Nevidal v. Allworth Constructions Pty Limited [2005] NSWIRComm 1123

APPLICANT applicant appeared in person LEGAL REPRESENTATIVES:

RESPONDENT Stephen Thompson

DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Zuzana Nevidal and Allworth Constructions Pty Limited

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

1 Pursuant to the provisions of Part 6, Unfair Dismissals, of Chapter 2, Employment [Ss.83 to 90] of the 1996 Industrial Relations Act, Mrs Zuzana Nevidal has lodged an application concerning the termination of her services as a new homes consultant with Allworth Constructions Pty Limited. She commenced employment on Thursday, 4 December, 2003 and her services terminated on Friday, 7 January, 2005. Mrs Nevidal resigned when she refused a transfer to another position. Nevertheless, in her Part 6 application she has claimed the termination of her services was unfair. The matter was allocated to me by Registry staff and set down by them for a conciliation and directions hearing on Thursday, 17 February, 2005.

2 Mrs Nevidal's resignation raises issues which go to the heart of my jurisdiction under Part 6. S.84(1), the central plank of Part 6, applies only to cases where:

"…an employer dismisses an employee and the employee claims the dismissal is harsh, unreasonable or unjust…"

It is trite to say that a resignation is not a dismissal for the purposes of Part 6, except to the extent that it is forced on the resigning employee by her employer, ie it is a constructive dismissal [ Health and Building Surveyors' Association of New South Wales v. Strathfield Municipal Council (1998) 25 IR 359 at pp.365 and 366]. Mrs Nevidal has claimed that she was constructively dismissed.

3 In her Part 6 application Mrs Nevidal has sought monetary compensation under S.89(5). I understand that she has commenced alternative employment three weeks after the termination of her services and is receiving in her new job remuneration marginally greater than the remuneration she received whilst she worked for Allworth. S.89(5) is concerned with loss of earnings. As McKenna C indicated in Henderson v. Rural Lands Protection Board (1997) 74 IR 142 at p.150, the purpose of monetary compensation in Part 6 proceedings:

"…is not to enrich an applicant nor to punish a respondent. Rather, as the remedy indicates, the purpose of the remedy of compensation is to compensate for losses occasioned by a harsh, unreasonable or unjust dismissal..."

The prima facie position for Mrs Nevidal, therefore, would be the restriction of her claim for monetary compensation to the remuneration she received over a period of only three weeks. Nevertheless, if her claim has substance, she would be entitled to monetary compensation, albeit a modest sum.

4 Conciliation failed to settle the matter. I programmed it for arbitration in a hearing on Thursday, 28 July, 2005. In the hearing Mrs Nevidal was represented by her husband and Allworth was represented by Mr Stephen Thompson, its managing director. The evidence in the hearing was derived essentially from two sources - a summary of evidence prepared by Mr Nevidal on behalf of his wife and statutory declarations provided by Mr Thompson. Mrs Nevidal and Mr Thompson also gave limited oral evidence at my request.

5 Mrs Nevidal was engaged by Allworth at the Kellyville Exhibition Centre and her letter of appointment which sets out the terms of her employment records that she was to be located at that site. However, after group sales meetings on Friday, 3 December, 2004 and Friday, 10 December, 2004 Mr Thompson informed Mrs Nevidal of his decision to transfer her employment as a sales consultant to a display centre at Bonnyrigg. I understand that the Bonnyrigg display centre is a smaller operation than the Kellyville display centre. Mrs Nevidal claimed that Mr Thompson informed her that the transfer was necessary because of a downturn in business. She subsequently came to doubt that claim, however.

6 Mrs Nevidal informed Mr Thompson that she would consider a temporary transfer on a rotational basis with other sales personnel. But that rotation was subsequently rejected by Mr Thompson at a further meeting on Friday, 17 December, 2004. Mr Thompson suggested instead that he would review the position in three months time but such a review would be no guarantee that she would ultimately be returning to the display centre in Kellyville. During that meeting it was alleged by Mrs Nevidal that Mr Thompson unintentionally revealed that a former employee was to be re-hired to replace her at the Kellyville display centre.

7 According to Mr Thompson, Mrs Nevidal telephoned Mr Thompson on or about Wednesday, 5 January, 2005 to indicate that she would accept the transfer and would start there on Saturday, 8 January, 2005. Mr Thompson recorded in the statutory declaration that formed the basis of his evidence in this hearing that he had concluded from Mrs Nevidal's conduct at a sales meeting arranged early in 2005 that she was "...upbeat and confident..." concerning her transfer, that she had been visiting agents and developers locally sourcing land stocks and had organised new signage for the display centre in Bonnyrigg. A fellow employee recorded in a statutory declaration which was admitted into evidence that Mrs Nevidal:

"...told me that she didn't mind working at this office because it was quieter and she was used to working in this environment as she had previously worked in this type of office before. Also adding that the travelling was not a problem..."

That statutory declaration was admitted into evidence without the need for the employee who made it to be called.

8 However, on Friday, 28 January, 2005 she approached Mr Thompson after a further group sales meeting and handed him a letter of resignation. Mrs Nevidal's letter of resignation, dated Friday, 28 January, 2005 is in clear terms, viz:

"...Hereby I tender my resignation from Allworth Homes. The unilateral transfer of my employment from Kellyville to Bonnyrigg is a fundamental change to the terms and conditions of my employment, which I do not accept. My contract of employment was specifically for the Kellyville Display Centre. Disregarding the above, you forced me to move from Kellyville to Bonnyrigg to '...make room...' for your former employee and during our three meetings in December, 2004 you conducted yourself in a very dishonest manner where, until the last meeting, you kept denying the real reason for the transfer. Your actions amount to a constructive dismissal and accordingly I will file an application for relief...for unfair dismissal..."

9 Mrs Nevidal's letter of resignation then goes on to say that:

"...during the investigation of the legality of your action, it was brought to my attention that I have not been paid any locomotion allowance at all. Consequently, hereby I request that I be paid the weekly locomotion allowance in accordance with the Real Estate Industry (State) Award... According to the above award, for my vehicle of 2,500cc engine capacity, which is over 5 years old, I was entitled to a locomotion allowance of $135.00. Hereby I request that the locomotion allowance is backdated from the start of my employment with Allworth Homes..."

By virtue of S.380(1) I hold jurisdiction to hear and determine a small claim, ie the recovery of remuneration owed up to a ceiling of $10,000.00, viz:

"An industrial organisation may, during any proceedings before the Commission, make an application for an order under this Part and for the application to be dealt with under S.379."

But as the words I have emphasised above indicate, an individual employee is not authorised to proceed before me in Part 6 proceedings for the recovery of remuneration owed. The right to do so is confined to an "industrial organisation", ie a trade union representing its member - a position which has been confirmed by the Full Bench of the Commission (Glynn and Hungerford JJ and Connor C) in its unreported decision of Wednesday, 10 February, 1999 in Maldoc Pty Limited v. Bollard [Matter No. IRC 2710 of 1997].

10 As the Full Bench of the Commission (Peterson and Marks JJ and Connor CC) commented in Allison v. Bega Valley Council (1995) 63 IR 68 at p.72:

"…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, their employer appears to have given his or her resignation? …"

11 A constructive dismissal may arise from an ostensible resignation in the following three situations:

(i) where the resignation is forced by duress [ Mohazab v. Dick Smith Electronics Pty Limited (1995) 62 IR 200; (ii) where the resignation constitutes a refusal of an employee to accept a unilateral decision of his employer to demote him or act to the detriment of his employment [ Russian v. Woolworths (South Australia) Pty Limited (1995) 64 IR 169]; or (iii) where the resignation is a "squeezing out, ie making an employer's position so intolerable that he is forced to resign [ Nettlefold v. Kym Smoker Pty Limited (1995) 64 IR 169].

Mrs Nevidal has based her Part 6 application on the unilateral decision by Allworth to vary her employment in a manner inconsistent with her contract of employment. It does not appear to me that the change was really to her detriment, however. Mrs Nevidal insists that a fundamental condition of her contract of employment with Allworth was her engagement at a particular location - Kellyville. But was that really the case? I do not believe so.

12 In my unreported decision of Tuesday, 7 May, 1996 in Mann v. Side Cafes Pty Limited [Matter No.IRC 413 of 1996] I concluded that a transfer of an employee constituted an unfair dismissal, commenting (at pp.3 and 4) as follows:

"…(The respondent employer) asserted in the hearing that, since (the applicant employee) had been offered alternative work and had declined that work, the termination of his services was not a dismissal for the purposes of (the equivalent to Part 6 in the 1991 Industrial Relations Act). The fact is that the transfer of (the applicant) to the work at the Narrabeen cafe involved a substantial reduction in salary for him, ie it was, in effect, a demotion. Is such a demotion categorised as a dismissal…? I believe that it was… Much now depends upon whether a demotion constitutes such a break in the contract of employment, and its replacement with another contract of employment, so as to constitute a dismissal… That will depend upon the facts of each case. In this case I hold no doubts that it did. (The respondent) was unilaterally changing the terms of the original contract of employment for (the applicant) to (his) detriment and against (his) wishes…"

13 But Mr Thompson has assured Mrs Nevidal (and me in his oral evidence in this hearing) that there was no element of demotion associated with Mrs Nevidal's transfer from Kellyville to Bonnyrigg. I would believe that the transfer would have been geographically acceptable (although Mr Nevidal suggested in his submissions that it was not). The distance to and from Mrs Nevidal's residence to Bonnyrigg is not excessive, in my opinion. Her level of remuneration and status would appear to have remained the same. Mr Thompson has claimed that the sales numbers for the four months before Mrs Nevidal's transfer at Kellyville and Bonnyrigg were comparable and, consequently, commissions from both display centres would have been likely to have been the same. Moreover, it would appear from the evidence that Mrs Nevidal initially accepted the transfer, albeit reluctantly, and later changed her mind.

14 Although reference was made in her letter of appointment to her being located at Kellyville, I am satisfied that did not constitute a fundamental condition of her employment. Ordinarily, an employer would be entitled to retain the right to move staff to other positions within its organisation within the range of work expected of that staff and to locations which should not represent a major problem in travel. Mr Thompson pointed out that the each display centre had a limited life. As a consequence, if employment with Allworth was restricted only to work in particular locations, the employment would come to an end when that position was abolished. It is much better for an employer to preserve the right to transfer staff rather than to dismiss them.

15 For those reasons, I see no grounds for my intervention in support of Mrs Nevidal and I decline to do so. I dismiss her Part 6 application.

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