstanding these observations, it is difficult to see how the applicant's employment could be characterised as permanent part time.

26 During the proceedings the Commission described the true nature of the employment relationship as little more than a mutually convenient arrangement. The applicant was paid $90 a day, through her husband's invoices, for work said to be performed by him. It hardly needs to be said that this arrangement was seriously flawed and most inappropriate.

27 In acknowledging the Commission's view of this arrangement, Mr Legge said that "my client has learnt a significant lesson from this experience and would not countenance this type of arrangement in the future" (T.p18). I sincerely hope so.

28 It is also clear from the evidence of Mr Heape that it was he and Mr Hodges who negotiated the applicant's pay arrangements. She seemingly had little, or no say in the matter.

29 Notwithstanding the dubious nature of the employment relationship, it is not open for the employer to now seek to ascribe to the applicant's employment a characterisation of what it plainly was not. In my opinion, the applicant was not a casual employee for the purposes of the exemption provisions of the Act and Regulations.

30 It follows, the respondent's case on both exemption arguments must fail. I find accordingly.

31 It must be accepted that the respondent did not expressly dismiss the applicant, either in writing, or verbally. Fundamentally, the conversation between Mr Hodges and the applicant on 24 July 2001 is not materially in dispute. The applicant returned to work on Tuesday, 24 July 2001, following the incident involving her husband on the Friday before. She expected not to have a job. During the conversation the applicant and Mr Hodges accepted it would be uncomfortable for her to remain employed, given the unpleasant circumstances of her husband's dismissal.

32 Many authorities of this Commission have defined a dismissal as a termination of employment at the initiative of the employer: see Allison v Bega Valley Council, 63 IR 68; Clark v Pittwater RSL Club Ltd (1998) 84 IR 309, Claric 218 Pty Ltd t/as Sanity Music v Meldrum, 91 IR 296, St Vincents Hospital Sydney Pty Ltd v Harris (unreported) Peterson Schmidt JJ, O'Neill C, Matter IRC5932 of 1997, 28 May 1998, Britton v Riverstone Public School (unreported) Schmidt J, Sams DP, McLeay C, Matter IRC5504 of 1999, 6 May 1999 and Bates v Gundagai District Services Club [2000] NSWIRComm 22.

33 A dismissal so characterised is to be contrasted with a termination of employment at the employee's initiative, such as a freely given resignation, or an abandonment of employment. Obviously, these terminations of employment are not dismissals. In these circumstances, it would be ultra viries for the Commission to determine an employee's claim of alleged unfair dismissal. However, that is not to say that attempts at conciliating the claim should not be undertaken - as was the case here, albeit unsuccessfully. See Shop, Distributive and Allied Employees' Association, New South Wales v Librus Pty Ltd, t/as Dymocks Parramatta [2001] NSWIRComm 46.

34 In the absence of a positive initiative of the employer, such as a letter of dismissal or words to similar effect or the "sending away" of the employee (see Smith v Director General of Education (1993) 51 IR 204), doubts will often arise as to whether it was the employer or employee who initiated the termination of employment.

35 One needs to examine the facts of the case and carefully analyse the circumstances surrounding the termination of employment.

36 Before doing so, I would refer to what Macken J said in to Bayley Trading Co and New South Wales Sales Representatives and Commercial Travellers Guild [1979] AR 392: Just as it is a fundamental requirement for an employment contract to be entered into by the genuine consent of both parties to the contract - a consent untainted by any hint of pressure or threat - so too, it must be terminated by a resignation equally untainted by any such threat. Where a contract is terminated otherwise, it amounts to constructive dismissal.

37 In my view, the facts in this case disclose a classic example of a forced resignation of employment, readily embraced by the employer as a convenient means of resolving the dilemma of the applicant's continuing employment. In short, the applicant was forced to resign.

38 I am strengthened to this conclusion by the fact that the applicant had initially sought work with the respondent because of financial difficulties. I doubt she would have willingly resigned from employment in circumstances where her husband had been dismissed only a few days before and the family's financial position would likely have been worse than before.

39 The Commission is cognisant of Mr Legge's submission that "it would be foolish of me to say that you could never apply a constructive dismissal into those circumstances" (T.p19). He qualified this concession by submitting that because the conversation between Mr Hodges and the applicant was amicable, " without rancour or anger ", the likelihood of a constructive dismissal is lessened. I do not agree. It does no more than demonstrate a certain inevitability as to the outcome and the good sense of both persons to avoid further unpleasantness. On any view of it, it was a resignation where the applicant felt she had little, or no choice.

40 It follows from these conclusions that the applicant was constructively dismissed. She is therefore not prevented from pursuing her claim of alleged unfair dismissal. I find accordingly.

41 Mr Legge sought to be heard on the merits of the matter should the respondent's jurisdictional challenges fail. The Commission has therefore deliberately eschewed making observations or findings as to whether the dismissal of the applicant was one which can be described as "harsh, unreasonable or unjust" within the meaning of Pt 6 ch 2 of the Act.

42 Nevertheless, having regard for the circumstances disclosed to the Commission in conciliation conferences, and in the evidence filed to date by both parties, I feel compelled to observe that this application, freed from jurisdictional challenge, is one which yearns to be settled through conciliation.

43 I propose therefore to direct that the parties confer as to settlement and that the matter be listed for further directions and conciliation on Monday, 10 December 2001 at 12.00 noon.

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