DECISION NO:576/96
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - no VALID REASON at the date of termination - PROCEDURAL FAIRNESS - whether there was a failure to afford the applicant the opportunity to defend himself against the allegations made - COMPENSATION - whether compensation payable in circumstances where the employee performs voluntary work subsequent to the termination
Industrial Relations Act 1988 ss 170DC, 170DE(1), 170EE(2), 170EE(3)
Selvachandran v Peteron Plastics Pty Ltd (1995-96) 62 IR 371
Victoria & Ors v The Commonwealth (1996) 66 IR 392
Nettlefold v Kym Smoker Pty Ltd (unreported, IRCA, Lee J, 4 October 1996)
Kerr v Jaroma Pty Ltd (unreported, IRCA, Marshall J, 7 October 1996)
GUS MACLEOD & MEDIA ENTERTAINMENT & ARTS ALLIANCE - v - SPRINGVALE CITY SOCCER CLUB
No. NI 1592 of 1996
Before: Judicial Registrar Millane
Place: Melbourne
Date: 28 November 1996
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
NI 1592 of 1996
B E T W E E N :
GUS MACLEOD &
MEDIA ENTERTAINMENT & ARTS ALLIANCE
Applicants
A N D
SPRINGVALE CITY SOCCER CLUB
Respondent
MINUTES OF ORDERS
Judicial Registrar Millane 28 November 1996
THE COURT DECLARES THAT:
1. On 9 April 1996 the applicant’s employment with the respondent was terminated in contravention of Division III Part VIA of the Industrial Relations Act 1988.
AND THE COURT ORDERS THAT within 21 days of the date of making these orders:
2. The respondent pay to the applicant compensation in the sum of $3,035.50.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
NI 1592 of 1996
B E T W E E N :
GUS MACLEOD &
MEDIA ENTERTAINMENT & ARTS ALLIANCE
Applicants
A N D
SPRINGVALE CITY SOCCER CLUB
Respondent
Before: Judicial Registrar Millane
Place: Melbourne
Date: 28 November 1996
REASONS FOR JUDGMENT
In this case the applicant seeks reinstatement to the position of senior coach of the respondent’s soccer club. He alleges that on 9 April 1996 his employment pursuant to the terms of a written contract was terminated and such termination contravened sections 170DE(1) and 170DC of Division III Part VIA of the Industrial Relations Act 1988 (the Act).
The respondent agrees that there was a termination at its initiative but says that there was compliance with the provisions of the Act both in a substantive and procedural sense. It justifies the action it took in bringing the coaching position to an end by relying on a unanimous vote of no confidence taken by the club’s committee on 4 April 1996 and matters preceding that vote of no confidence summarised as followed:
1. An allegation that in late November or early December 1995 the new management of the club, and in particular, the president Michael Rosa (Rosa), instructed the applicant that all future negotiations for the transfer of players from other clubs were to be conducted by the president and committee. An incident occurred subsequent to this instruction when, according to the club, the applicant entered into unauthorised negotiations for the loan of two players from the Seaford Club telling Rosa that the players could be returned by 1 March 1996 without any payment of a transfer fee if they were unsuitable;
2. In February 1996 the applicant was reported to the Victorian Soccer Federation and charged with conduct contrary to the interests of the game as a result of a complaint made by a linesman on 17 February 1996. The charges were dismissed on the grounds of insufficient evidence. However, it is alleged by the respondent that there were a number of hearsay complaints by members of the club about the applicant’s offensive language on the field. At hearing the respondent sought to prove the allegations made by the linesman by calling him to give evidence;
3. It was common place for the club to give aspiring players an opportunity to train with and try out for the team. The club alleges that the applicant turned young players away without giving them this opportunity and this was detrimental to the club’s interests, particularly where it was experiencing a shortage of funds and a reduction in membership numbers;
4. There was a general allegation that the applicant did not show an interest in promoting young members of the club in the team. In some ways this allegation appears to be part of the lastmentioned allegation; and
5. It was alleged that the club required the coach to socialise with players and members after training, however, the applicant had shown that he would not do this from at least some time in March 1996 onwards.
After the vote of no confidence taken on 4 April 1996, the applicant received a letter giving him the opportunity to resign or be sacked. When he refused to resign, on 9 April 1996, his employment was terminated summarily.
The applicant gave evidence. In addition to his own evidence he called evidence from Douglas Joseph Nolan (Nolan), a player with the club from 1992 and the captain of the senior team from the beginning of 1995, and another club official James Rooney (Rooney), who formerly held the position of assistant coach and youth development officer with the club. Rooney’s employment with the club ended in January 1996 after some five and a half years. Apart from his work as a coach he has played in both national and premier league.
The respondent called three witnesses other than Rosa. They were Tony Lettieri (Lettieri), the club treasurer and a committee member of many years standing; Robert Benovic (Benovic), the Victorian Soccer Federation linesman who reported the applicant for conduct contrary to the interests of the game in February 1996; and Ella Chrystal (Chrystal), the club secretary since January 1996.
THE CONTRACT OF EMPLOYMENT
Rosa, Lettieri and Chrystal were long term members of the club with various periods of committee service during their membership years.
In October 1995 there appears to have been a shake-up in the management of the club with the election of Rosa as president on 19 October 1995 and the resignation of a number of former committee members, including the applicant. The minutes of the meeting held on that date (Exhibit R1) clearly indicate the attitude taken towards the applicant by the new committee and the intention, of at least the president of the club, to bring the applicant’s employment to an end well before any of the matters relied on to terminate his contract of employment occurred. The minutes record the following exchange:
“Gus McLeod after reading agenda which was supplied by new Chairman Michael Rosa, asks if he is to be replaced or “sacked” at which Michael Rosa asks him to step down so new changes can take place at the Club.”
The applicant was first hired as a coach of the club in 1987 at a time when Rosa was the club’s vice president and a committee member. Rosa retired from the committee in 1992 before he was re-elected in late 1995 as president.
It was the applicant’s uncontested evidence that he is one of three level four soccer coaches in Victoria, having coached for some fifteen years in Australia. For the last five years he has also instructed other coaches at levels one, two and three. The applicant is forty-six years of age and a devotee of the sport of soccer having played the game in Scotland since he was fifteen years of age.
It is alleged by the applicant, and this evidence is also uncontested, that following the premiership season in 1994 the then committee of the club offered him a written contract which was duly executed on 1 November 1994 (Exhibit R2). The contract is for a senior coach of the club for the period ending “... on the completion of the 1997 V.S.F. League Season”. It is alleged by Rosa and Lettieri that they did not see the written contract until some days after the meeting and the election of the committee on 19 October 1995 when the applicant raised the issue of his contract in response to Rosa’s request that the applicant step down as coach. Indeed, Rosa claimed to have been shocked when he saw the contract and the remuneration provided for in that document as follows:
“1. The manager will be remunerated for (52) fifty two weeks per year in weekly payments.
2. The remuneration amount to be paid to the manager is at this date
$300 per week.
3. Amendments to the stated remuneration figure will be increased by
C.P.I. on 1/7/95, 1/7/96 and 1/7/97.”
Neither Rosa nor Lettieri were committee members on 1 November 1994 and, therefore, were not in a position to challenge the basis upon which the contract was entered into. For instance, it was not argued that the document was not one the committee in November 1994 authorised, nor was it said that the document was not properly executed. The respondent called from evidence from Chrystal, the club’s secretary. Prior to her more recent appointment as secretary from January 1996, Chrystal was also a committee member between 1988 and September 1994. She gave evidence that in mid 1994 the committee she was a member of until September 1994 rejected a written contract containing similar terms to that contained in Exhibit R2; acknowledging at the same time that the document rejected was a different document. After Chrystal left the committee in September 1994 she was unable to say what contractual arrangement had been entered into between the committee, as constituted on 1 November 1994, and the applicant.
On the evidence I am satisfied that the written contract represents the contract of employment applicable to the employment relationship at the date of termination. The shocked response of Rosa and the committee to this document appears to have more to do with the difficulty the document caused the new committee; having by that time decided to get rid of the coach, rather than with any defect in the making and execution of the document. In other words, the new committee had a problem because they wanted the coach out, he would not go and they had to contend with both the terms of his written contract and the unfair dismissal laws.
At hearing the applicant made no claim in the Court’s associated jurisdiction seeking damages arising out of any breach of the terms of the written contract. He relied exclusively on the statutory breaches and the remedies available under the Act.
The written contract contains the following termination provisions in clause 5:
“TERMINATION
(1) In addition to rights of termination detailed in this agreement, the club shall be entitled to terminate this agreement if the manager is in breach of any substantial or material element of this agreement by reasons of failure to discharge his duties hereunder or substantial disobedience on the field of play or training or any misconduct which in the opinion of the club renders him less fit to serve the club under this agreement.
The manager shall be advised by registered mail of any substantial breach which in the opinion of the club renders him less fit to serve the club as aforesaid and that the manager be advised to remedy the breach within seven (7) days. If the breaches are not remedied to the complete satisfaction of the club within the said seven (7) day notice period, then this agreement shall be at an end without prejudice to any rights that may have arisen in the club against the manager for breach of contract.
(2) The coach may terminate this agreement if the club is in breach of any substantial or material element of this agreement by giving written notice of the breach by registered mail and such breach is not remedied within seven (7) days of such notice.
(3) Any termination of this agreement shall affect future obligations only.
THE MANAGER AND THE CLUB AGREE AND ACKNOWLEDGE:-
That the managers services are of a special and skilful character and that by coaching with the club, the manager may well become sought by other soccer clubs. The club and the manager will not give each other notice of cessation of employment during a current season unless the party giving the notice agrees to pay to the other party ten (10) weeks remuneration, within seven (7) days of such notice being given, at the rate of the manager’s currently weekly remuneration at the time when such notice shall be given by either party (sic).”
THE COMPLAINTS CONCERNING THE APPLICANT’S CONDUCT AND PERFORMANCE AFTER OCTOBER 1995
The evidence of Rosa and Lettieri is that the club was short of funds in October 1995 when the new committee was elected and its funding situation has not improved since. Funds are directly related to membership and the success of the team during each season also has some bearing on membership and funds.
It was alleged by Rosa that because of the funding shortage there was no money to buy players and for the first time the club was required to rely on its juniors for its teams. This led him to tell the applicant in about November or December 1995 that the club could not afford to buy players by transferring players from other clubs and any negotiations for buying or selling players were to be conducted through him, the president. It was accepted by the applicant that the president and the committee had the responsibility and the right to negotiate and finalise any transfers.
In the latter part of 1995 Rosa alleged that the applicant came to him and asked him to try out two Seaford players, Lancaster and Johnstone. According to Rosa he was told that the Seaford club were seeking transfer fees of $2,500 and $500 respectively. Prior to that meeting Rosa claims he gave no permission to the applicant to enter into any discussions with the Seaford club. He told the Court he laughed at the suggestion made by the applicant because the club did not have $3,000 to pay for transfer fees. However, he claims that the applicant reassured him by telling him that the club could have the two players on loan until 1 March 1996 and if the club did not want the players, they could be returned without the payment of any transfer fee. At that meeting Rosa alleges he was handed by the applicant a note written in the applicant’s handwriting, which amongst other things, referred to the two players and said (Exhibit R5) “ON LOAN TILL 1ST MARCH at NO COST”.
Because of the abovementioned representations Rosa alleged that he understood that the club could return the players by 1 March 1996 if they were not wanted at no cost to the club.
The applicant’s account was slightly different to that given by Rosa in that the applicant recalled that he took the players to see Rosa after he had asked them to come and train with the team over a couple of weeks. This, the applicant said, was normal procedure for players to try out and seek selection and it was part of his duty as coach to keep an eye out for new players. He claims he asked Rosa for permission to go to the Seaford club and try to get the two players on loan because the club did not have funds. He was given that permission and proceeded to the Seaford club. The applicant alleged that the treasurer and secretary of that club rang Rosa in his presence and asked if the applicant could be party to any negotiations conducted. The making of this lastmentioned call was not put to Rosa in cross-examination.
There are certainly anomalies in the evidence given by both the applicant and Rosa about the negotiations for the loan of the players and the sequence of events leading up to the transfer of the players to the club. In Rosa’s case it is clear that he was satisfied with the proposal put to him and accepted it without remonstrating with the applicant about any authorisation the applicant needed to seek to embark on discussions with the Seaford club. I also have some difficulties with the applicant’s evidence because it seemed to me to be unnecessary for the applicant to require the treasurer and secretary of the Seaford club to telephone Rosa to obtain permission to negotiate directly with him when he claims that Rosa had already given him that permission. It is probable that earlier discussions were held with the Seaford club before Rosa came into the picture and Rosa subsequently ratified the course proposed by the applicant.
The applicant claims that when he conducted the negotiations with the Seaford club he was not aware that the result might lead to the club being responsible for taking and paying for the transfer of the two players. When he returned from his discussions with the Seaford club, he alleged he gave the note (Exhibit R5) to Rosa and it was then his belief that the note properly set out the arrangement for the players. If allowance is made for the inconsistencies in the evidence given by both men concerning these events, it is apparent that even if the applicant had commenced his discussions with the Seaford club before obtaining authorisation to do so, at some stage during the course of those discussions that authorisation was obtained directly from Rosa but it was limited to the arrangement described in the note. I have no reason to reject the evidence that each man believed that no commitment was being made to pay transfer fees and the arrangement was one which allowed the respondent to test the suitability of the players before being required to pay a transfer fee. This conclusion is to some extent borne out by the actions of Rosa on 13 December 1995 when, as a result of the representation made to him by the applicant, he wrote to the Seaford club confirming the arrangement he understood existed between the two clubs (Exhibit R6).
I accept the evidence that at the time the arrangement was entered into neither Rosa as club president, nor the applicant as senior coach were aware of a change to the Victorian Soccer Federation Rules relating to amateur clubs, which change required the club to take the players on transfer and pay for them.
On the evidence it is clear that, first, the applicant was granted authorisation to negotiate and enter into the loan arrangement and, secondly, there was a mistaken assumption about the enforceability of that arrangement. There was no evidence before the Court to show that the Seaford club ever replied to Rosa’s correspondence on 13 December 1995 other than to lay a complaint with the Victorian Soccer Federation against the club on 4 March 1996 claiming that the club had failed to pay an agreed transfer fee.
Significantly, the respondent did not put to the applicant that he deliberately misled Rosa. What is probable is that the ignorance of both men led them into error in circumstances where Rosa as president had the ultimate responsibility for authorising, negotiating and signing the transfers. He did eventually sign transfers and the club paid fees for the players but he gave no further evidence as to what steps he took to sort out the misunderstanding clearly recorded in his letter of 13 December 1995 to the Seaford club.
It was agreed that the outcome of the abovementioned incident is that Lancaster remains with the club and Johnstone has since left. However, the applicant gave evidence that since leaving the club he has attempted to acquire Lancaster for another club, the Albion Red Socks, with the payment of a fee but the transfer has been rejected by the respondent. This evidence concerning the fate of Lancaster was never put to the respondent’s witnesses.
By a letter dated 4 March 1996 the Victorian Soccer Federation notified the respondent that the applicant was charged with “Conduct Contrary to the Interests of the game in that he directed Foul and Abusive Language towards the Linesman during the game v Bulleen Lions played on 16.2.96.”
The abovementioned letter further notified the club of a tribunal hearing on 14 March 1996 at 7.15pm. The letter contained a copy of the linesman’s letter of complaint dated 17 February 1996, the substance of which is contained in the following paragraph:
“During the first half of the match, Mr McCloud expressed his disagreement with one of my decisions in no uncertain terms, and when told to sit down and be quiet, continued on with the abuse for another thirty seconds or so before finally quietening down.
Halfway through the second half, I had just awarded a throw in to Bulleen and again Mr. McCloud expressed his disagreement, this time his language becoming quite profane and loud. Although having already spoken to him in the first half, I had no real opportunity to talk to him about this incident as the match was moving at a fast pace and my full attention was needed on the game.
When the match referee, Mr. Steve Kralevski, blew the whistle to signal for full time, Mr. McCloud proceeded to follow the three of us (the referee, the second linesman Mr. Iain Orrock, and myself), from the park all the while commenting on our performances. As Mr. Orrock’s and Mr. Kralevski’s full attention were taken up with Mr. Jeff Olver (Bullen (sic) Goalkeeper) at the time (see separate report as filed by Mr. Orrock and Mr. Kralevski), I had no option but to handle Mr. McCloud myself. I asked him politely to leave, then he started abusing me in particular saying things like “you little pipsqueak” and so on.
I asked him another couple of times to “please go away” but he refused and kept up with his little display. When he had finally had enough, he turned pointing at me and said “I’ll see you later” and then walked into the Springvale city dressing rooms. I took this as a threat, and that is why I am now writing to you.”
The club did not attend the hearing and Rosa conceded that it was provided with notification of the outcome; namely, that the case was dismissed due to “insufficient evidence”. It was put to Benovic, the linesman, that before a complaint of a linesman is dealt with the Victorian Soccer Federation require a report on the charges from the match referee. Benovic was not aware of this and had not attended the hearing, so that he was not in a position to explain what had taken place at the tribunal hearing.
In giving his oral evidence Benovic reiterated the matters set out in his written complaint. At hearing the applicant was represented by a non-lawyer union representative who failed to appreciate the need to put the applicant’s case to the respondent’s witnesses giving evidence before the applicant proceeded with his case. With Benovic nothing was put to him about the circumstances the applicant claimed prevailed at the time of the alleged incident save to gain a concession from Benovic that at soccer matches swearing was not an uncommon occurrence. Having listened to his evidence it seemed to me that Benovic was mainly troubled by the perceived threat to him personally on the occasion of that soccer match. Because of the failure to challenge Benovic’s evidence in cross-examination by giving him the opportunity to respond to the applicant’s version of his conduct, I must accept the incident complained of occurred in the manner alleged. However, the applicant who attended the tribunal hearing was able to say, and this was not challenged, that the dismissal of the complaint was primarily because the referee did not provide a report supporting the complaint. Further, the applicant alleged, and this again was not contested, that after the game he went and had a drink with the other officials attending the game including the referee. It is open to me to infer, and I do infer from this evidence, that the referee did not support the complaint made.
What is of concern in this case is that the respondent seized upon the complaint without conducting any independent investigation or entering any discussion with the applicant, and accepted the complaint as proven despite its dismissal by the tribunal. The evidence from the respondent’s witnesses indicates that it made no inquiry as to how that dismissal came about, and because of these matters it is reasonable to conclude that the respondent was not particularly interested in the applicant’s explanation or any mitigating circumstances if such circumstances existed. Because of the way the case was run before this Court, Benovic’s complaint is generally substantiated but this was not so on or about 26 March 1996 when following a committee meeting to discuss the coach’s position with the club, the respondent sent a letter drafted by its solicitors containing a warning expressed in the following way (Exhibit R9):
“We advise that the Board recently met to discuss your position as coach of the Springvale City Soccer Club (“the Club”).
The meeting was convened as a result of the following matters:
1. The circumstances leading up to the transfer to the Club of Mr Andy Lancaster and Mr Brian Johnstone from Seaford United Soccer Club; and
2. Your conduct during soccer matches.
In relation to the transfers, the Board considers that you have wrongfully usurped its management powers and entered into an agreement with Seaford United Soccer Club on behalf of the Club.
Clearly, the purchase of players is a matter for Board discussion and approval.
The Board was not consulted during the negotiations conducted by you.
In fact, the Board only became aware of the matter when you gave Mr Rosa your notes of the concluded agreement reached by you with Seaford United Soccer Club.
Those notes confirm that Messrs Lancaster and Johnstone were on loan to the Club until 1 March, 1996 at no cost to the Club and that should the Club enter into transfer negotiations, it would agree to pay $2,500.00 for Mr Lancaster and $500.00 for Mr Brian Johnstone.
Because Seaford United Soccer Club is an amateur club, the Club was bound to pay the transfer fees in any event.
The Board views this incident of you acting without its authority as an extremely serious matter.
The continue operation of the Club is dependant upon responsible management.
Obligations incurred without Board approval jeopardise the Club’s position!
Accordingly, the Board cannot and will not tolerate any future transgression by you.
In relation to the issue of your conduct on the soccer field, the Board has noted your tendency on match days to swear at linesman and occasionally invade the pitch.
Recent incidents include the match against Bulleen Soccer Club where you were reported by a linesman to the Victorian Soccer Federation Tribunal and the match last weekend when you invaded the pitch during the game.
The Board considers your behaviour totally unacceptable.
It brings the Club into disrepute, is harmful to the development of juniors and discourages the attendance of families on match days.
Instances of this nature or any other similar behaviour will not be tolerated.
In view of the above matters, the Board has resolved to issue this warning.
This means that should you make any further transgressions, whether by exceeding your authority, conducting yourself in an inappropriate manner on match day or otherwise behaving in a manner which is contrary to how a coach should behave, the Board will have no other option than to terminate your employment.
The Board is sure that you understand the above, however, please feel free to raise any queries with Mr Rosa.
It is not our intention to over-emphasise the issues, but we re-iterate that you will not be given another warning and that no further transgressions will be tolerated.
Kindly sign the attached copy of this letter to acknowledge receipt thereof.”
The letter of warning was signed by a number of committee members including Rosa. It is clear from the expressions used in that letter that there was a belief on the part of the committee that the applicant had been guilty of exceeding his authority in relation to the player transfers and behaving in an unacceptable fashion vis-a-vis Benovic. It is also clear that the letter amounts to a final warning and relies principally on the two matters mentioned as grounds for giving that warning. My findings concerning the authorisation of the applicant to negotiate with the Seaford club contradict the specific allegation made on this matter. My findings on the behaviour of the applicant at the game on 16 February 1996 indicate that there was then substance to the allegation made only in respect to the linesman but no opportunity was given before the warning or the termination to explain the conduct alleged or to raise any matters in mitigation such as the matters to do with the referee’s position on the complaint.
The letter makes no reference to the termination provisions contained in the written contract, which provide for a seven day period within which to remedy an alleged substantial breach of the contract. According to Rosa the letter of warning was sent by registered mail to the applicant and this method of delivery on 29 March 1996 accords with the termination provisions contained in the written contract. Between that date and 4 April 1996 Rosa agreed that the applicant was not notified of any further complaints concerning his conduct. What seems to have precipitated further action on the respondent’s part was the applicant’s failure to socialise with the committee and club members in the club rooms following a training session on 4 April 1996. There was no direction to the applicant to attend or a warning that any failure to do so would result in termination of his employment. On the other matters opened on by the respondent’s counsel concerning the promotion of young players and the opportunities given to players to train with the team, I am not satisfied that there is substance to these complaints made because of the respondent’s failure to call relevant and admissible evidence to prove these complaints.
It was agreed by the applicant that some time after the new committee was appointed he stopped going for a drink and chat after training. This seems to have been a response to the strained relationship existing between him and the new committee from the date that that committee was appointed. He also conceded that after receiving the letter of warning he did not approach the respondent at all concerning the contents of the warning because he felt that there was nothing untoward in his conduct. Of course, the letter contained no express requirement that the applicant meet with the committee or discuss the complaints on any future occasion.
On 4 April 1996 the committee called an emergency meeting apparently as a result of the applicant’s failure to socialise after that night’s training session. That meeting took place at about 10.30pm and was concerned with the “future role of coach - Gus McLeod” (Exhibit R10). There was discussion of the applicant’s performance, his response to the final warning and the next step to be taken by the committee. There was an unanimous vote of “no confidence” in the coach and it was determined that the applicant would be offered the opportunity to resign. If he did not resign it was also determined that his:
“... services would be dispensed with by the Club as from 9th April in accordance with the clauses in his Contract.
Should the Coach (Gus Mcleod (sic)) seek to fight this decision the Committee agrees to pursue the matter either through ‘Arbitration’ or the ‘Legal system’.”
By a letter dated 4 April 1996 the applicant was informed as follows (Exhibit R11):
“A meeting of the Springvale City Soccer Club Committee was held on Thursday (4/4/96) at 10.30 PM. A motion of ‘No Confidence’ in the Coach (Gus McLeod) was passed unanimously and it was agreed that Springvale City Soccer Club will no longer need your services in any capacity as from Tuesday 9/4/96.
The Committee will, through the Chairman Michael Rosa, offer you the option of resigning. Should this option be unacceptable to you the Springvale City Soccer Club will then defend it’s decision through whatever avenue you choose to pursue i.e., Legal or Arbitration.
Should you seek further clarification of this matter please contact Michael Rosa (President) who has been delegated to handle this matter.”
He did not agree to resign and told the respondent he would have to sack him. By a further letter dated 9 April 1996 the respondent did just that (Exhibit R12):
“Due to the recent actions by yourself, the Committee decided that your services were no longer require (sic) by the Springvale City Soccer Club.
The Committee have given you the option to resign on this date April 9th. 1996 with which you have declined to take.
With this actions (sic) the Committee have no option but to terminate your Contract with the Club.
With all due respects we thankyou for your assistance through the past 9 years and wish you all the success with any future Club you undertake.”
The evidence from the committee members as to what matters they relied on in deciding to terminate, included the matters raised in the letter of warning and the failure to attend the club rooms after training.
FINDINGS
This is a case where it is obvious that the new committee wanted to be rid of the senior coach and any excuse that came along was seized upon as an attempt to justify an outcome sought and pursued from the date the committee was elected in October 1995.
I accept the evidence that the club was experiencing financial difficulties and, with falling membership, it was concerned to keep its members happy. I do not accept as proven the respondent’s contention that the perceived low morale at the club was solely or even partly the responsibility of the applicant. The evidence concerning any alleged complaints from club members was generally inadmissible because of its hearsay content. What was apparent from the evidence of Rosa and Lettieri is that the new committee were having difficulties taking charge of management issues and there were disputes between senior, reserve and youth coaches. Rosa, in particular, even though he is the president of the club was keen to blame the applicant for the club’s problems when it is apparent that his own ignorance of, for instance, the transfer rules, contributed to the confusion which occurred over the transfer of the two players. In saying this I am not ignoring the difficulties the committee obviously experienced because they did not have an easy working relationship with the senior coach from the commencement of their term of management, however, it is clear that they set themselves on a course of opposition by trying to force the coach to resign on the day the new committee took over. I am satisfied having regard to the evidence of Nolan and Rooney that the applicant is a very experienced and well respected coach and it was unreasonable to blame all of the club’s difficulties on one person, particularly where he appears to have had considerable success in coaching the club at least up until the end of the 1994 season.
Concentrating for the moment on the provisions of the Act, the respondent carries the burden of showing that at termination it had a valid reason or reasons for bringing the employment to an end summarily. In his decision in Selvachandran v Peteron Plastics Pty Ltd (1995-96) 62 IR 371, His Honour Justice Northrop describes the meaning of this phrase in the following way:
“Section 170DE(1) refers to "a valid reason, or valid reasons", but the Act does not give a meaning to those phrases or the adjective "valid". A reference to dictionaries shows that the word "valid" has a number of different meanings depending on the context in which it is used. In the Shorter Oxford Dictionary, the relevant meaning given is: "2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value." In the Macquarie Dictionary the relevant meaning is "sound, just, or well founded; a valid reason."
In its context in s 170DE(1), the adjective "valid" should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must "be applied in a practical, commonsense way to ensure that" the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd (1995) 60 IR 1, when considering the construction and application of s 170DC.”
The decision of the High Court in Victoria & Ors v The Commonwealth (1996) 66 IR 392 has led to a number of decisions in this Court including two from Judges of the Court; namely, Justice Lee in Nettlefold v Kym Smoker Pty Ltd (unreported, IRCA, Lee J., 4 October 1996) and Justice Marshall in Kerr v Jaroma Pty Ltd (unreported, IRCA, Marshall J, 7 October 1996) respectively, both of which decisions appear to support the proposition that an employer must justify a termination in the sense that there must be objective and fair grounds for termination.
The evidence in this case leads me to the conclusion that there was a good deal of prejudice in the minds of particularly Rosa and the committee members when it was decided to summarily terminate the applicant’s contract of employment. A vote of no confidence of itself is not a valid reason for termination if one has regard to the meaning attributed to that phrase by His Honour Justice Northrop. At the date of termination no reasons were given additional to the matters raised in the warning letter and there was no evidence that the applicant had transgressed from the date the warning was given apart from not staying behind to socialise after the match. The failure to socialise could hardly justify a summary dismissal.
Accordingly, my finding is that there was no valid reason for termination on 9 April 1996. Moreover, the termination was tainted by a lack of procedural fairness both because of the breach of the contractual provisions relating to the process to be adopted in bringing about a termination, and a contravention of s 170DC of the Act; in that the applicant was not given any or any appropriate opportunity to explain any want of performance or misconduct complained of.
REMEDY
The applicant was summarily dismissed. Prior to the termination he was paid at a rate of $300 gross per week with the net figure of $233.50 paid directly into his bank account. The rate of payment appears to accord with the terms of the written contract; although, according to the applicant, he did not get, nor did he seek, any appropriate CPI adjustment on 1 July 1995 because the club was not then financial and John Hill, the president at the time, had assured the applicant that he would get his money when things at the club got better.
On the evidence it is plain that the respondent did not intend to pay any compensation in lieu of notice. However, it did so by default, in that following the summary dismissal it continued to pay into the applicant’s bank account the sum of $233.50 for eight weeks totalling $1,868.00. This, the applicant says, he believed was payment because the respondent was then paying out his contract, which provides for not only the payment of fifty-two weeks’ wages rather than payment on a seasonal basis, but also ten weeks’ remuneration on the cessation of the employment during a current season.
At hearing it was conceded that the applicant was entitled to some payment in lieu of notice. By reason of his age and the years of employment with the respondent he was entitled to five weeks’ compensation at the net rate of $233.50 and this amounts to $1,167.50 leaving a balance of three weeks of payments the respondent seeks to offset against any order for compensation.
The applicant seeks reinstatement. When he was employed by the respondent it was as a part-time coach, his principal occupation being that of sales manager. Following the termination of his coaching employment by the respondent the applicant told the Court he took eight to ten weeks rest because he was “... very sad, very disappointed at my sacking ...”. He was then approached by a friend to assist another team, the Albion Red Socks, which request he acceded to, helping that team avoid relegation to a lower division by moving it from the last position in the league to fifth from the bottom. According to the applicant his arrangement with the Albion Red Socks Club is that it pay him petrol expenses only because he is hoping to be reinstated with the respondent and return to his former coaching position. He has, therefore, he says received no wages from the Albion Red Socks Club since the termination, yet continues in what he describes as a consultant’s position with that club.
When he was cross-examined on the abovementioned matters the applicant conceded that because of his seniority as a coach he is in demand and could have worked and have been paid up to $500 per week as a coach from the date of termination had he so desired. He agreed that it was his decision not to work in this period as a coach and because of his other employment he has not been required to return immediately to a paid coaching position.
In determining whether the matter of reinstatement is practicable in all the circumstances, the Court should adopt a common sense approach; that is to say, one which also recognises the position the parties may find themselves in should the Court make an order restoring the applicant to his former position. In his evidence the applicant conceded that he and the new committee had been unable to work together, even though in the many years he has coached at the club he has enjoyed a good relationship with earlier committees.
The applicant blamed the committee for the breach that existed and to some extent that observation is an accurate one because of the new committee’s actions in seeking the applicant’s resignation immediate upon its election to office, and its high-handed behaviour in the period leading to termination. However, my observation of the applicant as a witness was that he was not, on his evidence, always co-operative with the new committee. For instance, he withdrew from contact with them by ceasing to socialise and chat after training sessions. In the end the impression I gained was that the behaviour on both sides was not solely directed toward the interests of the club; although in making this comment I am mindful of the confrontational course the committee and, in particular, the president embarked upon from October 1995.
I do not consider that in the circumstances of this case it would be practicable to reinstate the applicant because the relationship between the committee and the former coach is vital to the successful operation of the club should they be required to work together in the future. Accordingly, I do not propose to make an order reinstating the applicant.
In determining the appropriate amount of compensation payable one matter I am required to have regard to is the remuneration the applicant would have received, or would have been likely to have received, but for the unlawful termination of his employment as coach. The wording of section 170EE(3) of the Act is such that the consideration of what is compensable is not confined to only remuneration lost and permits consideration of other matters such as the loss of security of a long term contract of employment, the seasonal nature of coaching work and any other factors. The termination provisions of the written contract provide both parties to the contract with an opportunity to give notice of cessation of employment during a current season on agreeing to pay ten weeks’ remuneration within seven days of such notice being given. Therefore, one of the losses suffered by the applicant was the loss of the opportunity to avail himself of the benefit of this provision in his written contract.
Mitigation of the loss claimed is an issue and, in this case, the decision not to pursue a paid coaching position needs to be addressed, particularly where the applicant concedes that he had a good chance of obtaining a paid position, possibly at a greater wage had he sought one and not offered his services to the Albion Red Socks Club for free. Section 170EE(2) of the Act gives the Court a discretion to order the payment of compensation if it considers it appropriate in all the circumstances of the case. In my view the decision to use and apply one’s skills for less than a return of income that might be obtained on the open market or for no return at all, does not immediately disentitle an applicant to the payment of compensation for the loss of remuneration during a period subsequent to termination. Obviously, a decision to perform voluntary work in the field in which an applicant was previously employed in and remunerated for is different to a decision not to work at all. In the circumstances of this case I do not consider the applicant’s actions since termination to be unreasonable given his strong desire to be available and ready to return to coach his old team and not commit himself contractually to a new club.
The compensation sought and the limit applicable to this case using the net figures and making no adjustment for any CPI increase from 1 July 1996, is $6,071.00.
Taking all the abovementioned matters into consideration I have discounted the sum sought and have assessed appropriate compensation at thirteen weeks’ compensation totalling the net sum of $3,035.50. This sum is additional to the eight weeks already paid amounting to $1,868.00.
MINUTES OF ORDERS
THE COURT DECLARES THAT:
1. On 9 April 1996 the applicant’s employment with the respondent was terminated in contravention of Division III Part VIA of the Industrial Relations Act 1988.
AND THE COURT ORDERS THAT within 21 days of the date of making these orders:
2. The respondent pay to the applicant compensation in the sum of $3,035.50.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
I certify that this and the preceding twenty-two (22) pages are a true copy of the reasons for judgment of Judicial Registrar Millane.
Associate:
Dated: 28 November 1996
Representative for the Applicants: Media Entertainment & Arts Alliance
Appearing for the Applicants: Ms J. McCulloch & Mr B. Schwab
Solicitors for the Respondent: Vadarlis Tasiopoulos & Co
Counsel for the Respondent: Mr M. Klemens
Date of hearing: 5 & 6 September 1996
and 7 October 1996
Date of judgment: 28 November 1996
