Daw v Finton Pty Ltd, 85 IR 1

CITATION : Sams and Contact Point International Pty Ltd [2001] NSWIRComm 18 APPLICANT PARTIES : Lynette Sandra Sams RESPONDENT Contact Point International Pty Ltd FILE NUMBER: 3774 of 2000 CORAM: Sams DP Termination of employment - unfair dismissal - heated verbal exchange between employer and employee - whether employee resigned - constructive dismissal - meaning of words used - employee and employer's intentions - procedural fairness - relevant principles. CATCHWORDS : Held, no investigation of employer's complaint against employee - employee did not intend to resign - employer dismissed employee - constructive dismissal established - dismissal "harsh, unreasonable and unjust' - reinstatement impractical - compensation ordered LEGISLATION CITED : Industrial Relations Act 1996 Daw v Finton Pty Ltd, 85 IR 1 Jones and Dunkel (1959) 101 CLR 298 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 396 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, CASES CITED : Sams DP, McLeay C, Matter IRC5504 of 1999, 6 May 1999 Bates v Gundagai District Services Club (unreported) Walton VP, Sams DP, Redman C, Matter IRC4710 of 1999, 14 April 2000 Police Service of New South Wales v Batton (2000) 98 IR 154 Shankar v Neumo Packaging (unreported) Sams DP, Matter IRC6891 of 1999, 10 November 2000 Cherry v Allied Express Transport, 73 IR 305 Smith v Director General of Education, 51 IR 204 Ryde Eastwood Leagues Club Ltd v Taylor, 56 IR 385 Mohazab v Dick Smith Electronics, 62 IR 205 Police Association of New South Wales, on behalf of Tregonning, and New South Wales Police Service (unreported) Sams DP, Matter IRC2799 of 1999, 8 March 2000 Byrne & Anor v Australian Airliens (1995) 185 CLR 410 Antonakopoulis v State Bank (1999) 91 IR 385 HEARING DATES: 11/13/2000; 11/14/2000 DATE OF JUDGMENT: 02/28/2001

APPLICANT Mr D Patch of Counsel SOLICITORS Teakle Ormsby Conn LEGAL REPRESENTATIVES: RESONDENT Ms M Dulhunty of Counsel SOLICITORS Macedone Christie Willis Solari Partners

JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP

LYNETTE SANDRA SAMS AND CONTACT POINT INTERNATIONAL PTY LTD

Application by Lynette Sandra Sams re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996

1 By application, pursuant to s84 of the Industrial Relations Act 1996 ("the Act"), Mrs Lynette Sams ("the applicant") filed a claim for relief from alleged unfair dismissal by Contact Point International Pty Ltd ("the respondent"), on 11 July 2000. 2 The issue to be determined by this decision is a relatively narrow one; namely, as a result of a heated verbal exchange on 11 July 2000, between the applicant and the respondent's owner and director, did the applicant resign, or was she dismissed?

It follows, of course, that if the former occurred, there was no dismissal and de juris, the application must fail for want of the Commission's jurisdiction under Pt 6 ch 2 of the Act. Alternatively, if the applicant was dismissed, was it a constructive dismissal according to the various authorities to which I will later refer? 3 At directions and conciliation proceedings on 18 and 30 August, the applicant represented herself and Mr I Connor (Solicitor) appeared for the respondent. As no settlement could be reached, the Commission issued directions for the filing and service of affidavit material and set the matter for hearing, pursuant to s87 of the Act. The directions were amended in proceedings on 4 October and hearing dates confirmed. 4 At the hearing Mr D Patch of Counsel appeared for the applicant and Ms M Dulhunty of Counsel appeared for the respondent.

Employment Details 5 Mrs Lynette Sams was first employed by Contact Point as a part time salesperson in November 1999. She had been offered the position by the respondent's Managing Director, Mrs Judith Lynn Reid, as a result of Mrs Reid's business connections with the applicant's then employer, Dominelli Ford, and after both women had become friends. 6 At the time of taking up employment, the applicant owned a gourmet take-away food business for which Contact Point provided some printing services. Mrs Reid's son also worked at the shop. 7 The letter of appointment discloses a salary of $20,800 plus commission for twenty hours work per week. Also in the letter are two clauses which refer to particular circumstances which apply in respect to termination of employment: ... 7) TRADING LIMITATION Prior to the 1st February 1999 you will also be asked to sign an agreement which will prohibit you, in the event of you resigning or being terminated, from: i. Commencing employment in any capacity; ii. Holding the position of Director; iii. Starting or holding shares; with another Mail House or fulfillment(sic) service organization(sic) within 24 months from the date of leaving CPI if that organization is within 500km of the operations of CPI. ... 9) TERMINATION In the event of termination both parties agree that commissions due shall be paid for period of 3 months after resignation or termination on the condition that the reason for discontinuing employment with CPI does not relate to an illegal activity or with the terms of this Offer.

There are no other references to termination of employment. 8 The applicant commenced full time employment in May 1999, and received a wage increase and a company leased car. Her salary at termination was $769.23 per week. The respondent had, and according to the evidence, continues to have a high regard for the applicant's sales and marketing abilities. Mrs Reid described her as "an excellent sales manager".

9 On 11 July 2000, while routinely checking mail, Mrs Reid noticed an invoice from a company WW Media. Mrs Reid had no knowledge of this bill. She summoned the applicant to her office and demanded an explanation as to why there was no job sheet for the invoice. The applicant said another employee, Helen McLean, had apparently filed several job sheets together, instead of individually. She had asked Ms McLean to do the job sheets as computer access had been denied to the applicant. Mrs Reid did not accept this explanation and blamed the applicant. 10 A heated exchange then ensued, witnessed by another employee, Marian Perrin. I will discuss this exchange in more detail later. After this discussion, the applicant collected her belongings and left the premises. Mrs Reid's son was instructed to assist her. Another director, Mr West, had arrived and met an agitated Mrs Sams just as she was leaving. He tried to talk to her, but the applicant refused. 11 A short time later (although the time is disputed) the applicant phoned Mr West to complain about what she had heard was being said about her by Mrs Reid. 12 Shortly thereafter, a full staff meeting attended by about twelve people, was convened to announce the applicant's departure. The discussion at the meeting is disputed. I will refer to it later. 13 On the same day, Mr West sent a letter to the applicant. After referring to the incident of the job sheets, Mr West said: However, to ensure there is no misunderstanding - i) As at the 11 July 2000 you resigned and the resignation was accepted by a Director of CPI, in the presence of a witness;

ii) When requested by me, knowing I am a Director of CPI, you did not wish to talk to me before leaving the premises;

iii) You later rang on my mobile (having just called the office and spoken to Jason and Sue) with threats of legal action; I wish to remind you that should you - i) contact any Client of CPI; ii) make any comment regarding CPI, Judi Reid, Robert West or any member of staff;

iii) accept a position with another Mail House as in accordance your letter of appointment I will have no alternative other than to commence legal action. This action will be commenced both as a Director of CPI and personally.

14 He then identified her outstanding entitlements and concluded by writing that the applicant had taken excessive time off for personal matters which was rarely made up.

15 The following day, Wednesday 12 July, accompanied by her niece, Jessie, the applicant attended the office to collect her pay. Her pay, at that time, was not prepared. The applicant attended the employer's premises on the next Friday. Another argument developed between the applicant and Mrs Reid about entitlements to wages, the mobile phone and car insurance. 16 On 17 July, Mrs Reid wrote to the applicant referring to outstanding entitlements, debts and company property. She concluded with these words: In relation to your comment that "I Fired" you this was not the case, you verbally resigned with the comment "I will not be staying much longer" and my reply of "OK, fine pack your things and go now" is not firing you. At this stage we are advising callers that you resigned due to personal reasons, would you prefer us to have had "fired" you, which wasn't the case. In the mean time I have instructed all staff to advise who ever calls that you have resigned, however, I can change this should you wish callers to be advised that you were "fired" together with a reason, which would you prefer?

17 The applicant's case is relatively straightforward - she claimed she had not resigned, but was dismissed. Her financial circumstances were such as she would never have resigned. The language and tone of Mrs Reid telling her "OK, fine, piss off, pack your things and go" convinced her she had been dismissed. She reacted accordingly, collected her things and left the premises. 18 On the same day, the applicant had received a phone call from Jo Anne Moore, another employee of Contact Point, who told her Mrs Reid had called the staff together and told them the applicant had been fired, as she almost cost the company $5,000 and had already cost the company around $17,000.

Jo Anne Moore, acknowledged as a friend of the applicant, prepared a statutory declaration (Ex'3') on 17 August, confirming what she had told Mrs Sams on the phone. She gave evidence that Mrs Reid approached her on 8 September about her statement. She said Mrs Reid told her that she was the only one saying Mrs Sams had been fired. If she couldn't remember, she should say so. Acknowledging that 11 July was a very emotional day and she may not have been able to recall everything, she did not change her statement. She firmly believed that Mrs Reid had said the applicant had been "fired".

Ms Moore's evidence went further to indicate she had a disagreement with Mrs Reid at the meeting and left. Neither Mr West, nor Ms Perrin, recalled this incident. 19 Mr Patch invited the Commission to draw a Jones and Dunkel inference by the respondent's failure to call evidence from the other employees at the staff meeting.

Mr Patch submitted that the respondent's three witnesses to the meeting gave inconsistent testimony as to what was said at the meeting. However they did say Mrs Reid criticised Mrs Sams. This is consistent with her being dismissed. 20 He said Mrs Reid had acknowledged that she could not be one hundred percent sure of the exact words used. She had no idea when Mrs Sams was intending to resign, or what notice she had given (T.p60). Therefore he concluded it could not be a resignation. 21 The applicant's evidence was that she was not to blame for the missing job sheets, as she handed the paperwork to Helen McLean. It subsequently emerged that Ms McLean had grouped the jobs together, rather than giving each a separate job sheet. 22 Mr Patch referred me to Gunnedah Shire Council v Grout, 134 ALR 156, as authority for the principles of repudiation of contract and, submitted that, on any version of the facts, there was not "an absolute refusal to perform the contract" by the applicant. 23 He cited other cases in which it has been held that for a resignation to be effected, unambiguous words must be said. The words used by Mrs Sams, he claimed, were ambiguous and indefinite. They were no more than expression of frustration. Mrs Reid's response, on the other hand, was immediate and unequivocal, effectively terminating the employment forthwith. It amounted to a breach of the implied terms of the employment contract such as to destroy, or seriously damage, the relationship of confidence and trust between the employer and employee. See Daw v Finton Pty Ltd, 85 IR 1. 24 Although the applicant had originally sought reinstatement, she now seeks compensation. Mr Patch submitted that, in view of her present and future economic loss - particularly in the context of the restrictive clause in her contract - the maximum compensation of twenty-six weeks should be ordered.

25 The employer, through Mrs Reid, stridently maintains that in the heated exchange on 11 July, Mrs Sams had said "well I wasn't planning to stay much longer anyway". Another witness, in Mrs Reid's office at the time, corroborated these exact words.

She regarded this comment as a resignation and, as all company executives who resign are required to do so on the spot, she had accepted the resignation and told Mrs Sams to " pack her things and go immediately ".

26 While acknowledging she was angry and very loud, Mrs Reid said she had no intention of dismissing the applicant. She was furious, because the incident which provoked the exchange, was not the first time job numbers weren't allocated.

Mrs Reid confirmed that the applicant was not screaming, but was aggressive.

She said if the applicant had apologised she would still be employed. 27 Mrs Reid gave evidence that the company was expanding and moving to new premises. Although she had just told Mrs Sams she was not getting a new computer at the new premises, this comment reinforced the position that she had no reason to dismiss her. Mr West had been discussing marketing strategies with Mrs Sams a week before the termination - a further indication she was integral to the company's future. 28 The evidence was that Mrs Sams was given considerable flexibility with time off for personal reasons. 29 Mrs Reid described the two occasions Mrs Sams returned to the office on the Wednesday and Friday, 12 and 14 July. The first occasion had been amicable, but on the Friday, Mrs Sams demanded two weeks' pay in lieu of notice. Mrs Reid refused. Mrs Sams said she would be keeping the mobile phone and Mrs Reid retaliated by cancelling her car insurance. 30 The employer's evidence in respect to the staff meeting was that Mrs Reid had told staff that Mrs Sams had resigned for personal reasons. However, it was really about the job sheets and the company's potential loss of $5,000. Mr West and Ms Perrin corroborated Mrs Reid's evidence that the word "fired" had not been used. Ms Perrin could not recollect the amount of $5,000 being mentioned at the meeting. Ms Dulhunty submitted that there are no Jones and Dunkel inferences to be drawn by not calling evidence from all those at the staff meeting. Three people had confirmed what was said and it would be a waste of the Commission's time to bring another ten witnesses who would all give the same evidence. 31 Mrs Reid said she was concerned that Jo Anne Moore was the only employee saying that she (Mrs Reid) had said the applicant was fired. Mrs Reid was concerned that Ms Moore would be in trouble if she was lying. She told her if she couldn't remember what was said, she should say so. She made no attempt to pressure Ms Moore to change her statement.

Another employee, Helen McLean had been present during this conversation. Her evidence was that Mrs Reid did nothing to try and have Ms Moore change her statement. 32 Ms Dulhunty submitted that the applicant's testimony was flawed in that the application and her two affidavits disclosed differences in the words used in the crucial 11 July argument with Mrs Reid. The applicant explained that the context was the same and that the application had been hastily prepared after she returned from holidays, thus explaining minor inconsistencies.

The applicant was also criticised for not mentioning in her 9 October affidavit, that on 12 July, she waited for thirty minutes with her niece outside Mrs Reid's office. 33 Ms Dulhunty referred to the failure of the applicant to initiate any discussion of reinstatement. The evidence was of a long friendship between the applicant and Mrs Reid; unyet the applicant chose not to ask for her job back. She refused to talk with Mr West on 11 July - although she claimed she was too distressed to do so. The evidence was, at no time in the meetings of 12 and 14 July did the applicant initiate a conversation about getting her job back.

34 Moreover, the applicant made an abusive and threatening phone call to Mr West, and was abusive in the meeting on 14 July. She only wanted to discuss her wages. The applicant claims to be in desperate financial need, but didn't seek to retain her job. Ms Dulhunty submitted this evidence is consistent with a person having resigned. 35 Mr West's relevant evidence focused on three incidents on 11 July; his meeting with the applicant outside Mrs Reid's office, her phone call to him shortly thereafter and the staff meeting later in the day.

Mr West said that when he met Mrs Sams outside Mrs Reid's office, she was crying and distraught. At that time he didn't know what had occurred.

In the phone call, he said Mrs Sams was agitated, angry, almost hysterical. She had said " Judy better be careful what she says ". He had warned her not to make contact with the company's clients.

As to the staff meeting, Mr West said there were two meetings that day. The first involved three employees, including Jo Anne Moore, and took place after the applicant's phone call to the company seeking to speak to Ms Moore.

At the second meeting where all staff had been present, Mr West told them Mrs Sams had resigned after an argument. He had heard Mrs Reid refer to the job sheets and potential loss of $5,000. The staff were told to tell clients, or customers, that Mrs Sams had resigned for personal reasons.

Mr West's evidence was that there was no angry exchange between Ms Moore and Ms Reid at the meeting. He had not seen Ms Moore leave the meeting in tears.

Conflicting Evidence 36 Ms Dulhunty sought to impugn the applicant's credibility by pointing to discrepancies in the words used in her application and subsequent affidavits as to the crucial conversation of July 11.

Application of 2 August I told her " it really has nothing to do with this issue at present " , that I was finding her behaviour very hard to take and if it keeps up I couldn't see myself being there for much longer. Affidavit of 9 October

I told Mrs Reid that I was finding her behaviour very hard to take and if the situation was to continue, I was going to find it difficult staying with the company for much longer. Affidavit of 9 November " The computer is not the issue, I cannot take much more of this ".

With respect, I see little material difference between the three extracts - certainly nothing which would sustain the degree of criticism asserted by Ms Dulhunty . In my view, these are differences without a distinction. 37 Taking into account the applicant was initially unrepresented, and mindful of the passage of time from July to October/November, it is understandable that recollections of precise conversations will be less than perfect.

In my view, it is only when the differences are patently inconsistent, or where evidence appears to be deliberately re-created, or omitted, that the Commission would have cause to doubt its veracity. 38 On the other hand, I am inclined to view with some scepticism, two witnesses whose recollections of conversations many months earlier, are precisely word for word. Such was the evidence of Ms Perrin and Mrs Reid as to what was said by the applicant in the 11 July conversation. It seems utterly improbable that, three and a half months later, two persons would recall exactly the same words. 39 Counsel for both parties focused on the conflicting evidence concerning the full staff meeting held on 11 July after the applicant had left the premises.

Attention was particularly focused on Ms Moore's evidence that she had heard Mrs Reid say the applicant had been "fired". Two witnesses for the respondent, Mr West and Ms Perrin, attested that the word "fired" was not mentioned. Mrs Reid denied using the word. There were about twelve people present at the meeting. 40 The Commission notes that all four persons who gave evidence of the meeting had different versions of what was said. This is demonstrated by three examples:

1. Ms Perrin was unable to recall whether Mrs Reid said Mrs Sams almost cost the company $5,000;

2. Ms Moore could recall mention of $17,000 that Mrs Sams had cost the company; whereas Mr West and Ms Perrin did not. I interpose to agree with Mr Patch that the figure of $17,000 was unlikely to have been plucked out of the air. It must have been told to Ms Moore at some time, by someone in authority.

3. Ms Moore said she had an exchange with Mrs Reid in which she too was criticised. She left the meeting in tears. Mr West and Ms Perrin do not recall the conversation, or Ms Moore leaving. 41 These inconsistencies point to a reasonably logical explanation. The explanation does not adversely reflect on either Mr West, Ms Moore or Ms Perrin. There were two meetings that day. Both apparently involved Mr West and Ms Moore. Perhaps all three witnesses were unclear as to what was said, by whom and at what meeting. 42 Both meetings were emotional, people may have come into them at different times. Recollections, after many months, are naturally hazy or incomplete. It seems probable that Ms Moore may have interpreted Mrs Reid's comments as Mrs Sams being fired, particularly as Mrs Reid was furious and angry during the meeting.

It seems to me more a case of the employer wishing to minimise any fallout from this unpleasant experience. Clients were to be told of the applicant's resignation, so as not to give any hint of company disharmony. 43 In any event, whether Mrs Reid said the applicant had been fired or resigned is not the relevant issue. The critical turning point to which I will shortly turn, was the earlier conversation between Mrs Reid and the applicant. 44 Another aspect of the evidence caused a flurry of claim and counter claim. This related to Mrs Reid's conversation with Jo Anne Moore in which she told Ms Moore that she was the only person saying that the applicant had been fired.

Mr Patch contended that this conversation was intended to pressure Ms Moore into changing her story such as to corroborate the respondent's version of events.

Mrs Reid did not deny she approached Ms Moore, but it was only to ensure she was certain about what she had heard, so as to avoid her getting " into trouble ". 45 I very much doubt Mrs Reid was motivated by a caring concern for Ms Moore's welfare. Nevertheless, I would not put it as highly as Mr Patch, that her attempts at coercing Ms Moore to change her story, constituted an attempt to pervert the course of justice. 46 The Commission accepts that Ms Moore may well have interpreted Mrs Reid's approach to be pressure to change her story. She was a young, inexperienced employee confronted by a domineering and aggressive employer. The mere fact of the unequal employer/employee relationship would have been sufficient to have left her with the impression that she should do as Mrs Reid was hinting - or else. 47 However, I do not labour this point. I have already said this case will not be decided upon what was said by Mrs Reid at the staff meeting, or what she said to Ms Moore.

48 It is trite law that the Commission's jurisdiction under Pt 6 ch 2 of the Act is not enlivened without a dismissal of an employee by the employer. In the absence of any findings of fact that a dismissal did occur, an application for relief from alleged unfair dismissal is bound to fail. 49 Often, the circumstances giving rise to a termination of employment will be clouded by no direct, or readily discernible act which gives immediate clarity as to who initiated the termination. 50 This is the conflict which applies in this case. It is resolved by the Commission making a positive finding as to whether a constructive dismissal has occurred. 51 The trigger to such a finding has been variously described as "termination at the employer's initiative", or "where the conduct or action of the employer is the real and effective initiator of the termination of employment" or "where the conduct of the employer has compelled or unduly influenced the employee to resign". 52 The seminal authority for the above descriptors is found in Allison v Bega Valley Council 63 IR 68. At p72-73 of the Full Bench's decision the relevant passage reads: 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 wilful 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 termination 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.

53 A number of more recent Full Bench decisions have reaffirmed the principles discussed in Allison. See 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, Bates v Gundagai District Services Club (unreported) Walton VP, Sams DP, Redman C, Matter IRC4710 of 1999, 14 April 2000 and Police Service of New South Wales v Batton [2000] 98 IR 154. 54 Determining this matter will, therefore, turn on an examination of the actions and behaviour of both parties to establish which party was the effective initiator of the termination of employment.

55 In developing my conclusions in this matter, I have juxtaposed the employer's actions in this case with the employer's actions in a recent case involving not dissimilar grounds of argument. 56 In Shankar v Neumo Packaging, (unreported) Matter IRC6891 of 1999, Sams DP, 10 November 2000, the applicant claimed to have been constructively dismissed in the context of a heated exchange between himself and the employer, in which the language used by the employer was said to constitute a dismissal.

In Shankar the Commission identified a raft of employer actions which convinced me that the employer had absolutely no intention to dismiss the applicant. 57 Such matters included inter alia:

i) making arrangements to discuss the applicant's grievances after the incident;

ii) continually insisting, both verbally and in correspondence, that the employee had been stood down - not dismissed;

iii) continuing to pay the employee until the termination of employment by an effective resignation;

iv) offering concessions to the employee to appease his grievances;

v) at no time, asking for the return of company property, such as office keys or equipment. 58 Based on this evidence, the finding in Shankar was that the employer had not initiated the termination of employment. There had been no dismissal. Consequently, the application was dismissed for want of jurisdiction. 59 However, the evidence here stands in stark contrast to that in Shankar.

1. Mrs Reid's immediate response to the alleged resignation was " okay fine, piss off, pack your things and go ".

2. The employer made no attempt to rationally consider the matter. 3) Within a very short time, the employer convened a staff meeting to advise that the applicant was no longer employed.

4. The employer instructed her son to assist Mrs Sams' departure from the premises.

5. The employer had two opportunities, on 12 and 14 July, to calmly and rationally offer to discuss the matter. No attempts to do so were even contemplated.

6. Mrs Reid took no steps to investigate whether Helen McLean had received the disputed invoice, whether she offered to enter it in the computer, or what had actually happened to it. 60 Ms Dulhunty relied on the following evidence as vindication that the respondent had no intention of dismissing the applicant:

1. Prior to the verbal confrontation, Mrs Reid had told the applicant she wouldn't have a new computer when the company moved.

2. Both Mrs Reid and Mr West said that Mrs Sams was a good salesperson - presumably to convince the Commission that as a valued employee she wouldn't have been dismissed.

To elaborate, I make this point. An employer and employee can have a most ideal and amicable long term relationship. Then an incident, or series of incidents, occurs which sours the relationship and triggers the employee's dismissal. Past history and excellent work performance count for nought. Friendships are forgotten.

The obvious point this demonstrates is that what occurs before a dismissal might bear absolutely no resemblance to the relationship at the point of dismissal and have little bearing on how individuals react in "the heat of the moment".

Often the actions and behaviour, after the dismissal, will be the decisive determinant of the employer's true intentions. 61 At this point, it would be remiss of the Commission not to make some observations on Mrs Reid's management style. Mrs Reid readily acknowledged she often lost her temper and yelled at employees. On the day in question she was furious and screamed through the intercom, so all in the office could hear.

It took little to convince me of Mrs Reid's admissions. Her demeanour in the witness box was aggressive, antagonistic and unrepentant. At one point, she even apologised for her sarcasm when answering a question in cross examination.

Her expression " I am the company " is indicative of her autocratic management style. She has contempt for anyone who makes a mistake, is unforgiving and jumps to conclusions without proper investigation. 62 There is no place in the workplace for screaming and yelling. A fortiori, there is no place for a senior manager to scream and yell at employees as if they are incompetent fools. Responsible employers are expected to demonstrate professionalism, restraint and patience; in short, to set a good example of how to react in pressure situations.

Unfortunately, I feel bound to say that, by any standard of acceptable behaviour, Mrs Reid's conduct as an employer leaves a lot to be desired.

Her reactions to the circumstances on 11 July were nothing short of deplorable.

63 This case has all the hallmarks of the classic falling out of two friends who had worked together amicably over a number of years. It is not clear to me what served as a catalyst for the breakdown in the relationship, or whether it had been gathering momentum over time. However, the applicant gave evidence that in February 2000 she had thought of resigning. Perhaps it was about this time the relationship began to sour. 64 As earlier observed, and as counsel for both parties correctly acknowledged, the issue to be determined in this case is a relatively narrow one. It centres primarily on the heated conversation between the applicant and Mrs Reid on 11 July 2000. 65 Mrs Reid's evidence was that the applicant had said she "wasn't planning to stay much longer anyway" and that these words were, in effect, a resignation. The applicant denies using these words - but did say that the circumstances were making it difficult for her to stay with the company. 66 Even if the respondent's version of the words is correct, two matters immediately spring to mind. Firstly, in the heat of an acrimonious exchange between an employer and employee it is not unreasonable to expect that words in anger and frustration might be used. In another context, where these words are used calmly and deliberately, they may well convey an intention to resign. However, in the context of the volatile circumstances here disclosed, I do not believe the applicant had any intention to resign, and would, upon cool and later reflection, regret using such language.

In any event, I find the words used by the applicant to be ambiguous. They do not convey any real or actual intention. 67 On this point a passage from Cherry v Allied Express Transport, 73 IR 305 at 309-310 is particularly apposite: The first and central consideration in this matter seems to me to be whether or not there was ever an intention on Mr Cherry's part to resign from his contract of carriage with Allied. Whilst I have come to the view that his actions in relation to Mr Poppleton were stupid and uncontrolled, in that he could have brought the matter to a ready end at two clear points in his conversation with Mr Poppleton, and his wild reaction merely added fuel to the fire, I do not consider that it can be said he manifested by his language, even if he used the words "stick it", that he intended to permanently sever the relationship; his language was ambiguous. I think the preferable view is that he created a mess for himself which resulted in Allied treating him as having that intention although on what is probably an insecure foundation. .... The authorities to which I was taken suggest that where an employee is thought by the employer to have resigned in the course of a heated exchange, and by the use of ambiguous language, the employer who accepts words seemingly of resignation faces the risk of having the contrary finding of fact made. In Minato v Palmer Corporation Ltd (1995) 63 IR 357, Murphy JR extracted and applied the principle adopted in Britain where seemingly unambiguous words of termination are used. The judicial registrar's decision reads (at 361-362) The central issue here, as far as the respondent is concerned, is whether the applicant had resigned. ... The legal position is set out in the case of Sovereign House Security Services Ltd v Savage [1989] IRLR 115 where at 116 May LJ said: In my opinion, generally speaking, where unambiguous words of resignation are used by an employee to the employer direct or by an intermediary, and are so understood by the employer, the proper conclusion of fact is that the employee has in truth resigned. In my view tribunals should not be astute to find otherwise ... However, in some cases there may be something in the context of the exchange between the employer and the employee or, in the circumstances of the employee him or herself, to entitle the tribunal of fact to conclude that notwithstanding the appearances there was no real resignation despite what it might appear to be at first sight. Those comments were considered in another case: Kwik-Fit (GB) Ltd v Lineham [1992] ICR 183 where at 188 Wood J said that he saw no difference in principle between words or actions of resignation. At 191 he set out the position as follows: If words of resignation are unambiguous then prima facie an employer is entitled to treat them as such, but in the field of employment personalities constitute an important consideration. Words may be spoken or actions expressed in temper or in the heat of the moment or under extreme pressure ("being jostled into a decision") and indeed the intellectual make-up of an employee may be relevant: see Barclay v City of Glasgow District Council [1983] IRLR 313. These we refer to as "special circumstances". Where "special circumstances" arise it may be unreasonable for an employer to assume a resignation and to accept it forthwith. A reasonable period of time should be allowed to lapse and if circumstances arise during that period which put the employer on notice that further inquiry is desirable to see whether the resignation was really intended and can properly be assumed, then such inquiry is ignored at the employer's risk. He runs the risk that ultimately evidence may be forthcoming which indicates that in the "special circumstances" the intention to resign was not the correct interpretation when the facts are judged objectively. The Commission has to determine the position which developed at the time and in this regard I conclude that Mr Cherry did not intend to, nor did he, offer his notice of termination of his contract of carriage.

68 Secondly, the words themselves do not convey any notice of when she was intending to resign.

There was no follow up by the applicant to formally resign, but rather the respondent appeared delighted to view it as a resignation and acted without hesitation. Mrs Reid's words " okay, fine, piss off, pack your things and go ", seem to me to comfortably fit with the conventional definition of dismissal which the authorities of this Commission define as " to send away ". 69 In this regard, I refer to the following passage from Smith v Director General of Education, 51 IR 204, where the former Industrial Court said at 219: 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 do, 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 s245, and, indeed, it seems to us that it is that defined sense of an employee being sent away from employment that unfair dismissal cases in industrial jurisprudence have been concerned. The terms of s245 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).

See also Ryde Eastwood Leagues Club Ltd v Taylor , 56 IR 385. 70 Moreover, the applicant's reaction was entirely consistent with someone who had been dismissed. Far from being relieved at being happily released from the bondage of her employment, she was distraught and crying - so much so she had a car accident soon after. 71 The soundness of my findings on the question of resignation is easily tested by examining the meaning of the words used. The test, in my opinion, might be summed up by the following maxim - absoluta sententia expositore non indiget. 72 Sitting neatly with this maxim is the notion of what an objective bystander would understand by the words used. 73 Accepting the respondent's version of the words "wasn't planning to stay much longer anyway" - would the objective bystander construe these words as a resignation? I think not.

To my mind, these words might imply an intended action; certainly not a definitive one. It may be construed that the applicant was intending to resign, but it most assuredly cannot be construed that she had resigned or given notice of resignation. In other words, the issue in her mind, remained unresolved. It was, however, decisively resolved by the eager reaction of Mrs Reid. 74 An alternative way of answering the question - did the applicant resign? - would be to ask: would the applicant have abruptly left the premises, if Mrs Reid had not used the words she had?

In Mohazab v Dick Smith Electronics , 62 IR 205, a Full Bench of the Industrial Relations Court of Australia put the proposition this way: It accords with the purpose of the Convention to treat the expression 'termination at the initiative of the employer' as a reference to a termination that is brought about by an employer and which is not agreed to by the employee. Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship

In my opinion, there can be absolutely no doubt that Mrs Sams would not have voluntarily left the premises if Mrs Reid had not so aggressively and rudely demanded she go. 75 Even so, I found the language used by Mrs Reid immediately prior to the applicant's disputed words, to be most illuminating. Mrs Reid, in describing the invoice incident, said "I can't tolerate this going on any longer", (para 18 - Ex"A"). This expression is inconsistent with her evidence that if the applicant had apologised she would still be employed.

In my view, these words convey a more decisive intent than anything subsequently said by the applicant. Mrs Reid acknowledged she was very angry. She plainly wasn't going to tolerate this behaviour any longer. In my opinion, these words convey a clear intent that Mrs Reid was going to do something about it. When the applicant baited her with the next comment, she welcomed the opportunity and seized the moment. 76 In summary then, it is, in my opinion, unarguable that the employer was the effective initiator of the termination. 77 Two further comments are necessary but not decisive.

Firstly, if I was to strain the language used by the applicant such as to interpret the words as giving an unspecified notice of resignation, Mrs Reid's immediate response was to terminate the employment relationship. This reaction would, in my opinion, demand a positive finding that the employer had initiated the termination of employment prior to the expiry of any notice. 78 Secondly, even if I accept the respondent's contention that the applicant had resigned, I would have determined as a secondary conclusion that a constructive dismissal had occurred, despite the resignation. In the circumstances, there would be little doubt that the employer had, in the words of Allison v Bega Valley Council, 63 IR 68 "compelled or unduly influenced the employee to resign".

As I am satisfied the applicant did not resign, I need take this matter no further.

79 Having found that the applicant was dismissed on 11 July 2000, the Commission's next task is to determine whether the dismissal was "harsh, unreasonable or unjust", pursuant to Pt 6 ch 2 of the Act. 80 Before examining the relevant facts and circumstances of this dismissal, it is appropriate to refer to the authorities which have considered the expression "harsh, unreasonable or unjust". 81 To do so, I need only repeat the discussion in Police Association of New South Wales, on behalf of Adam Tregonning, and New South Wales Police Service (unreported) Matter IRC2799 of 1999, 8 March 2000, where at p32 I said: As will be evident from my later findings, there is one particular aspect of the general principles that I wish to discuss in some detail. This concerns the meaning of the expression "harsh, unreasonable and unjust". It is apparent from both the ordinary meaning of each adjective, and their use in an industrial context, that each has its own discrete and distinct meaning - albeit with common threads. The Macquarie Dictionary defines the terms thus: HARSH: ungentle and unpleasant in action or effect;

UNREASONABLE: not endowed with reason; not guided by reason or good sense; not based on, or in accordance with, reason or sound judgement;

UNJUST: not just; not acting justly or fairly, as persons; not in accordance with justice or fairness, as actions.

and the Concise Oxford Dictionary records as follows: HARSH: ..repugnant to feelings or judgment; cruel, unfeeling; UNREASONABLE: Not reasonable; going beyond the limits of what is reasonable or equitable;

UNJUST: Not just, contrary to justice or fairness. In an industrial context, in Rose v Telstra Corp Ltd (AIRC, Print Q9292 (Vol 45 AILR 3-966, 4 December 1998) Ross VP described the terms: In my view, for the purpose of s.170CG, a termination of employment may be: HARSH, because of its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct; UNJUST, because the employee was not guilty of the misconduct on which the employer acted; and/or UNREASONABLE, because it was decided on inferences which would not reasonably have been drawn from the material before the employer. In Parker v Capitol Painters & Decorators Pty Ltd (68 IR 100 at 104, 12 September 1996) Connor C similarly defined the terms as follows: HARSH: too severe, having regard to all the circumstances.

UNREASONABLE: immoderate, excessive or extravagant.

UNJUST: unfair, inequitable, undeserved or biased. Having established that each element of the expression has its own independent meaning, it is axiomatic when the expression is applied to a particular case, and set of circumstances, that not all of the three terms might be evident. In aliis verbis , a particular dismissal might be found to be 'harsh', but not 'unreasonable' or 'unjust'. Other variations might be found. This notion has been considered in a number of authorities to which I now refer. In Byrne & Anor v Australian Airlines (High Court, 11 October 1995 185 CLR 410) the expression 'harsh, unjust or unreasonable' was considered in the context of an award provision. In their joint judgment, McHugh and Gummow JJ said at p465: It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted. The principle was further discussed in Outboard World v Muir ( Cahill VP, Peterson J and Tabbaa C , 51 IR 167 at 182) where a Full Commission said: First we deal with the argument for the appellant that the Commission erred by applying the wrong test in connection with the dismissal: 'unfair' rather than 'harsh, unreasonable or unjust' dismissal. We agree with Mr Reitano's submission in this respect that the reference by the Commissioner to "unfairness" did not represent any misunderstanding of the correct test but was merely the use of a shortened form of expression intended to embrace the three relevant words. Whilst we recognise that there may be a natural tendency (recognised in the use even by the advocate for the Company before the Commissioner of the term 'unfair') to use the shortened form, we consider that it is preferable that a member of the Commission utilise the precise words provided by s246, rather than the catch-all heading, particularly when expressing the basis for a finding that a dismissal is within one or more of the heads provided by the section. We take this view because, even though there may be some circularity in the full phrase 'harsh, unreasonable or unjust', we detect scope for variation of meaning which may be critical to the determination of a particular matter and may be obscured by the use of the substitute term "unfair". Different but not wholly dissimilar words, "unfair", "harsh", and "unconscionable", are used in s275, power of the Industrial Court to Declare Certain Contracts Void, of the 1991 Act. In relation to those words, then appearing in s88F of the 1940 Act, the Commission in Court Session (Perrignon, Cahill and Dey JJ) in A & M Thompson Pty Ltd v Total Australia Ltd [1980] AR (NSW) 399 at 418 (Cahill J delivering a separate judgment) said: The duty of the Commission is to reach a conclusion on the issues of whether the subject transaction is 'unfair', or 'harsh' or 'unconscionable'.

It has been said that those words are a 'tautological trinity' ( Davis v General Transport Development Pty Ltd ) [1967] AR 371) but we prefer to take the view that there is a perceptible difference between the meaning of the term 'unfair' and that of the terms 'harsh' and 'unconscionable'. What is unfair may not be so unfair as to be 'harsh'. But, whether this view be correct or not, once the transaction is found to be unfair the Commission may proceed to exercise its very wide power. In much the same way, we consider that, while strict definitions of 'harsh', 'unreasonable' and 'unjust' may produce a degree of circularity of meaning, turning on the notion of 'fairness', it may be in a given case that a dismissal may be viewed as coming within the ambit of one of the three adjectives but not the others. To avoid the possibility of misunderstanding or error, the tribunal, when making that primary finding, should state explicitly the basis on which it is made.

A contemporary authority reaffirming this principle is to be found in Bankstown City Council and Paris ( Wright P, Peterson J and Bishop C, IRC262 of 1999, 23 August, 1999). The Full Bench said at p20: The Commissioner found that the dismissal by the Council of Mr Paris was 'harsh, unreasonable or unjust'. This phrase, contained within s84, is an important key to jurisdiction and does require some specifity of finding. As has been observed by the Commission on numerous occasions, a dismissal may be capable of being unreasonable but not harsh, or harsh but not unjust, other permutations may apply. In the present case, however, it seems to us that the dismissal of Mr Paris was capable of meeting not one or the other of those descriptions but each of them. Therefore, nothing turns upon the expression adopted by the Commissioner. We would observe that in a case where the conduct of the employer might satisfy one but not all of those heads, a positive and specific finding should be made.

82 What then of the circumstances here disclosed? Was the dismissal "harsh, or unreasonable, or unjust?" Did the dismissal attract all three descriptors? 83 The evidence in this case leads me to make the following findings:

1. The applicant was dismissed unilaterally and without warning. There was no reasonable basis for the applicant's dismissal.

2. The employer made no attempt to properly investigate the complaint it had against the applicant.

3. The complaint - even if it was soundly based - was an insufficient basis for dismissal.

4. The employer made no attempt to reconsider its decision, even though it was made in the heat of the moment.

5. The employer readily acknowledged that the applicant was a good salesperson.

6. The applicant has suffered severe personal anguish, distress and humiliation as a consequence of the employer's unwarranted behaviour.

7. The applicant has suffered considerable economic loss as a result of her dismissal.

8. There is no evidence of any performance, or attitude related counsellings or warnings.

9. As an afterthought, the respondent criticised the applicant for taking time off for personal reasons. This complaint had never been raised with the applicant. It was a poor attempt to bolster the respondent's otherwise weak position. 84 It will come as no surprise from the aforementioned findings, that this was a dismissal which could only be described as "harsh and unreasonable and unjust" within the meaning of Pt 6 ch 2 of the Act.

Procedural Fairness 85 A number of the matters the Commission has just referred to can be appropriately regarded as procedural failings flowing directly from the employer's mishandling of the situation. A dismissal, of course, can be both procedurally and substantively unfair. For the relevant authorities on this proposition, I refer to the oft quoted High Court judgment in Byrne & Anor v Australian Airlines (1995) 185 CLR 410 at p465:

The distinction between procedure and substance is elusive. This is so even in those fields of private international law, the statute law dealing with limitations of actions and the effect of repeal upon accrued rights, and the Statute of Frauds, where it has an entrenched operation (217). In our view, it is unhelpful and contrary to the tenor of the Award to introduce it into cl.11(a). That is not to say that the steps taken, or not taken, before termination may not in a given case be relevant to consideration of whether the state of affairs that was produced was harsh, unjust or unreasonable. Thus, it has been said that a decision which is the product of unfair procedures may be arbitrary, irrational or unreasonable (218).

But the question under cl.11(a) is whether, in all the circumstances, the termination of employment disobeyed the injunction that it not be harsh, unjust or unreasonable. That is not answered by imposing a disjunction between procedure and substance. It is important that matters not be decided simply by looking at the first issue before there is seen to be any need to enter upon the second

86 A more recent Full Bench decision reaffirmed the basis upon which procedural matters might be considered in the context of an alleged unfair dismissal. In Antonakopoulis v State Bank (1999) 91 IR 385, the Commission said at p389: We agree with the conclusion of Hill J that procedural issues, that is failure to deal with the matter in a procedurally fair way, may, in certain cases, of themselves, constitute the basis for a determination that a dismissal is harsh, unjust or unreasonable. A failure to adopt a procedure which constitutes a breach of 'an essential prerequisite to, or inviolable limitation on, the exercise of the employer's right to dismiss' or a failure to afford procedural fairness which causes a 'substantial and irrevocable prejudice to the employee' will often vitiate the decision of an employer and warrant, in itself, a determination that the dismissal was harsh, unreasonable or unjust (and hence, establish the basis for a remedy under the Act). Further, a decision to dismiss made upon the basis of procedures which are unfair and where an innocent explanation or other appropriate explanation is reasonably available will normally constitute a firm basis for a determination that a dismissal, so effected, is harsh, unreasonable or unjust. and later, at page 390: While the findings of the Commission in Buckman focus on the issue of warnings, the observations apply also to broader tenets of procedural fairness contemplated in s88 and to matters such as those raised in these proceedings. We agree that there is no obligation in the Act to follow any particular procedure when effecting a dismissal. However, a failure by an employer to adopt appropriate procedures when effecting a dismissal, or a failure to follow procedures prescribed in an industrial instrument, or in procedures laid down administratively by an employer, may be properly taken into account by the Commission as part of the consideration of an application brought under s84. Further, as we have noted, where procedures are specified in an industrial instrument or by administrative action, a failure by an employer to apply, or to properly apply, those procedures may in appropriate cases, of itself, support a finding that the dismissal was harsh, unreasonable or unjust .

87 As mentioned in the above passage, the Commission has a statutory basis for considering procedural issues. s88 of the Act is this basis: 88 In determining the applicant's claim, the Commission may, if appropriate take into account:

a) whether a reason for the dismissal was given to the applicant and, if the applicant sought but was refused reinstatement or re-employment with the employer, whether a reason was given for the refusal to reinstate or re-employ, and

b) if any such reason was given - its nature, whether it had a basis in fact, and whether the applicant was given an opportunity to make out a defence or give an explanation for his or her behaviour or to justify his or her reinstatement or re-employment, and c) whether a warning of unsatisfactory performance was given before the dismissal, and

d) the nature of the duties of the applicant immediately before the dismissal and, if the applicant sought but was refused reinstatement or re-employment, the likely nature of those duties if the applicant were to be reinstated or re-employed, and

e) whether or not the applicant requested reinstatement or re-employment with the employer, and

f) such other matters as the Commission considers relevant

88 In summary, the Commission finds that the dismissal of the applicant was both procedurally and substantively unfair, being "harsh, unreasonable and unjust" within the meaning of Pt 6 ch 2 of the Act and consistent with the relevant authorities of this Commission. 89 Having considered the practicality of reinstatement in such a poisonous atmosphere, I have no hesitation in rejecting this as a remedy for the applicant. Compensation is therefore demanded as the only practical remedy. I propose to so order. 90 In addition to the factors earlier referred to, I have also taken into account the applicant's age, economic circumstances and restrictions on her securing comparable alternative work. 91 The Commission was invited to place considerable weight on the prohibition placed on the applicant, by virtue of her letter of appointment, such as to restrict her, for two years and within a 500 kilometre radius, from seeking work in the employer's line of business. While these contractual terms might well attract a conclusion of being unreasonable or oppressive, such a claim is not for the Commission, as presently constituted, to determine. The applicant may have such other rights to relief in respect to this restriction as she may take upon advisement. I have, nevertheless, taken the practical impact of these restrictions into account pursuant to s88(f).

92 Pursuant to s89(5) of the Act, the Commission orders that:

1. The respondent, Contact Point International Pty Ltd, shall pay to the applicant, Lynette Sandra Sams, an amount of sixteen weeks salary based on a rate of $769.23 per week.

2. The above amount shall be paid within twenty-one days of today.

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