INDUSTRIAL RELATIONS COURT

OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VI 1930 of 1996

B E T W E E N :

DENISE JOANNE LANG

Applicant

A N D

DIMMEYS STORES PTY LTD

Respondent

MINUTES OF ORDERS

Judicial Registrar Millane                                           17 December 1996

THE COURT DECLARES THAT:

1.         The termination of the applicant’s employment by the respondent on 30 May 1996 contravened Division III Part VIA of the Workplace Relations Act 1996.

2.         The termination of the applicant’s employment by the respondent on 30 May 1996 breached an implied term in the contract of employment not to terminate the applicant’s employment other than on reasonable notice.

AND THE COURT ORDERS THAT within 21 days of the date of making these orders:

3.         The respondent pay to the applicant compensation in the sum of $7,255.38 less any amount payable to the Commissioner of Taxation pursuant to the Income Tax Assessment Act 1936 and actually paid.

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

VI 1930 of 1996

B E T W E E N :

DENISE JOANNE LANG

Applicant

A N D

DIMMEYS STORES PTY LTD

Respondent

Before:           Judicial Registrar Millane

Place:             Melbourne

Date:               17 December 1996

REASONS FOR JUDGMENT

This proceeding involves a claim by the applicant for compensation alleging that on 30 May 1996 her employment as the respondent’s marketing services manager or advertising manager was terminated in contravention of Division III Part VIA of the Workplace Relations Act 1996 formerly known as the Industrial Relations Act 1988 (the Act). 

The respondent conceded termination at its initiative but argued that such termination was a redundancy based on its operational requirements.  There were no issues of capacity or conduct relied on by the respondent to justify the termination.

A further matter of contention between the parties related to the amount of the applicant’s salary or her entitlements at the date of termination.  She claimed she received a package of $62,880 inclusive of a fully maintained BMW motor vehicle and the payment of superannuation.  In contrast the respondent alleged that at the date of termination her package consisted of wages of $48,000 gross per annum plus the use of the company motor vehicle for the purposes of her job but not for her private use.

The applicant also filed a Statement of Claim seeking damages for wrongful dismissal the amount of which she quantified as a payment of six months’ salary. 

The respondent conceded that in contravention of section 170DB of the Act, at termination it failed to pay the applicant any compensation in lieu of notice.  Accordingly, I propose to make an order for the payment of one week’s damages pursuant to section 170DB of the Act at the appropriate weekly rate.

BACKGROUND

It was common ground that when the applicant was appointed to her position on 29 June 1995 and commenced her employment on 17 July 1995, she was employed with the entity known as Dimmeys Model Stores Pty Ltd.  It is a matter of record that in the early part of 1996 administrators were appointed to run that company and on 18 May 1996 the respondent purchased the employer’s business.  On 20 May 1996 the control of the discount department store business operated by the former employer was assumed by the purchaser and respondent to this proceeding, Dimmeys Stores Pty Ltd. 

By a written circular dated 7 May 1996 the administrators notified existing employees of, amongst other things, the purchase and further informed the employees as follows (Exhibit A1, document 6):

            “We are also pleased that the purchase will entail continuity of employment being offered to the Dimmeys and Forges staff.  Employee Annual Leave, Long Service Leave and Sick Leave entitlements will be transferred to the purchaser.”

The respondent disputes the existence of any agreement to provide continuity of employment alleging that at the date of termination the applicant had been employed some ten days rather than ten and a half months.  Of course, the shorter length of service may have some bearing on the amount of any compensation or damages payable both on the unlawful termination claim and the common law claim.

A shareholder in the new employer is Best Buys Pty Ltd, which company at the relevant time also ran discount department stores in country and regional centres.  When the sale was effected on or about 18 May 1996 Best Buys Pty Ltd employed an advertising manager, Jeffrey John Croft (Croft).  It was said by the respondent that it did not need two advertising managers and because of this the management and the directors of the respondent, who included the former managing director of Best Buys Pty Ltd, Douglas Edward Zappelli (Zappelli), decided to appoint Croft to the position of advertising manager as they were happy with the work he had performed for Best Buys and had confidence in him.  This led to the respondent offering the applicant an alternative position as a catalogue co-ordinator on a total salary package of $30,000 per annum.

The abovementioned matters were not really the basis of any contest; although the content of the conversations held between the principal witnesses in this case gave rise to some limited dispute. 

THE EVIDENCE

By a letter dated 29 June 1995 from Dimmeys Model Stores Pty Ltd to the applicant, the applicant was notified of her appointment as a marketing services manager as follows (Exhibit A1, document 2):

“I have pleasure in confirming your appointment as Marketing Services Manager at a commencing salary of $48,000.00 per annum., plus a fully maintained company vehicle.  The above salary includes the provision of superannuation at the rate of 5%.  A review of your salary would be conducted within a six month period.  A mobile telephone for your motor vehicle will also be provided.

As discussed at the interview, a staff account would be available to you, which would allow goods to be purchased from the group at cost plus 10%.

We very much look forward to you joining the company, and await your confirmation as to your commencement date.”

As can be seen from the contents of the letter to the applicant there was no restriction placed on her use of the motor vehicle which was a fully maintained BMW she alleges she used for personal and business use.  In evidence the applicant produced to the Court a further copy business record entitled “Dimmeys/Forges Group Salary Details” dated 14 August 1995 (Exhibit A1, document 4).  This document names the applicant and nominates her annual salary at $48,000 plus superannuation at 6 per cent ($2,880) and a fully maintained car.  The document quantifies all of these items at $62,880 in a column entitled “Value of Package”. 

The applicant also produced a copy document (Exhibit A1, document 3) which shows the management structure of the former Dimmeys Model Stores Pty Ltd with her position as advertising manager shown in what was described by her as a second tier management position, answerable to the chief executive officer. 

It was alleged by the applicant that she initiated a meeting with Croft and Zappelli, a director of both the respondent and Best Buys, on 24 May 1996; the purpose of which meeting was to ascertain what her role would be in the new company.  She alleges that Zappelli during the course of that meeting told her “It would be two to three months before anything was sorted out”. 

On 30 May 1996 the applicant alleges that she was asked by Zappelli’s son to meet with Croft in the downstairs management office.  She complied with that request and on attending on Croft was informed by him that he was to be the advertising manager.  He then offered the applicant a position as a catalogue co-ordinator at the rate of $30,000 per annum without any of the other benefits she currently enjoyed.

The applicant alleges that she responded to Croft by asking him whether he was saying to her that her position was redundant, to which question he replied in the affirmative.  This reply prompted the applicant to tell Croft that she would take a redundancy.  She then was, she said, surprised and extremely upset to be told that the respondent would give her one week’s pay and was asked by Croft to clear her desk and leave her car.  Croft did, she said, agree to let her return the car the following day to allow her time to remove her personal belongings from the vehicle.

After the meeting the applicant went to her desk in an upstairs office and commenced to clear it.  A short time later Croft appeared and was asked by the applicant when her cheque would be ready.  According to the applicant Croft informed her that there would be no payment.  The reasons given were that she was not being made redundant and she had failed to accept the offer of the alternative position.  This prompted the applicant, she alleges, to express her view that the respondent’s actions were unfair in reply to which comment Croft suggested that she “... take it to the DLI”.  I understood that to be a reference to what was formerly known as the Department of Labour and Industry. 

The reasons the applicant gave to the Court for rejecting the alternative position were two-fold.  First she noted that the duties in the position offered were already performed by her as part of her advertising management role.  Secondly, the offer involved a significant drop in salary with the prospect of the lower status job impacting on her career development.  Obviously at common law her demotion could be treated as a repudiation of her contract of employment.

On 31 May 1996 at approximately 11.00am the applicant delivered a letter to Croft personally (Exhibit A1, document 7) advising him as follows:

“Following on from our discussion I am disappointed that my current position has been made redundant.  The termination arrangements as outlined by you yesterday in my view appear very harsh and unjust.  I have been employed and remunerated on a monthly basis since my appointment in June 1995.  I am entitled to at least one months pay in lieu of notice and one months redundant payment.

If my request, which I consider reasonable under the circumstances, is not agreed to I will have no alternative than to seek redress for a harsh, unjust termination under section 170DE of the Industrial Relations Act 1988 (sic) ”

The applicant claims that after reading her letter Croft informed her that “... there was no way Doug (meaning Zappelli) would pay anything towards the redundancy or what I was requesting and gave me my cheques ...”. 

During their discussion the applicant alleges that Croft agreed to speak to Zappelli to try and resolve the matter and suggested that she ring him again at 4.00pm that day to ascertain the results of his discussions.  She did ring and was told that “... Doug wouldn’t pay the amount and that I should go ahead and lodge the papers.”

Another matter the applicant recalled after refreshing her memory from notes made following the meeting was that during their conversation she asked Croft why it was the case that she was not included on the redundancy list for senior employees who had, through the administrators, entered into discussions with the new management about the retention of their services, presumably once the sale was completed.  She claimed that Croft told her that “Doug” said to him she could not go on the list.

Brian Swersky is a solicitor and director of the respondent company.  On 5 June 1996, acting as the solicitor for the respondent, he wrote to the applicant formally replying to her letter of 31 May 1996 in the following way (Exhibit A1, document 9):

“We act for the abovenamed company and are in receipt of your letter to Mr Croft of 31 May 1996.  Our instructions are as follows:

1.         Your former position is not redundant and still exists.

2.         The option for you to work out your one month’s notice in the new position at a pro rata annual wage of $30,000.00 remains open to you.  It was, however, our client’s understanding that you preferred to leave without taking up this option.  Should you wish to take up this option and recommence your employment for one month, please contact Mr Swersky such that appropriate arrangements may be made.”

The offer to work out one month’s notice at the lower rate of income came nearly one week after the applicant had been terminated from her employment and had received her entitlements up to the date of termination without any monies being paid in lieu of notice, much less any severance pay.  By then the application to this Court had been filed on 3 June 1996 and the applicant advised Swersky that she would proceed with her claim.  Swersky did not contest the applicant’s evidence on any of these matters.

In cross-examination of the applicant the only matters of contested evidence put to the applicant and raised in Croft’s subsequent evidence-in-chief consisted of the following issues.

It was put to the applicant that Croft would deny making any statement to the applicant to the effect that Zappelli had excluded the applicant from the original list of employees for discussion on the redundancy issue because he said this was a confidential list which he would not discuss with another member of staff.  The applicant maintained her position on this evidence and I am satisfied from the evidence generally that the existence of this list was a matter of concern to her and it is more likely than not that there was some discussion about this once the applicant realised that she was then to be made redundant. 

Further, the applicant was challenged on the notes she made and her suggestion that, in effect, some of her duties were split between three other employees, including Croft during the ten days the respondent had control of the business prior to her termination.  Given the matters raised in Croft’s evidence, I am satisfied that at least some of the applicant’s duties were being performed by one if not two other employees apart from Croft.

The third matter amounted to a challenge to parts of the applicant’s written record of the discussion with Croft on 31 May 1996 where she allegedly reminded Croft of an earlier discussion prior to the purchase.  During this earlier discussion she claims that she raised the problem of both her and Croft being in the same job.  It was put to the applicant that Croft did not make this comment but, in fact, told the applicant that she would continue in her position.  No doubt in the period between February 1996 and the date of the purchase the applicant did have some concerns about the continuation of her position.  On communicating with Croft prior to the purchase I am satisfied that it is likely that she expressed some concern about which one of them would perform the advertising management duties.  I am further satisfied that it is more likely than not that because of her expression of concern about their future roles he reassured her in the manner he suggested.

A further matter of contention put to the applicant in cross-examination was an allegation that Croft gave the applicant the opportunity to work out one week’s notice which she refused to do.  This was denied by the applicant.  I am satisfied that it is unlikely that she was given this opportunity because the attitude of the respondent was then that it was not terminating her employment but, having offered her alternative employment, she chose to leave.

In cross-examination it was also alleged that the applicant chose to leave immediately but this was allegation was denied by the applicant.  Again I have some difficulty in accepting the respondent’s allegation because of its apparent view that she was not being terminated.  It is more consistent with this view that the respondent expected her to leave immediately or stay and take up the new position.  Swersky’s letter to her belatedly offering a period of notice at the rate payable for the alternative position, tends to confirm this conclusion. 

Lastly, the only other matter of significance raised in cross-examination of the applicant was the question of the length of her employment.  She agreed that she was employed by the respondent for ten days.  Because of this allegation and the concession made there was no reason for the Court to assume that for the purposes of this case her employment extended beyond the ten days, although this is obviously a case where reassurances were given to the applicant and as a result she took up employment with the respondent until she was, in effect, summarily terminated.

When Croft gave his evidence he indicated to the Court that he was now the respondent’s advertising manager and at the date of the purchase had six years experience with Best Buys as its national advertising manager.  In the four to five years preceding that he was Best Buys national operations manager and had worked for twelve months as its state manager for Victoria, South Australia and New South Wales.

With regard to the meeting initiated by the applicant on 24 May 1996 with Croft and Zappelli, Croft was uncertain as to whether Zappelli nominated a time-frame of two to three months as alleged by the applicant, but was nevertheless confident that Zappelli had said to the applicant “... continue as we are at this stage”. 

Zappelli himself was doubtful that he had made the representation the applicant alleges he made, however, in his evidence-in-chief he informed the Court that he thought he had said to the applicant on 24 May 1996 “that she would have a job”. 

The decision to call Zappelli to give evidence was something of an after-thought.  He seemed to be concerned that it might be suggested that he made a commitment to the applicant at the meeting in May whereas what was being put to him by the applicant’s counsel was that because the new company had to familiarise itself with the workings of its new business and re-organise various positions, the applicant had called the meeting with Zappelli and Croft to get some idea about the future.  As a result of this familiarisation process Zappelli had in fact reassured her by suggesting it may be two to three months before they worked out their “heads”.  The proposition put to Zappelli is consistent with the events occurring at the time and in my view is a plausible one in all the circumstances.

When the case was first opened before the Court as I have already noted there was some suggestion that there had been no termination at the initiative of the respondent because the applicant had rejected the alternative employment offered.  This defence was not pursued and the respondent relied on its operational requirements as establishing a valid reason for termination.  Interestingly enough when it was suggested to Zappelli in cross-examination that the applicant had been terminated his response was to say “she was not terminated”.  If anything to my mind this answer underscored the respondent’s lack of understanding of its obligations vis-a-vis its employee and the matters relevant to determining whether there was a termination. 

Zappelli had no further exchanges with the applicant following their meeting on 24 May 1996 and it appears from the evidence that that was probably the only meeting they ever had.  It was Zappelli’s decision to offer the applicant’s advertising managing position to Croft and give the applicant the opportunity to take an alternative position at a much reduced salary.  He described his reason for selecting Croft in preference to the applicant in the following words:

“I suppose the - main reason is that you know, I - you know, you look at the total picture and I’ve known Jeff for quite a number of years, known his capabilities and the things he is good at.  He’d had enormous experience in retail, etc. and you know, from - from - you know, the experience and what I - I’d seen of Denise in my opinion, Jeff was the ideal person for what we were trying to make the company compared to the - Denise.  Well, well, Denise I believe is - I’m not suggesting in any shape or form she’s not efficient, I’m just saying that you - you can’t have two people running an advertising department.  You know, you’ve got to have someone in charge, and - and as I said, at the time the decision was made we certainly had no intention of - of Denise not staying with the company.  But, but, you know, when you are in our situation you’ve got to make some changes and, like I say, you can’t have everybody in charge, you’ve got to have one person in charge and some working underneath.”

The decision appears to have been made in circumstances where Zappelli had first hand knowledge of and a close working relationship with Croft over some years.  He had met with the applicant only once and although there was evidence that all employees supplied curriculum vitae in about March 1996 to the prospective purchasers, there was no evidence that Zappelli ever read or considered the curriculum vitae the applicant provided before reaching his decision.

Croft told the Court that on 30 May 1996 he was informed by Zappelli that he would take on the full time role of advertising managing.  During this conversation he was asked by Zappelli what the applicant was like.  He obliged Zappelli by provided the following insight and recommendation:

            “I said, “Doug, she has a very good reputation around the trade.  I have not heard a bad word spoken about her.  I need someone to help co-ordinating the catalogues and I believe that that would be an ideal role for her”.  To which Doug said he was happy with that he nominated a salary which we should offer her.”

I have already outlined the areas of contention between the applicant and Croft concerning their conversations and the meetings on 30 May 1996 and 31 May 1996 and I do not propose to go through those matters again.

It was alleged by Croft that he offered the applicant one week’s pay in lieu of notice however he could provide no explanation for why that was never paid.  Neither could Zappelli.  In my view the failure to pay the week’s notice given Croft’s knowledge of what items were paid for such as accrued leave and outstanding petrol vouchers, is consistent with the respondent’s misguided view that the applicant’s employment was not terminated and that because she chose to reject the alternative position she was leaving of her own accord. Croft in his evidence conceded that on 31 May 1996 he may have said to the applicant “we don’t owe you anything; you’re job is not redundant ...”.

As can be seen from the abovementioned summary of the evidence the dispute concerning the facts of this case was a limited one.  The real dispute lay in how the actions of the parties should be characterised.

One factor emerging from the evidence of the respondent’s witnesses was that there was and is confusion in the respondent’s mind as to whether there was a termination of the applicant’s employment at its initiative and whether any termination was a redundancy.  On the first point I have already alluded to Zappelli’s evidence.  The second point is illustrated by both Croft’s comments to the applicant and the letter written by Swersky on 5 June 1996 telling her that her former position was not then redundant and still existed.

FINDINGS

It was urged upon the Court by the respondent’s counsel that this is a case where there was in fact a redundancy because the respondent was faced with the problem that it could not have two advertising managers after the advertising manager’s position of the former employer was merged with that of the advertising manager’s position at Best Buys.  The new position, it was submitted, was a different one to that formerly occupied by the applicant.  The evidence of the applicant and Croft indirectly supports the proposition put by counsel because, on the applicant’s side, she contends that some of her former duties were being performed by an independent contractor, another employee and Croft.  Further, Croft’s evidence in answer to questions put to him in cross-examination indicated to me that his duties at Best Buys were no longer performed by him after 30 May 1996 when he was made advertising manager apart from his former advertising duties.  Otherwise, someone else had, according to Croft, filled his former position and since 30 May 1996 that person was reporting to Croft once a week.

The respondent relied on the following extract from the decision of His Honour Justice Moore in Hawkins v Commonwealth Bank of Australia (1996) 66 IR 322 at pages 333 to 334 where His Honour cited with approval the reasoning of His Honour Justice Ryan in Jones v Department of Energy and Minerals (1995) 60 IR 304 and at the same time made the following observations:

“Thus, in the present case, it is necessary to consider whether the work of Hawkins, or a major portion of it, was no longer required to be performed and whether that arose relevantly, as a result of reorganisation.  I should add that the definition speaks of a position redundancy.  That is a reference, in my opinion, to a situation where the work done by an occupant of an identified position is no longer done by the occupant of that position and the position is abolished.  That might be because the work is not done at all or the work is allocated to a range of other identified positions in which some of the reallocated work is done but is done in conjunction with other work.  As Ryan J said in Jones (supra):

                        "It has generally been accepted that a dismissal is not unfair if it results from genuine redundancy, in the sense that an employee is no longer required to perform his or her job because of changes in operational requirements.  In R v The Industrial Commission of South Australia; ex parte Adelaide Milk Co-Operative Ltd (1977) 44 SAIR 1202, Bray CJ defined redundancy at 1205, where he stated:

                                    "a job becomes redundant when an employer no

                                    longer desires to have it performed by anyone."

            That definition was endorsed by a Full Bench of the Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy Case (1984) 8 IR 34, at 55-6.

            On Mr Jones' evidence, this case would not satisfy that narrow definition of genuine redundancy, as some of his former duties were still being performed.  However, it should be noted that Bray CJ's description of what can constitute a redundancy is not expressed to be exclusive.  His Honour's description was cast in terms of a "job" in the sense of a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer's organisation, to a particular employee.  However, it is within the employer's prerogative to rearrange the organisational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions, including newly-created positions.  It is inappropriate now to attempt an exhaustive description of the methods by which a reorganisation of that kind may be achieved.  One illustration of it occurs when the duties of a single, full-time, employee are redistributed to several part-time employees.  What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the re-organisation, any duties left to discharge.  If there is no longer any function or duty to be performed by that person, his or her position becomes redundant in the sense in which the word was used in the Adelaide Milk Co-Operative case."“

Despite the conflicting evidence given by the respondent’s witnesses I am inclined to the view that on balance this is a case where the applicant’s position became redundant with the creation of another position merging in that position some of the functions previously performed by the applicant.  Accordingly, my finding is that the respondent has discharged the onus it carries of establishing that this was a redundancy to the extent that the applicant’s position no longer exists. 

Notwithstanding the abovementioned finding the respondent is also required to discharge the further burden of proving that it had a valid reason for selecting the applicant for termination (see the Full Court decision in Kenefick v Australian Submarine Corporation (1996) 65 IR 366)).

Whether or not there was continuity of employment it is apparent from the evidence that the applicant was from at least 20 May 1996 employed by the purchaser and current respondent as an advertising manager and had not been included in any of the discussions held with other employees of the former employer who were not to be retained following the sale. 

For at least ten days she performed her duties as advertising manager and was remunerated at the same rate and enjoyed the same benefits.  Both before and during that period she received some reassurances from the respondent about her continuing position.  On Croft’s part he says he told her she would continue as advertising manager.

It is not the role of this Court to decide whether one employee or another is more suitable for appointment to any position created by the reorganisation of the employer’s business.  However, as is apparent from the decision of the Full Court in Kenefick’s case, the respondent has an obligation to show that it established objective selection criteria which when applied to the two employees from whom the selection was made provided a sound, defensible or well founded process and basis for selecting the applicant for termination. 

The evidence of Croft and particularly that of Zappelli shows that Zappelli did not turn his mind to the development of objective selection criteria, the application of which could properly lead to the selection of the applicant for termination.  He had already given the position to the employee he was acquainted with before he made any enquiries from Croft about the applicant’s skills.  These matters lead me to the conclusion that the respondent has failed to discharge the burden it carries in relation to the selection process.

In his decision in Nettlefold v Kym Smoker Pty Ltd (unreported, IRCA, Lee J, 4 October 1996) His Honour Justice Lee had occasion to consider an alleged redundancy and the meaning of the phrase valid reason citing with approval the meaning attributed to that phrase by His Honour Justice Northrop in Selvachandran v Peteron Plastics Pty Ltd (1995-96) 62 IR 371.  At pages 6 and 7 of his decision Justice Lee makes the following observations:

“As Ld Denning stated in Woods v W M Car Services (Peterborough) Ltd [1982] ICR 693 it is an implied term of an employment contract that an employer be "good and considerate" to its employees.

By giving effect to the Convention the Act seeks to establish a balance between the right of an employer to duly manage an enterprise in which labour is employed and the right of an employee, and of the community, not to have the asset represented by the capacity of employees who provide such labour, whether skilled or unskilled, depreciated by incompetent or capricious management of labour by an employer.”

Apart from the abovementioned observations His Honour also noted in his decision that the respondent employer gave no evidence of any change in the manner or conduct of the business nor of how the application of good management required the employee’s employment to be terminated by reference to the respondent’s operational requirements.

Bearing in mind the matters Justice Lee alluded to in his decision, I must say that I felt some concern in this case that the respondent, who in May 1996 was in the throws of sorting out a $70m business acquisition, gave no evidence of any or any proper consideration of alternative employment and duties at a level to reflect the applicant’s senior management and advertising skills.  She was simply offered a demotion to a far less senior position or nothing, without any proper consideration of her skills and how these skills could be utilised by the respondent and properly remunerated.

REMEDY

The applicant has now obtained income earning work as a photographic co-ordinator from 12 August 1996.  This work is performed as an independent contractor and she is remunerated at the rate of $55,000 per annum paid monthly.  Her contract precludes any access to benefits previously enjoyed in her position with the respondent and the respondent’s predecessor such as superannuation payments, the use of a fully maintained motor vehicle, holiday pay and sick leave pay.

The applicant did not seek reinstatement and in view of her engagement elsewhere I find that such a remedy is impracticable.  She did, however, seek compensation quite apart from the damages sum of one week’s pay in lieu of notice payable pursuant to section 170DB of the Act, which lastmentioned sum the respondent acknowledged as being payable. 

On the evidence I am satisfied that the applicant’s package was $62,880 at termination which included an entitlement to superannuation payments and a fully maintained motor vehicle with no restriction on its use.  There was no evidence given by the respondent to suggest that when the applicant commenced her employment on 20 May 1996 the terms and conditions of that employment were any less advantageous than those spelt out in the letter of appointment from her former employer dated 29 June 1995.

The applicant seeks, using the rate of payment of $241.84 gross per day, fifty-one days lost remuneration between 31 May and 12 August plus twelve months shortfall of income amounting to $7,880, which shortfall relates to the period of her contract as an independent contractor.  The total claim pursuant to the provisions of the Act amounts to $20,213.84.  The claim for the shortfall on a twelve month period depends on the Court inferring that because of the lack of any criticism of her conduct or performance, the applicant could have expected to have remained with the respondent for at least this period and longer.  On scrutinising the figures claimed in the particulars of loss and counsel’s submissions I must say that I have not been able to work-out how the figures were arrived at.  For instance, the time between 31 May and 12 August when the applicant resumed paid employment, having been paid up to and including 31 May, is seventy-two days.  On a package of $62,880 she was rewarded at the rate of $1,209.23 gross per week.  Her loss for seventy-two days or just over ten weeks’ remuneration is $12,437.79.  Together with the shortfall of $7,880 the total claim should be $20,317.79.

The uncontradicted evidence of the respondent’s witnesses was that with the purchase of the failing business there were uncertain times ahead and it seems to me inappropriate to assume that an employee with a comparatively short period of employment behind her could sustain a claim to anything more than a hope and expectation that longterm employment lay ahead of her. 

As an employee occupying a senior management position the termination was a abrupt one and deprived the applicant of the opportunity to relocate herself whilst still employed as well as depriving her of the opportunity of being properly considered for selection to the position of advertising manager or an alternative senior position with the respondent. 

The abovementioned considerations lead me to the conclusion that an appropriate amount of compensation is the equivalent of six weeks’ remuneration of $7,255.38 inclusive of the damages sum payable pursuant to section 170DB of the Act.

With regard to the common law claim I am not satisfied that any implied term regarding the giving of reasonable notice would in this case give rise to a period of some six months’ notice.  In his decision in Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567, His Honour Justice Ashley makes the following observations at pages 580 to 581 which observations are pertinent to the case before me:

            “It was common ground that the content of “reasonable notice” is to be determined as at the date when notice is given, not when the contract is entered into.  In this context matters occurring antecedently to the making of and in the course of the performance of the contract up to the date of termination are not irrelevant.

            Macken et al, Law of Employment, pp. 157-8, lists certain pertinent considerations.  Thus, for example:  the duration of the hiring; industry practice; the seniority of the position held; the importance of the position held; the size of the salary; the worker’s age; the worker’s length of service; what the worker gave up to come to the present employer; the worker’s prospective pension or other rights.

            In the present case I regard as principally important the worker’s age when he entered the August 1985 contract, the seniority and importance of, and salary commanded by that position, the fact that the parties would have envisaged - in August 1985 as they did in January 1985 - that the job would be a long-term one, the fact that the plaintiff had given up security to enter the defendant’s employment in January 1985 (albeit that this was under a different contract) and the fact that the plaintiff’s reasonable expectation of getting superannuation protection was destroyed by the termination was effected.”

In my view four weeks’ notice would have been reasonable notice given the facts of this case.  The uncertainty of her position and comparatively short period of service, whether that is taken from July 1995 or May 1996, are particularly important considerations in reaching this conclusion.  The amount payable is less than the amount I have found to be appropriate for the payment of compensation payable under the Act and, therefore, I do not propose to make any order for common law damages.

MINUTES OF ORDERS

THE COURT DECLARES THAT:

1.         The termination of the applicant’s employment by the respondent on 30 May 1996 contravened Division III Part VIA of the Workplace Relations Act 1996.

2.         The termination of the applicant’s employment by the respondent on 30 May 1996 breached an implied term in the contract of employment not to terminate the applicant’s employment other than on reasonable notice.

AND THE COURT ORDERS THAT within 21 days of the date of making these orders:

3.         The respondent pay to the applicant compensation in the sum of $7,255.38 less any amount payable to the Commissioner of Taxation pursuant to the Income Tax Assessment Act 1936 and actually paid.

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 nineteen (19) pages are a true copy of the reasons for judgment of Judicial Registrar Millane.

Associate:                 

Dated:                                    17 December 1996

Solicitors for the Applicant:                        Richmond & Bennison

Counsel for the Applicant:             Mr J. Bourke

Respondent in Person

Counsel for the Respondent:        Dr K. Hanscombe

Date of hearing:                               1 November 1996

Date of judgment:                            17 December 1996