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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Nikolas Rutherford Peacock and Calandra Pty Ltd (ACN 009 547 353) and Elizabeth Ann Zak
Long service leave dispute - domestic or other pressing necessity - arbitration - order made REASONS FOR DECISION Introduction On the 27 August 1997, Mr Nikolas Rutherford Peacock, a dental mechanic, resigned his employment with Calandra Pty Ltd (ACN 009 547 353) and Elizabeth Ann Zak (as Trustee for E A Zak Family Trust), trading as Metzler and Zak Dental Laboratory and Chrom-Tec. He did so, after just over 10½ years service, because:1 "The importance of my immediate family has become utmost in my mind. I will be looking after my daughter, Jessica, full time as I believe the flexibility of my employment with you does not allow me to fulfil my obvious obligations.". Calandra Pty Ltd accepted Mr Peacock's resignation, but declined his request for payment of pro rata long service leave entitlements. The employer's view was that Mr Peacock's reason for resigning did not fall within guidelines established by the Long Service Leave Act 1976. Mr Peacock responded to that decision by referring the matter to the Chief Executive, Workplace Standards Authority. In doing so, he claimed the reason for his resignation constituted a domestic necessity of the kind for which Section 8(3)(c) of the Long Service Leave Act1976 makes provision, ie: "an employee who terminates his employment on account of incapacity or domestic or other pressing necessity of such a nature as to justify the termination of that employment". An Authority inspector, Mr R E Leeson, investigated Mr Peacock's complaint but could not resolve the matter. For that reason the Chief Executive, acting in accordance with Section 13 of the Long Service Leave Act 1976, referred the dispute to this Commission for hearing and determination. Contentions Mr A Wilson appeared for Mr Peacock. He acknowledged that, under Section 8(3)(c) of the Act, the onus fell on his client to demonstrate that the need to look after Jessica, his three-year-old daughter, comprised a "domestic" or "pressing necessity" and, consequently, the compelling reason for his resignation. Mr J Bremner, who appeared for Calandra Pty Ltd, added that, having regard to the decided cases, Mr Peacock must also satisfy the Commission that:2 (a) his reason for resigning was a genuinely held belief, not merely a colourful rationalisation designed to elicit gain; (b) his belief was the sole and genuinely motivating reason for terminating his employment; and (c) a reasonable person, in the applicant's position, would feel compelled to end his or her employment. The evidence establishes that, before his resignation, both Mr Peacock and his wife were gainfully employed persons. It is also clear that problems associated with Jessica's care occupied their attention for nearly two years before Mr Peacock's resignation3. About six months before that event, it appears, Mrs Peacock changed from full-time to part-time employment4 because, in Mr Peacock's words, "we'd been having troubles with Jessica for a period of time"5. According to Mr Peacock, the then existing arrangements for Jessica's care and management had broken down to the extent that:6
Mr Peacock said he and his wife discussed the problem for some time and tried several solutions aimed at overcoming their difficulties. In the end, he said, it got to the stage where they took a joint decision that Jessica needed full-time care at home by one of her parents. After weighing the matter carefully the Peacocks decided Mr Peacock should be the one to resign because, according to Mr Leeson's report:7 "... his wife's employment attracted a number of benefits from the Bank; his (presumed) entitlement to long service leave where his wife had none yet; and their entitlements to certain social security benefits (his wife's level of income being just under the cut off level for these and his income exceeded the entitlement threshold)." Mr Peacock's evidence is that, immediately following his resignation, he began to look after and care for Jessica on a full-time basis.8 Those home duties, he said, he maintains to the present day9 and expects to continue to do so until Jessica starts full-time schooling.10 He also testified that, because of these arrangements, Jessica's situation improved dramatically.11 The facts and circumstances surrounding Mr Peacock at the relevant time, Mr Wilson submitted, show that his reasons for ending his employment satisfy the requirements of Section 8(3)(c) of the Long Service Leave Act 1976. They do so, according to Mr Wilson, because the Peacocks' need to better provide for the care and well being of their daughter Jessica comprised a "domestic or other pressing necessity of such a nature as to justify the termination of that employment". The employer took no issue with the contentions raised in relation to Mr Peacock's daughter. Indeed, I was told that if Jessica were the sole and only motivating reason for Mr Peacock's action, the employer would "quite happily pay long service leave due".12 However, the employer's contention is that Jessica was not the sole or motivating reason behind Mr Peacock ending his employment with Calandra Pty Ltd. In support of that contention Mr Bremner asserted that Mr Peacock:
This evidence, Mr Bremner said, establishes that Mr Peacock's actions were occasioned by simple economic choice and not by any compelling domestic necessity such as the need to care for his daughter. In that regard, I was told the evidence discloses that husband and wife, having discussed the matter, decided upon a course of action best suited to their economic advantage. That is to say, as I understand Mr Bremner, they took into account the incentives flowing to Mrs Peacock from the Bank, the absence of any long service leave entitlement accruing to Mrs Peacock, and the capacity of Mr Peacock to pursue his own business at home. In reality, according to Mr Bremner, the circumstances surrounding Mr Peacock at the time of his resignation do not disclose any compelling necessity for him to take such action. All the evidence shows, he said, is that Mr Peacock faced a question of choice. On the authority of Keenan v Minister Administering the Tasmanian State Service Act 1984, he said, choice does not lead to "necessity" of the kind envisaged by Section 8(3)(c) of the Long Service Leave Act 1976. Findings In my view, the evidence establishes a prima facie case in Mr Peacock's favour. That conclusion, I believe, draws support from the employer's concession that it would accept Mr Peacock's claim, were the need to care for Jessica his "sole and only motivating reason" for resigning. In those circumstances, I accept Mr Wilson's contention that the onus shifted to the employer to demonstrate there was a motivating reason for Mr Peacock's resignation other than the one he advanced. Neither Mr Wilson nor Mr Bremner put any submissions to me concerning the point in time at which I should weigh the evidence for purposes of determining any entitlement Mr Peacock might have to long service leave. In the circumstances, since both relied on events that occurred after Mr Peacock's resignation, I assume that my task is to weigh the evidence as it stood at the time of the hearing. Acting on that assumption, I go now to the first of the grounds relied upon by the employer, that is, in brief, Mr Peacock had completed his qualifications and "was ready to move on". There is no doubt that Mr Peacock is a qualified dental prosthetist who need only apply for and obtain registration should he wish to commence practice in his own right.24 Mr Peacock's achievements in that regard appear significantly in the employer's conclusion, at the time, that he was resigning to gain financial advantage. Witness Zak explained the partners' reasoning this way:25 "... it seemed rather strange that Mr Peacock, having just finished his registration course, was leaving and our assumption would have been that in the near future he would have been opening up somewhere, working for dentists or working for himself and that the reasons stated were a little bit unbelievable in that at the time ... his wife was only working three days a week." Witness Zak said that, in addition to their disbelief of the reasons advanced by Mr Peacock, he and his partners, in making their assumptions, also relied on the fact that Mr Peacock already possessed "the equipment to be able to set himself up"26 in private practice. Mr Zak confirmed, however, that the partners formed their views without benefit of advice from Mr Peacock as to his future intentions27 in that regard. From a personal point of view, Mr Zak admitted that, while he had some knowledge of the Peacocks' problems with Jessica, he had no in-depth knowledge of their financial circumstances. There is other evidence that Mr Peacock apparently had something in mind, at one time or another, about private practice. Witness Hartalis said Mr Peacock told her he did not want to stay with the firm when registered, that "he wanted his own surgery" and that he mentioned part-time employment to her "numerous times".28 However, in cross-examination, Ms Hartalis conceded that Mr Peacock did not qualify his comments by reference to time.29 Mr Peacock's evidence on this issue is that he admitted to having "all the tools of my trade". However, he denied having a complete workshop set up at home30 and said he had no intention at the time of his resignation, or any present intention, to establish a dental prosthesis practice.31 The evidence upon which the employer relied in support of this ground appears to me to be, at best, insubstantial. The only "hard" evidence offered is that, at the time, Mrs Peacock was working part-time; Mr Peacock's admission that, since resigning, he had worked for others (an issue that I deal with below); and the recollections of witness Hartalis that he asked her to go and work for him. The remaining evidence, it seems to me, is merely the employer's assumption that, according to witness Zak, he and his partners drew without asking Mr Peacock for his views and in the absence of any in-depth knowledge of the family's financial circumstances. To the contrary, there is the uncontested evidence of the family's problems with Jessica, of which Mr Zak admitted he had some knowledge. What weight, if any, he or the partnership gave that knowledge when concluding that the reason for Mr Peacock's resignation was one of financial gain is not a matter of evidence. In my opinion, looking at all the facts and circumstances, the preponderance of evidence, even at the time of Mr Peacock's resignation, notwithstanding the nature of Mrs Peacock's employment and Ms Hartalis' observations, weigh heavily in favour of the reason he advanced for his resignation. That finding attracts confirmatory support from the unchallenged evidence that, following his resignation, Mrs Peacock obtained full-time employment32 and Mr Peacock did not set up in private practice as the employer expected. Rather, he commenced and continued to care for Jessica on a full-time basis, an occupation that Mr Peacock said he intends to pursue until Jessica starts full-time schooling. The second of the grounds upon which the employer relied is the allegation that, having rejected an offer of part-time employment, Mr Peacock worked with other dental mechanics and did free-lance work. Mr Peacock's evidence is that there were "no discussions of any part-time work or anything like that".33 Witness Zak, however, distinctly remembered Mr Metzler asking Mr Peacock about part-time work and his (Peacock's) response, ie. "that's not an option".34 Although Mr Zak said Ms Hartalis was also present at the time, Mr Bremner did not ask her during examination-in-chief to recall her memory of the particular discussion. I have no reason to disbelieve either Mr Peacock or Mr Zak regarding this evidence. In general, I found both of them to be co-operative witnesses who, with one exception in the case of Mr Peacock, answered the questions put to them in a candid manner and to the best of their recollection. In the circumstances, since it does no harm to Mr Peacock to do so, I believe my approach should be to weigh the evidence from the point of view that most favours the employer, ie. that Mr Metzler offered Mr Peacock part-time employment. Assuming, therefore, that there was such an offer, I accept Mr Wilson's contention that, in the circumstances, it was an irrelevant factor. In coming to that conclusion, I rely on the observations of Watling C in Brazendale v Elphin Continental Cakes, where the facts were similar to those of the present case, that:35 "Mrs Brazendale was entitled to accept or reject the employer's offer to take up, what I believe to be a new contract of employment, at some future undetermined date. Her eligibility for pro-rata long service leave was not contingent upon a return to work in a part-time capacity." Concerning work of a professional nature undertaken since his resignation Mr Peacock, in cross-examination, denied doing any dental prosthesis work.36 He did agree, however, quite openly and without equivocation, to having worked as a "technician or mechanic" for another dental mechanic and to having "done some work for my wife".37 In re-direct examination, Mr Peacock explained that he also did "a small amount of lab work" for a dentist to cover the cost of some dental work for his wife.38 As to the work done for a dental mechanic, he said:39 "I did approximately five or six hours work before Christmas for a friend - a mechanic friend to help him out. It was over a period of two mornings. That particular time was most fortunate for me because Rachel [Mrs Peacock] happened to be at home for those days..." Mr Peacock then went on to confirm that the above episodes comprised the only professional work done by him since resigning his employment. I accept Mr Peacock's explanations. In my opinion, in the circumstances, the tasks undertaken by him reflect nothing more than isolated instances of occasional or casual work. The two events do not convey to me any impression of a pattern of part-time or free-lance work, on the part of Mr Peacock, that is indicative of him establishing his own practice or working for himself in the sense mentioned by Mr Zak. The next ground relied on by the employer, in short terms, is that although technically proficient, Mr Peacock "was not a good employee". In considering this ground I also consider, because it is convenient to do so, those allegations that Mr Peacock was pilfering expensive dental material and had done his own work in the employer's time. Mr Zak's evidence in this regard is that Mr Peacock:
Mr Peacock denied being unhelpful and unco-operative at work; he rejected as "outrageous" the suggestion that he would not perform tasks he believed to be beneath him; and he denied doing his own work in Company time.44 He also denied "rubbishing" his employer to other people.45 With the exception of the "rubbishing" issue, there is no reason for me to disbelieve the evidence of either witness regarding Mr Peacock's attitude in the workplace. In the circumstances, I believe that, again, since it does no harm to Mr Peacock, I should weigh the evidence from the point of view that most favours the employer, ie. that Mr Peacock was, at least in the sense of being difficult, "not a good employee". The "rubbishing" issue lends itself more easily to resolution. I found Mr Peacock extremely evasive and uncooperative with Mr Bremner on this point. Although, in re-direct examination, Mr Peacock continued to deny the allegation, I formed the view that his evidence was entirely unconvincing. Accordingly, I find that, most likely, Mr Peacock did denigrate the professional ability of one of his employer's customers. Then, next, there is the question of Mr Peacock's alleged misuse of Company product. Mr Peacock admitted to taking the Company's product in the form of "dental bits and pieces ... for the course patients and so forth that I was doing".46 It is clear from the evidence of witness Hartalis that she believed Mr Peacock was using Company materials for inappropriate purposes,47 for which reason she voiced her concern to Mr Zak, Mrs Zak and Mr Metzler.48 It is equally clear that Mr Zak believed Ms Hartalis although, in cross-examination, he did concede that he had no actual proof of wrongdoing against Mr Peacock.49 Mr Zak said that he raised the issue with Mr Metzler who, in turn, discussed the matter with Mr Peacock. The latter having denied any knowledge of such an activity, the partners decided they did not want "a great big inquiry" because they hoped the practice would stop.50 There is a problem with this line of evidence in that, early in his evidence, Mr Zak volunteered the observation that, during his years of professional training, the Company permitted Mr Peacock to see private patients at the workplace.51 This was clearly a qualified privilege for purposes of Mr Peacock's professional training, the expectation being, apparently, that the patient would remunerate the Company.52 It is equally plain as a matter of inference, despite Mr Peacock's explanation to the contrary, that neither Mr Zak nor Ms Hartalis held the belief that Mr Peacock's admitted use of Company materials was solely for course work purposes. The problem to which I earlier referred is this. Given the existence of Mr Peacock's qualified privilege regarding private patients, I can make nothing of the Company's allegation of pilfering. That circumstance arises because the evidence simply does not allow me to distinguish between permitted use of the materials in question (the qualified privilege) or a misuse of the kind alleged by the Company. Since I cannot take this matter any further, it is perhaps fortunate that, in my opinion, I do not need to attempt do so. It is clear from the evidence of witness Zak that the partnership never counselled or admonished Mr Peacock, or took disciplinary action against him for any reason during his entire period of employment. However, Mr Zak made it plain it was not he, but Mr Metzler, who apparently tolerated Mr Peacock's workplace attitude.53 In any event, Mr Zak agreed in cross-examination that Mr Peacock's attitude at work had no impact on whether he resigned for financial gain or to care for his daughter. Having regard to this evidence, Mr Wilson's submission was that the employer's allegations that Mr Peacock was "not a good employee", pilfered Company materials and did his own work in the employer's time, are irrelevant to the question now before the Commission. I accept Mr Wilson's submission because, as he said, in the absence of any employer counselling, admonition or disciplinary action at the relevant time, the employer's grounds all arise ex post facto Mr Peacock's decision to end his employment. As such, in my opinion, they do not bear on whether Mr Peacock resigned for financial gain or to care for his daughter. There was other information also available to the Company at the particular time:
Some of this information, most notably Mr Zak's dissatisfaction with Mr Peacock's attitude and performance, clearly arose over time. Other events, however, were contemporaneous, or very nearly so, with Mr Peacock's decision to resign. When viewed as a whole, all these matters - remembering my earlier assumptions and that Mr Peacock rejected some of Mr Zak's allegations - nevertheless tend to suggest a decaying employment relationship between Mr Peacock and the firm's partners, particularly Mr Zak. I suspect the partners felt those matters very keenly given that, as Mr Bremner submitted, the evidence (which I accept) shows the Company went out of its way to demonstrate generosity and kindness towards Mr Peacock.58 For example, the partners helped him through his apprenticeship59 and gave him a "gift" of $500 at the time of his resignation because he "was going to be struggling on the amount of money that we gave him".60 The Company even allowed him to return to the workplace, post resignation, to complete his registration year.61 They did this, apparently, because while Mr Peacock was a difficult employee he was, nevertheless, a technically excellent worker.62 In these circumstances, it is understandable that, being left to form their own conclusions, the partners concluded Mr Peacock wanted to resign for purposes of financial gain. From their point of view, in the absence of any assistance from Mr Peacock as to full details of his position, it is easy to see why the partners decided as they did. It likely seemed to them, I think, that the weight of evidence, as they saw it, had little to do with Mr Peacock's need to care for his daughter. The further knowledge, received later, that Mr Peacock was accepting work from other dental mechanics and doing free-lance work most likely, in my view, reinforced their conclusion. The facts and circumstances discussed above show quite clearly the basis of the employer's conclusion that Mr Peacock resigned for purposes of financial gain. It remains to be seen, however, whether that conclusion is so sufficiently grounded in fact, rather than assumption, that it should displace my earlier finding that "the evidence establishes a prima facie case in Mr Peacock's favour".63 I turn now to consider that issue. In my opinion, the employer's conclusion that Mr Peacock resigned for purposes of monetary gain is, upon analysis of the relevant facts and circumstances, without substance for the following reasons. The evidence is that Mr Peacock did not open up his own practice or, in the business sense perceived by the partners, start working for dentists. Rather, he became and remains the full-time home carer that, in his letter of resignation, he said he wanted to be. He expects to continue this role. In that context, in my opinion, it is not relevant that, at the time, Mrs Peacock was working only three days per week. That is not a consideration, in my view, that falls within the employer's prerogative. It is, as Commissioner Watling observed in Withers v Industrial Transmission and Engineering Supplies Pty Ltd,64 a matter solely for the parents themselves, ie: "When deciding their future and the future of their children, I believe parents have a fundamental right to choose whether or not their children will be cared for by themselves or some other person". The offer of part-time employment, even should I give it full weight in the employer's favour, does not assist the Company. That is because, for reasons already advanced, such a representation constitutes an offer of a new contract of employment, which Mr Peacock was free to either accept of reject. The professional work that Mr Peacock did for other persons, in my opinion in the particular circumstances, does not support the employer's assumption that he was in the course of either opening his own practice or working for himself in the commercial sense assigned to him by the Company. All the other grounds upon which the Company relied, taken at their highest value, do not assist the employer because, for reasons discussed above, they do not bear on the question of whether Mr Peacock resigned for financial gain or to care for his daughter. At best, they serve only to illustrate why the partners formed the conclusions they did. It was reasonable, in my opinion, for them to so decide. For that outcome, Mr Peacock has only himself to blame. I say this because, since he was applying to the employer for special consideration in his favour, the obligation fell upon him to put forward his best and most detailed case. While Mr Zak, or any of the partners for that matter, might have asked Mr Peacock for further details they were not, strictly speaking, obliged to do anything more than they did, ie. to merely consider the facts put to them. Mr Peacock, however, chose not to give the partners the benefit of all the details that he might have done. In so acting, I suspect he confirmed the employer's judgment that he was a difficult employee and contributed to the assessment they formed of his reasons for resigning. Understandable though these reasons are they do not, when weighed against all the facts and circumstances, support the employer's contention that Mr Peacock resigned for purposes of financial gain. They have that colour, in my judgment, because their basis, for the most part, rests on the employer's assumptions rather than on the facts. As such, they do not support the contention that Mr Peacock had a choice of the kind referred to in Keenan.65 Accordingly, having regard to all the evidence, I find that:
Having regard to these further findings, I confirm my prima facie finding. That is, in resigning from his employment to look after his daughter Jessica, Mr Peacock, in terms of Section 8(3)(c) of the Long Service leave Act 1976, terminated his employment on account of "domestic or other pressing necessity" that was of such a nature as to justify him terminating his employment. Before making the Order sought by the applicant in this matter, I pause to briefly mention the issue of the $500 "gift". At first glance that amount appears to be a "bonus"66 given "in lieu of an entitlement to pro rata long service leave".67 However, the better evidence, that of Mr Zak, is that the sum does indeed represent a "gift" given to Mr Peacock by the partners in recognition of the fact that "he wasn't getting a lot of money".68 In the circumstances, and in the absence of any submissions on the point, I believe it is not open to me to speculate what the employer might or might not have done had it decided to grant rather than reject Mr Peacock's long service leave claim. ORDER: PURSUANT TO the power conferred on me by Section 13(3) of the Long Service Leave Act 1976 I HEREBY ORDER that Calandra Pty Ltd (ACN 009 547 353) and Elizabeth Ann Zak (as Trustee for E A Zak Family Trust), trading as Metzler and Zak Dental Laboratory and Chrom-Tec, of 4 Mathers Lane, Hobart, Tasmania 7000 pay to former employee Mr Nikolas Rutherford Peacock of 17 Allardice Avenue, Goodwood, Tasmania, 7010 the sum of Five Thousand Five Hundred and Eighty-Eight Dollars and Thirteen Cents ($5,588.13) for accrued pro rata long service leave entitlement, such payment to be made on or before close of business Tuesday 12 May 1998.
B R Johnson Appearances: Date and place of hearing: 1 Letter of resignation dated 20 August 1997. |
