T7146 - 29 September
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Michael Charles Hoskinson and Tamar Valley Wines
Industrial dispute - termination of employment - valid reason for termination - denial of procedural fairness - s31(1B) of the Act - Articles 4 and 7 of the ILO Convention - reinstatement impractical - compensation ordered REASONS FOR DECISION Introduction In this matter, Mr M C Hoskinson alleged Tamar Valley Wines (the Company) unfairly dismissed him on Wednesday, 23 July 1997. Mr Hoskinson said there was no reason for his dismissal because the Company never told him his work was unsatisfactory. I concluded hearing Mr Hoskinson's evidentiary case on 8 December 1997. At that point, Mr S McElwaine submitted the application was outside the Commission's jurisdiction. The evidence, he said, did not disclose a termination of employment at the initiative of the employer. I published my Reasons for Interim Decision on 12 May 1998. In that decision, I found that "Mr Hoskinson's dismissal on Wednesday 23 July 1997 constituted a termination of employment at the initiative of the employer."1 I described the relevant fact situation in the following terms:
The hearing resumed on 20 July 1998. Contentions R Holder for the applicant: Tamar Valley Wines unfairly dismissed the applicant. In dismissing him the Company failed to afford him procedural fairness and did not give him a valid reason for terminating his employment. The evidence is that the Company gave the applicant no warnings at all. In particular, Mr Hoskinson received no warning that his work performance was unsatisfactory or that the Company might terminate his employment for that reason. The applicant "put in a good day's work"8 and kept up with other workers. For the first five weeks of his period of employment the Company permitted Mr Hoskinson and his fellow employees to finish work each Friday at 1:30pm. However, on 23 July 1997, the Company's supervisor, Ms C Mahoney, told Mr Hoskinson and other employees that for the next 15 weeks their Friday finish time would be 4:00pm. The employer's action in that regard constituted a unilateral change of Mr Hoskinson's conditions of employment. Mr Hoskinson told Ms Mahoney he needed to finish at 1:30pm the following Friday (25 July 1997). The evidence is that Ms Mahoney left the scene before Mr Hoskinson could give his reason for wanting to finish at 1:30pm instead of 4:00pm that particular Friday. In the circumstances, the Company did not give Mr Hoskinson an opportunity to explain his response to the changed conditions of employment. The uncontested evidence is that the Company required Mr Hoskinson to work a minimum of 152 hours per month. Looking at each month individually, the changed conditions of employment, which introduced a 40-hour week, effectively required Mr Hoskinson to work 160 hours per month. In that regard, the Company acted contrary to Mr Hoskinson's original terms of employment, which required him to work a minimum of 152 hours per month. The evidence is that Ms Mahoney dismissed Mr Hoskinson on 23 July 1997 by telling him, in effect, that instead of "knocking-off" at 1:30pm on the coming Friday he could finish straightaway. Ms Mahoney did not explain to Mr Hoskinson that she was dismissing him because of unsatisfactory work performance. Indeed, the evidence is that Ms Mahoney never made a statement of any kind regarding the unsatisfactory nature of Mr Hoskinson's work performance. In the circumstances, the Company clearly did not give Mr Hoskinson a valid reason for terminating his employment. Mr Hoskinson's evidence is that he is agreeable to reinstatement. In that regard he is ready and willing to complete his duties, should the Commission find the Company unfairly dismissed him. However, should the Commission find that reinstatement is impractical, an order requiring the Company to pay compensation to Mr Hoskinson would be appropriate. Because Mr Hoskinson's original period of employment was 20 weeks, the minimum amount of such an order should be 15 weeks' wages, the unexpired portion of that term. From that amount, the Commission should deduct unemployment benefits to the value of $290 a fortnight that Mr Hoskinson received during the relevant period. S B McElwaine for the respondent: Mr Hoskinson's contract of employment was for a specific task, ie to do and finish pruning from June for a period of 20 weeks. The contract was also one for a defined period of 20 weeks. To ensure best levels of productivity the employer needed to prune the vines while they were dormant and to complete that task before spring "bud burst" commenced.9 At the time of Mr Hoskinson's dismissal, the evidence is that he and his fellow workers were down on their hours and falling behind schedule. Ms Mahoney's evidence is that hours were down, not only for the week but also in overall terms, because of wet weather and absenteeism. Mr Hoskinson's contract of employment-like those of his workmates-required him to work a minimum of 152 hours each month throughout the 20 weeks' term of the contract. In the circumstances it was entirely within the employer's prerogative to inform Mr Hoskinson that, instead of finishing early at 1:30pm, he would need to work until 4:00pm each Friday. The employer's actions, consequently, do not constitute a unilateral change in the terms and conditions of Mr Hoskinson's contract of employment. It was open to Mr Hoskinson to explain to Ms Mahoney that he could not meet the new work requirements because "I had a taxation appointment at 2 o'clock to get my tax done".10 However, he said nothing to Ms Mahoney. The evidence is that on the day of his dismissal, although he had some time from about 11:00 or 11:30am to 2:00pm to do so, he chose not to communicate his reason to Ms Mahoney. Indeed, even after his dismissal, Mr Hoskinson decided it was not in his best interests to say anything.11 When Mr Hoskinson and his workmates walked off the job, Ms Mahoney tried to call them back. Her further evidence is that she was willing to discuss having them back as employees.12 Those are the actions of a reasonable employer. The employer clearly dismissed Mr Hoskinson because he insisted on finishing at 1:30pm on the particular Friday, despite being told to finish work at 4:00pm. However, the Commission might want to conclude that the employer did not tell Mr Hoskinson of the reason for its action in a manner to which he could reasonably respond before dismissal actually took place. In such circumstances, each case must stand on its own facts. The Commission should assess the events as they occurred in the vineyard at the time and not from the vantage point of some 12 months later. Even if the employer failed to give Mr Hoskinson a reasonable opportunity to respond, there was no substantive denial of procedural fairness-merely a technical denial. That distinction has an important bearing on the question of remedy. There was little likelihood of Mr Hoskinson's employment continuing, even if Ms Mahoney had given him a clear opportunity to defend himself. Ms Mahoney's unchallenged evidence on this point is that Mr Hoskinson:
In such cases the former Industrial Relations Court of Australia awarded only nominal compensation-see, for example, Davis v Portseal Pty Limited19 and Kenefick v The Australian Submarine Corporation Pty Ltd.20 In this case, the Commission cannot order reinstatement because:
As to compensation, the Commission should apply a substantial discount to the applicant's claim of 15 weeks-the unexpired portion of Mr Hoskinson's initial 20 weeks' engagement. The Commission cannot assume Mr Hoskinson's continued status as an employee for the balance of the 20 weeks' period. Because of his work performance and attitude it is highly probable that Mr Hoskinson's period of employment would have ended before the 20 weeks' period expired. The Commission must remember that Mr Hoskinson was a casual employee with no guarantee of long-term employment. The amount of any such discount is a matter for the Commission's judgment on the facts. In addition, after taking into account Mr Hoskinson's wages of $410 per week before dismissal the Commission should allow for the DSS payment of $145 per week. In all those circumstances, the Commission should order "a quite nominal amount of compensation".22 Findings I begin my consideration of the issues in this matter with the question of whether Ms Mahoney had a valid reason for dismissing Mr Hoskinson. The relevant provisions of the Act in that regard are Section 31(1A) and Article 4 of Part II of the International Labour Organisation's Convention concerning the Termination of Employment at the Initiative of the Employer (the ILO Convention). Article 4 provides that:
There was no suggestion by either party that Mr Hoskinson's dismissal related in any way to the employer's operational requirements. The uncontested evidence is that Tamar Valley Wines employed Mr Hoskinson (one of approximately 20 such employees) as a casual vineyard hand for a fixed term of 20 weeks. That term commenced on or about 10 June 1997. The Company required Mr Hoskinson and his fellow employees to prune and tie grapevines. Ms Mahoney explained the purpose of the contracts in the following terms:23
There was also no dispute about the fact that the contracts of employment, that of Mr Hoskinson included, required each employee to work a minimum of 152 hours per month.24 Because of that evidence I accept Mr McElwaine's contention that Mr Hoskinson's contract of employment was for a fixed term and for a specific purpose. I also accept his submission that completion of pruning activities while the vines were still dormant was a matter of importance to the Company. Ms Mahoney's evidence is that, about five weeks into the 20 weeks' contractual period, the Company became aware that "within a six week period we'd lost, I think, 240, 260 actual working hours through people not turning up for work."25 Ms Mahoney said she accordingly told the employees on the day of Mr Hoskinson's dismissal that they would have to work extra time to catch up, particularly on Fridays.26 That evidence, unchallenged in cross-examination, explains the background to Mr Hoskinson's statement that Ms Mahoney told the employees "youse guys won't be knocking off on Friday, you'll be working for the next 15 weeks for a 40 hour week".27 However, although Mr Hoskinson and witnesses Smith and George all agreed that Ms Mahoney made the "40 hour week" statement, they denied she also mentioned the subject of lost hours. In the circumstances, it is necessary to examine the evidence to see what the employees, Mr Hoskinson in particular, believed was the nature of their contracts of employment. On that point, Mr Hoskinson's evidence-in-chief appears to be contradictory. In the first place he was quite firm that his contract involved working a 38-hour week.28 Indeed, he said that for the first five weeks of his contract he actually worked a 38-hour week. That enabled him to work through his lunch hour and finish at 1:30pm on Fridays29 because "we done our 38 hour week".30 To the contrary, however, he readily admitted that (a) his contract did not specify a working week of 38 hours;31 (b) he was on a casual rate of pay;32 (c) he did have the odd day or two off work;33 (d) he was not paid for the time he had off;34 (e) from time to time other employees took time off;35 and (f) the employment arrangements were very flexible.36 In cross-examination Mr Hoskinson added that (i) he believed his contract was for a period of 20 weeks of 38 hours;37 (ii) he understood there was a relationship between the 20 weeks' term of his contract and the Company's pruning period;38 (iii) he knew that he had to put in a minimum of 152 hours per month;39 and (iv) he believed he probably did have a day off during the previous month.40 The evidence of witnesses Smith and George on these matters, while perhaps less contradictory in appearance, is generally consistent with that of Mr Hoskinson. The important features for present purposes appear to be that all three employees acknowledged the term of their contracts, the casual nature of their employment, the relationship between the term of their contracts and completion of pruning, the fact that their contracts required them to work a minimum of 152 hours per month and, finally, the fact that all had apparently taken time off during their first few weeks of employment.41 On this last point, since Mr Hoskinson did not deny he had taken time off, I think he simply misunderstood Mr Fulton's question when he asserted that he had actually worked 38 hours for each of the preceding five weeks. It seems to me from the course of his evidence that Mr Hoskinson was merely reflecting the belief that his contract of employment organised work on a 38-hour week basis. In the circumstances, I do not believe he was referring to actual hours worked. Viewed in that light, I think the apparent contradiction in his evidence is not a matter of substance. After reviewing this evidence, I conclude that Mr Hoskinson understood the essential elements of his contract, even if he misunderstood the fact that its basis was not a 38-hour week but a minimum of 152 hours per month. In particular, as he himself acknowledged, Mr Hoskinson knew his obligation was to work a minimum of 152 hours per month.42 However, it is clear from Mr Hoskinson's own evidence that he had not worked the minimum number of hours required of him because he had taken either one or two days off work. His evidence does not disclose which days he was absent from work. Assuming that he only had one day off, to put his case in its best light, that was the equivalent of either 8 hours (if the day concerned was one of Monday to Thursday inclusive) or 5½ hours (if the day in question was a Friday). Accordingly, I find that at the time of his dismissal Mr Hoskinson had not worked the minimum number of hours required of him by his contract, ie 152 hours per month. In the circumstances, I believe it was lawfully open to Ms Mahoney to require Mr Hoskinson to work the additional 2½ hours on the particular Friday afternoon. In that context I accept Ms Holder's submission that Mr Hoskinson's contract of employment, because it required him to work a minimum of 152 hours per month, obliges me to look at each month individually. In that regard, it seems unlikely the parties' contractual arrangements entitled Ms Mahoney to direct Mr Hoskinson, as she did, to work every Friday afternoon for the 15 weeks that remained of the term of his contract. Such a proposition assumes that, at the time, Mr Hoskinson was down in his monthly hours to a greater extent than the evidence allows, ie at the most he had apparently taken only two days off work. Fortunately, perhaps, it is not necessary for me to attempt to resolve that issue because Mr Hoskinson at all times made it clear to Ms Mahoney he would not work that particular Friday afternoon. I pause to consider Ms Holder's contention that Ms Mahoney's direction amounted to a unilateral variation of Mr Hoskinson's contract of employment, ie by directing him to work 160 hours per month instead of a minimum of 152 hours. To the extent that Ms Mahoney's direction purported to require Mr Hoskinson to work more than the minimum number of monthly hours stipulated in his contract, I agree with Ms Holder. However, I do not see how that helps Mr Hoskinson. In the context of a valid reason for dismissal the issue is not whether he refused to work those hours. Rather, it seems to me, the issue is that Mr Hoskinson refused his employer's lawful direction to work on the particular Friday to make up what the evidence shows was a shortfall in his minimum monthly hours to that date. In refusing Ms Mahoney's lawful directions Mr Hoskinson, in my opinion, provided his employer with a valid reason for his dismissal. Accordingly, I find that, pursuant to Article 4 of the ILO Convention the Company, through Ms Mahoney, had a valid reason to dismiss Mr Hoskinson on grounds connected with his "capacity or conduct". In my view, Mr Hoskinson's refusal of Ms Mahoney's lawful direction to work to 4:00pm on the Friday in question constituted the relevant grounds. I turn now to consider Ms Holder's alternative submission that, in dismissing Mr Hoskinson, Ms Mahoney failed to afford him procedural fairness.43 In particular, Ms Holder asserted that Ms Mahoney neither gave Mr Hoskinson a valid reason for his dismissal nor told him his work was unsatisfactory.44 In that context, the relevant provisions of the Act are Section 31(1A) and Article 7 of the ILO Convention. Article 7 provides that:
No party suggested it was not reasonable for Ms Mahoney to provide Mr Hoskinson with such an opportunity. Mr McElwaine, in reply, asserted that from the time Ms Mahoney directed Mr Hoskinson to work the additional hours until his dismissal some time later, he had ample opportunity to inform her of the reason for his refusal to work as directed. Even at the time of his dismissal Mr Hoskinson said nothing in his own defence. He, with others, simply walked off the job and ignored Ms Mahoney's attempts to call them back. 45 In the first place, I believe there is no substance in Ms Holder's contention that Ms Mahoney failed to tell Mr Hoskinson his work performance was unsatisfactory. As I view the evidence there was no reason for her to make such a statement, given that she clearly dismissed him for refusing to work as directed. It is equally clear, I think, that the time that passed between Ms Mahoney's direction to Mr Hoskinson and his subsequent dismissal did not constitute giving him "an opportunity to defend himself against the allegations made" in terms of Article 7 of the ILO Convention. During those hours I accept that Mr Hoskinson knew Ms Mahoney disagreed with his expressed intention to not work after 1:30pm on the Friday in question.46 However, it is plain that he was not aware she might dismiss him should he continue to maintain his refusal to work as directed. According to the evidence, Mr Hoskinson did not become aware of Ms Mahoney's intentions until she actually dismissed him. Even then, Ms Mahoney did not give Mr Hoskinson an opportunity to defend himself. The evidence shows that, in what appears to be a single statement, she told him of the reason for his dismissal-his refusal to work until 4:00pm the following Friday-and then immediately proceeded with his summary dismissal.47 In the circumstances, in my opinion, Ms Mahoney's subsequent attempt to call Mr Hoskinson (and others) back does not constitute giving Mr Hoskinson an opportunity to defend himself. That is because, even if Ms Mahoney's action did amount to an opportunity of some kind to redeem his job, it was not an opportunity contemplated by Article 7, since it followed rather than preceded Mr Hoskinson's dismissal. For all these reasons I find that, contrary to Article 7 of the ILO Convention, Ms Mahoney dismissed Mr Hoskinson for reasons related to his conduct or performance without first giving him an opportunity to defend himself against her allegations. Concerning remedy, Ms Holder's primary submission was that I should reinstate Mr Hoskinson because he is ready and willing to complete his duties.48 However, it is clear from the evidence that substantial practical difficulties confront such a course of action. The most significant fact in that regard is the substantial reduction in the scope of the employer's operations since Mr Hoskinson's dismissal. That is, the sale of many vineyards and a reduction in employee numbers from 30 to five.49 Of further relevance is the fact that Mr Hoskinson's initial 20 weeks' term of engagement, which reflected a contract of employment for a fixed term and for a specific purpose, expired in October 1997. In light of those circumstances, I find that reinstatement of Mr Hoskinson is impractical. In support of his argument against reinstatement, Mr McElwaine also relied on the assertion that the evidence disclosed a clear breakdown in the day to day working relationship between Ms Mahoney and Mr Hoskinson.50 I do not accept his contention. I agree the evidence tends to show that Mr Hoskinson's workplace attitude was apparently less than cooperative.51 However, I do not think that fact on its own, in the present case, establishes a breakdown in the relationship between supervisor and employee that is so fundamental as to prejudice reinstatement. After all, Ms Mahoney's evidence is that she tried to recall Mr Hoskinson when he walked off the job after being dismissed because she was willing to discuss having him back. 52 I move now to the issue of compensation. Ms Holder submitted that the quantum of any such order should reflect the unexpired portion of Mr Hoskinson's contract, ie 15 weeks, less the value of unemployment benefits received by him during that period. Neither party put in issue the appropriateness of such an action regarding unemployment benefits. In the circumstances, I calculate the total value of that claim to be $3975.00, ie:
Mr McElwaine, on the other hand, submitted that if there was a breach of Article 7 of the ILO Convention, it was not a substantive denial of procedural fairness but a technical denial of the kind referred to in Davis v Portseal and Kenefick v The Australian Submarine Corporation.54 In those circumstances, he submitted, the Commission should significantly discount the applicant's claim by awarding nothing greater than a nominal amount of compensation. In support of his contention Mr McElwaine relied on evidence tending to show that, because of a poor workplace attitude, it was highly probable that Mr Hoskinson's term of employment would have come to an end before the full 20 weeks' term of his contract expired.55 Where the Commission finds that a dismissal was unfair and reinstatement is impractical, it may, if of the opinion that it is appropriate to do so:56
In my view, the evidence in this case points to the appropriateness of making an order for compensation. Section 31(1B) of the Industrial Relations Act 1984 and Article 7 of the ILO Convention operate to vest in employees a right not to be dismissed before being given an opportunity to defend themselves against the particular allegations. In this case, the facts are that Ms Mahoney, in dismissing Mr Hoskinson, breached that statutory right. In the circumstances, that breach, in my opinion, entitles Mr Hoskinson to vindication by way of compensation, since I have found reinstatement impractical. In assessing the amount of compensation to award, it is necessary to consider what might have happened had Ms Mahoney given Mr Hoskinson an opportunity to defend himself against her allegations. In that regard it is highly likely, in my opinion, that had she put the position clearly to Mr Hoskinson before dismissing him, he would have obliged her on that day by giving the reason why he could not work the following Friday. I take this view because Mr Hoskinson's evidence is that, when first directed to work until 4:00pm on the day in question, he did not "have a chance to say anything at the lunch hour".57 Later, of course, Ms Mahoney dismissed him before he could offer any explanation. It is a matter of conjecture as to what Ms Mahoney's response might have been in those circumstances. Most likely, I think, she would have given Mr Hoskinson the time off after receiving from him a commitment to make up his hours to the necessary contractual minimum in the near future. In venturing that opinion I rely on the following facts:
For those reasons I conclude that, had Mr Hoskinson received an opportunity to defend himself at the time of his dismissal, it is unlikely Ms Mahoney would have found reason to terminate his contract of employment on that occasion. What was the likelihood, in those circumstances, of Mr Hoskinson's employment then continuing for the full term of his 20 weeks' contract? In that regard Mr McElwaine relied on Mr Hoskinson's past record of alleged unsatisfactory workplace behaviour62 to assert that it was very probable his employment, given it was of a casual nature in any event,63 would have come to an end well before expiry of the 20 weeks' term. It is true, as Mr McElwaine pointed out, that there was no direct challenge to Ms Mahoney's evidence about Mr Hoskinson's workplace attitude. However, as to work performance, Ms Mahoney also said that Mr Hoskinson kept up with his workmates64 but, while capable of pruning the required number of vines per hour, was inconsistent in output.65 Mr Hoskinson's evidence is that he was never given any warnings or, as he put it, "chatted" about his work performance.66 Witness Smith said that Mr Hoskinson "put in a good day's work" and "kept up with the seasonal pruners".67 Witness George, who worked "all the time" with Mr Hoskinson said he never heard Ms Mahoney warn Mr Hoskinson.68 He also said they could match or overtake the seasonal pruners.69 Contrary to Mr Hoskinson's evidence,70 Witness Smith said that all employees knew the Company required them to prune a minimum number of vines per hour.71 While there is no reason for me to refuse to accept Ms Mahoney's assessment that Mr Hoskinson disliked his job and had a poor workplace attitude, some of the evidence before me, for example that regarding warnings or counselling, is irreconcilable. Viewed as a whole, however, the evidence does permit me to conclude that, as to work performance, there most likely was an issue between Mr Hoskinson and Ms Mahoney regarding his lack of consistency in pruning the required number of vines per hour. In other words, I suspect Mr Hoskinson, perhaps because he disliked the work, did not always give of his best. In that context I discount Mr Hoskinson's evidence of denial of knowledge about the number of vines he should attempt to prune each hour because of its self-serving nature. Instead, I prefer the evidence of the independent witness, Mr Smith. It seems to me that a requirement to consistently prune a certain number of vines each hour logically reflects the Company's need to complete pruning within a fixed seasonal period. The importance the Company attached to individual work performance in keeping to the target of completing pruning within the required time is evidenced in the circumstances of Mr Geale. Ms Mahoney dismissed Mr Geale because, according to Mr Hoskinson, his work was not up to standard.72 These circumstances lead me to this conclusion. Because of his dislike of the work, his poor work attitude and his inconsistent work performance, there is a high degree of probability the Company's employment of Mr Hoskinson would have ended before expiry of the 20 weeks' period of his contract. However, while I believe Mr Hoskinson's dismissal was probably inevitable, it does not follow on the facts of this case that compensation should be a nominal amount, as Mr McElwaine argued by reference to Davis v Portseal and Kenefick v The Australian Submarine Corporation. In my view, it is likely that Mr Hoskinson's employment would have continued some weeks past the date of his actual dismissal had that event not occurred. I say this because (a) his dismissal did not relate to work performance;73 (b) he had a capacity to perform up to the required level, albeit inconsistently,74 and (c) in my opinion, given the focus on completing pruning within seasonal time constraints, it was in the Company's interests to keep him on, subject to his "capacity or conduct", since he was trained for the work required of him.75 Having regard to all the facts and circumstances I assess appropriate compensation as the equivalent of four weeks wages. In money terms that measure equates to the sum of $1060, calculated as follows:
ORDER PURSUANT TO the powers conferred on me by Section 31 of the Act I HEREBY ORDER that the respondent employer Tamar Valley Wines, Baxters Road, Pipers River, Tasmania pay to the applicant, Mr Michael Charles Hoskinson, 120 Franklin Street, George Town, Tasmania the sum of One Thousand and Sixty Dollars exactly ($1060) on or before the close of business on Friday 16 October 1998.
B R Johnson Appearances: Date and Place of Hearing: 1 Page 7. |