Christine May v Lilyvale Hotel Proprietary Limited

Note: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY

JOE DI GIULIO First Respondent WALTER SZYSZKA Second Respondent ROSS RUSSO Third Respondent

The applicant claims that the termination of her employment was unlawful and in breach of section 170DC and 170DE(1) of the Workplace Relations Act 1996 ("the Act"). In his opening address, her counsel indicated that a claim would also be made that the termination of her employment was in breach of section 170DF(1)(a) of the Act. However, that claim was not supported by the evidence, and was abandoned during submissions. I will not refer to it further.

BACKGROUND FACTS The applicant was employed by a firm of accountants. The partners of that firm were Mr Joe di Giulio, Mr Walter Szyszka and Mr Ross Russo. Each of those three persons are respondents to this application. The applicant commenced employment in November 1994 as a junior accountant within the firm. Her employment was terminated on 1 April 1996. WAS THERE A VALID REASON FOR THE TERMINATION OF THE APPLICANT'S EMPLOYMENT? At the time of the termination of the applicant's employment, there were three reasons in the minds of her employers. They were: (1) That the applicant was receiving money from clients of her own, for whom she was doing work on company time, and she was not passing that money on to the firm; (2) That the applicant in any event was spending too much time on clients of her own, to the detriment of her work for the firm; and (3) That the applicant had caused business cards in her name to be printed on firm letterhead without the authority of the firm.

1. The allegation that the applicant was keeping the firm's money for work done for "her" clients. There was simply no evidence at all adduced in respect of this allegation, and it was not pressed during the proceedings. I find, therefore, that it was not a valid reason for the termination of the applicant's employment.
2. The allegation that the applicant was spending too much time on "her" clients. The applicant gave evidence that she had had a discussion with Mr di Giulio, approximately six months after she commenced employment, concerning the work that she would do for clients of her own. (ie clients that she brought into the firm). She gave evidence that Mr di Giulio had agreed that, if she brought clients of her own into the firm, she could do work for them outside the normal working hours, but using the resources of the firm. In return, any moneys that she received from them would be given to the firm and she would receive 40 per cent of any such moneys. Mr di Giulio denied that any such conversation had occurred, and cross-examined the applicant to that effect. When the applicant gave evidence, she also referred to a number of surrounding circumstances by which she said her version of the conversation was to be supported, if not corroborated in the technical sense of the word. She pointed to various other conversations with Mr di Giulio concerning the arrangement and said that she, on average, would have received about $50 a week in commissions as a result of the arrangement. Mr di Giulio's evidence on the other hand was simply a denial. I observed the applicant in the witness box and I observed Mr di Giulio in the witness box and I found the applicant on balance to be a more convincing witness. It is possible, in my opinion, that Mr di Giulio simply does not remember the conversation, for the simple reason that such a conversation would have been much more important to the applicant than it would have been to him. It is always difficult to choose between two witnesses who give conflicting testimony. However, on balance, I prefer the applicant's version in this respect to Mr di Giulio's version and find that the arrangement that she referred to was, in fact, entered into. In respect of the time spent on "her" clients, the applicant denied that, during normal business hours, she had done work, except perhaps on relatively minor matters, for clients that she had introduced to the firm, and in respect of whom she was going to be receiving commissions. Mr di Giulio said that he had seen the applicant doing work for such clients. Mr di Giulio did not go into any detail about his observations and simply said that that is what he had seen. It is possible, therefore, that there is actually no contradiction between the evidence of Mr di Giulio and the evidence of the applicant. However, I believe there is a contradiction. I believe that Mr di Giulio was asserting, although he did not say it particularly bluntly, that the applicant was, in his observation, spending a significant amount of time on work for "her" clients. Once again, on balance, I prefer the applicant's version, if there is the conflict that I believe Mr di Giulio was attempting to raise. I therefore accept that, except for relatively minor matters, the bulk of the work that the applicant did for clients of her own that she had introduced into the firm was done outside of normal business hours. I therefore find that the second reason for the termination of the applicant's employment was not proven. It follows that it was not a valid reason for the termination of the applicant's employment.
3. The allegation that the applicant had caused unauthorised business cards to be printed. The applicant said that she had had a discussion with Mr di Giulio about the business cards and that he had given her permission to have the business cards printed, on the condition that she paid for them. The applicant also said that similar permission was given in respect of business cards for another employee of the firm, Ms Collette Kosseifi. Mr di Giulio denied each of those assertions. I find it unnecessary to resolve the conflict in respect of that matter because, even if the applicant had had those business cards printed without permission, there is no evidence as to the degree to which she used them or to any harm being done to the business or reputation of the respondents. This is the sort of thing that could have easily been cleared up by a simple discussion between the respondents and the applicant when the respondents found out (if that is what happened) about the cards. In any event, even on the respondents' version of the evidence, the applicant's conduct in having the business cards printed would not have been conduct which warranted the termination of her employment. The penalty of termination would have been so out of proportion to the conduct complained of that the conduct would not have formed a valid reason for the termination of her employment. It follows from the above reasoning that there was not a valid reason for the termination of the applicant's employment and that the termination of her employment, being in breach of section 170DE(1) of the Act, was unlawful. WAS THE TERMINATION OF THE APPLICANT'S EMPLOYMENT IN BREACH OF SECTION 170DC OF THE ACT? The decision to terminate the applicant's employment was made by Mr di Giulio on Monday 1 April, 1996. He never had a discussion with the applicant about the prospective termination of her employment prior to that decision being made. It follows inevitably from that that the applicant was never given the opportunity to respond to the allegations in respect of which her employment was terminated, as that phrase is taken to be meant in section 170DC of the Act. There was nothing which made the termination of the applicant's employment so urgent that such an opportunity could not have been given to her. It follows that the termination of the applicant's employment was in breach of section 170DC of the Act, and was unlawful for that reason as well. REMEDY Reinstatement The applicant has another job and does not seek reinstatement. It follows from those facts that to order her reinstatement would be both inappropriate and impracticable. Compensation The applicant's employment was terminated on 1 April 1996. She obtained a new job as a permanent full time employee with another firm of accountants on 17 June 1996. In the meantime she earned about $3,000 in casual employment. The applicant's evidence about the amount she earned in that casual employment was uncertain. She said initially that it was between $2,500 and $3,000 and with some prompting from her counsel it became $2,500. I have some doubt about how much she actually earned, and I resolve that doubt in favour of the respondent. I will regard the amount that the applicant earned from that casual employment as $3,000 for the purpose of the calculation of compensation. She was earning $31,000 in wages at the time of the termination of her employment and also, on average, had earned and would have expected to have continued to earn the sum of approximately $50 per week in commissions. That is to say the applicant's remuneration would have been about $33,500 per annum at the time of the termination of her employment. If the applicant had stayed in her job with the respondents until now, which is a period of 217 days, she would have earned at that rate a sum calculated as follows: $33,500 divided by 365 (to find the daily rate) times 217, which comes to $19,916.44 gross. She has actually earned as follows: Firstly, in her new full time job from 17 June until present, she has worked for 150 days. $29,900 divided by 365 times 150 comes to $12,287.67. She also earned in casual employment, as I said, $3,000, which comes to a total of $15,287.67. Her actual loss to date is therefore $4,628.77. At the moment she has an ongoing economic loss at the rate of $3,600 per annum as a result of the termination of her employment by the respondents. I find that that ongoing economic loss is likely to continue for some time. Such a loss is to be taken into account on the question of the calculation of the appropriate amount of compensation. See the decision of Wilcox CJ in May v Lilyvale Hotels Proprietary Limited (1995) 68 IR 112. However, the applicant is a young woman at the beginning of a professional career. It is likely therefore that her earning capacity will increase and increase fairly rapidly in the time to come as her experience increases her earning capacity. I find that any ongoing economic loss that she is now suffering will probably disappear gradually over the next year or two. It is impossible, of course, to be precise about such a nebulous and ongoing process. Suffice it to say that, in my opinion, about $5,000 is sufficient to take into account the applicant's ongoing economic loss. Rounding off the final figure, the order that the Court will make in respect of compensation will be for a total amount of $9,600. The Court orders that:

Counsel appearing for the applicant: Mr K Chamberlain

Date of hearing: 13 December 1996