House v The King

Industrial Relations Commission (NSW)|1999-08-12|Before: Walton J, Sams DP, Schmidt J, Mr Trevor J, Walton VP

CITATION : Trevor John Bates and Gundagai District Services Club. Application by Trevor John Bates for leave to appeal and appeal against a decision of Commissioner Connor given on 12 August 1999 in Matter No IRC2112 of 1998 [2000] NSWIRComm 22 PARTIES : Trevor John Bates Gundagai District Services Club FILE NUMBER: 4710 of 1999 CORAM: Walton J Vice-President; Sams DP; Redman C Termination of employment- appeal - nature of appeal - whether actions of employer constituted a dismissal - principles of constructive dismissal. CATCHWORDS : Held, leave to appeal granted - findings of fact reasonably open to Commissioner at first instance - no error of principle or law - employee not dismissed - matter not within jurisdiction of the Commission - appeal dismissed. LEGISLATION CITED : Industrial Relations Act 1996 House v The King (1936) 55 CLR 499 Mace v Murray (1955) 92 CLR 370 Re Solicitors (State) Award (No 3) (1997) 72 IR 225 at 234 Stone Microsystems (Aust) Pty Ltd v Kwong (1997) 42 NSWLR 160 at 163 Allison v Bega Valley Council (1995) 63 IR 68 Mohazab v Dick Smith Electronics Pty Ltd (1995) CASES CITED : 62 IR 200 Russian v Woolworths (SA) Pty Ltd (1995) 64 IR 169 Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370 Clark v Pittwater RSL Club Limited (1998) 84 IR 309 Claric 218 Pty Ltd t/as Sanity Music v Meldrum (1998) 91 IR 296 St Vincents Hospital Sydney Pty Limited v Harris (1998) 81 IR 173 Lorna Britton v Riverstone Public School (unreported Schmidt J, Sams DP and McLeay C, Matter IRC5504 of 1999, 6 May 1999) HEARING DATES: 11/29/1999; 11/30/1999 DATE OF JUDGMENT: 04/14/2000

APPLICANT Mr T Bates RESPONDENT LEGAL REPRESENTATIVES: Mr C Moore (Barrister) SOLICITORS Pryor Tzannes and Wallis with Murphy and Maloney Solicitors

JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Trevor John Bates and Gundagai District Services Club

Application by Trevor John Bates for leave to appeal and appeal against a decision of Commissioner Connor given on 12 August 1999 in Matter No IRC2112 of 1998

1 This is an application for leave to appeal and appeal by Trevor John Bates ("the appellant") against a decision of Connor C on 12 August 1999 in IRC98/2112. The decision appealed against concerned an application lodged by the appellant in which he alleged that he was constructively dismissed by the Gundagai District Services Club, on or about 6 April 1998, and that the dismissal was "harsh, unreasonable or unjust" in terms of s84 of the Industrial Relations Act 1996 ("the Act"). He sought relief in the form of reinstatement, re-employment or, alternatively, monetary compensation in lieu thereof, pursuant to s89 of the Act. 2 Shortly put, Connor C defined the issue to be determined as whether, Mr Bates was dismissed from his employment - an issue, correctly stated by the Commissioner, as fundamental to his jurisdiction to entertain the claim. We shall shortly discuss the Commissioner's consideration of the evidence and his findings; suffice to observe at this point that the Commissioner concluded there had been no dismissal and, therefore, no jurisdiction under s84 of the Act for the Commission to deal with the matter.

BACKGROUND 3 The appellant, Mr Trevor J Bates, was employed from 9 May 1997 as Secretary Manager of the Gundagai District Services Club ("the Club"). The appellant was paid according to the Club Manager's (State) Award but claims he was entitled to a payment of a fixed amount of overtime equivalent to eight hours for weekend work. He maintains that this amount was inherited from his predecessor, Mr Slater. While it was acknowledged that there was no formal authorisation for its week on week payment, the Club was aware of its existence and did not question it, until it became the main allegation of misconduct against him in April 1998. The Club refuted the appellant's understanding of the basis of his remuneration. 4 On 6 April 1998 a heated exchange occurred between the Club President, Mr Mitchell, and the appellant concerning a Board meeting the next day convened to discuss a report prepared by Mr Nick Barry from the Registered Clubs Association concerning the financial affairs and other arrangements of the Club (the "Barry" Report). 5 The appellant had not been invited to the meeting, despite his remuneration being one of the topics of discussion. The "Barry" Report was critical of the operational capacity of the appellant and in one passage proposed that the "Board should consider dispensing with his services". There was no reference to the overtime issue or any allegation of misconduct. 6 It was in the 6 April exchange that the appellant maintains he was dismissed by Mr Mitchell. The appellant continued to attend the Club premises, at various times up to 14 April, when he received a letter suspending him from duty and requiring him to attend a meeting of the Board on 17 April, where he would be required to "show cause why his employment should not be terminated for irregularities in the manner in which he had instructed the office supervisor to recompense him and other irregularities relative to his employment". 7 The evidence disclosed that some time prior to 14 April, a Mr Elphick observed a new deadlock on the front door entrance to the Club. He spoke to Mr Mitchell, and was informed by him, that it was to deny access to the appellant. Mr Mitchell had said "I don't want him in here. He's finished as far as I am concerned". Mr Mitchell denied this conversation. 8 The Board meeting of 17 April 1998 did not take place as planned. However, a meeting between Board members and Mr Barry was held on this day which was taped. A copy of the transcript was tendered in the proceedings below. 9 Mr Mitchell wrote to the appellant on 17 April, expressing concern with his non attendance at the meeting and asking for answers to a number of specific questions. 10 The appellant replied on 21 April indicating he intended to pursue a claim, through his union, before the Industrial Relations Commission. He declined to answer the questions. 11 The appellant filed his unfair dismissal application on 27 April 1998. 12 On 27 April, Mr Mitchell wrote again to the appellant identifying that his actions in not attending for work, refusal to respond to the 17 April letter and the removal of his personal effects led him (Mr Mitchell) to believe that he had resigned or abandoned his employment. 13 The appellant responded on 29 April requesting confirmation of his reinstatement. 14 On 30 April Mr Mitchell wrote again to the appellant denying the appellant had been dismissed, or threatened with dismissal, on 6 April and seeking responses to his letter of 14 April which would be considered by the Board.

LEAVE TO APPEAL 15 Section 188 of the Act provides: (1) An appeal to a Full Bench of the Commission under this Part may be made only with the leave of the Full Bench. (2) The Full Bench is to grant leave to appeal if, in its opinion, the matter is of such importance that, in the public interest, leave should be granted. (3) The Full Bench may deal with an application for leave to appeal separately and without conducting a hearing into the merits of the appeal. 16 When considered in the context of the jurisdictional question as to whether or not a dismissal had been effected and, in particular, the issue as to whether the appellant had been constructively dismissed, we consider that the matter is of sufficient importance as to warrant leave to appeal being granted pursuant to s188(2). Leave is granted accordingly. We consider then the merits of the appeal.

NATURE OF APPEAL 17 An appeal against a decision of a single member of the Commission brought pursuant to s187 is governed by the provisions of Pt 6 of ch 7 of the Act. In particular, s191 provides: 191 Nature of appeal (1) An appeal to a Full Bench of the Commission under this Part is not by way of a new hearing and is to be determined on the evidence and material adduced in relation to the decision appealed against. (2) However, the Full Bench may, by leave, receive further evidence if it considers that special grounds exist or if the evidence concerns matters occurring after the decision appealed against. (3) To avoid doubt, the Full Bench cannot merely substitute its decision on the matter, but must follow the principles applying to appeals from discretionary decisions, whether or not further evidence is received. 18 Under this provision, appeals against a discretionary decision are to proceed on the basis of the principles in House v The King (1936) 55 CLR 499 and Mace v Murray (1955) 92 CLR 370, whereas appeals against other decisions are to proceed on the basis of ordinary principles governing appeals against findings of facts or determinations of law: see Re Solicitors (State) Award (No 3) (1997) 72 IR 225 at 234 and Stone Microsystems (Aust) Pty Ltd v Kwong (1997) 42 NSWLR 160 at 163. THE COMMISSIONER'S DECISION 19 The Commissioner considered that the appellant's position at the club "was very tenuous" and there may possibly have been a threat of dismissal up to 6 April, 1998. However, this threat was said to have been overtaken by events: In this hearing, events have clearly overtaken any threat of dismissal. The evidence supports the contention that there has been a severance of the contract of employment. Both Mr Bates and the club accept that to be the position in spite of the fact that there is no formal acknowledgment of that fact in correspondence from Mr Mitchell. But I do not consider that Mr Mitchell dismissed Mr Bates on Monday, 6 April 1998 or at any other time. 20 In considering whether there had been a "constructive dismissal", the Commissioner referred to Allison v Bega Valley Council (1995) 63 IR 68, Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200, Russian v Woolworths (SA) Pty Ltd (1995) 64 IR 169 and Nettlefold v Kym Smoker Pty Ltd (1996) 69 IR 370 and then said: I consider that Mr Bates jumped the starter's gun. He was not dismissed (although it was highly likely that the board may ultimately come to that conclusion); he was not forced to resign; there was no unilateral and detrimental variation to the conditions of his employment (although that was possibly in the pipeline); nor was he being "squeezed out" by making his conditions of employment intolerable. 21 In dismissing the application, the Commissioner stated: For these reasons I consider that Mr Bates' Part 6 application is beyond my jurisdiction. Furthermore, I would add that if the termination of Mr Bates' employment was properly categorised as a dismissal for the purpose of Part 6, it would not, in my opinion, be a case for my intervention to support of him. I therefore dismiss his Part 6 application. 22 We note also the Commissioner found many inconsistencies in the appellant's evidence and did not accept him as a credible witness.

RELEVANT PRINCIPLES 23 In Clark v Pittwater RSL Club Limited (1998) 84 IR 309, it was confirmed that the issue as to whether a dismissal has occurred is a question of fact. The Full Bench stated (at 312): We conclude, therefore, that on the basis of the evidence available to the Commissioner the only conclusion open to him was that the appellant had been dismissed by the respondent from his employment as a receptionist/doorperson and that jurisdiction existed under s84 to determine the matter on the merits. The error committed by the Commissioner derived, at least in part, from the erroneous view taken by him as to the nature of the question he had to decide. As noted above, the Commissioner saw the issue of whether there was a dismissal as a question of law and further, the question of law was answered by reference to, and reliance upon, the decision of Connor C in Charara v Mac's Liquor. The relevant question is one of fact. See, for example Allison v Bega Valley Council (1995) 63 IR 68 at 72-73; the approach of Madgwick J in Westen v Union des Assurances de Paris (Industrial Relations Court of Australia No. NI 2819/1995, 28 August 1996, unreported) at pages 3-5 and that of the Full Industrial Relations Court of Australia ( Wilcox CJ., von Doussa and Marshall JJ) in Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 142 ALR 99 at 106. See also, by way of analogy, the recent judgement of a Full Bench of this Commission in Clarkson v Dent (1998) 84 IR 250.

Although there are aspects of the decision in Charara which might lead to the view that the issue there considered (demotion or dismissal) was approached on the basis that it was a question of law, nevertheless a passage at page 8 of the decision makes plain that the issue was to "be determined in the light of its own particular facts".

24 The principles to be applied in determining what constitutes a constructive dismissal have been the subject of consideration in a number of decisions of this Commission. In Allison v Bega Valley Council, the Full Bench stated (at 72): 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 determination was effectively initiated by the employer or by the employee, particularly where the dynamics within a factual situation may change. For example, an employer may demand a resignation with a threat of dismissal, negotiations may then ensue and the employee may ultimately be genuinely pleased with the outcome of those negotiations to the extent that any resultant resignation may be said to be given freely and without any undue influence being brought to bear by the employer. Where an employee initiates the termination of the contract of employment it is necessary to consider whether that ostensible act of termination was given freely and without any undue pressure. If the ostensible resignation is, in effect, a response to and consistent with a desire by an employer that such resignation be forthcoming, then what has occurred may be that the termination has been brought about by the employer and that in this way the employee has been dismissed.

25 The principle distilled from Allison is whether the employer's actions or behaviour were such as to render its conduct as the real and effective initiator of the termination of employment. Put more simply, a constructive dismissal is a termination of employment brought about by reason of the employer's conduct. See also Claric 218 Pty Ltd t/as Sanity Music v Meldrum (1998) 91 IR 296, St Vincents Hospital Sydney Pty Limited v Harris (1998) 81 IR 173, Clark v Pittwater RSL Club Ltd and Lorna Britton v Riverstone Public School (unreported Schmidt J, Sams DP and McLeay C, Matter IRC5504 of 1999, 6 May 1999).

Was there a dismissal? 26 We find no relevant error in the Commissioner's decision warranting appellate intervention. We consider that the findings of fact made by the Commissioner were reasonably open to him and there was no error of principle or law. 27 In particular we consider that the following factual matters indicate that a dismissal did not occur in this case:

i) The conversation of 6 April 1998 between the appellant and Mr Mitchell was inconclusive as to whether the appellant was dismissed at that time. It was open to the Commissioner to accept Mr Mitchell's version of the conversation which really indicated that subsequent steps were required to be taken before the question of dismissal could be properly considered; the new material introduced in the proceedings does not, in our view, warrant a contrary conclusion to that reached by the Commissioner.

ii) The appellant continued to attend the club (apparently for service) subsequent to 6 April, raising a question as to whether or not he believed he was dismissed. He had attended the club on 14 April, in his own words, " for duty ".

iii) The appellant took sick leave subsequent to 6 April and secured medical certificates to cover his work absence.

iv) The correspondence from the Club of 14 April (and subsequently) refers to him being suspended from duty pending further consideration.

v) The Club proceeded with a process designed to address whether a dismissal should occur. 28 However, we are moved to mention one aspect of this case which causes us some concern. It relates to the taped meeting of 17 April, involving Mr Barry and various club directors. The uncontested recorded conversations of this meeting make it clear that the procedure adopted was one in which those present had effectively prejudged the appellant's alleged misdemeanours, and found him guilty, before he had an opportunity to defend himself. We have given consideration as to whether these events may have warranted a finding that the club constructively dismissed the appellant at the meeting. However, this meeting was not a Board meeting, and sufficiently left open the issue of whether the appellant would be dismissed. As such, it would not, in our view, warrant us interfering with the Commissioner's decision on jurisdiction.

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