Rose v East Coast Conveyancing

1 This matter was subject to arbitration proceedings at Wauchope on 20 July 2001 in accordance with directions issued following unsuccessful attempts to resolve the matter in conciliation. 2 Mr K Byrnes, Solicitor of Kevin Byrnes and Associates, appeared on behalf of Ms Joan Rose, the applicant. Mr T Cox, Solicitor of Paul Bollen and Associates, appeared on behalf of East Coast Conveyancing, the respondent. 3 Mr Byrnes brought evidence from Ms Rose. Mr Cox brought evidence form Mr Adrian Richards, principal of the respondent; Mrs Sue Richards, spouse and business partner of Mr Adrian Richards; and Ms Merrilyn Page, the current manager of the respondent's Port Macquarie office. THE FACTS

4 Ms Rose deposed that she commenced employment with the respondent at its Port Macquarie office in June 1999. Prior to this engagement she had worked as a legal secretary for approximately 28 years, predominantly in the areas of conveyancing and mortgage work. 5 Ms Rose's evidence is that in May 1999 she was employed on a full time basis as a legal secretary/conveyancer having resided in the Port Macquarie region for some 16 years, having worked for a number of legal firms in the region during her 16 years of residence. Ms Rose's evidence is that she was well known to real estate agents and solicitors in the local area. 6 Ms Rose deposed that in April 1999 she was made aware by a real estate agent that the respondent was to open an office in Port Macquarie. The real estate agent sought her interest in employment by the respondent. Ms Rose expressed an interest and was subsequently contacted by Mr Richards which led to an interview with he and Mrs Richards. Ms Rose's evidence is that at this interview she was informed that the respondent was seeking an experienced person to "run the show with minimal supervision". 7 Ms Rose's evidence is that during her pre-employment interview Mr Richards said to her:

" We are aware that you are not a licensed Conveyancer. If you decide to obtain your licence we will pay the cost of the external studies required." 8 Ms Rose was subsequently offered and accepted employment. It is her evidence that: I worked in the Port Macquarie Office with Monica Simpson. Monica was employed as a Receptionist/Clerk/Junior employee. Adrian Richards visited the Port Macquarie Office approximately once per week for a few hours at a time. Otherwise I was in charge. If I had any queries I would ring Mr Richards. Ordinarily however I would conduct a matter from start to finish without any involvement from Mr Richards. 9 It is Ms Rose's evidence that the volume of work increased over the period June to December 1999, which she put was largely due to her personal contact with real estate agents in the area. Ms Rose deposed that in November 1999 there was discussion with Mr Richards who indicated to her that he was looking to employ another conveyancer. In late 1999 Ms Page, a licensed conveyancer, was engaged and commenced work at the Port Macquarie office. 10 Ms Rose deposed that just prior to the 1999 Christmas break Mr Richards informed her that a person had been employed as a conveyancer in the Forster office, that this person was undertaking study to become a licensed conveyancer, and would be employed to work at the Port Macquarie office in late January or early February 2000. Ms Susan Chamberlain subsequently commenced employment in the Port Macquarie office. 11 Shortly after the commencement of Ms Chamberlain's employment Ms Page was promoted to Branch Manager 12 The evidence of Ms Rose is that she was concerned during the early part of 2000 that there was insufficient work for three conveyancers in the Port Macquarie office. 13 Ms Rose's evidence is that on 5 April 2000 she was injured during the course of her duties. She did not take time off immediately, however the disability continued to the point where she became unfit for work from 29 May to 19 June 2000. On her return to work on 19 June 2000 she found that she continued to suffer from the effects of the injury. She consulted her treating medical practitioner on 27 June 2000 who certified her as being unfit for work until 11 July 2000. 14 Ms Rose resumed employment on 11 July 2000 pursuant to a return to work program managed by the Commonwealth Rehabilitation Service. Her evidence is that she made slow but steady progress and was able to return to full time employment on 3 October 2000. 15 Ms Rose's evidence is that on 10 October 2000 she was called to a meeting with Mrs Richards and Ms Page. Mrs Richards informed her that her position was redundant, providing her with written confirmation, and asked her to leave the office immediately. The notice of redundancy is attachment A to Ms Rose's affidavit of evidence (ex 1) and is reproduced below:

"Joan Rose c/- East Coast Conveyancing

It is with regret that it has become necessary to make your position redundant.

As we have discussed previously the Port Macquarie office is not achieving the figures we had hoped for and the recent down turn in the economy has put further pressure on the profitability of the branch.

We have decided we can no longer sustain three conveyancers at the office.

Our reason for selecting your position to become redundant is due to the fact the other conveyancers are or have the potential to obtain a conveyancing license. Merrilyn is already licensed and Susan has the opportunity to obtain her license next March. This is highly beneficial to our firm as we have the opportunity of always having a licensed property conveyancer in the office during holiday periods without the need for Adrian to be constantly on call.

As per the clerical award under which you work we will deposit this weeks pay as well as 5 weeks redundancy pay into your account on Thursday along with any outstanding holiday pay.

We wish you well in your future. If you require a reference please contact me at home on (telephone no. provided)

Yours faithfully Sue Richards Operations Manager" 16 Ms Rose deposed that she was shocked at this development as she had been given no prior notice or warning concerning the security of her employment. She deposed that she was unable to find employment between 10 October 2000 and 3 March 2001, despite an active pursuit of employment in that period. 17 Ms Rose's evidence is that on 3 March 2001 she and her partner took up a lease on a hotel at Coominya in Queensland where she has been occupied to date. She concludes her affidavit in the following terms: 33. At no time was I advised by either Mr or Mrs Richards that my employment was dependent upon a Conveyancers Licence. At no time was I advised that my position was in jeopardy because I did not have a Conveyancers Licence. At no time was I advised that I would be the first person "put off" because I did not have a Conveyancers Licence. Had any of the above been made known to me I would either not have taken the position or alternatively I would have applied for a Conveyancers Licence. 18 The evidence of Mr Richards (ex 2) is that he is principle of East Coast Conveyancing which currently operates offices in Newcastle, Forster, Taree, Port Macquarie and Toronto. 19 The evidence of Mr Richards is that the Forster office was opened in 1992, the Newcastle office in 1997, the Port Macquarie office in June 1999, the Taree office in July 1999 and the Toronto office in April 2001. 20 The evidence of Mr Richards is that numbers of employees have remained somewhat stable with the exception of an expansion in the Newcastle office from six to eight or nine employees and the opening of the Toronto office in recent times. 21 Ms Rose was not offered any of the positions which became available subsequent to the termination of her employment. 22 Mr Richards accepted that there was an increase in the amount of work in the Port Macquarie office during the period June to December 1999, which he deposed was not due to Ms Rose but was the consequence of a buoyant real estate market combined with a strong marketing campaign undertaken by him, and the fact that his business offered "cut price conveyancing" which he put was at a significantly reduced rate compared to conveyancing charges by legal firms in Port Macquarie. 23 Mr Richards deposed that there was sufficient work to justify the position of a third conveyancer in the Port Macquarie office in February 2000. He deposed that the decision to make a position redundant came after a realisation that a strong down turn in the market, caused primarily in his opinion by the introduction of the GST on 1 July 2000, was having a highly adverse effect on the number of conveyancing transactions being handled by the Port Macquarie office. 24 Mr Richards relied upon work analysis figures (attached to ex 2) which he put showed that the number of conveyancing matters settled in the Port Macquarie office fell from 67 in June 2000 to 30 in July 2000 and continued at that rate for the following three months. 25 Mr Richards deposed that on Ms Rose's return to full time work on 3 October 2000 three was insufficient work and that a redundancy was necessary to the viability of the Port Macquarie office. 26 Mr Richards deposed that he, Mrs Richards and Ms Page came to the conclusion that Ms Rose was the appropriate candidate for redundancy rather than Ms Chamberlain. He deposed that the option of Ms Page being made redundant was not open as she was the only licensed conveyancer in the Port Macquarie office and he was extremely pleased with the way in which she performed her role as office manager. 27 Mr Richards expanded upon this explanation in the following terms (para 8 ex 2): Whilst it was never a requirement that the conveyancers employed by the business had to be licenced, the fact that Susan Chamberlain was expected to complete her studies in law in March 2001, such that she could then apply to become a Licenced Conveyancer, offered the Port Macquarie office some distinct advantage over that of the applicant. Susan Chamberlain has now satisfactorily completed her studies in law. 28 Mr Richards conceded that Ms Rose had received no notice or warning of the prospect of redundancy and had been required to leave the premises immediately due to concerns he held that if she remained she could cause problems in respect to conveyancing matters under her control. 29 In cross examination there was considerable examination of the figures relied upon by Mr Richards, found in ex 2. The figures represent data from July 1999 to October 2000. Exhibit 6 is the same data extended to June 2001. These are repeated below: MONTH & YEAR ACTIVE NOT TOTAL ACTIVE EXCHANGED NO. SETTLED 1999 - 2000 MATTERS PROCEEDING MATTERS IN MONTH IN MONTH 1999 JULY 12 0 12 5 10 AUGUST 25 2 23 22 4 SEPTEMBER 22 3 19 21 19 OCTOBER 29 5 24 21 11 NOVEMBER 31 1 30 29 18 DECEMBER 33 1 32 24 32 2000 JANUARY 43 5 38 29 28 FEBRUARY 55 4 51 49 28 MARCH 49 1 48 46 49 APRIL 44 3 41 39 38 MAY 53 4 49 52 49 JUNE 41 4 37 34 67 JULY 45 4 41 48 30 AUGUST 38 4 34 30 34 SEPTEMBER 38 1 37 38 35 OCTOBER 51 8 43 36 28 NOVEMBER 51 2 49 30 37 DECEMBER 32 3 29 28 51 2001 JANUARY 59 7 52 35 37 FEBRUARY 62 6 56 57 36 MARCH 56 4 52 46 57 APRIL 72 4 68 44 48 MAY 80 5 75 65 56 JUNE 81 11 70 67 56 30

In cross examination by Mr Byrnes Mr Richards deposed that as well as settlements and active matters, those not proceeding and exchanged matters were relevant to consideration of the volume of work and the projection of future work which influenced staffing decisions. 31 The evidence of Mrs Richards and Ms Page generally confirmed that of Ms Rose and Mr Richards. SUBMISSIONS 32 Mr Byrnes submitted that the redundancy was a sham, proven, in his argument, by analysis of the settlement figures taken from the evidence of Mr Richards. Mr Byrnes provided a chronology of relevant events interspersed with settlement figures (ex 7) in the following terms: Settlements

June 1999 Applicant commences employment July 1999 10 August 1999 4 September 1999 19 October 1999 11 November 1999 18 29 November 1999 Susan Chamberlain employed 30 November 1999 Merillyn Page employed December1999 32 January 2000 28 February 2000 28 March 49 April 2000 38 May 2000 49 June 2000 67 July 2000 30 August 2000 34 September 2000 35 October 2000 28 10 October 2000 Applicant dismissed November 2000 37 December 2000 51 January 2001 37 February 2001 36 March 2001 57 2 April 2001 Julie Shields employed April 2001 48 3 May put ad in paper re receptionist/conveyancing clerk "Office expanding" May 2001 56 June 2001 56

18 June Cory Darcy employed 33 In analysing the number of settlements, Mr Byrnes submitted that the figures leading to the appointment of Ms Page and Ms Chamberlain were rising from 10 to 18 over the period July to November 1999, with 32 recorded in December 1999. Mr Byrnes put that on this level of business the respondent deposed that there was adequate work for three employees in the Port Macquarie Office; yet in October 2000, with settlements in the high 20's and low 30's and subsequently rising to 50, the consideration, without consultation or notice to Ms Rose, was that there was not enough work and that she should be made redundant. 34 Mr Byrnes submitted that the argument against the genuineness of the redundancy is further supported by subsequent settlement numbers and the employment in the period March 2001 through June 2001 of two additional staff members. 35 Mr Byrnes submitted that Ms Rose was denied substantive and procedural fairness, emphasising that she was invited to leave a secure position to join the respondent's organisation with an implied promise of long term employment. Mr Byrnes put that there was no argument from the respondent that Ms Rose had failed to carry out her duties in an efficient and effective manner. 36 Mr Byrnes referred me to Re The Holy Family School, Lindfield re Dismissal of Teacher (1975) 75 AR 991 wherein it was held that termination due to a lack of qualifications was unfair. At p994 Dey J said: I agree with the commissioner that to terminate, because of the lack of academic qualifications, the employment of a teacher who had been teaching acceptably at the school without them, without warning her that her employment would be terminated unless she took steps to become so qualified, was to treat her unfairly. It seems to me too, that the other reasons, raised for the first time at the hearing, do not cancel out the injustice of the dismissal. 37 Mr Byrnes also relied upon the decision of Mr Commissioner Buckley in Clancy v Owen Carney Co-Op Limited (Matter No 1952 of 1993, 18 March 1994 unreported) in which Buckley CC held that a seasonal worker of many years experience, dismissed due to his inability to deal with more complex machinery, was unfairly dismissed as he had not been consulted concerning his technical deficiency or offered any training to adapt. 38 Mr Cox put that the onus of proof lay on the applicant to establish the allegation that redundancy was not genuine. 39 Mr Cox submitted that the analysis of the business performance and prospects must be taken from a view of matters exchanged, as settlement would not be expected for some weeks, and total active matters which indicated the current business activity; and that this analysis is much more reliable than matters settled in the month. 40 Mr Cox submitted that an appropriate projection of future activity for the consideration of staffing matters is the sharp down turn in matters exchanged following the introduction of the Goods and Services Tax (GST) in July 2000, which reflects in a decline in total active matters and a subsequent decline in matters settled. This, Mr Cox submitted, combined to reveal declining activity and a restriction in revenue supporting redundancy. 41 Mr Cox submitted that the applicant was the appropriate employee to be made redundant as she held no qualifications or prospect thereof. Mr Cox submitted that a unique feature of the respondent's operations is that all employees carry out identical work. 42 Mr Cox noted that to become a licensed conveyancer, a two year course must be taken, putting that the prospect that the applicant obtain qualifications had not offered a timely resolution to the immediate problem. 43 Mr Cox referred me to a decision of Mr Commissioner Connor in the matter of Buchanan v Australian International English College (Matter No 1938 of 1993, unreported) which holds that it is a matter for the employer to select the best employee. 44 Mr Cox submitted that the prospect of re-employment did not arise for some seven months after the termination of the applicant's employment, which corresponded with a significant up turn in total active matters in April, May and June of 2001. 45 Mr Cox submitted that the termination of the applicant's employment was not harsh, unreasonable or unjust and that at worst the respondent's actions in asking the applicant to leave immediately and not giving a proper warning would be at the lower end of the scale of procedural unfairness; though, in his submission, justified by the sensitive nature of the work undertaken and the consequence of error. 46 Mr Byrnes, in reply, referred me to a decision of Mr Commissioner Shields in Wildey v Asset Developments (Matter No IRC 1238 of 1994, 27 July 1994, unreported). 47 Mr Byrnes put that the argument advanced by the respondent of financial imperative is not supported in these proceedings by any commercial information whatsoever.

CONSIDERATION 48 The arguments advanced by Mr Byrnes effectively defeat the assertion that the termination of Ms Rose's employment was due to a genuine redundancy. On any analysis the level of business activity, current and projected, was higher at the time the applicant was terminated than at the time Ms Page and Ms Chamberlain were employed. 49 The argument that there was a downturn in July following introduction of the GST may be supported by total active matters, however this had recovered to exceed pre-GST levels by October 2000. 50 The failure of the respondent to make an offer to the applicant to take up any one of the positions subsequently becoming vacant further reinforces a view that the respondent did not wish the applicant to remain in his employ. The failure to consult and provide notice further compounds the harsh and unjust nature of the termination of Ms Rose's employment. 51 I find the termination of the applicant's employment to be harsh, unreasonable and unjust. 52 I find that neither reinstatement nor re-employment are practical and determine compensation of an amount equal to 21 weeks pay, discounted by the five weeks paid on termination, at the stated weekly wage of $730.74, being the amount of $11,691.84. oo0oo

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: HARRISON DP Monday, 20 August 2001 Matter No IRC 5187 of 2000

Application re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 ORDER

Pursuant to s89(5) of the Industrial Relations Act 1996 East Coast Conveyancing is ordered to pay Ms Joan Elaine Rose the amount of $11,691.84 (eleven thousand six hundred and ninety one dollars and eighty four cents) within 21 days of the date of this decision. I so order.

The Hon. R W Harrison Deputy President

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.