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T7334

 

TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s29 application for a hearing in respect of an industrial dispute

Anthony Peter Johnston
(T7334 of 1997)

and

Paul and Fiona Woodward

 

PRESIDENT F D WESTWOOD

HOBART, 30 July 1998

Industrial dispute - termination of employment - abandonment of employment - termination at the initiative of the employer - contract of employment for milking season - no enforceable probationary period - termination the result of failure to agree on new terms of employment - no valid reason for dismissal - social security payments ignored in consideration of mitigation of losses - Nicholson v. Heaven & Earth Gallery applied - compensation ordered $5,967.63 payable by 21 August 1998.

REASONS FOR DECISION

This application was lodged by Anthony Peter Johnston pursuant to section 29(1A) of the Industrial Relations Act 1984, seeking a hearing in relation to a dispute with Paul and Fiona Woodward, who conduct a joint dairy farming partnership, Newwood, at Smithton. The dispute related to the termination of his employment.

Both Ms S Irvine and Mr G McLean, legal practitioners, each at different times sought and were granted leave to appear to represent the applicant. Mr P Heerey, also a legal practitioner, sought and was granted leave to represent the employers who initially were represented by Mr Rice of the Tasmanian Farmers and Graziers Employers Association (the TFGEA).

The matter came before the Commission for hearing at Devonport on 10 December 1997, and was adjourned to enable the employers to seek legal advice. The parties were urged to pursue a negotiated settlement. The hearing resumed at Ulverstone on 27 February 1998.

The applicant and his spouse, Mrs Johnston, and Mr and Mrs Woodward each gave evidence.

It seems Mr Johnston was employed by Mr and Mrs Woodward as a farm hand, level 3, under the Farming and Fruitgrowing Award. He was to commence work on 1 September 1997. At that time the Johnston family moved from their home at Forest, which they rented out until 16 December 1997, into another house on the Woodwards' property.

Prior to starting with the Woodwards, Mr Johnston had been employed milking, on a relief basis, and on a casual basis as a trades assistant with Haywards Constructions at Port Latta where he was clearing about $650 per week. Before that he had been unemployed for sufficient time to entitle the Woodwards to a wage subsidy for the period 1 September 1997 to 30 November 1997. Mr Johnston said he had told Mr Woodward that because he was "earning really good money" in his position with Haywards Constructions, which might last beyond Christmas 1997, the job with him had to be for the full season.1 It appears from Exhibit 6, the Jobstart Placement Advice in the form of a letter from the CES Manager, Burnie, to Mr Johnston, that during the subsidy period the employer could not change any of the terms and conditions of his employment, for instance, hours of work or rate of pay, without the approval of the CES.

To begin with the conditions of Mr Johnston's employment were that he "was to be paid the award wage" of $409.50 for a 38-hour week. Also he was to work for about twelve hours every second weekend in return for rent free accommodation on the farm. An alternative of working on a contract basis for $2,000 per month had been proposed, which he and his wife rejected.

Mr Johnston claimed he was given to understand, before he commenced his employment, that there would be a trial period of 3 months to establish (a) whether he was capable of doing the work unsupervised, and (b) whether the job was to his liking. Depending on that, his employment would extend to the end of the milking season, that is to 30 June 1998. The employer expressed a different view of the "probationary period", which is discussed later.

Mr Johnston was late for the afternoon milking after visiting Wynyard one day in the week commencing 6 October, which seemed to provoke the Woodwards to query the number of hours he had worked. Mr Johnston was able to demonstrate that he had worked a number of hours in excess of 38 per week and the agreed hours every second weekend, and a payment was made by the employer for the excess hours.

About that time the Woodwards told Mr Johnston that he was needed for fifty hours per week. But the Woodwards had a budget "to work within", so it was suggested to Mr Johnston that they should negotiate a new employment contract in the form of an "enterprise agreement" to enable the number of hours Mr Johnston worked to be extended, but on a flat rate of pay because, amongst other things, it seemed Mrs Woodward did not have the time to work out the penalty rates.2 Negotiations took place over a short period of time towards the end of October; offers and counter offers were made, discussed, and rejected, but no agreement was reached.

On 29 October, a discussion took place in relation to a counter offer offer made by Mr Johnston to his employer, and following a verbal exchange between Mr Johnston and Mrs Woodward, his employment ceased. Mr Johnston alleged his employment had been unfairly terminated; his employers disagreed and said he had left the job voluntarily.

Mr McLean contended that an oral contract had been entered into to have effect from 1 September 1997 to 30 June 1998 and that the contract had been terminated by the employers without good cause.

He asserted that the employment separation certificate (Exhibit 7), signed by Mrs Woodward, showed that the reason the separation had occurred was because the parties had been "unable to agree on employment terms". The employer had indicated on the form that Mr Johnston had ceased work voluntarily and that neither unsuitability for the work, shortage of work, nor misconduct, were considered to be reasons for the termination.

Mr McLean said:

"Even if that were not the case we would be saying that the requirements that they (Mr and Mrs Woodward) were attempting to impose on him (Mr Johnston) which effectively were to work for much longer hours than his contract required him to, and to work those longer hours at a rate which was considerably under the award rate .... would amount to a constructive dismissal and a repudiation of the contract of employment terms by the employers."3

Mr Heerey said his clients' basic position was that the initial contract was a probationary period of employment for a fixed term of 3 months from 1 September to 1 December 1997. He said that there had been a possibility that it might be extended to a maximum to June 1998, but this was contingent upon satisfactory performance in the probation period, and indeed conditional upon the applicant wishing to continue on in his employment4.

He confirmed the assertion, made by Mr Rice on the first day of hearing, that this was not a termination at the initiative of the employer. However if the Commission was to find against the Woodwards on that point it would be submitted that there was a valid and just reason for the termination which was to be exposed during witness evidence.

Mr and Mrs Woodward subsequently in their evidence claimed that certain aspects of Mr Johnston's work were not up to the standard they expected from an employee required to work in an unsupervised capacity, specifically that:

  • Mr Johnston had been late for work on a number of occasions. Mr Woodward referred to only one occasion that Mr Johnston had been late, on the second or third morning, but he had been prepared to give Mr Johnston a "go". Mrs Woodward claimed he was late "most mornings", although she relied on Mr Woodward to tell her as she was not at the dairy for the early milking.

  • Contrary to instructions not to do so Mr Johnston had milked a marked (painted) cow, which had been treated with penicillin, into a common vat.

  • Mr Johnston had continued to smoke in the dairy contrary to being asked not to do so. (Mr Woodward could recall, in the first two weeks, two occasions when Mr Johnston had disobeyed that instruction.)

  • Mr Johnston had allowed a vat of milk to overheat by activating the wrong switch which could have had costly ramifications if Mr Woodward had not returned in time and noticed that the temperature was up.

In his evidence Mr Johnston described the events leading up to the termination of his employment which revolved around the negotiations about the enterprise agreement. He and Mrs Johnston had considered suggestions by the Woodwards and on the morning of 29 October, Mr Woodward handed an offer to Mr Johnston. Mr Johnston claims he was told "this is it or no job". Mr Woodward denies he said those words. At about 3 p.m., just as milking started that afternoon, Mr Johnston presented a counter proposal to Mr Woodward and later that day, after milking, asked Mr Woodward how he was to be paid. He told Mr Woodward he wanted to know because the question was causing conflict between him and Mrs Johnston, who was seven months pregnant, and his children were suffering from the "insecurity". Mr Woodward said he would discuss it with his wife and wanted to "leave it" until the "end of the week"; but Mr Johnston wanted to know that day. He approached Mrs Woodward about 5.30 p.m., who said she had not had time to read the document and had not made a decision, and because she had visitors, she would tell him in the morning.

Mr Johnston said:

"I just asked Fiona if what - the way I was going to be paid, how were they going to pay me, and she said that she hadn't had time to look through it, and she hadn't made a decision. I just stated that I'd like to know, because of my wife's condition and I asked her whether they were going to pay on the award wage, and she said, `No,' and I said, `Are you going to pay us on a contract basis?' She said, `No.' I said, `Well, what is - what's that mean?' She said, `Well, you're finished.'

Asked what he did then, Mr Johnston replied:

"I just asked Fiona if she could fill out the separation certificate and went home."5

The Johnston family remained in the farm house for a fortnight as Mr Johnston said he was entitled to because he had worked the necessary weekend hours.

Mrs Johnston, in her evidence, said she and her husband had sought financial advice about taking the job and it had been concluded that they would need to take it for a full season to manage financially. She understood the three months' trial period was to allow the Woodwards to make sure that Mr Johnston was capable of doing the work that they needed him for, and if he did not enjoy the job he had the right to go.

She said they had to clean the house "from the ceilings to the floors" and to repaint the majority of it before they moved in. The paint was supplied by the Woodwards. They were prepared to put in the time and work because they thought the job was until 30 June. She went, with her husband, to a meeting with the Woodwards on or about 23 or 24 October, where Mr Johnston was told by the Woodwards that there was "no point him being employed on the farm if he could only do a 38-hour week; he was needed for at least 50 hours per week."6 That was in addition to the every second weekend milkings. Mrs Johnston said she had a discussion with Mrs Woodward and she was told that the job was until the end of June 1998, and that the Woodwards were happy with Mr Johnston's work.

In relation to the final discussion between Mr Johnston and Mrs Woodward, Mrs Johnston gave the following evidence:

"He (Mr Johnston) told me that Fiona had put him off and I said to him, `What do you mean, put you off?' He said, `She put me off'. He had given her the ultimatum of paying him on the contract basis or under the award wage that we originally went down for. She refused to do both and he told me that she said he was finished."7

And

"He said that he'd asked her for a separation certificate and Fiona was going to bring it over later. We were actually going to be out that evening, so I went to the house to see if I could get it then or tell them that we would pick it up the following day as we would be out that evening. When I got to the house Paul answered the door and I said to Paul, `Anthony tells me that you've put him off', and he said, `Yes, that's right.' I just said that we'd get the separation certificate tomorrow if it hadn't been filled out because we were going out, and I asked him what would happen with the house, because we couldn't move back into our own house at that stage. He said that it would be fine for us to stay in their house until we could go back to our own place."8

Mrs Johnston later saw Mrs Woodward to get the separation certificate. She asked for a new one because she did not think the information was correct as the boxes, identifying the reason employment had ceased, had not been marked. Mrs Woodward then ticked the box indicating that Mr Johnston had ceased work voluntarily. When Mrs Johnston challenged that she said Mrs Woodward "crossed it out and just wrote that they were unable to agree on employment terms".9 She said Mrs Woodward then ticked the box indicating that Mr Johnston had not ceased work voluntarily.

She said while offers were going back and forth Mrs Woodward had told her that "regardless of the negotiations", the job was still until 30 June 1998.

As to the final offer from the Woodwards, Exhibit 4, Mrs Johnston said that Mr Johnston showed the document to her and said "This is it or I've got no job". They made their counter offer because they believed they had "the right to stay in the job" for either one of the two offers that originally had been made by the Woodwards, that is $2,000 per month on a contract basis, or to observe the award.

In his evidence Mr Woodward said that he "took care of the day-to-day running of the farm" and his wife handled "all the business and financial side of the business".10 He said "he had wanted an employee who could work unsupervised." He and Mrs Woodward had two interviews with Mr and Mrs Johnston and decided on a three-month trial period, 1 September 1997 to 1 December 1997, to enable him and Mr Johnston to get to know each other; for Mr Johnston to get familiar with the farm; to see whether Mr Johnston wanted to stay there, and if Mr Johnston was "happy with everything, it would be till the end of the season"11. Under cross-examination on the last day of hearing Mr Woodward changed his previous evidence and said "if we were both happy after the three month trial, we would review it".12

Mr Woodward said when the problem over hours arose after the Wynyard trip he and his wife decided they "had to sort something out and try and be more flexible". When he handed the offer of 28 October (Exhibit 4) to Mr Johnston he told him to "take it home and have a look at it". He said the counter offer (Exhibit 5) was handed to him by Mr Johnston as he was about to start milking at 3 o'clock. Mr Johnston said, "Here you go, have a look at this", and he said, "Okay", and he "put it in the house". Mr Woodward "kept going backwards and forwards" to the house to speak to his wife about the offer. When she arrived home at about 4 o'clock he told her that Mr Johnston had given them a proposal and she said she did not have time to look at it then but they would discuss it that night.

He went back to the dairy and told Mr Johnston they would look at it that night. When Mr Johnston asked for a response, he said "Look I haven't had a chance to look at it, let alone discuss it with Fiona". Mr Johnston persisted and Mr Woodward asked his wife to speak to Mr Johnston. Shortly after the discussion between Mr Johnston and Mrs Woodward she told him that Mr Johnston had "finished". Mr Woodward said he had never made a decision to terminate Mr Johnston's employment, nor had he discussed that prospect with his wife. He could not remember a conversation with Mrs Johnston in which he was alleged to have acknowledged that Mr Johnston had been "put off".

He said they would have made a decision in relation to keeping Mr Johnston on "at the end of the three-months trial". He thought that Mr Johnston would have been "kept on" if he had not resigned his employment.

Mrs Woodward said she and Mr Woodward interviewed the Johnstons and outlined the work that Mr Johnston would be expected to perform. Mr Johnston was told that he would be in charge of the "wellbeing of the cows" and that he would be a level 3, unsupervised employee, under the Farming and Fruitgrowing Award. When asked whether it was ever said that the position "would run until 30 June 1998", Mrs Woodward replied:

"If he was suitable after the trial period of the three months we said that we would probably keep him on for the season. Nothing was stipulated though."13

Mrs Woodward said:

"You can't actually assess somebody until we're in the full swing of things. Which was the reason for the three months trial. By the beginning of December all the cows would be in milk".14

During cross-examination Mrs Woodward disputed that Mr Johnston's work was satisfactory.15

Mrs Woodward said that after the incident when Mr Johnston was late getting back from Wynyard, she and her husband felt they needed to specify Mr Johnston's hours of work and the idea of an enterprise agreement was promoted. They agreed to enter into negotiations. Mrs Woodward said their accountant had told them they needed to include the monetary value of the rent in Mr Johnston's pay for tax purposes, but the Johnstons were not prepared to have it included as the "gross wage would go up where they would lose their benefits". So she said they needed to "come to a flat rate" to cover the extra hours.

Mrs Woodward agreed that the proposals all involved a flat rate for overtime work significantly below the award rate. But they, "in the end", decided that they would not work Mr Johnston in excess of a 38-hour week.

Mrs Woodward said she was told by Mr Woodward, on her return home on 29 October, that Mr Johnston wanted an immediate answer to his counter proposal. She described the next events in the following way:

"I went over to Anthony who was standing in the driveway just up from the dairy and I just said to Anthony I hadn't had a chance to read it and "I'll read it tonight. Discuss it with Paul" and I'll let him know in the morning and he said, "No, I need an answer now" and I said, "Look, I haven't had a chance to read the document that you've proposed." He said, "Well, are you going to put me on a contract basis?" and I said, "No, we can't put you on a contract basis" and he said, "Well, what then? Do you want me, or you don't?" and I said to him, "I can't give you an answer because I haven't read your document. It's your decision whether you stay or you go but I can't give you an answer" and he asked me for a separation certificate and he left." 16

Mrs Woodward denied she told Mr Johnston that he was "fired" or "finished". She believed Mr Johnston had "finished" when he asked her for the separation certificate. She said she marked the certificate to show that Mr Johnston had left voluntarily. She denied that either she or Mr Woodward had terminated Mr Johnston's employment but she thought they "probably" would not have kept him on.

During cross examination Mrs Woodward elaborated on the reasons why Mr Johnston might not have remained in their employ. She was concerned that "he (Mr Johnston) was starting to undermine (her) husband's authority" and was not "taking the job seriously enough".17

Mrs Woodward was not surprised that Mr Johnston had walked out because he was "getting quite agitated at the time". She said she "gave him the decision whether he wanted to stay or go, and he chose to go".18

Mrs Woodward also denied she had completed two separation certificates, the first in different terms to the second. But later she said she had filled in another form but had not completed all the responses to the reasons for termination. She had completed the second form on advice from Centrelink.

She had not heard of any discussions between Mr Woodward and the Johnstons about Mr Johnston taking some days off in March 1998 when Mrs Johnston's baby was due to be born. She was aware that Mr Woodward and Mr Johnston had discussed what would "happen around Christmas time".

As to payment of wages, Mrs Woodward said she completed the wages book. She said she had paid Mr Johnston a flat rate for the 20 hours overtime worked which he claimed.

According to Mrs Woodward, Mr Johnston was paid a week's pay on "leaving", his accrued holiday pay, and a 17 ½% loading. Mrs Woodward did not know why she had recorded in the Wages Book that the extra week's pay on termination had been for "notice on leaving". She said the Johnstons were not charged rent, which she claimed was "about $200", for the last two weeks they were in the house.

Ms Irvine said it was clear from the evidence that the understanding of the parties at the time of entering into the period of employment was that the job would run from 1 September 1997 to 30 June 1998 - a full dairy season. This was subject to a three-month probation period during which Mr Johnston's suitability for the employment could be assessed. If he were found to be incapable of performing the work for which he was employed his employment could be terminated at that stage.

She said the evidence also showed that Mr Johnston had been guaranteed work with Hayward Constructions at least until Christmas. Ms Irvine submitted it was unlikely that a young man with a pregnant wife and three small children would give up such well paid employment for a position which was less well paid and was only guaranteed to run for three months. She said the evidence also showed that Mr and Mrs Johnston wanted to take up farming work and were concerned about how they would manage on the lesser income. She said the outcome was they could manage provided the work would run for the full season. They also spent a considerable amount of time and effort cleaning up the house they were to live in on the farm, and painting it. They said in evidence they would not have gone to such trouble if they were only going to be there for three months.

There was evidence, she said, that Mr Johnston was left alone to manage the farm for three days in October with only the help of a 12-year-old boy. The Woodwards had had six weeks until then to assess his capabilities. Ms Irvine submitted that they would not have left their farm in his hands if they believed he was not capable of performing the work in an unsupervised capacity.

She submitted that the reason for the termination of the employment was that the parties were unable to agree on terms of employment. But, Ms Irvine added, the terms had been decided before he commenced, so any inability to agree was clearly an inability to agree on new employment terms. In other words, she said, the terms were clearly in the process of being changed.

She said Mr Woodward had made no attempt to discuss the situation with Mr Johnston in the two weeks after the termination that the Johnstons remained in the house on the farm. Ms Irvine said that if Mr Johnston had in fact resigned without notice, the more likely thing to have happened would have been for Mr Woodward to have approached him and tried to sort it out.

Ms Irvine submitted that Mr Johnston had been given a final pay cheque that consisted of three days' pay, plus accrued holiday pay, plus an amount that was referred to by Mrs Woodward as a week's pay on leaving. The clear implication from the words that appear in the wages book was that Mr Johnston's employment was terminated by the employer and he was therefore paid a week's pay in lieu of notice.

For the applicant, Ms Irvine sought compensation of $13122, being Mr Johnston's award entitlements foregone, less amounts received by way of Social Security payments and other income received up to 25 March 1998.

Mr Heerey submitted:

"The respondent's position, Mr President, is simply that the contract of employment was for a fixed period of three months to commence on the 1st December 1997 and that was what was offered to Mr Johnston and that was what was accepted by him."19

And

"... after that three month period the parties would then be able to sit down and assess the future for all of them. It would be my submission, Mr President, that the evidence has made it clear that any extension to that initial three month period to the 30th June 1998 was subject to three factors, that is, the respondents' satisfaction with the applicant's work; secondly, the applicant's desire or not to stay; and thirdly, a firm offer to the applicant and an acceptance of that offer to extend the contract to the 30th June 1998."20

It was contended that, on the evidence of Mrs Woodward, it had been shown that Mr Johnston had abandoned his employment. However if that version of the evidence was not accepted, Mr Heerey submitted, the four areas of his performance criticised by Mr and Mrs Woodward created a valid and just reason to the employers to terminate Mr Johnston's employment.

Mr Heerey submitted that reinstatement would not be a desirable remedy in the circumstances and that compensation, if any, should be limited.

Mr Heerey submitted that if I was satisfied that the applicant had succeeded in his application, any compensation awarded should reflect the principles espoused by Wilcox C J of the Australian Industrial Relations Court in Nicholson v Heaven and Earth Gallery Pty Ltd (126 ALR 233) at page 244, in which it was stated:

"That in assessing compensation it is appropriate to consider what would have been likely to occur if the breach had not occurred."

And

"It would be unrealistic for a court automatically to assume that the employee's employment period would have continued indefinitely."

Mr Heerey referred also to the Full Bench decision of this Commission in T6918 of 1997, O'Connor v. Capital Hill Corporation Pty Ltd, and submitted that I should have regard to factors therein addressed in determining the amount of compensation, if any, which should be awarded. He submitted that in any event compensation should not extend beyond 1 December 1997. He accepted that on an averaging basis a fair assessment of the rent for the farm house would be $100 per week.

Findings:

I deal first with the question of whether Mr Johnston was dismissed by his employer or whether Mr Johnston decided to terminate his own employment.

The evidence clearly demonstrates a period of tension between the employers and Mr Johnston, and indeed between Mr and Mrs Johnston, while the process of negotiating an enterprise agreement was in train. On the last day Mr Johnston was concerned to reach a conclusion to the negotiations so that his wife and family would feel secure about their immediate future. From the employers' perspective it seems to me, given the evidence, that at least Mrs Woodward was feeling some uncertainty about employing Mr Johnston, in particular in relation to the Woodwards' budgetary position, and there was an unwillingness to decide too quickly on the terms of Mr Johnston's continuing employment. That concern must be balanced against Mr Woodward's evidence that he wanted some assistance and that he thought Mr Johnston would have continued to work with them until 30 June 1998.

Mr Woodward's inability to remember any conversation with Mrs Woodward about the termination is of concern to me because it is difficult to believe that Mr and Mrs Woodward would not have discussed a matter of such importance to their business undertaking. His inability to remember a conversation he is alleged to have had with Mrs Johnston on the subject, or to deny that such a conversation occurred, suggests to me that such a conversation might well have taken place. The evidence of Mrs Woodward about filling in the separation certificates, one while Mrs Johnston was there and another which she sent to Centrelink, and the reference in the wages book to the payment to Mr Johnston of a week's pay for notice on leaving, are also of concern because they are inconsistent with the claim that Mr Johnston voluntarily resigned his employment. These circumstances lead me to the view that there is substance to Mr Johnston's claim that he was dismissed.

Further, I consider it most unlikely that Mr Johnston would have resigned his position in such a dramatic fashion given the commitment he and his wife had made to their new lifestyle and their efforts to clean up and paint the farm house.

If Mrs Woodward did tell Mr Johnston that it was his decision whether "to stay" or "to go", and I find it difficult to accept her evidence that she did, Mr Johnston would have been put in an intolerable position given that the impetus to change the contract of employment came not from him but from the employer.

In the circumstances, whether Mrs Woodward told Mr Johnston that he was "fired" or "finished", and I do not consider it matters which of the two words was used, I am satisfied that Mr Johnston's employment was terminated by the employer.

The next question for me to determine is whether the contract of employment was for the milking season as put by the applicant, that is until 30 June 1998, with a three-month probationary period concluding on 1 December 1997 or, as put by the employer, whether it was a fixed term contract of three months beginning on 1 September 1997, with the option of extending the contract or entering into a new contract for the remainder of the milking season until 30 June 1998.

All four witnesses identified in their evidence an understanding of the possibility that Mr Johnston's employment might continue to 30 June 1998. Mr Woodward finally said that prospect was to be reviewed at the end of the probationary period, as did Mrs Woodward, although she thought it would be unlikely that Mr Johnston would have been kept on after 1 December 1997. However I am of the opinion that Mr Woodward's first version of the arrangement agreed with Mr Johnston, as given in his evidence-in-chief, is more likely to be accurate than his revised version.

As I have already mentioned, in my view it would have been most unlikely that the Johnstons would go to the trouble of painting and cleaning the farm house and moving their family from Forest, which was a 25 minute drive away, if they were expecting to stay there for just three months. Having said that I recognise that Mr Johnston during cross examination conceded that his job might have concluded on 1 December 1997. But I interpret that statement as being a recognition of the possibility that he might not have wished to stay on, or that the Woodwards might have considered him to be unsuitable.

In the circumstances I am satisfied that Mr Johnston was offered the job for the milking season, that is until 30 June 1998, subject to the satisfactory completion of the three month trial period and that there was only one employment contract.

It is appropriate to mention at this stage that the Farming and Fruitgrowing Award which has application to dairy farming makes no provision for probationary employment or a trial period of employment. While I recognise that the parties might have been prepared to honour their agreement to enter into an arrangement for a period of probation, given the subsequent disagreement there is, I believe, no capacity to enforce that agreement.

Having determined (a) that Mr Johnston's employment was terminated at the initiative of the employer, and (b) that his contract of employment was for the period of the milking season, that is until 30 June 1998, I turn now to the issue of whether or not there was a valid reason for the employer to terminate Mr Johnston's employment.

Article 4 of the ILO Convention concerning the Termination of Employment at the Initiative of the Employer, states:

"The employment of a worker shall not be terminated unless there is a valid reason for such termination connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service."

Article 7 states:

"The employment of a worker shall not be terminated for reasons related to the worker's conduct or performance before he is provided an opportunity to defend himself against the allegations made, unless the employer cannot reasonably be expected to provide this opportunity."

If, during the course of his employment, Mr Johnston had been told that late arrival at work and smoking in the dairy at any time would not be tolerated, then any transgression on Mr Johnston's part could well have given the Woodwards cause to dismiss Mr Johnston.

Similarly, if Mr Johnston had been warned that any further examples of errors of judgment such as milking the marked cow or activating the wrong switch, could lead to his dismissal, then any subsequent examples of lack of judgment might have created a valid reason for the termination of employment of a person engaged to work as an unsupervised employee.

However at no stage was Mr Johnston told that the alleged deficiencies in his performance were likely to affect his employment, nor were they raised with him at the time of his termination. Nor were any concerns about Mr Johnston's suitability for the work, his performance, or his conduct referred to on the separation certificate. Indeed Mr Woodward thought Mr Johnston would still be working with them if he had not "resigned".

It is clear that Mr Johnston was dismissed without reference to his conduct, his suitability, or his performance. If the alleged deficiencies were of such concern to the employer, they should have been put to the employee well prior to the dismissal. It seems to me that Mr Johnston's alleged deficiencies were raised after the dismissal and during the course of these proceedings in order to provide the employers with an alternative argument if their claim that Mr Johnston "abandoned his employment" failed to be accepted by the Commission. In all the circumstances I reject the respondents' alternative submission that those concerns represent a valid reason for the termination of Mr Johnston's employment.

Further, I consider that Mr Johnston's employment with the Woodwards was terminated because the parties were unable to agree on new terms of employment which were to be incorporated in an enterprise agreement. I do not consider that to be a valid reason for the termination and accordingly I consider that the termination was unfair.

Having determined that there was no valid reason for Mr Johnston's dismissal, I turn now to the application of Articles 10 and 11 of the Convention.

Article 10 states:

"If the bodies referred to in Article 8 of this Convention find that termination is unjustified and if they are not empowered or do not find it practicable, in accordance with national law and practice, to declare the termination invalid and/or order or propose reinstatement of the worker, they shall be empowered to order payment of adequate compensation or such other relief as may be deemed appropriate."

Article 11 states:

"A worker whose employment is to be terminated shall be entitled to a reasonable period of notice or compensation in lieu thereof, unless he is guilty of serious misconduct, that is, misconduct of such a nature that it would be unreasonable to require the employer to continue his employment during the notice period."

I have considered the submissions of both parties and agree with them that the reinstatement of Mr Johnston to his previous position with Mr and Mrs Woodward is impractical, see Section 31(1B) of the Act, and that the question of appropriate compensation must now be determined.

During the hearing, whilst dealing with the need for the applicant to mitigate his losses, the relevance of including Social Security payments with other income earned was raised. Having considered the question in more depth I am satisfied that it would be inappropriate to deduct such payments from any compensation awarded by this Commission. The responsibility for preventing double counting rests, in my opinion, with the organisation responsible for making security payments and the recipient, not the tribunal whose responsibility it is to determine the extent to which the employment contract has been breached and the appropriate compensation necessary to remedy that breach. In my view the Commission should go no further. From a practical point of view the effect of making such a deduction would be that the employer would be subsidised further in this case, given the existence of the Wages Subsidy Agreement, by the Commonwealth Government. The possibility that a dismissed employee might receive compensation for a period during which he or she has received Social Security payments is in my opinion a matter for consideration by the Government agency involved and the former employee once the latter has received any money due from the former employer. Accordingly I have only considered payments for work performed by the applicant since his dismissal when determining the extent to which the applicant has mitigated his loss. In this case income received by Mr Johnston from work performed between the date of his dismissal and 27 February 1998 was advised to the Commission as being $175. That work was performed in the weeks immediately after his dismissal and prior to 28 January 1998. That figure was not disputed by the employer.

Having regard to the tests established in Nicholson, in all the circumstances I consider it most unlikely that Mr Johnston would have been retained for more than four weeks after Christmas which was when the Woodwards wanted some relief while they left the farm for a break. I consider also, in these circumstances, that the minimum acceptable period of notice of termination would have been two weeks which was the rental period for the farm cottage. I have excluded compensation for lost earnings for weekend milkings, as the notional figure arrived at was, in fact, offset against the cost of rent for the farm cottage which the Johnstons vacated two weeks after the termination.

No consideration has been given to questions raised by Ms Irvine, but not pursued, concerning the possibility that there might be a subsequent claim for breach of the Farming and Fruitgrowing Award.

Having regard to the foregoing, I determine that Mr Johnston is entitled to receive a payment by way of compensation for his unfair dismissal calculated in the following way:

     13 weeks pay to 28 January 1998, at $409.50 per week $5,323.50
     Proportionate annual leave on termination 409.63
     2 weeks notice at $409.50 per week 819.00
     Less one week's notice paid 409.50 409.50
  6,142.63
     Less income earned to 28 January 1998 175.00
  $5,967.63

Accordingly, pursuant to section 31(1) of the Act, I hereby order Paul and Fiona Woodward of Newwood Dairy, Park Road, Smithton, Tasmania, to pay to Anthony Johnston of Partridge Road, Togari, the sum of $5,967.63 by 21 August 1998; such payment being compensation that I determine to be appropriate in respect of Mr Johnston's unfair dismissal from his position with Paul and Fiona Woodward.

 

F D Westwood
PRESIDENT

Appearances:
Ms S Irvine and Mr G McLean (27.2.98) for Mr A P Johnston
Mr K Rice (10.12.97) and Mr P Heerey (27.2.98 and 24.3.98) for Mr P and Mrs F Woodward

Date and place of hearing:
1997
December 10
Burnie
1998
February 27
March 24
Ulverstone

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