Cocksedge v. Centenary Hill Pre-School [2005] NSWIRComm 1010

PARTIES: RESPONDENT Centenary Hill Pre-School

CATCHWORDS: termination of employment - unfair dismissal - purported retrenchment - notice for retrenchment - out-of-time application - burden of proof - monetary compensation

Centre Based and Mobile Child Care Services Regulations (No.2) 1996 LEGISLATION CITED: Industrial Relations Act 1996

Re Barrett and the Crown Street Women's Hospital (1947) AR 565 Blackman v. Brieth Pty Limited (unreported) Broken Hill Proprietary Company (No.2) Case (1943) AR 146 Busways v. Johnson (1994) 55 IR 255 CCH Australia Limited v. Bowen (1998) 79 IR 206 Crocker's Case (1983) AR 485 D and R Commercial Pty Limited v. Flood (2002) 113 IR 344 Griffith Ex-Services Club Limited v. Federated Liquor and Allied Industries Employees' Union of Australia (1993) 51 IR 186 Hollingsworth v. Commissioner of Police (No.2) (1999) 88 IR 282 King v. The Smith Family (unreported) Leeds and Northrup Australia Pty Limited v. Hull (1992) 46 IR 11 Little v. Commissioner of Police (No.2) 112 IR 212 CASES CITED: Loty's Case (1971) AR 95 Neal v. Shaw McDonald Pty Limited [2003] NSWIRComm 298 Nowra Bomaderry Leagues Club Case (1986) 15 IR 463 Oswald v. New South Wales Police Service (1999) 90 IR 42 Outboard World Pty Limited v. Muir (193) 51 IR 167 Parker v. Capitol Painters Pty Limited (1996) 68 IR 100 Quality Bakers of Australia v. Goulding (1995) 60 IR 327 Redundancy Award Case (1994) 36 AILR Rep.301 Shop, Distributive and Allied Employees' Association v. W D and H O Wills Holdings Pty Limited [2000] NSWIRComm 98 Skelly v. Prouds Jewellers Pty Limited (1994) 53 IR 3 Tipping's Case (1957) AR 273 Todd v. Mainfreight Distribution Pty Limited (unreported)

APPLICANT Megan Cameron Turner Freeman Lawyers

LEGAL REPRESENTATIVES: RESPONDENT Paul Matters Leo and Morrison Lawyers

DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Application under S.84 of the Industrial Relations Act, 1996

1 Ms Vicki Cocksedge was employed as a full-time child care worker with the Centenary Hill Pre-School under the terms of the Miscellaneous Workers Kindergartens and Child Care Centres (State) Award. Her services were terminated on Friday, 20 February, 2004 after eight years of employment when her position was to be filled on a part-time basis by a trainee. The pre-school claimed that Ms Cocksedge's position had been made redundant as a result of restructuring which was dictated by financial constraints. Ms Cocksedge had indicated her preparedness to work on a part-time basis but since her position was occupied by a trainee she was deemed ineligible to do so. Pursuant to the provisions of Part 6, Unfair Dismissals, of Chapter 2, Employment [Ss.83 to 90] of the 1996 Industrial Relations Act, Ms Cocksedge lodged an application seeking her re-employment or monetary compensation in lieu thereof.

2 The matter was allocated to me and it was the subject of a preliminary hearing before me on Tuesday, 24 February, 2004 and a mention on Monday, 1 March, 2004 and Monday, 10 May, 2004. Conciliation failed to settle the matter. I programmed it for arbitration. The hearing was set down for Monday, 27 September, 2004 but it was not possible to conclude the hearing on that day. The hearing extended to Monday, 13 December, 2004. All proceedings were convened in the Commission's offices in 90 Crown Street, Wollongong. 3 The parties sought access to the transcript of the proceedings prior to making their submissions and I agreed that those submissions may be provided later in writing. Undertakings were given that those written submissions would be provided promptly. Ms Cameron, representing Ms Cocksedge in the hearing, provided her written submissions on behalf of Ms Cocksedge on Friday, 24 December, 2004. Mr Matters, representing Centenary Hill in the hearing, did not respond, prompting me to programme a further mention of the matter on Monday, 14 February, 2005 but, when in the afternoon of Friday, 11 February, 2005 he, in fact, provided those written submissions, I vacated the further proceedings.

4 Ms Cameron called Ms Cocksedge to give evidence in the hearing. She also called Ms Judy Daunt, a children's services adviser with the Department of Community Services, and Ms Heather Gowing, a former child care worker at the child care centre, as a witness in the hearing. Mr Matters called two witnesses to give evidence: Mrs Sandra Jensen, the owner of Centenary Hill, and Mr Paul Grebert, Mrs Jensen's father and business associate. Mrs Renelle Johnston, a parent who had made an unsuccessful attempt to enrol her daughter in the pre-school had provided a written statement and Mr Matters proposed initially to call her but he did not ultimately do so. Delay

5 Ms Cocksedge lodged her Part 6 application on Wednesday, 23 March, 2004, 11 days outside the 21 day time limit prescribed by S.85(1) which provides as follows:

"Any application under this Part must be made not later than 21 days after the dismissal."

Ms Cocksedge was initially negotiating with the Australian Liquor Hospitality and Miscellaneous Workers Union for severance payments and when that fell through she approached the firm of solicitors who lodged the Part 6 application on her behalf. She had not appreciated that there was a 21 day time limit on the lodgement of Part 6 applications until she was informed of that fact by the solicitors who took up her case.

6 Whether or not to admit and out-of-time claim form is a matter for my discretion. Under S.85(3) members of the Commission hold a discretion to accept an out-of-time Part 6 application if they consider that there is sufficient reasons for doing so. In determining whether there is sufficient reason to hear an out-of-time Part 6 application, S.85(3) directs me to have regard to a number of specific matters: (i) the reason for, and the length of, the delay, (ii) any hardship that may be caused to the applicant if the claim is denied or the employer if it progressed and (iii) the conduct of the employer.

7 The prima facie position is that the 21 day time limit should be followed, however: it is a clear instruction of the legislature that the time limit should be imposed and to depart from it there must be some material upon which to exercise the discretion in favour of an out-of-time Part 6 applicant [Skelly v. Prouds Jewellers Pty Limited (1994) 53 IR 3 at p.5]. Otherwise the time limit in S.85(1) would be meaningless. But it still remains a question of determining where the balance of convenience lays: whether a late applicant employee should be denied a remedy or the respondent employer be put to the considerable inconvenience which may arise for her from a late application [Griffith Ex-Services Club Limited v. Federated Liquor and Allied Industries Employees' Union of Australia (1993) 51 IR 186 at p.191]. 8 In Parker v. Capitol Painters Pty Limited (1996) 68 IR 100 I stated (at p.101) that:

"…in my view, it is not appropriate to adopt a restrictive approach in exercising my discretion under S.85(3). It is a question of balancing the competing interests of (the applicant) and (the respondent)…"

In the circumstances, I believe that the balance favours Ms Cocksedge. Ms Cameron indicated in her written submissions, Centenary Hill has not been prejudiced by the small delay in filing Ms Cocksedge's Part 6 application. As Ms Cameron indicated in her written submissions:

"...it is not the case that vital witnesses cannot be found or that documents have been destroyed. The respondent suffers no more prejudice in the application being accepted than it would if the application had been made within time..."

In any event, Mr Matters has not raised the question of delay in his submissions as a barrier to her claim. I exercised my discretion to permit Ms Cocksedge's Part 6 application to go forward to hearing on its merits.

9 I now turn to consider the evidence before me in this hearing. Centenary Hill is a preschool for children aged from 3 to 5 years of age. It has 29 places for such children. Meals are prepared on the premises for the children in care. Mrs Jensen took over the child care centre in late 2000. It was always the view of Mr Grebert that the child care centre was overstaffed and Ms Cocksedge conceded in her evidence that he has communicated that view to her from time to time. From the outset Mr Grebert has informed Mrs Jensen that to comply with the child/staff ratios required by the 1996 Centre Based and Mobile Child Care Services Regulations (No.2) she should restructure and change the staff rosters.

10 In particular, S.34 of those child care regulations provides child/staff ratios as follows:

"(1) The licensee of a service must ensure that the ratio of primary contact staff to children being provided with the service is:

(a) 1:5 in respect of all children who are under the age of 2 years; and

(b) 1:8 in respect of all children who are 2 or more years of age but under 3 years of age; and

(c) 1:10 in respect of all children who are 3 or more years of age but under 6 years of age.

(2) The licensee of a service must ensure that...at least 2 persons who are staff (whether or not primary contact staff) of the service are present on the premises of the service whenever children are being provided with the service at the premises."

Pursuant to S.23, where meals are prepared and provided to children on the premises of the child care centre, a cook must also be employed for a period necessary to prepare the meals.

11 Mr Grebert's claim that the child care centre was overstaffed is disputed by Ms Daunt, who in her evidence challenged the interpretation of the child/staff ratios advanced by Mr Grebert. An affidavit she supplied as the basis of her evidence states:

"…A child care centre which takes children between 3 and 6 years must have at least one primary contact staff member for each 10 children. This means that a centre with 29 children must have at least three primary contract staff. Centenary Hill Preschool is licensed to take 29 children from ages 3 to 5. Therefore, they need 3 primary contact staff whenever their numbers exceed 21 children.

I am aware the centre also provides meals for its children. Therefore, they are required...to have a qualified person cook or prepare these meals.... A primary contact staff member cannot prepare meals at the same time as minding, educating or caring for children. If the centre does not have 3 primary contact staff, in addition to a person cooking meals, then in my opinion this is an insufficient amount of staff..."

In his evidence Mr Grebert indicated that his understanding and his interpretation of the child care regulations was drawn essentially from his own reading of them and, to that extent, they may not be accurate. In particular, the assertion by Ms Daunt that the person who prepares the meals for the children may not be included as part of the child/staff ratio for personal care does not have been factored into Mr Grebert's calculations. 12 Ms Daunt claimed that her assessment was the general policy of the Department of Community Services. She was not specifically addressing the situation at Centenary Hill, however, and that child care centre has apparently not been subjected to any further investigation in the light of Ms Daunt's assessments. Nor am I in any position to comfortably determine whether Centenary Hill was, indeed, in breach of the child care regulations. The question remains unanswered in these proceedings - and unanswerable on the state of the evidence before me in this hearing. The number of children actually in care and the manner in which the workforce in the child care centre is organised is essentially outside my task in this hearing and is a matter for the appropriate authorities. All that is required for my determination is whether Mr Grebert and Mrs Jensen genuinely thought that the child care centre was overstaffed because it is on the basis of their beliefs that they claim they acted in retrenching Ms Cocksedge.

13 Mrs Jensen indicated in an affidavit which formed the basis of her evidence that, whilst she believed that Mr Grebert was right in his assessment that the child care centre was overstaffed, she could not in the past bring herself to terminate the services of any of her staff - wishing only to retain friendship with them, according to Mr Grebert. Mrs Jensen claimed that matters came to a head when the child care centre opened in 2004 when, due to financial concerns and advice from Mr Grebert and her accountant that there was a need to cut back on operational costs, she believed that she could no longer "...keep her head in the sand...". A cut back of staff became necessary. It is claimed by the child care centre that Ms Cocksedge was simply a casualty of that staff cut back.

14 Ms Cocksedge worked for 38 hours each week on Mondays, Wednesdays and Fridays [from 7.30am to 3.30pm] and on Tuesdays and Thursdays [9.45am to 6.00pm] for the child care centre. On Friday, 20 February, 2004 Ms Cocksedge was called into the office by Mrs Jensen and informed:

"We have to give you two weeks notice because of the financial state of the business." Mrs Jensen claimed that she had spoken to Ms Cocksedge as follows:

"You know our numbers are down and we are overstaffed. I have to make your position redundant due to the financial strain it's placed on the business. I'm sorry, I've tried to carry the overstaffing levels for so long but can't anymore due to the financial strain it's placed on the business."

Mrs Jensen had formed the view that, because Ms Cocksedge was an unqualified child care worker, her position was the logical choice for retrenchment. She informed Ms Cocksedge that, whilst the State kindergartens and child care centre award provided Ms Cocksedge with notice of one week in terminating her services, she had decided to give her two weeks' notice.

15 Mrs Jensen indicated in her evidence that she regarded the decision to terminate Ms Cocksedge's services as a very difficult one for her to make and she began to cry, saying words to the following effect:

"Thanks for how you are taking this. We were awake all night worrying about this. You understand it's nothing personal, but purely a business decision."

"That's okay darlin', I understand that it is a business decision."

But Ms Cocksedge claimed in her evidence that she was shocked by the decision to terminate her services. And whilst she may have given Mrs Jensen the appearance of being resigned to the termination of her services, she was far from happy about it.

16 Mrs Jensen indicated that her full-time position was to be taken up by part-time work - 25 hours each week. According to Mrs Jensen, she had initially offered that part-time work to Ms Cocksedge, viz:

"We will be creating a new part-time position of approximately 25 hours per week if that's of interest to you."

"That's okay darlin', I can survive on 25 hours a week."

And Mrs Jensen claimed that she had responded, initially offering the part-time position to Ms Cocksedge, viz:

"It's a part-time position, which I will advertise anyway to ensure fairness, but you can just submit an application."

Ms Cocksedge disputed that such an offer was actually made to her by Mrs Jensen and she had simply volunteered to work part-time when she was told her position was to be occupied only on a part-time basis. Ms Cocksedge asserted that Mrs Jensen was "...taken aback..." when she volunteered to work part-time. 17 My assessment of the evidence is that Ms Cocksedge did not really believe that she was going to be provided with the part-time work and was simply putting Mrs Jensen on the spot by indicating her preparedness to work it. I also consider it likely that any offer of part-time work to Ms Cocksedge by Mrs Jensen was only made by her on the belief that Mrs Cocksedge would not have been inclined to take it up. The two women were doing no more than going through the motions. In my opinion, neither of them was being genuine with one another. 18 In any event, Ms Cocksedge then approached the LHMWU and was informed that she did not have to apply for the part-time work but that should have been offered to her. She conveyed that information to Mrs Jensen who informed her that she would check up on the situation. On Monday, 23 February, 2004 Mrs Jensen informed Ms Cocksedge that:

"We've decided to make it a part-time traineeship." Thereby excluding Ms Cocksedge from eligibility to apply for the position. The traineeship position became more attractive to Mrs Jensen because it involved a lesser salary and was partly government funded.

19 On Tuesday, 24 February, 2004 Ms Cocksedge commenced work at the normal time. Mr Grebert became concerned that Ms Cocksedge had informed one of the parents that she had been "sacked" because that may unnecessarily upset the parents who would believe that there was something amiss in the child care centre. Ms Cocksedge denied that she had used that word "sacked" but admitted that she had told the parent that she had been given two week's notice. Mr Grebert claimed that Ms Cocksedge had replied to his inquiry:

Mr Grebert claimed that Ms Cocksedge was very agitated and he informed her:

"Yes, you can - but you have to make sure that it is the truth. You have not been sacked! As you know, you're being made redundant because the child care centre has been overstaffed for some time and just can't afford this anymore. You haven't been sacked... The word 'sacked' unnecessarily upsets parents as they may think you have done something wrong or in some way jeopardised the welfare of the children. Apart from being wrong, it doesn't do you or us any good by saying it." Perhaps the distinction that Mr Grebert was drawing - "sacked" or retrenched - escaped Ms Cocksedge. From her perspective, the result was the same: her services had been terminated.

"If you are having trouble coping and can't report information accurately to parents, it may be better if you finish up today."

Ms Cocksedge agreed to leave immediately. It is Mr Grebert's conviction that it was Ms Cocksedge who had brought her employment to an end by her agreement to cease work at that time when she did, rather than work for the two weeks remaining to her on the notice period. The decision to terminate her services was final, however, only its timing was changed and the result was that Ms Cocksedge's services were terminated with two weeks' pay in lieu of notice.

21 Mrs Jensen asked her to hand over the keys to the premises and she did so. Ms Cocksedge had taken tea towels at the centre home to wash them. She unpacked the clean laundry from her bag and handed it over to Mrs Jensen. She went to the kitchen and said goodbye to the other staff and the children in care. She did not collect her personal belongings at the centre at that time - a hairdryer and her certificates for her qualifications - which she asserted in her evidence were still held at the day care centre.

22 For retrenched workers in this State there are two standards for redundancy pay, viz:

(i) the scale advanced initially by Fisher J - the President of the former State Industrial Commission in Crocker's Case (1983) AR 485 - the so-called Fisher formula which has been incorporated into Reg.5(b) to the 1982 Employment Protection Act; and

(ii) the scale prescribed by the Full Bench of the Commission (Fisher J - President, Glynn and Peterson JJ and Buckley CC) in the Redundancy Award Case (1994) 36 AILR Rep.301 which, upon application, has been inserted in State awards.

In this case, it is no doubt the later, and more attractive, scale of severance payments which would apply. It is acknowledged that Ms Cocksedge is covered by the terms of the State kindergartens and child care centres award which incorporates the Redundancy Award Case scale of redundancy. But as Mr Grebert confirmed with his accountant, the prescribed scales of redundancy from the Employment Protection Act and the Redundancy Award Case do not apply where the employer has fewer than fifteen employees at the point when the services of the employee are terminated. Centenary Hill employed four staff members at the time that Ms Cocksedge's services were terminated.

23 That does not necessarily take Ms Cocksedge's Part 6 application outside jurisdiction under Part 6, however. In Outboard World Pty Limited v. Muir (1993) 51 IR 167 the Full Bench of the Commission (Cahill J - Vice President, Peterson J and Tabbaa CC) gave examples where a genuine retrenchment might still be an unfair dismissal, commenting (at p.182) that:

"...for example, it may be that in selecting employees for redundancy an employer unilaterally decides to terminate an employee of long and exemplary service over another employee. The facts of the case may demonstrate both redundancy of the position but unfairness as against the employee selected. Once that position is accepted then it follows that an employee is not necessarily incapable of suffering an 'unfair' dismissal in the context of a position becoming redundant…"

In that respect Beazley J of the Federal Industrial Court in Quality Bakers of Australia v. Goulding (1995) 60 IR 327 commented at p.334 that:

"...a failure to consult with an employee or union about the issue of redundancy may mean a termination on that ground is harsh, unjust or unreasonable... A termination may also be harsh, unjust or unreasonable because the employee may have been, but was not, offered suitable alternative employment with the employer..."

24 And in several unreported decisions Sams DP has laid down helpful guidelines dealing with cases of retrenchment. For instance, those guidelines were set out in his unreported decision of Monday, 22 September, 2003 in Neal v. Shaw McDonald Pty Limited [Matter No.IRC 607 of 2003 at p.17], viz:

(i) to give reasonable notice to employees and/or their unions;

(ii) to adequately consult with employees and/or their unions on the impact of the proposed changes;

(iii) to explore genuine alternative options for redundancy, such as redeployment or relocation;

(iv) to ensure such options are fairly offered to the affected employees;

(v) to provide reasonable standards of redundancy benefits;

(vi) to provide appropriate ancillary services, such as time off to seek alternative work, retraining opportunities, outplacement services or financial planning; and

(vii) to ensure employees nominated for redundancy are fairly selected on an objective and unbiased basis. Sams DP produced similar guidelines in his unreported decision of Wednesday, 9 June, 2004 in Shop, Distributive and Allied Employees' Association v. W D and H O Wills Holdings Pty Limited [Matter No.IRC 3363 of 1999] to which Ms Cameron referred in her written submissions.

25 Although Mrs Jensen was aware of the financial difficulties being experienced by the child care centre for four years, she only communicated the position to Ms Cocksedge that her position was in jeopardy early in 2004. Mrs Jensen may have been reluctant to give any indication to staff concerning the future of their employment because of her wish to retain a friendship with them. But the fact remains no advance warning of the impending termination of Ms Cocksedge's employment was given to her at all. The child care centre closed down over the Christmas period. At least if Ms Cocksedge had been given advice that her position was to be made redundant prior to closure of the child care centre over the Christmas period, she would have had the opportunity to explore alternative employment options earlier. That was denied to her. And in the light of Ms Cocksedge's eight years of employment at the child care centre, the two weeks notice of her retrenchment would appear to me to be far from adequate.

26 Moreover, Ms Cameron has challenged that the retrenchment of Ms Cocksedge was, in fact, genuine - "fair dinkum", to use the term given in the proceedings by Mr Matters. That is certainly Ms Cocksedge's perception. As I indicated in my unreported decision of Tuesday, 8 June, 2004 in King v. The Smith Family [Matter No.IRC 3627 of 2003 at p.16]:

"...Clearly, where the decision to retrench an employee is not made in good faith, where it shows bias against that employee or where she is being victimised in some manner in the process, the retrenchment may be challenged under Part 6 [the Broken Hill Proprietary Company (No 2) Case (1943) AR 146 at p.147]. A purported retrenchment arising out of the restructuring of an enterprise designed to be no more than a method of getting rid of a particular employee would not be a bona fides retrenchment at all..."

For instance, in my unreported decision of Friday, 21 July, 2000 in Blackman v. Brieth Pty Limited [Matter No.IRC 7070 of 1999] I indicated (at p.4) that:

"...I accept...that the management of any business has the right to reorganise its work at any time, not necessarily because of financial concerns alone, and retrenchments may arise out of such a reorganisation..."

"...I believe from the evidence before me in this hearing that the whole process of restructuring that...was put in place...was for one thing and one thing only: to remove (the retrenched employee) from employment for some unspecified reason... That is not to suggest that an employer needs an excuse to restructure his operations. He may do so at any time and for any reason. But in doing so he should act fairly to his employees..."

And it is in that light that other issues in the employment raised in the evidence in this hearing become relevant, despite Mr Matters' submissions that they were not relevant. Other Issues in the Employment

27 Ms Cocksedge indicated in an affidavit which formed the basis of her evidence in the hearing that she had initially enjoyed working at the child care centre but from some time in 2003 some friction appears to have emerged there among staff. Some of those issues involved other staff members and they were only indirectly of concern to Ms Cocksedge. But they appear to me to have created a working environment at the child care centre which influenced Ms Cocksedge in her attitudes at work and, more importantly, the attitude of Mrs Jensen to her.

28 From the middle of 2003 Mrs Jensen had been absent on maternity leave and Ms Gowing, who had originally been employed temporarily at the centre was authorised to act as a supervisor. However, late in 2003 Mrs Jensen indicated her intention to return to work and Ms Gowing was given two weeks notice of her termination. Ultimately, Mrs Jensen did not return to work full-time. Instead a new staff member arrived for part-time work in a job-sharing arrangement with Mrs Jensen. Ms Gowing and Ms Cocksedge were obviously friends and Ms Gowing's evidence in this hearing is supportive of Ms Cocksedge. At that point some friction appears to have emerged in the working relationships at the child care centre.

29 Earlier warnings had been given to Ms Jayne Kyle, another child care worker. The first warning concerned her alleged theft of money. She had taken cash from the child care centre fees without permission, presumably to make up a shortfall in her wages. Ms Gowing's version of that allegation is that a delay in that employee having her wages paid had prompted her to take some money out of the fees which she paid back when her wages were received. Ms Gowing claimed that, whilst wages were to be paid on Thursday, sometimes it was not available until the following day or even Mondays in the next week. Ms Gowing claims that the employee had not taken the money in an underhand way and she did not believe it to be theft. She believed that the warning given to the employee was unfair. Nevertheless, as Mr Matters emphasised in his cross-examination of her, when Ms Gowing became aware that Ms Kyle had taken the money, it certainly would have been prudent for her to contact Mrs Jensen and inform her what had occurred.

30 The other warning concerned what Mrs Jensen and Mr Grebert regarded as Ms Kyle's excessive sick leave. There seems to have initially been some confusion over sick leave entitlements for employees with Mrs Jensen maintaining that Ms Kyle was only entitled to five days sick leave. An organiser of the LHMWU was approached at the instigation of Ms Gowing and he confirmed sick leave entitlements of the employees - ten days each year. A staff meeting had been subsequently held and Ms Cocksedge recalled the question of sick leave was discussed at the meeting. According to Ms Cocksedge, Mr Grebert, who attended the meeting, became very angry and she recorded in her affidavit that he was "...talking in his usual intimidating manner..." and telling the staff that "...sick days were not an entitlement but a privilege..." so that Ms Gowing put her hands up to motion him to stop.

31 Ms Gowing was subsequently retrenched when Mrs Jensen returned to work at the day care centre. Ms Cocksedge claimed that the staff were shocked by the announcement and believed that Ms Gowing's retrenchment, like her own, was for personal reasons - issues which had emerged in the employment relationship. At a further staff meeting late in 2003 Ms Gowing's services were to be terminated and she spoke to Mr Grebert in the following terms concerning Ms Gowing's retrenchment:

"I think you are making a big mistake. Ms Gowing is the best thing that has ever happened to this place."

To which Mr Grebert is later to have allegedly replied to her:

"You shouldn't take other people's problems on board. Let them speak for themselves."......"

32 In her affidavit, Ms Cocksedge indicated that when Ms Gowing's services were terminated:

"...we were all very upset. We though it was unfair what had happened to her and we had become close to her. We decided to organise a farewell get together for her. We did not invite Mrs Jensen because she had terminated Ms Gowing's employment and we felt that Mrs Jensen would not want to attend if Ms Gowing was there - and nor would Ms Gowing want Mrs Jensen to attend. All the staff organised to have drinks at Shellharbour Workers Club on a Friday night. I believe it was Friday, 19 December, 2003..."

Ms Cocksedge observed that Mrs Jensen's mother and father-in-law were at the club but she did not speak to them. The celebration was reported to Mr Grebert.

33 On Monday, 22 December, 2003 Mr Grebert spoke to Ms Cocksedge in the playground at the child care centre and informed her that Mrs Jensen was disappointed that she was not invited and spoke to her in the following terms:

"You should think about whether you want to work here."

"I know I want to work here. I love working here but it is difficult given everything that has happened."

And later Mrs Jensen and Ms Cocksedge discussed the matter. Ms Cocksedge claimed that both she and Mrs Jensen "...were both quite teary...". Mrs Jensen conceded that she was upset that she had not been invited and she had not been aware that there was any animosity between her and Ms Gowing. Ms Cocksedge said:

"I am sorry that you were upset about us going out."

Ms Cocksedge informed Mrs Jensen that Mr Grebert had made the comment about her wanting to remain working at the child care centre and Mrs Jensen replied:

34 Some time shortly after the child care centre opened in 2004 - on Friday, 23 January, 2004 - a shelf bracketed to the wall fell down. Ms Cocksedge alleged that one of Mrs Jensen's daughters, who was enrolled in the child care centre, had lent on the shelf and it had detached from the wall. Mrs Jensen claimed that the shelf was at a height that a child would not be able to lean against. According to Ms Cocksedge, Mrs Jensen's daughter said to her:

Ms Cocksedge told Mr Grebert about the accident and he indicated that he would place longer screws in the shelf to hold it up. Ms Cocksedge did not make a formal written report over the incident. 35 Mrs Jensen subsequently asked Ms Cocksedge what had happened to the shelf and which child was involved. Ms Cocksedge was at first evasive in providing information about which child was involved. Mrs Jensen either called Ms Cocksedge an "arsehole" (Ms Cocksedge's version) or a "smart-arse" (Mrs Jensen's version). In either version, it is clear that the discussion had developed into a heated exchange between the two women. Mrs Jensen conceded that she had been frustrated at the time. Ms Cocksedge ultimately informed Mrs Jensen of the involvement of her daughter in the incident - in a sarcastic tone, according to Mrs Jensen.

36 A written warning dated Monday, 27 January, 2004 was given to Ms Cocksedge over this incident (also raising other more general concerns over Ms Cocksedge's work attitude), viz:

"...With regard to you not disclosing information in regards to the safety of children on Friday, 23 January, 2004, I must reinforce the severity of this event. The main issue of concern over this matter is:

• you did not follow centre policy - by choosing not to disclose information in reporting an incident of a child to the authorised supervisor;

• you do not have a right to censor any information or withhold information of a child to the authorised supervisor/licensee;

• interaction with parents, eg not your normal happy self, parents have described you as unfriendly and short towards them;

• I have also been informed that you have recommended some families to enrol their children in other local centres and not at Centenary Hill Preschool;

• Disclosure of family details to other families within the centre, eg two individual families disclosed personal information to you in which you have discussed with other families within our service.

I must therefore reinforce the importance of maintaining professional conduct and confidentiality within the centre and remind you that you are to abide by centre policy. I will review this situation in two months time and if you continue to use such action in the future, you place your job in jeopardy and this may lead to your dismissal. I must now advise you that this is your official first warning and I put you on notice that further such examples may lead to your dismissal..."

37 Ms Cocksedge asked Mrs Jensen who the parent was who had informed Mrs Jensen that she had recommended that children be enrolled in another child care centre. Mrs Jensen refused to give that information to her. The child care centre is apparently not licensed to take children under 3 years of age and Ms Cocksedge claims that the only parents whose children were not enrolled were under 3 years of age. She also claimed that Mrs Jensen sometimes allowed children under 3 years to be enrolled. In those circumstances, Ms Cocksedge expressed particular opposition to the words I have placed in italics above and, whilst Mrs Jensen did not apparently accept Ms Cocksedge's explanation, she agreed to delete those words. (Mrs Johnston's evidence may have thrown further light on this allegation but ultimately Mrs Johnston was not called to give evidence.)

38 The other issue raised in the letter - the disclosure of family details to other parents with children in care - centred on a conversation Mrs Jensen overheard Ms Cocksedge make to a mother. Ms Cocksedge conceded that she had told that mother that another male parent was returning to work. The mother and the other parent and his wife had been friends and Ms Cocksedge did not believe that she was in any way revealing confidential information. I share her view. When the matter was raised with Ms Cocksedge by Mrs Jensen, Ms Cocksedge responded:

I do not believe that this particular issue was something over which Ms Cocksedge should have received censure. Submissions

39 In her written submissions, Ms Cameron refuted the claim made by Centenary Hill that its financial position had been the motivation behind Ms Cocksedge's dismissal. She asserted that any financial difficulties which the child care centre had suffered were not acute or sudden and were not really relieved by the termination of Ms Cocksedge's services. Moreover, she claimed that the termination of Ms Cocksedge's services had not been performed in a manner which was either fair, just or reasonable and she described it as "...unconsidered and capricious...". She commented in her written submissions that:

"...the respondents have not placed before the Commission any reliable evidence that they have reduced their expenses on salaries and wages in the period since the applicant's dismissal. The respondents' evidence as to their rostering and wage expenses does not withstand analysis and should not be relied upon by the Commission in coming to a decision in this matter. In view of the issues identified...it is the applicant's submission that Mrs Jensen's evidence on these issues should be treated carefully by the Commission and be given relatively little weight..."

"...the business had been at a relatively stable level of staffing for the entire period that the respondents had owned the business... This situation had been in existence for at least three years without causing any other acute financial crisis. As a matter of logic, the Commission cannot accept the respondent's evidence that the alleged financial crisis was a result of overstaffing..."

Ms Cocksedge had not been consulted over the termination of her services and the one option which was put to her by Mrs Jensen - reduced hours of work - was subsequently removed without any real explanation being given to her.

40 Mr Matters asserted in his written submissions that there was no unfairness in the termination of Ms Cocksedge's services by Mrs Jensen, viz:

"...The respondent submits that she did not unfairly dismiss the applicant...from her employment at the Centenary Hill Pre-School Centre... The respondent further submits that the dismissal of the applicant from her employment was caused by a situation of redundancy that arose in regard to the position in which the applicant was employed...prior to her dismissal... The respondent respectfully submits that the applicant has failed to meet the evidentiary onus and burden required to justify intervention and relief by the Commission. In addition, it respectfully submits that the respondent has provided credible evidence to the Commission establishing that the applicant's employment was terminated because of redundancy..."

41 Later in his written submissions, on the question of the replacement of Ms Cocksedge with a trainee and the choice of Ms Cocksedge for retrenchment, Mr Matters commented that:

"..after the respondent had determined to reduce costs by replacing the unqualified position with that of a trainee, there was a requirement of consultation and notification to the affected employee. As there was only one unqualified child-care worker, no discretionary decision had to be made in regard to the choice of the employee to be made redundant. Once the decision to reduce costs by replacing the unqualified position with a trainee had been made, the inevitable consequence was that the respondent as the only unqualified child care employee employed at the centre was made redundant... It is respectfully submitted that the determination to reduce operating costs by replacing the untrained position with a traineeship in the situation where the respondent was the only untrained employee created a non-discretionary redundancy..."

42 That having been said, Mr Matters argued that the matter remained only a question of determining Ms Cocksedge's entitlements to the relevant obligations on an employer retrenching staff. He claimed that Mrs Jensen did consult with her employees and the LHMWU but that "...the force of circumstances overtook the respondent to precipitate her decision...". Conclusion

43 My principal task in this hearing remains to identify whether or not the termination of Ms Cocksedge's employment with Centenary Hill was unfair, ie using the language adopted by Sheldon J of the former Commission in Loty's Case (1971) AR 95 at p.99 whether she had received a "fair go". The words in S.84(1) on which any Part 6 application relies are "harsh", "unreasonable" or "unjust" [Busways v. Johnson (1994) 55 IR 255 at p.261]. But, in my opinion, for all practical purposes there is little to distinguish between the "fair go" concept and the words "harsh", "unreasonable" or "unjust" in S.84(1). I believe that the termination of Ms Cocksedge's employment with the child care centre was unfair in that context.

44 Firstly, there was no real notice given to Ms Cocksedge that her services were to be terminated. The two weeks which Ms Cocksedge had originally been offered as a period of notice evaporated for the reasons Mr Grebert gave in his evidence in this hearing. And as I indicated earlier in this decision, the notice of the termination of Ms Cocksedge's services was given ahead of the closure of the child care centre over Christmas. That period would have at least afforded Ms Cocksedge a better opportunity to obtain alternative employment. 45 I am not satisfied that there was any real discussion between Mrs Jensen and Ms Cocksedge to explore alternative options in Ms Cocksedge's employment, even when Ms Cocksedge indicated her preparedness to work part-time (albeit half-heartedly, in my opinion). I do not accept the evidence of Mrs Jensen and Mr Grebert that they were genuinely exploring the prospect of engaging Ms Cocksedge on a part-time basis but were defeated because of the later decision taken to engage a trainee instead. I am satisfied from the evidence that, in fact, it was Mrs Jensen and Mr Grebert who were moving the goal posts and had no intention at any time to engage Ms Cocksedge on a part-time basis. Any offer of part-time work that was made by Mrs Jensen - which Ms Cocksedge disputes was made in the first place - appears to me to have been made only on the basis that Ms Cocksedge would not be prepared to accept it.

46 Secondly, notwithstanding the assertion by Mrs Jensen that there was "...nothing personal..." in the termination of Ms Cocksedge's services, the sequence of events which led to the termination of her services suggest to me that was not the case. The burden of proof to establish the unfairness of the dismissal and, in that respect, to satisfy me that the purported retrenchment of Ms Cocksedge was not genuine rests with Ms Cameron in this hearing [Tipping's Case (1957) AR 273 at p.279, Re Barrett and the Crown Street Women's Hospital (1947) AR 565 at p.566 and the Nowra Bomaderry Leagues Club Case (1986) 15 IR 463 at p.464]. On the basis of the evidence adduced in this hearing, it is open to me to conclude that a number of incidents - Ms Gowing's retrenchment, Ms Cocksedge's support for her, the celebrations which excluded Mrs Jensen and the warning notice Ms Cocksedge received - were the real motivation for Mrs Jensen in her decision to terminate Ms Cocksedge's services. And I do conclude that to have been the true position. 47 Mrs Jensen's evidence is that she kept Ms Cocksedge in employment over the whole period that she operated the child care centre, despite constant advice she had received from Mr Grebert and her accountant that there was a need for her to shed staff. Yet suddenly, and in the light of incidents that had clearly soured the working relationship she had with Ms Cocksedge, she gives almost immediate effect to the decision to retrench Ms Cocksedge. As revealed by the financial records Mrs Jensen supplied as evidence in this hearing, the decision to terminate Ms Cocksedge's services was taken at the same time that she was making a number of major purchases, ostensibly equipment for the child care centre, when it would actually have been closed over the Christmas period. 48 Ms Cameron described that situation as follows in her written submissions: "...In the period immediately prior to the applicant's dismissal, the business was not run as if it were in financial crisis, or even financial difficulties. Ms Jensen purchased a large number of groceries and consumer goods in late December and gave evidence that these were for the use of the child care centre. However, this evidence must be considered in light of the fact that the centre was about to be closed for three weeks and could not have required groceries in that period, and that the centre toys and supplies from wholesale suppliers and not from retail chains. Ms Jensen's evidence on this point is not credible and should not be relied upon by the Commission.

In the period when the centre is said to have been overstaffed and running over costs, the business paid for the price and running costs of a large car for Ms Jensen and also for the professional advice of Mr Jensen's father. The Commission cannot accept Ms Jensen's evidence that the business was in such dire straits that it needed to dismiss the applicant when other such unnecessary expenses had been incurred..."

49 In her Part 6 application, Ms Cocksedge had sought her re-employment with the child care centre in terms of S.89(2). Reinstatement under S.89(1) or re-employment under S.89(2) remain the primary remedies for an unfairly dismissed employee, a position that has been consistently confirmed by the Commission [Leeds and Northrup Australia Pty Limited v. Hull (1992) 46 IR 11 at p.15, CCH Australia Limited v. Bowen (1998) 79 IR 206 at pp.217 and 218, Oswald v. New South Wales Police Service (1999) 90 IR 42 at pp.67, Hollingsworth v. Commissioner of Police No.2 (1999) 88 IR 282 at pp.341 and 342, and Little v. Commissioner of Police (No.2) (2002) 112 IR 212 at p.243]. 50 In my opinion, the friction in the working relationship which has been described in the evidence before me in this hearing would militate against the restoration of any effective employer/employee relationship between Ms Cocksedge, on the one hand, and Mrs Jensen and Mr Grebert, on the other hand. More significantly, in the hearing on Monday, 13 December, 2004 I was informed that Mrs Jensen has now sold her interest in the child care centre since the first day of the hearing of the matter - Monday, 27 September, 2004. That must inevitably make reinstatement an impracticability for Ms Cocksedge and confine her claim in these proceedings to monetary compensation under S.89(5) alone.

51 The upper limit for monetary compensation is set by S.89(5) as:

"…an amount of compensation not exceeding six months' remuneration of the applicant at the average rate received over the period of six months immediately before being dismissed…"

And Ms Cocksedge's claim in this hearing must also be considered bearing in mind the provisions of S.89(6), viz:

"When assessing any compensation payable, the Commission is to take into account whether the applicant made a reasonable attempt to find alternative employment and the remuneration that would have been payable if the applicant had succeeded in obtaining alternative employment."

52 S.89(5) is concerned with loss of income, not any assessment of damages. But as I indicated in my unreported decision of Wednesday, 23 May, 2001 in Todd v. Mainfreight Distribution Pty Limited [Matters No. IRC 5572 and 5708 of 2002 at p.30]:

"…It seems to me that a certain level of speculation is still suggested by the wording of S.89(6) itself - '…whether the applicant made a reasonable attempt to find alternative employment and the remuneration received in alternative employment, or that would have been payable if the applicant had succeeded in obtaining alternative employment …'. The...(words I have highlighted) suggests to me that members of the Commission are not constrained to concrete facts alone but must make an assessment catering for a range of possibilities, provided always that they do not exceed the six month time limit prescribed by S.89(5)…" In D and R Commercial Pty Limited v. Flood (2002) 113 IR 344 the Full Bench of the Commission (Wright J - President, Walton J - Vice President and Tabbaa C) explained the proper approach to the assessment of monetary compensation when (at p.363) it commented that:

"…the power in the Commission to make a money order, subject to the limitation on the quantum of compensation and the matters required to be taken into account by S.89(6), is nevertheless within the Commission's discretion. Whilst the Commission is required to take into consideration the matters identified in S.89(6), those matters are not necessarily to be reflected in any particular, arithmetic or definitive way in the money order for compensation made…"

Therefore S.89(6) does not provide a simple mathematical formula - a sum representing the amount of income over the period of six months immediately prior to dismissal minus a sum representing the earnings after that date equals the amount of compensation available. The direction in S.89(6) is to "…take into account…" those factors: what is actually to be done with that information is still a matter for my discretion - provided always, as I indicated in Todd v. Mainfreight Distribution Pty Limited , that I do not exceed the six month ceiling in S.89(5).

53 Since the termination of her services at the day care centre, Ms Cocksedge initially found some casual work in two other child care centres. She has undertaken a course for training as an assistant in nursing. The course extended for six week for three day each week. She has also undertaken unpaid work experience in a nursing home and has been in receipt of a Newstart allowance until she found more regular work. She has now found alternate paid work in the nursing home but at a salary level less than she had formerly received when she worked at Centenary Hill.

54 In the circumstances, based on the figure of $547.62 which Ms Cocksedge recorded in her Part 6 application as her average weekly remuneration when she worked at the child care centre, I propose to order that it pay to her the sum of $8,750.00.

1. Mrs Sandra Jensen shall pay the sum of $8,750.00 to Ms Vicki Cocksedge within 28 days. 2. This order shall take effect on and from Friday, 4 March, 2005.

04/03/2005 - correction as per slip rule - Paragraph(s) Order

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