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TASMANIAN INDUSTRIAL COMMISSION
Industrial Relations Act 1984
s.29 application for hearing of industrial dispute
Denise Elaine Greed
(T12065 of 2005)
(T12066 of 2005)
and
Australian School of Fine Furniture Ltd
(Administrator Appointed)
|
COMMISSIONER T J ABEY |
HOBART, 11 August 2005 |
Industrial dispute - s.29(1) alleged unlawful termination of employment - 29(1A) alleged unfair termination of employment - jurisdiction - s.440D of Corporations Act found not to stay proceedings - repudiation of contract of employment - s.29(1) application dismissed - extension of time - representational error - extension granted - no valid reason for termination - redundancy a `sham' - termination procedurally unfair - order issued - alleged breach of award - order issued
REASONS FOR DECISION
[1] On 4 May 2005, Denise Elaine Greed (the applicant) applied to the President, pursuant to Sections 29(1A) and 29(1), respectively, of the Industrial Relations Act 1984, for a hearing before a Commissioner in respect of an industrial dispute with the Australian School of Fine Furniture Ltd (ASFF), arising out of the alleged unfair termination and alleged unlawful termination of her employment.
[2] When this matter came on for a hearing (conciliation conference) on 31 May 2005, Mr B McTaggart, Barrister, appeared for the applicant. Mr W Griffiths, Barrister, and Mr J Woods, Administrator, appeared for ASFF.
[3] At the commencement of the conciliation conference Mr Griffiths advised that the school was about to be placed in voluntary administration. The Administrator, Mr Woods, was in no position to respond in any meaningful way to the application, and that further proceedings, whether by way of conciliation or hearing, would be futile. Mr Griffiths sought an adjournment, a course which was opposed by Mr McTaggart.
[4] In the circumstances I granted an adjournment until 5 July 2005.
[5] On 4 July 2005 Mr Woods sent the following facsimile to the Commission:
"Further to my telephonic call this morning to your office I confirm that at approximately 5.00pm last Friday, the University of Tasmania, who were to fund the cost of defending Mrs Greed's allegations, advised me that they no longer wished to be involved. Consequently, as I am without funds, I am obliged to advise that the Australian School of Fine Furniture Ltd will not be represented at the hearing scheduled for tomorrow in Launceston.
Notwithstanding the foregoing, I submit that section 440D of the Corporations Act 2001 has the effect of staying the proceedings during the period of Administration. Please note that should the Commissioner decide to continue with the hearing, I reserve the right to appeal to the Supreme Court of Tasmania on the grounds inter alia that any determination he may make would be ultra vires."
[6] At the commencement of the hearing Mr McTaggart urged that the matter proceed notwithstanding Mr Woods' correspondence.
[7] Section 440D of the Corporations Act 2001 reads:
"Stay of proceedings
(1) During the administration of a company a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except:
(a) with the administrator's written consent; or
(b) with the leave of the Court and in accordance with such terms (if any) as the Court imposes.
(2) Subsection (1) does not apply to:
(a) a criminal proceeding; or
(b) a prescribed proceeding."
[8] This is a matter which has been raised on a number of occasions in the past. In Tata v Watts Communications Australia Pty Limited (in Liquidation)1 the Commission as presently constituted observed that the Commission was not a "court" and had its own jurisdiction arising from the Industrial Relations Act 1984.
[9] This position had not been overturned and I therefore accepted Mr McTaggart's submission that the matter should proceed on the law as it currently stood.
[10] On 27 July 2005 Crawford J handed down a judgement in Watervale Pty Ltd (in liquidation) v Abey, Tim, a Commissioner of the Tasmanian Industrial Commission & Manning.2 As this was a matter I intended to take into account, the judgement was referred to the parties inviting further written submissions pursuant to s.20(4) of the Act. Submissions were subsequently received from both the applicant and the Administrator, and have been taken into account.
Jurisdiction
[11] Watervale concerned an application for Judicial Review of a decision of this Commission in which an order had been issued against a company in liquidation requiring payment in satisfaction of claims for annual leave, long service leave and a redundancy payment.
[12] The applicant contended that the Commission did not have jurisdiction to make the orders because of s.500(2) of the Corporations Act, which reads:
"After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes."
[13] Section 500(2) is found in Part 5.5 of the Corporations Act, which deals with voluntary windings up. This section is to be distinguished from Part 3A (s.440D), which concerns the administration of companies with a view to executing a deed of company arrangement, and Part 5.4B (s.471B), which deals with the winding up of companies in insolvency or by a court.
[14] Crawford J noted that s.500(2) "appears to extend to civil proceedings generally, whether in a court or not". He went on to find that "a matter before the Commissioner amounted to a civil proceeding".
[15] His Honour concluded:
"Because the terms of s500(2) are different from those of ss440D(1) and 471B, particularly because they do not require the relevant proceedings to be in a court, I conclude that they may have a different application. In any event, because s500(2) does not in its terms require the relevant proceedings to be in a court, I hold that it does not as a matter of law require it. I add that I have come to that conclusion after some hesitation and without the assistance of argument in support of a different conclusion.
Therefore, I hold that the Commissioner had no jurisdiction to hear and determine Ms Manning's application without a Court, as that word is defined in the Corporations Act, s58AA, having first given leave under s500(2)."
[16] In relation to s.440D, His Honour observed:
"Because subs(1) only applies to `a proceeding in a court' it possibly does not extend to proceedings before the Tasmanian Industrial Commission. In Tata's case the Commissioner made the observation that he did not sit as a court."
[17] A similar observation was made in respect of s.471B.
[18] Crawford J also considered Rochford v Textile Clothing and Footwear Union of NSW3. He said:
"... Austin J, of the Supreme Court of New South Wales, held that for the purposes of s440D, the New South Wales Industrial Relations Commission, when hearing an industrial dispute concerning an allegation of unfair dismissal, as is basically the case here, was a court and was dealing with `a proceeding in a court'. That conclusion is contrary to what the Commissioner held in Tata's case but, of course, the different legislation might justify a different conclusion."
[19] The observations of His Honour in relation to s.440D are obiter and arguably not authority for the proposition that s.440D has no application to this Commission. The converse is equally true. There is nothing in Watervale that prevents the Commission from proceeding to determine this matter.
[20] In Rochford Austin J, after considering the authorities, observed:
(i) there are no conclusive, generally-applicable criteria for classifying the body as a court;
(ii) the answer in each case depends on the particular statutory question to be decided; and
(iii) the answer is to be supplied in light of a close consideration of the statutory constitution and functions of the body in question."
[21] His Honour went on to consider the structure of the NSW Industrial Relations Act.
[22] It would be reasonable to conclude that there are a number of similarities between the "structural indications" of the NSW and Tasmanian Acts. However in the context of whether or not the Tasmanian Commission is a court, there are also very significant differences.
[23] The NSW Act provides for judicial appointments, and there is provision for the Commission to sit in Court Session, which is established as a superior court of record. In dealing with applications alleging unfair dismissal, the NSW Commission may or may not be constituted by a judicial appointment. This can be contrasted with the Tasmanian Act where there is no provision for judicial appointments, and members of the Commission do not require legal qualifications and are appointed for a term of seven years.
[24] Another factor that appeared persuasive in Rochford is the legislative scheme that applied prior to the 1996 Act. It would seem that prior to 1996 unfair dismissal cases came before Industrial Relations Courts. This can be contrasted with the Tasmanian position whereby this Commission, and its predecessor, has always had a clear jurisdiction on unfair termination matters.
[25] Other factors which distinguish the NSW legislation include the power to award costs, the power to direct that a witness be prosecuted for perjury, and the power to initiate contempt proceedings.
[26] In my view the above factors are of considerable moment and sufficient for me to conclude that Rochford is not persuasive in the context of the Tasmanian legislation.
[27] In Helm v Hansley Holdings Pty Ltd (In Liquidation)4 the Western Australian Court of Appeal adopted Austin Js reasoning in Rochford in concluding that the Western Australian Industrial Commission is a court for the purposes of s.471B of the Corporations Act.
[28] This judgement however is to be distinguished from both Rochford and the Tasmanian position in that s.12 of the Industrial Relations Act 1979 (WA) provides that the Western Australian Industrial Commission is a court of record (Helm per Kennedy J at [14]).
[29] A similar approach was taken in a decision of Merkel J of the Federal Court in ALHMWU v Home Care Transport Pty Ltd (In Liquidation)5 whereby His Honour held that proceedings in the AIRC were stayed by s.471B.
[30] However in Smith, Ovcaric, Hose & Farrager v Trollope Silverwood and Beck Pty Ltd (In Liquidation)6 a Full Bench of the AIRC adopted a position contrary to Rochford, Helm and Home Care. The Full Bench said:
"In ascertaining whether the terms of a statute give rise to a contrary intention it is necessary to have regard to the relevant text. In our view there is nothing in the text of s.471B itself which evidences an intention that applications to bodies other than courts should be subject to the leave provision. Those decisions which have held that there is such an intention are based upon the purpose said to be implicit in the section. In Home Care and Helm that purpose was said to be to enable the court effectively to supervise all claims being brought against the company which is being wound up. To permit the Commission to deal with claims without leave might undermine the effectiveness of the court's supervision and permit an alteration or diminution of the rights of creditors which the court would be powerless to influence.
Without the benefit of authority, it seems to us that there are some difficulties with the respondent's reliance on a purposive approach. This is because of the nature of the Commission, its jurisdiction and the powers available to it.
The Commission's jurisdiction includes the prevention and settlement of industrial disputes (Part VI of the WR ACT), the fixation of minimum entitlements of employees (Part VIA) including applications for relief in respect of termination of employment (Part VIA, Division 3) and facilitating the making and certifying of agreements of various kinds (Part VIB). In exercising its powers the Commission is sometimes required to take into account the public interest, as well as the interests of the parties directly concerned.7 When exercising its arbitral function the Commission is concerned with the creation and adjustment of rights, rather than with the declaration and enforcement of existing rights, the latter being functions of a court: Re Ranger Uranium Mines Pty Ltd: Ex parte Federated Miscellaneous Workers Union of Australia.8 This is so even when the Commission exercises jurisdiction to determine applications for a remedy in relation to termination of employment on the basis that the termination was harsh, unjust or unreasonable.9 While it is clear that by the exercise of its arbitral and other functions the Commission might affect the rights of creditors, by altering or extinguishing existing rights or creating new ones, it is not apparent that it is a purpose of s.471B that the Commission should be prevented from exercising those functions save with the leave of the relevant court. Because the Commission exercises predominantly arbitral power and may be required to take into account the public interest rather than just the interests of creditors, restraint of the Commission raises a number of issues that do not arise when restraint of a court is in contemplation.
Since the Commission is primarily concerned with what rights there should be rather than with existing rights, the court could not supervise the exercise of the Commission's jurisdiction in the same way in which it might supervise the exercise of jurisdiction by a court. The Commission is required to take policy considerations into account in deciding what rights should exist whereas a court is not primarily concerned with such questions. If Commission proceedings were subject to the leave requirement, in exercising its discretion on the question of leave in a particular case, the relevant court may have to take into account considerations additional to those which might be relevant if leave were sought in relation to court proceedings. It is a truism that the relevant court could not itself exercise the Commission's jurisdiction and accordingly the nature of the supervision would be different on that account also. Because supervision of Commission proceedings would differ significantly from supervision of court proceedings, we think some specific indication would be required for an intention to appear that `court' should be given a meaning which differs from its defined meaning and which includes the Commission.
We also think it is significant that the legislature has not included specific reference to the Commission and similar bodies. While one explanation is that the legislature has relied upon the decisions in Helm and Rochford and by implication endorsed those decisions by enacting the 2001 statute with the definition of court in relevantly the same form as it took in the preceeding legislation, that explanation is negatived to a significant extent by the fact that the Commission has dealt with many applications involving companies in liquidation without the leave of the relevant court being obtained either for the initiation or the continuation of the applications. Examples may be found of Commission decisions relating to liquidations of great notoriety and national significance: Re Trustees Executors and Agency Company Ltd (In liquidation);10 Re Clerks' (Domestic Airlines) Award 1980 (Compass Airlines);11 Re Insurance Industry Award 1998 (HIH Insurance).12
If the legislature had intended to make proceedings in the Commission subject to the leave requirement it could have done so by express provision. An example of such a provision may be found in s.5 of the Suitors' Fund Act 1951 (NSW) which defines court in these words: `includes such tribunals or other bodies as are prescribed'.
Taking these considerations into account, we have concluded that the contrary intention does not appear and that `court' in s.471B should be given its defined meaning. With respect to those who have held otherwise, in our view the purposive approach does not take the respondent the distance it needs to go."
[31] This decision is binding on members of the AIRC sitting alone. Given the similarity in function and operation of the AIRC and this Commission, together with the toss of the coin chance of an application being against a State or federal award bound employer, the decision is particularly persuasive. The observation of the Full Bench that the Commission is primarily concerned with what rights there should be rather than with existing rights, is particularly to point. The approach of this Commission to redundancy payment cases in particular means that, more often than not, a claim for severance pay could not be lodged until after the appointment of an Administrator. If s.440D is to stay such applications, employees under State awards may well be denied monetary entitlements which are routinely available by award prescription in other jurisdictions.
[32] In Melbourne University Student Union Inc. (In Liquidation) v Sherriff,13 Mandie J of the Supreme Court of Victoria noted the decision in Smith, but preferred the approach of Merkel J in Home Care. Noting that a federal Court judge was sitting as President of the Commission in Smith, His Honour said:
"I am not persuaded however that I should grant an injunction against the defendant. It would put the defendant in an invidious situation when Courts in the Corporations jurisdiction are saying one thing, and the Commission under the Workplace Relations Act is saying another. Obviously this conflict has to be resolved."
[33] The dichotomy of views expressed in the above judgements, of which only Watervale (and then only to a limited extent) is binding on this Commission, provides little assistance by way of guidance. Section 440D of the Corporations Act was considered, albeit briefly, by Crawford J in Watervale, whereby His Honour concluded that the section "possibly does not extend to proceedings before the Tasmanian Industrial Commission".
[34] I am of the view that the Tasmanian Industrial Commission is not a "court" and s.440D of the Corporations Act does not prevent the Commission from exercising its jurisdiction pursuant to s.31 of the Industrial Relations Act 1984.
[35] I now turn to the merits of the application.
The Evidence
[36] Sworn evidence was given by Ms Greed.
Questions to be Determined
[37] Ms Greed was "terminated" by her employer on 8 December 2004, ostensibly on the grounds of redundancy. The applicant contends that the actions of the employer amounted to a repudiation of the employment contract by the school, a repudiation which was not accepted by Ms Greed. It follows that there was no actual termination and the applicant seeks orders that Ms Greed continue to be employed.
[38] If the Commission was against the applicant on the repudiation argument, then the termination was unfair, and an order for compensation would be appropriate. This alternative argument also involves an application for extension of time, pursuant to s.29(1B) of the Act.
Background
[39] Ms Greed was first employed as Business Development Officer on 12 May 2003. This position attracted a salary of $40,000pa and was subject to a three-month probationary period.
[40] On 17 July 2003 Ms Greed received the following letter:14
"As you know, the board of the ASFF has been holding extensive discussions about the duties and responsibilities of its staff.
We have taken into account the need for professionalism and teamwork across all aspects of the school's operations.
As a result I am sorry to tell you that we will not be extending your employment beyond your probationary period.
That period ends on 12 August. However, under the arrangements outlined in your letter of appointment the board is giving you one month's salary in lieu of notice, to date from next Monday, 21 July.
We are sorry that things have not worked out as planned, and wish you well in your future endeavours."
[41] No further explanation for the termination was given.
[42] The next day (Saturday 18 July) an advertisement appeared in the paper15 for an Administration Manager at the school.
[43] On Monday 21 July the then chairman, Mr Peter Collenette, telephoned Ms Greed indicating the board was offering her the position as advertised. Following a meeting with Mr Collenette and the school principal, Ms Greed accepted the position.
[44] Like the previous role, this position attracted a salary of $40,000pa, with a three-month probationary period.16 According to Ms Greed, the probationary period "came and went" without comment from the employer.
[45] Ms Greed said she initially reported to the board, pending the completion of job descriptions, which it would seem never happened.
[46] According to Ms Greed, the board was "rolled" in September 2003, and not replaced until 25 November 2003. Thereafter she reported "informally" to the board.
[47] In July 2004 the executive director was moved to another role external to the school. The principal also resigned in July 2004. Neither was replaced. Asked as to the resultant workload, Ms Greed said17:
"What about the workload you had without the principal and the executive director - what level of work did you have?---I did everything in the school except teach. So to quantify that, it was huge.
How, to your observation, did the students react to the absence of any principal?---Both verbally and formally to the board and to staff members, they were very angry, because they had paid up to $32,000 to come to this school with no teacher. So for six months there was no teacher. They were very angry."
[48] Ms Greed said a new principal was subsequently appointed, to commence on 10 January 2005. That appointment materialised and, according to Ms Greed, the principal's wife was appointed programs co-ordinator, a role formerly performed by Ms Greed.
[49] In August 2004 a part-time accountant was appointed who, Ms Greed understood, was still working with the school.
[50] During October 2004 Ms Greed became indirectly aware that certain issues were emerging. She said:18
"MR McTAGGART: Now, you were saying that you heard something from a cleaner at the school?---That's right.
What did you hear?---I had heard that there was a letter that was going to be submitted to the board from the students addressing their issues and concerns, and that one of the students had spoken to the chairman and the chairman's response was that I was going to be sacked anyway. And that was supposedly - supposed to appease the students. So - - -
Now, on 29 October, did you speak to a board member?---Yes, I did.
Who was that?---That was Mr Trevor Jones.
And what did he inform you?---He informed me that the chairman, Rex Heathcote, had called him the night before and quote, "Was trying to get dirt on me," unquote.
Did you know what Mr Heathcote's problem with you was?---No.
Did you try to contact him?---Yes, I did.
How?---By email, phone calls and fax."
[51] On 31 October Ms Greed sent the following e-mail to the Chairman, Mr Heathcote:19
"Further to my phone calls to you on Friday,
It appears that there are some serious issues being discussed amongst the students, some board members, some teaching staff and yourself (as chairman of the Board) that involve me, however I have had no opportunity to be involved in these discussions.
I believe it is time we bought these issues into the public arena and I am very keen for a meeting to be held ASAP between yourself (representing the Board), myself and all the students.
The aim of this meeting is to discuss the issues that appear to be related to me, however to date I have had no opportunity to balance the discussion. The principles of justice and equity do not appear to be evident to me at this time and this must be rectified.
I look forward to arranging this meeting with you on Tuesday morning 2nd of November, 2004."
[52] Mr Heathcote responded on 1 November as follows:20
"This is in response to your faxed and emailed letter of 31st October 2004.
Whatever discussion I or others have with board members or students really shouldn't concern you, as that's the way it has to happen sometimes. Twice on Friday I returned your phone calls but to no avail.
That notwithstanding there are some serious issues that need addressing. I do not agree to meeting like that with the students as you suggest as it will only exacerbate the situation and the students have enough work to do coming up to the end of the year. And really they don't want to be involved at that level and neither do ...
There will be an opportunity for a discussion to take place as soon as possible between some board members and yourself. You will be welcome to bring along someone else as well.
As there is a board meeting on Tuesday I will try to arrange the meeting to be either on Tuesday or Wednesday. In the meantime please leave the students out of any discussion relating to your situation within the school."
[53] A further exchange of correspondence occurred on 1 November, as follows.
[54] Greed to Heathcote:21
"In response to your fax dated 01/11/04 (with regard to my fax and email to you of the 31/10/04), I appreciate your point of view, however in this case this is not the way to resolve the issues - what ever they may be. The way to resolve any issues is an open discussion with all parties concerned.
Rex, if the students take enough time to write you a letter concerning issues that relate to me, then they must accept the responsibility to assist in the resolution of those issues.
I believe in relation to the students an analogy comes to mind. If the students were personified by a spoke wheel, you will find that there are only two or three broken spokes.
However, you appear to be focusing only on the broken spokes and not the ones still intact.
Hence my comment in my previous email and fax to you that relates to justice and equity.
I am ready to face my accusers and resolve the issues amicably.
I believe it is only common courtesy to allow this requested meeting to occur."
[55] Heathcote to Greed:22
"You seem to be missing the point. This is an issue between us (the board) and you (the business and administration manager) not just the students. Therefore we will have the meeting proposed in my previous fax. I do not understand you (sic) reference to a letter from the students because I don't have one nor do I know of one existing. Therefore there will be no meeting between yourself, the students and me. Again! Leave the students out of this, they have enough just dealing with the remaining part of the year."
[56] According to Ms Greed, the meeting referred to in the correspondence did not take place.
[57] Ms Greed then sought legal advice and on 29 November her legal representative (Mr Targett) wrote to the school in the following terms:23
"We advise that we act for Ms Denise Greed.
Our client has consulted in relation to matters affecting her employment with the School.
We are instructed that recently that Mr Heathcote has advised our client that there were serious issues concerning our client's employment which would be addressed with our client.
Our client is most concerned that apparently no further action has been taken on the part of the Board to address such issues notwithstanding her indication of her willingness to do so.
If there are any such issues would you kindly particularise the same to this firm at your earliest convenience so that they may be properly addressed.
Secondly, our instructions indicate that our client in her employment with the School does not have a formal job description. The absence of such a document makes it impossible for our client to be properly aware of her duties and responsibilities.
We ask that the School provide same at its earliest opportunity."
[58] The school did not respond to this correspondence.
[59] On 8 December Mr Heathcote telephoned Ms Greed indicating that he wished to have a meeting with her at 1.00pm that day. Ms Greed's evidence was:24
"What did he say?---He said that he had sent an email and that he wanted to have a meeting with me and some other people at 1 o'clock that day.
What did you say?---I asked him what the meeting was about, and he would not tell me. I asked him, was it a performance-issue-based meeting, and he would not tell me. I asked him who was coming to the meeting, and he would not tell me. And I told him that I needed to know, because if it was a performance-based meeting, then I had the option of having a witness there and I needed to organise somebody, and he would not tell me.
Right. Did you arrange for someone to attend the meeting with you?---Yes, I did."
[60] At the meeting Ms Greed was told that her position was redundant, effective immediately. According to the "minutes" of the meeting, the following exchange took place:25
"Denise Greed: Is this all there is? (holding up the financial paper) Will you write something down about me being made redundant?
Bill Griffiths: No.
Denise Greed: I object to the way this has been done. Have you said everything?
Bill Griffiths: Yes."
[61] At the meeting Ms Greed was handed a document titled "Redundancy Payment Calculation".26
[62] This document contained the following items:
|
· "Salary to 8 Dec 04 |
$3333.33 |
|
· Bona fide redundancy |
$2307.69 |
|
· Termination payment 31 Jan 05 |
$3333.33 |
|
· Total gross termination payment |
$8974.36" |
[63] According to Ms Greed, no payment has ever been made.27
[64] On 23 December 2004 Mr Targett forwarded a "without prejudice" letter, which said in part:28
"Our client instructs that she has been purported to be made redundant. We note that she has objected.
We are further instructed that the work that she previously performed is now being undertaken by others. We have advised our client that if these facts are correct then her redundancy is not a true redundancy but a mere device to effect dismissal, and that such dismissal is prima facie unfair.
Our client is considering her position as to whether or not she refers this matter to the Industrial Relations Commission.
Our client however will dispose of all matters at issue between herself and the School that she is paid the sum of ... forthwith made up as follows."
[65] No response was received and a follow up letter was sent on 8 February 2005.29
[66] Mr Targett sent a further letter dated 18 March 2005, which read:30
"We refer to our letters of 23rd December 2004 and 8th February 2005 in relation to which we have not received a reply.
We refer to the writer's telephone conversation with Mr Griffiths on the 10th February 2005 whereby he acknowledged receipt of our correspondence and advised the School was not as yet in a position to reply.
We hereby request a substantive reply by return failing which our client will forthwith take proceedings herein for relief.
Our client has been extraordinarily generous in allowing your organisation to respond to this matter in a meaningful way and it has failed to do so."
[67] Mr Griffiths responded by letter dated 24 March 2005:31
"I have been handed your letter to the Australian School of Fine Furniture dated the 18th March 2005 and asked to respond.
I understand that numerous serious deficiencies have been found in the work undertaken by your client whilst she was employed by the School and there are apparently a multitude of examples where she has failed to comply with her work description.
I expect to be asked to give some advice as to whether the serious deficiencies in her work were indeed sufficient to enable my client to summarily dismiss yours and of course if that is the case then your client will need to take proceedings if she wishes to dispute the matter.
I expect to have the instructions to which I have referred shortly after Easter and I expect that my advice will be completed before the middle of May."
[68] Further correspondence between the legal representatives followed:
[69] Targett to Griffiths 1/4/05:32
"We refer to your letter of 24 March 2005, the contents of which we have referred to our client.
Please note that this is an open letter.
If there is any suggestion that there were deficiencies in our client's work performance, it is rejected. We further observe that if such was an issue, then no particulars of any such issue were provided.
Indeed, by our letter of 29 November 2004 to the Australian School of Fine Furniture we requested particulars, and none were provided. Further, at the meeting between representatives of the School and our client on 8 December 2004 whereat our client was purported to be made redundant, no issues were raised. Despite the time that has elapsed, still no particulars are provided.
We take the view that our client has not been dismissed. In the circumstances, we say that your client had no power to dismiss our client. It is not lawful for an employee to be dismissed without a valid reason. Nor is it lawful for an employee to be dismissed without having been given procedural fairness. It matters not upon the facts to hand that your client may feel that it had sufficient reason to summarily dismiss our client. Without articulating the reasons for such, any purported dismissal is unlawful.
If your client contends that it has a valid reason to dismiss our client, then we invite it to attempt to do so forthwith, lawfully. That would include your client giving our client a valid reason for the proposed termination and also an adequate opportunity to respond to it before your client makes its final decision.
In the meantime, it is our belief that our client is clearly entitled to backpay. We request that the same be provided to her immediately."
[70] Griffiths to Targett 12/4/05:33
"Thank you for your letter of the 1st April.
I do not seem to have a copy of the letter of the 29th November to which you refer but that is not necessarily surprising since your client seemed to keep what at the very best was a most haphazard filing system.
Please let me have a copy of that letter.
The numerous serious deficiencies in the work undertaken by your client have been discovered, and continue to come to my client's notice, since your client was made redundant.
As I have previously said such is the nature of some of the deficiencies that are now coming to my client's notice that I expect my client was entitled to summarily dismiss your client.
My client has not yet done that; your client was advised that her position had become redundant.
I advised you in an earlier letter of the likely time frame with respect to the completion of the investigation of your client's work.
For the time being I suggest it may be worthwhile for you to have your client explain to you the manner in which she would suggest she has fulfilled her job description.
The remainder of this letter is without prejudice.
My client's are working through the duties of your client; they have discovered the employment by your client of a Melbourne phone answering service but unfortunately to date they have discovered precious little else to record your clients fulfilment of her various obligations.
My client presently believes that one task, which probably occupied about one third of your client's job description, was so entirely neglected that it very nearly led to the closure of the school.
Your client should take whatever steps she thinks appropriate.
No payment will be made to your client before the review to which I have earlier referred is completed."
[71] The trail of correspondence ended at this point and the applications were lodged with the Commission on 4 May 2005.
[72] Ms Greed gave evidence as to persons who had been employed (to her knowledge) subsequent to her "termination".
[73] Mr Peter Rochford was engaged as business manager. Mr Rochford was both a student at the school and a director of the school.
[74] The chairman's stepdaughter was employed as receptionist.
[75] The wife of the new principal was employed as programs co-ordinator.
[76] Ms Greed said that, to her knowledge, all three remained in employment at the school.
Repudiation
[77] Mr McTaggart submitted that Ms Greed had been terminated without a valid reason. It therefore amounted to an unlawful termination.
[78] He said that the actions of the employer amounted to a repudiation of the contract of employment. Ms Greed rejected this repudiation, both at the time of termination and in correspondence from her legal representative dated 23 December 2004.
[79] Mr McTaggart referred to the Law of Employment34, which states:
"The Australian authorities and, on balance, the English ones as well, now confirm the application of the traditional rule that on the repudiation of the contract by one party, the innocent party has an election whether to keep the contract on foot."
[80] In the instant case Ms Greed had rejected the repudiation and the employer had not moved to lawfully terminate the contract. It follows that the contract of employment remains on foot, that Ms Greed should be paid her salary and permitted to work, Mr McTaggart said.
[81] In relation to repudiation Macken states:35
"Although the term `repudiation' may have a variety of meanings, the employment cases appear to accept that a repudiation will exist either when there is a breach of a condition going to the essence of the contract or when one of the parties to the contract has evinced an intention through her or his conduct, either expressly or by implication, no longer to be bound by the contract ..."
[82] To the extent that the employer in this instance evinced an intention to be no longer bound by the contract, there has been a repudiation of the contract.
[83] It is arguable whether or not Ms Greed rejected this repudiation. Certainly she was most unhappy about it, although the without prejudice nature in the 23 December correspondence suggests some equivocation.
[84] More importantly, what flows from a rejection of the repudiation?
[85] Unlike the Commonwealth Act, the Industrial Relations Act 1984 does not distinguish between "unfair" and "unlawful" terminations, other than in the case of victimisation (s.85).
[86] Quite clearly on the facts the employer terminated Ms Greed's employment contract. Whether or not the termination was "unfair" is another question entirely.
[87] Macken states:36
"It is clear that the court in Turner endorsed the view taken by Dixon J in Automatic Fire Sprinklers Pty Ltd v Watson that an employee cannot refuse to accept the repudiation and claim for unearned wages until such time as the contract is lawfully terminated. The employee's principal remedy is for unliquidated damages for wrongful dismissal. Dixon J said:
`The common understanding of a contract of employment at wages or salary periodically payable is that it is the service that earns the remuneration and even a wrongful discharge from the service means that wages or salary cannot be earned however ready and willing the employee may be to serve and however much he stand by his contract and decline to treat it as discharged by breach.' "
[88] I conclude that Ms Greed's contract of employment terminated on 8 December 2004. Application T12066 of 2005, being an application lodged pursuant s.29(1) of the Act, is accordingly dismissed.
[89] I now turn to application T12065 of 2005, being an application lodged pursuant to s.29(1A) of the Act.
Extension of Time
[90] The application was lodged some five months out of time.
[91] The evidence relevant to an application for an extension of time includes the following.
[92] Ms Greed sought legal advice and Mr Targett raised the issue with the employer comfortably inside the 21-day limit. The letter of 23 December 2004 stated inter alia:
"Our client is considering her position as to whether or not she refers this matter to the Industrial Relations Commission."
[93] At the time Ms Greed was unaware of any applicable time limits, nor was she given any advice to that effect by her legal advisor.
[94] In early March 2005 Ms Greed "called the union" and was told of the 21-day time limit. Ms Greed in turn passed this on to Mr Targett who, according to Ms Greed, "believed that we would be OK".
[95] The correspondence from Mr Targett dated 18 March 2005 states:
"We hereby request a substantive reply by return failing which our client will forthwith take proceedings herein for relief."
[96] There is no explanation for the delay between Mr Griffiths' final letter (12 April) and the lodgement of the application (4 May).
[97] The principles relevant to an extension of time application were discussed in Izard v Simons37 and more recently confirmed by the Full Bench in Patch's Variety v Lewis.38 I have also had regard for the findings in Kornicki v Telstra-Network Technology Group,39 which appears to be a leading authority on representational error.
[98] The following factors are relevant to my conclusion.
[99] The applicant vigorously contested the termination from the outset. She sought legal advice, and the employer was effectively "on notice" well within the initial 21-day period.
[100] The applicant, in conjunction with her legal representative, actively pursued the issue with the employer over subsequent months.
[101] It was Ms Greed who, through her own resources, became aware of the time limit and informed her legal advisor.
[102] The employer consistently ignored legitimate correspondence forwarded on behalf of Ms Greed.
[103] The application, on its face, has a reasonable prospect of success.
[104] There is no apparent prejudice to the employer, should the extension be granted.
[105] There was some doubt as to whether the employment contract was at an end (see Repudiation above).
[106] This is a clear case of representational error compounded by the persistent refusal of the employer to respond to issues legitimately raised. The prudent action on the part of Mr Targett would have been to lodge the application, and then continue the negotiations.
[107] I remain concerned that Mr Targett apparently waited nearly two months from the time he was alerted as to the time limit, until the actual lodgement of the application. There is an expectation that statutory time limits will be complied with. Further, the "exceptional circumstances" test under this Act is more onerous than that which applies for discretionary extension applications under other similar statutes.
[108] I am however satisfied that Ms Greed did everything that could reasonably be expected in the diligent pursuit of relief. It would be unfair to penalise her for shortcomings or oversights beyond her control.
[109] The application for an extension of time is granted.
Was the Termination Unfair?
[110] Immediately Ms Greed became aware, via a third party, that there were "issues" regarding her ongoing employment, she sought to discuss these matters with the chairman and the students.
[111] The chairman confirmed that there were "serious issues that needed addressing", but at no stage articulated what those issues were. The chairman also undertook to arrange a meeting, but this did not materialise.
[112] Ms Greed felt compelled to seek legal advice, resulting in the letter from Mr Targett dated 29 November 2004. No response was forthcoming from the school.
[113] It would seem that Ms Greed was given less than half a working day's notice of the meeting on 8 December. The chairman specifically declined to indicate the subject matter of the meeting, or who would be in attendance.
[114] No performance related issues were raised at the meeting. Ms Greed was told that her position was to be made redundant forthwith, yet the board representative declined to put this in writing. Nor has Ms Greed been paid the promised redundancy payment.
[115] On the available evidence it would seem that the work previously performed by Ms Greed is now shared amongst others who have been appointed subsequent to her termination. In the absence of any counter evidence I conclude that the purported reason for termination, i.e. redundancy, was a sham.
[116] In correspondence from Mr Griffiths dated 1 April and 12 April 2005 there are broad references to performance related issues, again without any particularisation.
[117] It is axiomatic that for there to be a valid reason for termination, such reason must be articulated. I have already found the purported reason given, redundancy, was a sham.
[118] I therefore find that Ms Greed was dismissed without valid reason.
[119] As no performance related issues have been articulated, despite numerous requests on Ms Greed's part, she had nothing to answer. It follows that there has been a profound denial of procedural fairness.
[120] I find that Ms Greed was unfairly terminated.
Remedy
[121] With the school in voluntary administration reinstatement would seem quite impractical.
[122] In determining compensation the starting point must be one month's notice, which it would seem, Ms Greed is owed under her contract of employment. In assessing the appropriate level of additional compensation, I have taken into account the following:
· Ms Greed's persistent attempts to have any performance related issues addressed.
· The degree of unfairness, which I consider to be at the higher end of the spectrum.
· The persistent refusal of the school to respond to issues legitimately raised on Ms Greed's behalf. It was not until the 12 April 2005 correspondence that some (belated) degree of finality was brought to the negotiation process attempted by Ms Greed.
· Ms Greed's attempts to mitigate her loss.
· Ms Greed's relatively short length of service.
[123] On my assessment the appropriate level of compensation is three months' salary in addition to the one month's notice referred to above.
Mitigation of Loss
[124] Ms Greed's evidence was that she has earned $11,263 between January and July 2005. On a pro rata basis this amounts to $1877 per month. An amount of $5631 (3 x $1877) will be deducted from the additional compensation referred to above.
Alleged Award Breach
[125] In a supplementary submission Mr McTaggart submitted that Ms Greed's contract of employment was underpinned by the Clerical and Administrative Employees (Private Sector) Award.
[126] He submitted that the employer had breached this award, and that the following amounts were consequently owed to Ms Greed:
|
· Superannuation |
$1283.07 |
|
· Wages 1/12/04 to 8/12/04 |
$ 923.10 |
|
· Public holidays worked |
$1153.85 |
|
· Annual leave |
$4260.36 |
[127] In the absence of any evidence or submissions to the contrary, I am satisfied that the above claims have been properly made out.
ORDER
Pursuant to section 31 of the Industrial Relations Act 1984, I hereby order that Australian School of Fine Furniture Ltd (Administrator Appointed) pay to Denise Elaine Greed, or the relevant superannuation fund, as the case may be, the following amounts:
1. One thousand two hundred and eighty three dollars and seven cents ($1283.07) by way of superannuation,
2. Nine hundred and twenty three dollars and ten cents ($923.10) by way of unpaid wages.
3. One thousand one hundred and fifty three dollars and eighty-five cents ($1153.85) in respect of public holidays worked.
4. Four thousand two hundred and sixty dollars and thirty-six cents ($4260.36) in respect of accrued annual leave.
5. Seven thousand seven hundred and two dollars ($7702) by way of compensation.
Tim Abey
COMMISSIONER
Appearances:
Mr B McTaggart, Barrister, for Denise Elaine Greed
Mr W Griffiths, Barrister (31/5/05), with Mr J Woods (31/5/05), Administrator, for the Australian School of Fine Furniture Ltd (Administrator Appointed)
Date and Place of Hearing:
2005
May 31
July 5
Launceston
1 T10387 of 2002
2 [2005] TASSC 67
3 [1998] ACSR 38
4 [1999] WASC 71
5 [2002] FCA 497
6 PR940508
7 See, for example, ss.90 and 170MW(5)(c)
8 (1987) 163 CLR 656 at 667
9 See s s.170CE(1)(a) and 170CFA(1) and Miller v University of New South Wales [2003] FCAFC 180, 14 August 2003
10 (1983) 291 CAR 200
11 (1992) 2 CAR 373 (Compass Airlines Pty Ltd provisional liquidator appointed)
12 AW784988, PR904332, 18 May 2001 (HIH Casualty and General Insurance Limited in provisional liquidation)
13 [2004] VSC 266
14 Exhibit A3
15 Exhibit A4
16 Exhibit A5
17 Transcript PN 108/9
18 Transcript PN 131 to 138
19 Exhibit A7
20 Exhibit A8
21 Exhibit A9
22 Exhibit A10
23 Exhibit A11
24 Transcript PN 173/5
25 Exhibit A12
26 Exhibit A13
27 Transcript PN 193/4
28 Exhibit A14
29 Exhibit A15
30 Exhibit A16
31 Exhibit A17
32 Exhibit A18
33 Exhibit A19
34 Macken, O'Grady, Sapideen, Warburton, p.224
35 Supra p.220
36 Supra p.226
37 T11310 of 2004
38 T11860 of 2004
39 1997 42 AILR 3-590
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