Berends v Gillilodge Pty Ltd Trading as The Campmart [2001] QIRC 122 (2001) 167 QGIG 402

402 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 17 August, 2001 ########################################################################################################################### QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 74 – application for reinstatement Jay Berends AND Gillilodge Pty Ltd Trading as The Campmart (Case No. B362 of 2001) COMMISSIONER ASBURY 3 August 2001 Termination of employment – Dismissal or resignation – Constructive dismissal – Case law – Refusal to pay wages to the applicant constituted fundamental breach of employment contract – Applicant entitled to accept breach and consider himself discharged from further performance of contract – Applicant was constructively dismissed – Dismissal was unfair – Consideration of Award provisions re limitations on hours to be worked in any one week by casual employees – Compensation to be awarded – Further details of earnings to be provided by applicant to enable compensation to be determined. DECISION Background to the Application This is an application by Jay Berends (the applicant) alleging his unfair dismissal by Gillilodge Pty Ltd trading as The Campmart (the respondent). The respondent is engaged in the retail of camping and other similar equipment. The applicant commenced employment with the respondent on 27 September 1999, as a shop assistant. The applicant’s employment was governed by the Retail Industry Interim Award – State (the Award). The applicant worked in the respondent’s Strathpine store. The applicant’s employment ceased on Thursday 8 February 2001. The applicant contends that he was constructively dismissed. The respondent contends that the applicant resigned his employment. The facts in relation to this application can be briefly summarised as follows. In late September 2000, the applicant contacted Wageline, seeking information about the rate of pay to which he was entitled under the Award. The applicant’s initial inquiries established that the Award rates had increased from early September 2000, and that the rate being paid to him and to other employees, was less than the Award rate. The applicant then held a number of discussions with the Manager of the Strathpine store, Mr Nigel Crossley, in an attempt to resolve the matter. When those discussions failed to address his concerns, the applicant, prepared a letter to the owner Mr Liekari, dated 5 January 2001, which was signed by a number of other employees (one of whom subsequently withdrew his name), requesting payment in accordance with the Award, and back payment of penalty rates and overtime. The letter also stated that if there was no reasonable response to the request within fourteen days, the matter would be taken to the Industrial Relations Commission. The applicant also raised with the respondent, the issue of the definition of casual employee contained in the Award (at clause 3.1(4), which provides that a casual employee is one who is employed for not more than 30 hours in any one week. Prior to raising these issues, the applicant was regularly rostered to work 40 hours per week. Upon becoming aware of the Award provisions with respect to casual employees through the applicant and its own inquiries, the respondent reduced the rostered hours of the applicant to 28 hours per week, with effect from 9 January 2001. The applicant says that only the hours of casual employees who had complained about their wages and working conditions were reduced. The respondent says that the hours of all casual employees were reduced, to ensure compliance with Award provisions. The applicant says that the respondent then further reduced his hours to twenty per week. The respondent says that the further reduction was because the applicant had advised that he was unable to work on Mondays. Events leading to the cessation of the applicant’s employment On 2 February 2001, the applicant attended a meeting with Mr Liekari to discuss his claim for underpayment of wages. The applicant says that at that meeting, Mr Liekari made an offer to settle his claim for underpayment of wages, and that after a further discussion with the inspector, who had been investigating the claim, (who was on the respondent’s premises at the time), he advised Mr Liekari that the offer was accepted. The applicant says that after he had accepted the settlement offer, Mr Liekari advised him that he wanted the Department of Industrial Relations to check whether the amount offered was correct. The applicant says that he had no option but to agree to this proposal. The applicant further says that Mr Liekari offered him an amount of $1,000 as part payment of the settlement amount, and that he accepted this on the basis that he was in financial difficulty due to the reduction in his rostered hours which the respondent had imposed. Mr Liekari’s version of the meeting differs significantly from that of the applicant. Mr Liekari says that he was in the middle of discussions with the applicant about his wages claim, when he was advised that the inspector had just told Mr Crossley, that casual employees were not entitled to overtime payments under the Award until they worked in excess of 38 hours. Prior to this advice, Mr Liekari says that he had been calculating payments owed to the applicant on the basis that overtime was payable to casual employees after 30 hours were worked in any week. Mr Liekari says that the applicant agreed to let the inspector recalculate the final figure to attend a further meeting to conclude the claim. Mr Liekari says that in the interim, he advanced the applicant $1,000 against his future earnings, on the basis that he had been advised by Mr Crossley that the applicant was short of money due to the reduction in his rostered hours. Mr Liekari says that this amount was a loan. Subsequently, Mr Liekari says that he found an “IOU” in the cash register from the applicant for the amount of $40. Mr Liekari says that he became concerned about how the applicant was going to repay the $1,000 “loan” and the amount of $40, and gave an instruction to Mr Crossley to arrange a meeting with the applicant on Friday 9 February to discuss these amounts, and not to release the applicant’s weekly pay (which was due to be paid on Thursday 8 February) until that day. The applicant says that he attended work on Thursday 8 February and was asked by Mr Crossley to attend a meeting with Mr Liekari the next day. The applicant declined to do so, on the basis that Friday 9 February was the first day of a number of days off, and he was not due to start work again until Tuesday 13 February. The applicant also said he told Mr Crossley that he could not afford the fuel to undertake a 25 minute car trip, as a result of the reduction in his rostered hours. Upon requesting payment of his wages for the week he had just worked, the applicant says that he was told that his pay was being withheld until he met with Mr Liekari to discuss repayment of the $1,000 “loan” and the $40 “IOU”. -- 1 of 4 -- 17 August, 2001 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 403 The applicant told Mr Crossley that it was illegal to withhold his wages, and that he had no other choice but to leave the workplace. The applicant says that the reduction to his hours of work; the refusal to pay his wages and other acts of intimidation on the part of Mr Crossley and Mr Liekari, resulted in a situation where he believed that he had no other option but to leave his employment with the respondent. The respondent maintains that there was no refusal to pay the applicant’s wages to him. Had the applicant attended the meeting on 9 February as requested, and resolved issues with the “loan” and the “IOU”, his wages would have been paid to him. The respondent contends that the applicant resigned his employment, and that the cessation of the applicant’s employment does not constitute a constructive dismissal. Constructive Dismissal Numerous authorities have established under previous legislation, that relief is not available through unfair dismissal provisions, unless a “dismissal” has occurred. (See for example, decisions of Bougoure C in Griggs v Health Equipment Hire and Supplies Pty Ltd (1995) 149 QGIG 131; Thomas v Power Electric Switchboards Pty Ltd (1995) 149 QGIG 493 and Mabo v Linkup (1995) 149 QGIG 775). The provisions of the legislation when those decisions were handed down, were not materially different for the purposes of this issue, from those of the Industrial Relations Act 1999, and the proposition stated in those decisions still has application. In Dowdell v Sunlite Glass Bricks (1997) 155 QGIG 785 Bougoure C, citing Cowan v Trinolea (1995) 148 QGIG 639; Cooper v Darwin Rugby League Inc. (1994) 1 IRCR 130 and Allison v Bega Valley Council IRC 116 of 1995, 1 September 1995, said “[i]t seems to me that a ‘dismissal’ may be conveniently described as a termination of employment at the initiative of the employer and without the genuine consent of the employee”. Notwithstanding the changes in the legislation, and the fact that previous legislation called in aid the ILO Termination of Employment Convention 1982, it is still the case that the provisions of the Industrial Relations Act 1999 dealing with unfair dismissal, have application when an act of the employer results directly or consequentially in the termination of employment, and the employment relationship does not end voluntarily [Mohazeb v Dick Smith Electronics (No. 2) (1995) 62 IR 2000]. In Iskander v Brisbane Display and Shopfitting Pty Ltd (1997) 154 QGIG 806, Chief Industrial Commissioner Hall noted that the expression “constructive dismissal” has leaked into the reported decisions of Australian Industrial Tribunals over the past twenty years. In that decision the Chief Commissioner doubted that the adjective “constructive” adds anything, if all that is involved in the notion of a constructive dismissal, is a proposition to an employee to “resign or else”. The Chief Commissioner went on to say that “[i]t has always been the case that one must go past matters of form and look at the whole facts and characterise the transaction”. In Allison v Bega Valley Council IRC 116 of 1995, 1 September 1995, a Full Bench of the Industrial Relations Commission of New South Wales said:– “Although the term ‘constructive dismissal’ is quite commonly used it can deflect attention from the real inquiry. That inquiry should involve an analysis of what occurred. Did the employer behave in such a way so as to render the employer’s conduct the real and effective initiator of the termination of the contract of employment and was this so despite on the face of it the employee appears to have given his or her resignation…In order to undertake the necessary analysis it is necessary to determine whether the actual determination was effectively initiated by the employer or by the employee particularly where the dynamics within a factual situation may change.”. This approach was also followed by Fisher C, in Venter v Australian Country Choice Abattoir (1997) 154 QGIG 605 at 606. In Iskander, the Chief Commissioner also traced a line of authority for the proposition that a fundamental breach of the contract of employment by the employer, entitles the employee to consider himself discharged from further performance. In such cases, the contract is terminated by the employee by reason of the employer’s conduct, and the employee has been constructively dismissed (Lord Denning MR in Western Excavating (ECC) Ltd v Sharp (1978) ICR 221 at 226). Further Chief Commissioner referred to authorities for the proposition that there is an implied term in a contract of employment that employers will not, without reasonable cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. It is not necessary to show that the employer intended any repudiation of the contract. The Tribunal’s function is to look at the employer’s conduct as a whole, and determine whether, on a reasonable and sensible view, it is such that the employee cannot be expected to put up with it (Woods v WN Car Services (Peterborough) Ltd [1981] 1 ICR 666 at 670 per Browne-Wilkinson J. This view is also apparent in the decision of the Full Court of the Industrial Relations Court of South Australia in Little v Sparrow (No 2) [1998] SAIRC 58 29 October 1998 and the decision of the Supreme Court of South Australia in Grivell v Adelaide Advertiser Newspapers Ltd (1999) 90 IR 211 at 217. Was the applicant constructively dismissed? On consideration of the respondent employer’s conduct as a whole in this case, I am reasonably satisfied that the employer was the real and effective initiator of the termination of the applicant’s employment. The evidence clearly shows that after the applicant raised the issue of the apparent 30 hour limit on ordinary hours which a casual employee could work in any week, under the Award, that his hours of work were reduced to 28 and then 20 per week. While the respondent was entitled to reduce hours of work of casual employees to comply with the Award limitation, the applicant, and Mr Gensh who gave evidence on the applicant’s behalf, contended that this was done selectively, and targeted at employees who had signed the letter of demand of 5 January, in relation to their wages and working conditions. The respondent only called evidence from one employee, Mr Jarrott, to counter this contention. Mr Jarrot’s evidence establishes that while his hours of work were reduced from 38 to 30 per week, he had made a deal with Mr Crossley some time in January, that his hours would be increased when the Award related issues were resolved. The evidence of Mr Crossley and Mr Liekari for the respondent, was that they believed, on the basis of their own inquiries, that the Award required casual employees to be paid overtime, for hours in excess of 30 per week, and they had acted upon this view. Mr Crossley and Mr Liekari held this view until 2 February 2001, when an industrial inspector investigating the applicant’s underpayment of wages claim, retracted the advice which had previously been given in relation to the limitation on hours for casual employees under the Award, and advised Mr Crossley that overtime was not payable to casual employees until 38 hours in any week had been worked. It is clear from the evidence that Mr Crossley gave a commitment to increase Mr Jarrott’s hours of work to 38 per week, at a time when he believed that such an increase would breach the Award. No such commitment was given to the applicant, or any of the other witnesses called by the applicant who had signed the letter of complaint to Mr Liekari on 5 January 2001. I am reasonably satisfied, given the evidence of Mr Jarrott about the “deal” with Mr Crossley, that the reduction in hours was not primarily motivated by a desire on the part of Mr Liekari or Mr Crossley to conform with the provisions of the Award. Rather, the reduction was motivated, at least in part, by a desire to silence employees who had made claims against the employer in respect of wages and working conditions. In my view, it was reasonable for the applicant to form a view that he was being targeted by the respondent for having made such a claim. While this may not have lead directly to the dismissal of the applicant, it could certainly have contributed to the views he later formed about other conduct on the part of Mr Liekari and Mr Crossley. -- 2 of 4 -- 404 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 17 August, 2001 In my view, the delay of the respondent in dealing with the applicant’s claim for underpayment of wages was unreasonable. The applicant had raised serious issues about his wages and working conditions in September 2000, and had later provided details from Wageline about these matters. Further, the respondent’s evidence establishes membership of an employer organisation, which could have provided advice in relation to the applicant’s claim. In light of this delay, it is hardly surprising that the applicant became distressed, and concerned about his position. Again, while this may not have lead directly to the dismissal of the applicant, it could certainly have contributed to the views he later formed about other conduct on the part of Mr Liekari and Mr Crossley. I accept the evidence of the applicant that the $1,000 was paid to him by Mr Liekari, in part settlement of his claim with respect to underpayment of wages. The evidence clearly establishes that payment of an amount of $1,000 to the applicant as an advance on wages, would have been unprecedented, given that previous advances were in the order of $50 to $100. Mr Liekari also stated in his evidence that he had made an offer of $5,100 to settle the applicant’s wages claim, prior to offering to “loan” him $1,000 as an advance against his wages. In my view it is highly improbable that having become aware of the change in the industrial inspector’s view about the payment of overtime to casual employees, that the respondent would have offered to lend or advance the applicant an amount of $1,000 against his future wages. The more probable version of events is that on 2 February, Mr Liekari offered the applicant $1,000 as part payment of $5,100 amount which the applicant had agreed to accept in settlement of his wages claim. Upon subsequently becoming aware that the industrial inspector had altered his view about the restriction on hours of work for casual employees under the Award, Mr Liekari sought to transform the $1,000 payment into a “loan”. While all of these matters contributed to the applicant’s frame of mind about his treatment by the respondent, they did not constitute fundamental breaches of his contract of employment. However, the refusal by Mr Liekari, the Managing Director of the respondent, to pay the applicant’s wages, is another matter. I am reasonably satisfied on the evidence before me, that Mr Liekari sought to withhold payment of the applicant’s wages, in order to induce him to agree to repay the $1,000 amount and the $40 “IOU”. Mr Crossley said in his evidence that he told the applicant on 8 February, that Mr Liekari would happily release the applicant’s pay, when the applicant sat down with Mr Liekari and worked out the repayment of those amounts. Mr Matley’s submission for the respondent, that there was no evidence that the applicant’s wages were never going to be paid, and that all he had to do to receive payment, was attend a meeting on the following day with Mr Liekari, misses the point. The reality is, that on the evidence of the respondent’s own witnesses, the applicant was not going to be paid his wages until Mr Liekari was satisfied that arrangements for the repayment of the amounts he believed the applicant owed him, regardless of whether the applicant attended a meeting on 9 February or not. There was no evidence that the respondent’s position in relation to this matter would have changed, and indeed, the evidence shows that the applicant has still not been paid for the week worked prior to the cessation of his employment on 8 February. The simple facts of the matter are that the respondent had no right to withhold payment of the applicant’s wages in the circumstances of this case. Even if the respondent had established that the $1,000 was a loan or an advance against future wages, no deduction could lawfully have been made from the applicant’s wages in settlement of that loan (much less the total withholding of the applicant’s wages), in the absence of his written agreement. Indeed, s. 391(1) of the Act would appear to prohibit the respondent’s conduct. In my view, the action of the respondent in withholding the applicant’s wages constituted a fundamental breach of the applicant’s contract of employment, and entitled the applicant to consider himself discharged from the further performance of that contract. The obligation of the employer to pay wages for work performed by an employee goes to the root of the contract of employment, and refusal to do so, in the absence of some common law or statutory right to withhold payment, is a repudiation of the contract, which the applicant was entitled to accept. The applicant did so, with the result that he was constructively dismissed by the respondent. I reject the submission of Mr Matley that the applicant freely resigned and subsequently filed an unfair dismissal application due to failure to gain satisfaction with respect to alleged unpaid entitlements as was found to be the case in Butler v Docklea Combined Services (2000) 165 QGIG 50. Further, in my view, this is not a case where the applicant acted unreasonably in withdrawing from a meeting, where the employer was seeking to give him an opportunity to respond to allegations about his conduct, capacity or work performance as required by the Act, as was the case in Wotherspoon v Ibex International Business Exchange Limited (1997) 154 QGIG 467. I also note that in that case, the applicant held a management position and was considered by Bougoure C as being capable of responding to the allegations in question. In this case, the applicant was a casual shop assistant, entirely dependent for income upon his wage from the respondent. The respondent had reduced the applicant’s hours of work, failed to respond to his wages claim in a reasonable time frame, and was unreasonably (and arguably unlawfully) refusing to pay the applicant’s wages, until he had repaid an amount of money which he quite rightly, did not accept had been loaned or advanced against those wages. Was the dismissal of the applicant unfair? The case for the respondent has focused on the contention that the applicant resigned his employment. Some evidence has been lead for the respondent to establish that the applicant had been warned about his conduct, capacity and work performance, during the period of his employment with the respondent. However, I am unable to be reasonably satisfied that the matters about which the applicant had been warned, had any bearing on his dismissal. Further, I am unable to be reasonably satisfied that the applicant engaged in conduct at the time of his dismissal that would justify his dismissal. The applicant had pursued a wages claim which he was perfectly entitled to do, and the manner in which that claim was pursued was not unreasonable, given the delay on the part of the respondent in dealing with the matters raised. The conduct of the applicant in refusing to attend a meeting with Mr Liekari on his day off, was also perfectly reasonable in my view, given the refusal on the part of Mr Liekari to authorise the payment of the applicant’s wages, in the circumstances in which that refusal occurred. The applicant did not pursue the argument that his dismissal was for an invalid reason pursuant to s. 73(2)(e) of the Act. After carefully considering all of the evidence in this case, I am not prepared to make a finding in this regard. I find that the dismissal of the applicant, in all of the circumstances, was unfair, in that it was harsh, unjust and unreasonable. Further, I have considered the matters required by s. 77 of the Act and in my view, the provisions of subsections (a), (b) and (c) of that section are not relevant to a finding that the dismissal of the applicant was unfair in this case, given the circumstances in which the dismissal occurred. In relation to s. 77(d), the other matters which I consider are relevant to the determination of whether the dismissal of the applicant was unfair, are set out in this decision. Wages claim In dealing with this case, I have considered the manner in which the applicant’s wages claim was dealt with by the respondent. While the substance of that claim is not a matter I am required to determine, and I have not taken the correctness or otherwise of the claim into account in reaching my decision in this case, evidence about the claim has been presented by both the applicant and the respondent, which I intend to make some comment about. The respondent was represented by an employer organisation, and the implications of some of the evidence lead on this issue, should have been apparent. -- 3 of 4 -- 17 August, 2001 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 405 Clause 3.1(4 ) of the Award contains the following definition of a casual employee:– “ ‘Casual employee’ shall mean an employee who is engaged as such and who is employed for not more than thirty (30) hours in any one (1) week.”. The principles of statutory interpretation should generally be applied in interpreting awards. As a general principle, an award should be interpreted consistent with those principles so that as far as possible, words or sentences are not superfluous, void or insignificant. (See Project Blue Sky v ABA (1998) 194 CLR 355 at 382 per McHugh, Gummow, Kirby and Hayne JJ referring to the decision of Griffith CJ in The Commonwealth v Baume (1905) 405 CLR 414) who had cited the statement in R v Berchet ((1688) 1 Show KB 106 [89 ER 480]) that it was “a known rule in the interpretation of statutes that such a sense is to be made upon the whole that no clause, sentence or word shall prove superfluous, void or insignificant, if by any other construction they may all be made useful and pertinent” and Isaccs and Rich JJ quoting from Broom’s Legal Maxims, 9 th ed., pp. 367-368, in The Metropolitan Gas Company v The Federated Gas Employees’ Industrial Union and Another (1925) 35 CLR 449 at 455: “In construing an instrument every part of it should be brought into action, or in other words construction must be made upon the entire instrument, and not merely upon disjointed parts of it … the whole context must be considered … although the immediate object of inquiry be the meaning of an isolated clause …”). The obvious question is what effect does clause 3.1(4) of the Award have? It may very well be arguable that this provision does not entitle a casual employee to be paid overtime rates for work in excess of thirty hours in any one week, but in the absence of detailed argument on this point I will not express a view. However, if this argument is correct, that is not the end of the matter. It is equally arguable that a casual employee who is regularly rostered or otherwise required to work in excess of thirty hours per week, ceases to be a casual employee for the purposes of entitlements under the Award. As a result, such an employee may become entitled to benefits of the Award applicable to weekly employees. Remedy In concluding his case, the applicant advised that he was not seeking reinstatement, and had obtained alternative employment in May 2001. In all of the circumstances of this case, I find, pursuant to s. 79(1) of the Act, that reinstatement is not practicable. Accordingly, I intend to compensate the applicant for his unfair dismissal. Unfortunately, the applicant presented his own case, and was not in a position to put evidence to the Commission about the date he commenced his new employment; the remuneration he has received from that employment; or any non-refundable earnings from other sources (such as unemployment benefits) he may have received since his dismissal. Accordingly, I direct the applicant to file an affidavit with the Industrial Registry within seven days of the release of this decision, detailing these matters. In particular the applicant is to provide a break-down of this information showing dates when wages or other non-refundable payments were received. The applicant is to also serve the affidavit on the respondent’s representative, the Queensland Retail Traders and Shopkeepers Association Industrial Organisation of Employers (QRTSA). The required form of an affidavit is available from the Industrial Registry. Upon receipt of the applicant’s affidavit, the QRTSA is to advise the Industrial Registry in writing, of whether or not the respondent seeks to cross- examine the applicant with respect to the contents of the affidavit. This advice is to be provided by the QRTSA within fourteen days of the release of this decision. In the event that the respondent seeks to cross-examine the applicant the matter will be relisted for this purpose. In the event that the respondent does not seek to cross-examine the applicant in relation to his affidavit and/or does not advise the Industrial Registry in accordance with the above direction, the contents of the affidavit will be relied upon to determine an appropriate amount of compensation, to be paid by the respondent to the applicant. I.C. ASBURY, Commissioner. Released: 3 August 2001 Appearances:– Mr J. Berends, the Applicant, on his own behalf. Mr D. Matley of Queensland Retail Traders and Shopkeepers Association (Industrial Organization of Employers) for the Respondent. -- 4 of 4 --