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T8242

 

TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s.29 application for a hearing in respect of an industrial dispute

John Oram
(T8242)

and

OPSM Pty Ltd

 

DEPUTY PRESIDENT J G KING

Hobart, 30 June, 1999

Industrial dispute - alleged unfair dismissal - application dismissal

REASONS FOR DECISION

The applicant in this matter Mr John Oram (the Employee) has been employed by OPSM since 1976, at locations in South Australia and the Northern Territory. On 6 May 1997 he was transferred from Adelaide to Hobart as the Store Manager of the Hobart Branch.

On 19 November 1998 Mr Chris Beer the Retail Operations Manager from OPSM Melbourne and described by the Employee as "my employer" came to Hobart and advised him that he was to be transferred to the Eastlands Store. The Employee's Proof of Evidence contains the following description of events on 19 November 1998.

    "On the 19 of November 1998 Mr Chris Beer flew from Melbourne to Hobart. He told me that I had grown stale and needed a new start with the company. He said that he was not going to discuss the situation at all, his mind was made up and he was going to make a change. He then told me that I was going to be working as the manger of the Eastlands Store or there would be no managerial job available for me. He made it clear that I would be exchanging positions with the manager of the Eastlands store. He said that he wanted to try and improve the sales figures for Hobart."

His further evidence on the transfer to Eastlands reads:

    "The news of my transfer was a severe blow to me. My impending transfer to the Eastlands store was without doubt going to cause increased stress and pressure for me which at the time I found an almost intolerable situation."

and

    "It was well known that staff at the Eastlands store were not happy with their working conditions given the stress levels. The prospect of this while coping with the extreme stress levels that I was suffering and had been suffering from the previous six months was unbearable." 1

Mr Collinson (of Counsel) in summarising the effect of the above described events in his opening submission, on 2 March 1999 submitted as follows:

"Mr Collinson

Now on 19 November 1998, Mr Chris Beer had flown from Hobart to Melbourne and informed Mr Oram that his employment as a store manager in Hobart was to cease and that he was to be transferred to Eastlands and that we say that that wasn't open to discussion at all.

And that's the essence of the application; is that there's been a constructive-type dismissal." 2

When the matter reached the stage of evidence and final submissions on 17 June 1999 Mr M Turnbull (of Counsel) who had replaced Mr Collinson for the applicant sought though evidence and case precedent to show that there had been a constructive dismissal of the Employee and that it had not been for a valid reason.

Mr Stanton's summary of the respondents position reads in part:

"Mr Stanton

    At its shortest, Sir, our response is this: that Mr Oram, in terminating his own employment, has denied himself access to the jurisdiction. The necessary condition of course is that the termination will be shown to be at the initiative of the of the employer. And what we say is, Mr Oram effected the resignation in writing on 28 December which took effect on 22 January of this year.

    In that written resignation, Mr Oram indicates that he considers that there are positive ongoing management roles elsewhere for him and on that basis he has chosen to bring his employment with the respondent to an end.

    As we understand the resignation, it certainly doesn't indicate anything in the nature of an allegation of anything sinister or untoward on the part of the company.

    We also say this, Deputy President, that we deny there's been any unilateral demotion. It's certainly not the case that there was a unilateral demotion on 19 November."

and,

    "The transfer to the Eastlands store, was - there are two aspects of that that I wish to submit on. Firstly, that it was an entirely lawful thing for the respondent to propose, and we draw comfort from the specific terms of the applicant's employment contract which gives the company that right.

    But secondly, that it was not done in a dictatorial fashion; that it was explained to Mr Oram by Mr Beer that the transfer would be for all parties benefit." 3

The issue for my determination, was there a constructive dismissal of the Employee and if there was, was it for a valid reason? or was it in contravention of Part 11 of the International Labour Organisations Convention concerning termination of employment?

A brief summary of the Employees evidence in this matter is:

  • in December 1997 the Hobart store was relocated, this resulted in increased work load and increased hours worked;

  • part of the increase in work load was caused by a reduction in staff and pressure from Mr Beer to increase sales;

  • the increase in work load reduced his time with his family;

  • the above developments caused the Employee to suffer stress and in October 1998, for the first time he suffered a severe migraine;

  • he took time off on sick leave from 28 October through to 9 November 1999 because of stress;

  • on 19 November 1999 the meeting referred to earlier with Mr Beer took place where he was advised of his transfer to Eastlands;

  • the effect on the Employee of the above was detailed earlier from his evidence;

  • the employee alleged the Employer was well aware of his stress problems to that date and would be aware of the added stress of a move to Eastlands;

  • the Employee acknowledged that as an alternative to transferring to Eastlands as the manager he would prefer to stand down as a manager and accept a lower paid position;

  • the Employee suffered stress during November and December and was off work on periods of workers compensation;

  • a workers compensation claim for stress was finally settled on 23 February 1999;

  • on 1 December 1998 the Employee lodged a grievance notification in accordance with his contract;

  • the grievance indicated amongst other things that he was considering moving back to Adelaide and this resulted in a number of discussions going to the detail of that move;

  • however, on 28 December 1998 the Employee made a decision not to re-locate back to Adelaide and he resigned his employment giving one (1) months notice, becoming effective 22 January 1999;

  • on 25 January 1999 he commenced working for another company at a substantially reduced salary and loss of the use of a company car that he had with OPSM;

  • his strong evidence was that he would still be Store Manager, Hobart with OPSM if it hadn't been for the poor treatment by that company and in particular the unreasonable attitude of Mr Beer;

  • his resignation was achieved by these very unfair actions of the Company.

Mr Turnbull in addressing a remedy in this matter in his closing submission put to me:

"Mr Turnbull

      Sir, obviously the law requires that reinstatement is the first option for my client. Now clearly that is going to be difficult given what has occurred since the time of him leaving his employment with OPSM and in those circumstances the Act does allow you to provide that compensation, if reinstatement is not practicable."

and

      "I ask that you have regard to the fact that he is now working for less money, that is, he now receives thirty-two and a half - this is in his statement by the way - $32,500 as compared to near on $40,000 previously and as well as that previously he had the use of a company motor vehicle

      Sir, if you are to find that there has not - there was not a valid reason for his dismissal, in my submission it amounts to a bad termination of employment, one that could have been avoided and one that my client shouldn't have had to have been faced with.

      In my submission, given the length of time he has been there I would seek at least six months." 4

Mr Stanton in a very methodical and thorough cross examination of the Employee sought to demonstrate that the decision to resign was the Employees, that nothing in the evidence and documentation could demonstrate that there had been a forced termination of employment.

In his final address, Mr Stanton submitted as follows:

"Mr Stanton

    There has been a termination and the initiative is wholly the applicant's. And so much is clear from the evidence presented here this morning particularly, but not exclusively, the evidence from the cross-examination. And I remind the Commission that in the course of my examination of Mr Oram, he answered the critical questions freely and willingly, and I say honestly, particularly where I questioned him in relation to the events leading up to his decision to resign.

    And it is the case, and the record of the proceedings will show, that those answers were in the nature that he had considered this matter for some two and and a half weeks, that he had had the opportunity to discuss the resignation with his wife, with his parents and with a lawyer prior to submitting the resignation.

    The initiative is wholly his. I put it to him fairly in the cross-examination towards the end that did he understand the term `initiative'. He described it, if I recall as an idea of one's own, and he agreed with me that this resignation in so far as it was an idea was wholly his own. He agreed in the cross-examination that he was never asked to tender a resignation. It was never proposed by any employee of the respondent company. And what we say is that the Commission simply cannot find that there is a termination at the initiative of the employer. And my friend is quite right in saying that the International Labour Convention is the necessary instrument against which the facts in this case must be assessed." 5

I agree with Mr Stanton that the evidence is clear in relation to the decision to resign being at the initiative of the Employee. However, it is what caused that initiative which is important in this case and the issue that I must determine is whether there has been a termination at the initiative of the Employer.

Both parties to the extent that they supported their respective positions relied on precedent. I indicate that in determining this matter I will rely on the principles enunciated in the decision of the Full Court of the Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics. 6

I accept from the evidence that this was not a case where the Employer gave the Employee an option to resign in lieu of some other action ie. as in the Full Court case referred to above where the employee was offered the option of resigning or being dismissed.

In this case the Employee was told he was to be transferred to the Eastlands store, there was no choice if he wished to remain a Manager but he was to be transferred as store manger with no loss of salary. Mr Stanton submitted there were four other options at this point ie. at the 19 November 1998 meeting. Those options were, leave the employment, transfer to Eastlands but pursue a grievance, remain with the Company but be employed as a Senior Dispenser, remain where he was as Hobart Store Manager and agitate a grievance. This last option from the evidence did not appear to be real as the evidence of the Employee that the decision to transfer him to Eastlands or out of the Managers position at the Hobart store was not negotiable was not seriously challenged. However, I accept that a later option developed where the Employer agreed to provide considerable assistance to the Employee in a re-location to Adelaide, if this was his choice.

I must find on the evidence that there were options open to the Employee other than to accept the transfer to Eastlands or resign. In my assessment those options were real and some were not unrealistic.

The Employee's evidence was that Eastlands was a more stressful store than Hobart yet the total evidence showed that two employees at Hobart had gone on workers compensation with stress related problems none had done so from Eastlands. I acknowledge the unsworn statement 7 of Linda Byrne an ex employee of OPSM at Eastlands who asserts that it was a very stressful work environment. However, apart from the debate about the Eastlands store being a stressful work place there appears no other reason why the Employee could not have transferred under protest and lodged a grievance. The grievance procedure in his contract provided for any disputes being dealt with at a number of levels and ultimately by this Commission.

It is clear that although the Employee commenced grievance proceedings he did not complete the ultimate steps of the process before he resigned. It is therefore unknown what the outcome of that process may have been. I also acknowledge a submission of Mr Stanton that it was rather unusual for Employers to provide for the resolution of grievances in contracts for managers particularly where they allow the manager to take the matter to an Industrial Tribunal for ultimate settlement.

I accept as a general principle that an Employer must have the right to transfer employees from location to location, provided this is done in a fair and proper manner. I believe this is particularly so when the transfer involves a manager: there are any number of legitimate reasons for a Company such as OPSM to want to transfer a manager; performance being one of them. On top of that general principle going to the right to transfer there is a provision in the Employee's contract which reads:

    "2. Place of work

    It is a term of your employment that you may be required to transfer to another store or location in your local area, provided that there is no unreasonable change in travel requirements." 8

I find from the evidence of this case that the Employer through Mr Beer has not provided the Employee the opportunity to properly discuss the reasons for the decision to transfer him to Eastlands and thereby failing in one of the fundamental requirements of not only being fair in its actions but also following a fair process in implementing its decisions. However, on balance it appears from the evidence that even with open and genuine discussion on the reasons for transfer it is likely that the transfer would still have been required.

The evidence is also clear that the Employer never at any stage during the period 19 November 1998 to the date of the Employee's resignation on 28 December 1998 raised the prospect of the Employee resigning as an outcome or option.

Mr Stanton in describing the Employer's view of the Employee submitted:

"Mr Stanton

    There is no reason and no reason has been shown or even suggested by Mr Oram himself as to why the employer would desire to bring about the termination of his employment.

    My friend is quite right, that Mr Oram has had 22 years of service with this company, good and faithful service to this company, acting in a responsible role of manager and although evidence wasn't brought in relation to this, it is the case, Mr Oram is highly regarded by the employer and, I submit, that still is the case notwithstanding these proceedings, it still is the case." 9

In coming to a conclusion in this matter I turn to the Full Court decision earlier referred to and in their findings their Honours concluded:

    "On the finding of fact that the respondent directed the appellant to resign or have the police `Called in' it is our view that what occurred was a termination of employment at the initiative of the employer. When an employee has no effective or real choice but to resign it can hardly be said that the termination of her or his employment is truly at the employee's initiative. But for the insistence of the employer, termination of employment would not cross the mind of the employee.

    According to the appellant's evidence which as we have said the registrar accepted and preferred where it conflicted with evidence adduced by the respondent, the respondent told the appellant that it would have the police "press charges" against him. He was placed in a situation designed to induce him into resigning on the basis that he would be relieved of having to go through the ordeal of a police investigation. An unstated consequence of benefit to the respondent was that, in turn, it would be relieved of an obligation to the appellant to conduct a procedure that gave a fair opportunity to the appellant to answer any allegation made against him before the respondent terminated the appellant's employment if it decided so to act.

    It was not a real option for the appellant to respond to the respondent's ultimatum by electing to face a police investigation where there was an operative inducement that resignation would save the appellant and his family from the embarrassment that would ensue from an investigation. In so far as the ultimatum offered the choice of resigning it was not in the circumstances a real choice.

    On the facts as found by the registrar the threat to call in the police was intended to induce a reluctant resignation in circumstances where the respondent had not completed its inquiries and had not resolved to report the matter to the police. It appears to have been accepted by the registrar as a finding that the appellant believed that a report to the police would place a strain on his character and inhibit his prospect of other employment in the future, irrespective of the outcome of a police investigation.

    The proper conclusion from the facts as found by the registrar and presented to his Honour was that the respondent wanted the appellant's resignation because it desired to terminate the appellants employment."10

I cannot in this case make a finding or come to a conclusion "that the respondent wanted the appellant's (applicant's) resignation because it desired to terminated the appellant's (applicant's) employment."

As I indicated earlier there were options available to the Employee after the meeting of 19 November 1998, those options were real and not unrealistic. I believe that it was the Employee's decision to resign and it was therefore not a "constructive dismissal."

There is no doubt in my mind that the Employee was influenced to resign by the decision of the Employer to transfer him and by the events that followed. I accept from the evidence that he experienced "stress" as a result of his employment both before and after 19 November 1998. I have also indicated that I believe the meeting of 19 November 1998 could have been better handled by the employer, with a proper opportunity afforded to the Employee to discuss the proposed transfer and the reasons for it.

However, in spite of the above, there were reasonable options open to the Employee other than resignation and I must accept from the evidence that it was his choice to resign and of course his right to do so.

For the reason detailed above and in accordance with s. 31(1) of the Industrial Relations Act 1984 I dismiss this application and so I order.

 

J G King
DEPUTY PRESIDENT

Appearances:
Mr R Colinson of Counsel (2.3.99), Mr M Turnbull (17.6.99) of Counsel with Mr J Oram
Mr J Stanton of Australian Business Industrial, Sydney with Mr C Beer for OPSM

Date and place of hearing:
1999
March 2
June 17
Hobart

1 Ex T.1. Page 4
2 Transcript page 1
3 Transcript Pages 2 & 3
4 Transcript pages 54 & 55
5 Transcript page 55 & 56
6 62.1.R.200
7 Exhibit T 2
8 Ex S 1
9 Transcript page 57
10 62 !R page 206