T6816
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Mark McKenzie and Chubb Protective Services
Termination of employment - no valid reason for termination - reinstatement impractical - hearing reconvened to settle minutes of proposed order - order made for compensation REASONS FOR FURTHER DECISION Background These proceedings in their totality concern an allegation by the applicant, Mr M McKenzie, that his termination of employment on 6 March 1997 by Chubb Protective Services was unlawful and unfair. In written Reasons for Decision dated 29 October 1997 I determined, after having heard the parties, that "within the meaning of Article 4 of the ILO Convention, Chubb did not have a valid reason for its termination of Mr McKenzie's employment".1 I then went on to find that, in the circumstances, reinstatement of Mr McKenzie was impractical.2 After considering the parties' submissions regarding compensation, I rejected Chubb's contention that there should be no such order and assessed adequate compensation, in total, as "being an amount equivalent to 20 weeks' lost wages". I then observed that:3
I concluded my decision by noting that I could not settle the minutes of any order until I possessed reliable evidence as to the money amounts represented by items (2) and (3) mentioned above. I said I would reconvene the hearing in due course to deal with that matter. The parties subsequently made concerted efforts to settle the dispute without further intervention of the Commission. Unfortunately, those efforts failed. As a consequence, at the applicant's request, I brought the matter on for hearing again on 24 March 1998. At that hearing I discussed with the parties the desirability of appointing, at the applicant's cost, a commercial arbitrator for the purpose of "inquiring into the business activities of Mr McKenzie so that the expert might prepare a report on the relevant earnings of Mr McKenzie from his business activities during the relevant period".4 The purpose of such an arrangement was to overcome the applicant's objection to disclosing to Chubb, a commercial competitor in the security industry, details of his business activities. While the proposal was not without its difficulties, I was ultimately able to obtain the parties' consent to take the suggested course of action. Regrettably, that attempt to resolve this longstanding dispute also failed because Mr McKenzie subsequently decided he could not afford the cost of the arbitrator. At the applicant's request the matter again came before me, this time on 8 December 1998. On that occasion Mr J Bronstein, appearing for Mr McKenzie, submitted that:
In the course of the proceedings I remarked to Mr Bronstein that the approach suggested by his client appeared to be arguably against his own interest. Mr Bronstein confirmed that Mr McKenzie fully understood the implications of his instructions but, finding himself in a difficult financial position, "nevertheless feels that he cannot afford to spend any more time and money in relation to this matter as it presently stands ...".5 The Applicant's Submissions As a result of questioning from the Bench, Mr Bronstein confirmed that there was no contest between the parties that (1) at the time of his dismissal Mr Mackenzie's rate of pay was $505 per week and (2) his estimated subsequent earnings, as an employee of Moore & Moore Security, averaged $123 per week. Further discussion concerning the amount of Mr McKenzie's earnings from his small business operations did not bring to light any additional evidence. All that Mr Bronstein could add to the original record, and then only by way of a statement from the bar table at Mr McKenzie's instructions, was that during the relevant period his client's gross small business income per week was $1,000.40 and gross expenditure per week was $1,258.30, an overall weekly loss of $257.90. The Respondent's Submissions Mr R Brown of the Tasmanian Chamber of Commerce and Industry Limited (TCCI) replied on behalf of Chubb Protective Services. He argued that, first, despite the parties' attempts to settle the matter since the Commission published its original decision, and the passage of time that has since followed, the applicant has still not been able to put forward a true picture of his business earnings during the relevant period. Second, serious questions arise regarding the bona fides of the drawings or earnings obtained by Mr McKenzie during the relevant period. From the accountant's statements provided to Chubb by Mr McKenzie,6 there is no way of ascertaining his actual earnings or what portion of the identified income and expenditure related to expenses of a capital nature. The weekly averages supplied by Mr Bronstein do not help in this regard, since they appear to be nothing more than outcomes obtained by dividing gross income and expenditure amounts by the relevant number of weeks, ie 20 weeks. Mr Brown submitted that, in all the circumstances, the order originally proposed by the Commission should be set aside for want of serious prosecution. There is no evidence before the Commission from which it might identify Mr McKenzie's true earnings as a self-employed person during the relevant period. In the absence of any adequate evidence on that issue, the Commission should not oblige Chubb to make any payments additional to the five weeks' wages paid in lieu of notice at the time of Mr McKenzie's termination. At the conclusion of his submissions I suggested to Mr Brown, as a matter of argument without going to the cases, that an absence of evidence or an insufficiency of evidence might not be grounds for making no order at all, but perhaps grounds for discounting any order that might be made. In reply, Mr Brown submitted that, if it came to a matter of discounting, then the Commission should discount the entire amount of the proposed order that remained after allowing for the initial five weeks notice period and Mr McKenzie's earnings from Moore & Moore Security. Conclusions Determining the amount of compensation payable to Mr McKenzie in the circumstances of this case is clearly a very difficult undertaking. It is convenient to start from the premise that the measurement of compensation must depend upon the loss to Mr McKenzie-since, on my finding, Chubb did not have a valid reason to dismiss him-during the 20 weeks' period following the date of his dismissal. The problem with such an approach in the present matter is that there is no reliable evidence-indeed, no evidence at all in a proper sense-regarding Mr McKenzie's earnings as a self-employed person during the particular period. Fortunately, some guidance in this difficult area can be found in the judgment of Wilcox CJ of the former Australian Industrial Relations Court in Kenefick v Australian Submarine Corporation Pty Ltd,7 which I take to be the law in matters of this nature. In that matter the Full Court,8 after upholding the individual appeals of five former employees, returned all the proceedings to His Honour for the purpose of determining the appropriate amounts of compensation. Although Wilcox CJ offered them an opportunity to do so, no party elected to call additional evidence concerning the quantum of compensation. They did, however, present written submissions. His Honour observed of these circumstances that:9
In the present case there is admittedly only one unknown factor-Mr McKenzie's earnings as a self-employed person during the particular period. However, that factor on its own ensures that it is not possible for me to make anything other than a general assessment, since there is nothing before me upon which I might rely to make a mathematically correct award-assuming I should decide to make an award. In Kenefick, Counsel for the respondent employer submitted that, because there was no evidence concerning the circumstances of the applicants later than the first three months after termination, the Court could not allow anything by way of loss in respect of any period greater than three months. That was so, Counsel contended, because the burden of proof lay with the applicants. Although they had received an opportunity to discharge that burden, they had neglected to do so. Wilcox CJ decided the issue in the following terms:10
Having regard to Section 31(1B) of the Industrial Relations Act 1984, I do not think this Commission, as a matter of law, is precluded from allowing compensation in Mr McKenzie's case. That is because the provision clearly enables the Commission, having determined that a dismissal was unfair and reinstatement is impractical, to make an order "requiring the employer to pay the employee or former employee compensation of any amount the Commissioner determines appropriate". For this reason, but subject to establishing on "the evidence as it is" that there was "a possibility of loss" to Mr McKenzie, I reject the employer's submissions in the present case that I should refrain from making any order at all.11 During the course of presenting Chubb's contentions regarding remedy, Mr Brown also submitted that I should set aside the proposed order "for want of serious prosecution".12 I dealt with that matter at the time, in the following terms:
I confirm my extempore observations and formally decline to set aside the proposed order, assuming I make an order at all, "for want of serious prosecution". In the course of refusing to award compensation to one of the applicants in Kenefick, whose evidence in part was that at the relevant time he had suffered no loss, Wilcox CJ remarked that:
His Honour's remarks, of course, dealt with the then Commonwealth Act. However, I believe the substance of his remarks applies equally to Section 31(1B) of the Tasmanian Act-that is to say, it is a power to compensate an unfairly dismissed employee for the loss suffered by that person as a consequence of the employer's unlawful act. It is clearly not a power to punish the employer for that act. The undisputed evidence in this case discloses the following relevant facts:
The evidence regarding the number of weeks Mr McKenzie actually worked for Moore & Moore Security is far from clear. In his evidence-in-chief Mr McKenzie said the period was "probably about six or seven weeks".13 So far as I can see, there was no challenge to that estimate, vague though it is. In my first decision I assessed adequate compensation to be, in total, an amount equivalent to 20 weeks' lost wages. From that amount I deducted the equivalent of five weeks' wages, being payment made to Mr McKenzie in lieu of notice. The remaining 15 weeks, I said, comprised the period of time that I believed Mr McKenzie might have expected to remain an employee of Chubb. In money terms, my observations reflect in the following table:
Having regard to the evidence, so far as it goes, the above table shows that Mr McKenzie's estimated loss for the relevant period was in the order of $6714. Against that loss, however, I must take into account Mr McKenzie's earnings as a self-employed person during the same period. In that regard, the employer disputed all the evidence-if "evidence" is the right term for what is before me in that regard. By way of statement from the bar table and therefore not tested by cross-examination, Mr Bronstein, on instruction, told me that in pursuit of his small business activities, Mr McKenzie actually suffered a weekly loss of $257.90.14 I do not accept this "evidence" as being definitive of Mr McKenzie's personal earnings as a self-employed person. While the gross income and expenditure figures advanced by Mr Bronstein on Mr McKenzie's behalf may well be correct, they simply do not tell me what drawings Mr McKenzie may have taken from his business for personal use during the relevant period. In the circumstances I reject the evidence as unreliable in relation to the purpose for which it was put forward. In proceedings on 24 March 1998 I made it clear to the applicant what I wanted:
I did not receive that information in any form. According to Mr Bronstein, Mr McKenzie put some information to the employer which Chubb evidently rejected because it did not disclose sufficient detail.15 Whatever that information was, it was not put to me. All I have before me in that regard is Mr Bronstein's submission that his client's instructions are that he "is content for the matter to be resolved on the findings ... made in the original application".16 In my opinion it is highly unlikely that, in the course of his small business activities following his dismissal by Chubb, Mr McKenzie would have withdrawn nothing at all for personal purposes. Indeed, what I gather from his evidence is that it was and had been a quite successful small business for a period of some three years.17 In the circumstances, I believe it is open to me to conclude that Mr McKenzie benefited personally from his business in a manner that reduced the loss outlined in the table set out above. How should I measure Mr McKenzie's loss, if indeed there was a loss? Because of the insufficiency of evidence I can only make a broad judgment on this point. On the evidence before me, in particular his full-time employment with Chubb, it is clear that Mr McKenzie's commitment to his own business was part-time at best. In the circumstances, I think it is unlikely that the business could have returned to him drawings of sufficient amount to fully offset the loss he occasioned by way of his unfair dismissal. In other words I believe that, on a balance of probabilities, Mr McKenzie most likely suffered some loss-his small business earnings notwithstanding-even if the amount of that loss is not quantifiable. For that reason, I am prepared to find, having regard to what I understand to be the law as expressed by Wilcox CJ in Kenefick, that "the evidence as it is" demonstrates there was "a possibility of loss" to Mr McKenzie as a consequence of his unfair dismissal by Chubb. In the circumstances I believe it is appropriate in this case to make an order for compensation. I accordingly reject Chubb's contentions to the contrary that, in the absence of any adequate evidence on that issue, the Commission should not oblige Chubb to make any payments additional to the five weeks' wages paid in lieu of notice at the time of Mr McKenzie's termination.18 As to the sum of Mr McKenzie's loss, there can be no certainty of any kind because of the lack of evidence. In that regard, in my opinion, Mr McKenzie must bear the burden of his decision to refrain from putting forward relevant evidence. In the circumstances, I believe it is appropriate to assess Mr McKenzie's financial loss from the unfair termination on the basis of what I consider on the facts of this case to be a nominal sum. I propose, therefore, to award a nominal sum of $2,500. ORDER PURSUANT TO the powers conferred on the Commission by Section 31(1B) of the Industrial Relations Act 1984 I HEREBY ORDER that the respondent employer Chubb Protective Services, 29-33 Wellington Street, North Hobart, Tasmania 7000, in full and final settlement of the industrial dispute referred to in application T No 6816 of 1997, pay to Mr Mark McKenzie, Unit 1, 44 Twelfth Avenue, Moonah, Tasmania 7009 through his agents Ogilvie McKenna Barristers and Solicitors, GPO Box 435E, Hobart, Tasmania 7001 the sum of Two Thousand Five Hundred Dollars ($2,500) on or before the close of business on Monday, 19 April 1999.
B R Johnson Appearances: Date and Place of Hearing: 1 Page 29. |