Eaton v Queensland Railways Institute Inc [2000] QIRC 115 (2000) 165 QGIG 206

206 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 3 November, 2000 ########################################################################################################################### QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 74 – application for reinstatement Gary Eaton AND Queensland Railways Institute Inc (No. B614 of 2000) COMMISSIONER THOMPSON 24 October 2000 DECISION Mr Gary Eaton made an application for reinstatement as General Manager of the Queensland Railways Institute Inc (QRI) following termination of his employment on 27 April 2000. The applicant commenced employment with the respondent on 23 March 1994, as General Manager, and held that position until his dismissal. At the date of termination, the applicant’s annual salary was $59,251. Whilst General Manager, the applicant contended that he was instrumental in:– • introducing a number of significant new services for the benefit of members, including: the commissioning of the QRI Café and Conference Centre; commissioning Café 8; organising discount fuel cards for members; providing general insurance services for members; commissioning four (4) additional licensed clubs; publishing a members’ handbook; establishing an accommodation, cleaning, catering and transport business in the mining district in Central Queensland; and winning the tender for a members’ gym in the Mincom Building in Edward Street, Brisbane; • increasing the annual turnover of QRI from $1.5 million dollars to $6.5 million dollars; and • maintaining membership at approximately 80% of all eligible railway employees in Queensland. On 31 March 2000, the applicant received correspondence from Mr J. Noble, Secretary, QRI, written on behalf of the Management Committee, expressing dissatisfaction with his performance in eight (8) identified areas and requiring the applicant to respond to the eight (8) points prior to the next meeting of the Management Committee, scheduled for 27 April 2000. The eight (8) points were:– 1. Why was the Emerald payment made against instructions of Committee? 2. Employment of a bookkeeper when instructed to employ accountant. 3. Outstanding Café debts when assured problem fixed last year. 4. Handling of Café supervisor problems (approach by letter not as instructed by Committee). 5. Inability to respond to Management Committee decisions. 6. Failure to fix problems with financial reports. 7. Employment of relatives. 8. Communication – Ipswich/Morale/Staff. The letter from Mr Noble further advised the applicant that his response to the eight (8) points would be subject to review by the Management Committee at the next meeting and, additionally, his contract of employment with the QRI would also be reviewed at the meeting. On April 2000, the applicant delivered a written response to the Management Committee of the QRI, forwarding by post a copy to all members of the Management Committee. The applicant stated in that response that:– • in each case the applicant had at all times acted to the best of his ability in accordance with sound business principles; -- 1 of 4 -- 3 November, 2000 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 207 • in each case the applicant had, as best he could, acted in consultation with, and in accordance with, the directions of the Management Committee; and • where he was constrained, he was constrained by decisions of the Management Committee by which he was bound. At the meeting of the Management Committee held on 27 April 2000, at which the applicant was present, both the Secretary’s letter to the applicant (dated 31 March 2000) and the response document, of some forty (40) pages, were tabled. The applicant submitted that he was asked at the meeting of 27 April 2000, whether he had anything to add to his written response to which he replied “no”. In turn, he then invited questions from the various members of the Management Committee, and none were forthcoming. The applicant was then requested to leave the meeting. Later, on the afternoon of 27 April 2000, the applicant, in the presence of Mr Mark Dillman, a Solicitor, was advised by Mr Kenneth Cavanough, President of the QRI, that his employment was being terminated immediately and was requested to leave the workplace at close of business that day. A letter of termination, dated 27 April 2000, and signed by Mr Cavanough and Mr Noble, was later given to the applicant. The letter, written on QRI letterhead, stated:– “Dear Gary, On behalf of the Management Committee of Queensland Railways Institute Inc. I wish to inform you of the Committee’s decision to give you notice of termination of your employment contract. The Committee, as the employer, hereby gives you notice of termination of your employment with four weeks pay in lieu of notice effective close of business 27 th April 2000. All outstanding entitlements of your employment contract due at this date will be paid. Please arrange to return all property belonging to QRI Inc. It is agreed that you have use of the QRI vehicle to transport your personal belongings on the condition that the vehicle is returned by 0900hrs on Friday 28 th April 2000. K. CAVANOUGH J. NOBLE President Secretary.”. The applicant submitted that at no stage was he given, either written or verbally, reasons for his dismissal, and that when he sought a response from Mr Cavanough, he was told that there were no reasons and that the respondent was relying on the notice provisions of the agreed terms of his initial employment contract from March 1993 to effect the termination. The applicant was subjected to a lengthy period of cross-examination by Ms Kylie Downs, on behalf of the respondent, during which a number of matters were canvassed including (but not exclusive):– • applicant’s employment status since departure from QRI; • Management Committee dissatisfaction with continued lateness of financial reports at Committee meetings; • lack of procedure documentation; • failure to carry out directions of the Management Committee; • Michelle Priestly’s resignation/grievance procedure matter; • staff remuneration, performance reviews; • Emerald loan payment – transfer of funds; • employment of relatives – wife; • falsifying Management Committee Minutes; and • employment of a bookkeeper as opposed to Management Committee direction to employ an accountant. Evidence was given by Mr Dillman that along with the applicant, he attended the meeting of the Management Committee of the QRI on 27 April 2000, when the applicant’s response to the eight (8) points raised in the correspondence from Mr Noble were tabled. Mr Dillman confirmed the applicant’s evidence in respect of the conduct of that meeting. He further provided evidence that some three (3) to four (4) hours later, on that day, he appeared before the Executive of the Management Committee, at which time Mr Cavanough advised the applicant that his employment was being terminated immediately and that the applicant was to leave the workplace at the close of business on that day. Mr Dillman stated that he asked Mr Cavanough the reasons for the termination of the applicant’s employment to which Mr Cavanough replied that no reasons would be given and the QRI were relying upon it’s rights conferred by the contract of employment between the respondent and the applicant. -- 2 of 4 -- 208 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 3 November, 2000 In summary, Mr Chris Wilson, on behalf of the applicant, stated that the termination of the applicant had been harsh, unjust and unreasonable within the terms of the Industrial Relations Act 1999, and the failure of the respondent to provide the applicant with reasons for his termination confirmed the unfairness of the dismissal. Mr Wilson, in further submissions, indicated that the applicant, until the immediate period prior to his dismissal, had a good work record that had been unquestioned by the respondent and, under his leadership, a substantial number of new services had been introduced and the financial turnover of the organisation had tripled since the applicant’s appointment as General Manager. The remedy sought by the applicant was reinstatement to his previous position, and that the decision of the QRI to leave open the Manager position until the applicant’s reinstatement issue was finalised, would allow for such reinstatement to occur in an orderly way. The respondent, in opposing the reinstatement, called four (4) witnesses. The first witness, Mr Christopher Barlow, a qualified Clinical and Organisational Phycologist, was engaged by the QRI after the applicant’s termination to provide a written report on the following matters:– • a review of the QRI operations; and • to make recommendations in relation to improving the QRI’s operations The process of investigations, interviewing staff, and reviewing documentation, commenced on 21 June 2000. In evidence, Mr Barlow submitted that, in his opinion, the issues of concern raised in his report were as a result of the applicant’s failure to properly perform his duties as General Manager of QRI. A number of contracts between QRI and various clients had been found to be unsigned, further demonstrating the lack of good management practices. According to Mr Barlow, he found staff morale low, and was aware that a number of resignations had been tendered. The second witness, on behalf of the respondent, Ms Juliet Schultz, is a member of the QRI Management Committee, and has been in that position for the past four (4) years. Ms Schultz’s evidence transcended across a number of areas, including: the resignation/grievance issue of QRI employee, Ms Michelle Priestly; the applicant’s failure to implement decisions of the QRI Management Committee; and, the loss of confidence by the Management Committee in the applicant’s ability to manage. The main witness, on behalf of the respondent, Mr Cavanough, former Treasurer and now, as mentioned, President of QRI, detailed numerous items which the Management Committee had raised with the applicant, since 1998, relating to concerns about his work performance. Whilst there were a number of complaints in respect of the applicant’s failure to address adequately matters such as salary reviews, lateness of financial accounts and minutes, there was, however, according to Mr Cavanough, other more substantial issues that were of a major concern to the QRI. These included:– • the applicant’s handling of Ms Priestly’s case and his alleged deliberate failure to adhere to the Management Committee’s decision on how to proceed with resolvement of this issue; • falsifying the minutes of a Management Committee meeting by the creation of a motion to form a Proprietary Limited subsidiary company of the QRI; and • the disregarding of a direction from Mr Cavanough to inform other Management Committee members of the transfer of loan funds to the Emerald QRI Club prior to the transfer occurring. Mr Cavanough, in evidence, provided information relating to the process leading to the applicant’s termination, and confirmed that the applicant had not been given reasons for his dismissal. Ms K. Downes, Counsel for the respondent, in final submissions indicated that the termination of the applicant was not harsh, unjust or unreasonable and, in fact, that because of the applicant’s poor work performance, it would have been appropriate for dismissal to occur at an earlier date. It was submitted that the applicant’s failure to follow directives of the QRI’s Management Committee in some instances, had the potential to expose the QRI to possible legal action. The applicant, according to Ms Downes, had demonstrated by his manner and demeanour that he was completely unsuitable to hold the job as General Manager. Ms Downes, in addressing the important issues of Ms Priestly’s employment, Emerald’s loan funds, and the employment of relatives, submitted that the applicant’s consistent failure to pay proper attention to Management Committee directions meant that he “wouldn’t have lasted more than three months” in his job as General Manager had he not been dismissed on the 27 April 2000. In addressing the issue of compensation, Ms Downes stated that on termination, the applicant had received four (4) weeks pay in lieu of notice and was paid a further one (1) weeks wages on the 9 May 2000, to comply with the provisions of the Industrial Relations Act 1999. Ms Downes questioned whether the applicant had taken steps to reduce his financial loss since the termination and whether an appropriate mitigation of such loss, by the applicant, occurred. Conclusion In determining whether the applicant’s dismissal was harsh, unjust or unreasonable, I find that, in accordance with s. 77(a) of the Industrial Relations Act 1999, the evidence before the Commission is undisputed in that the respondent did not provide the applicant with reasons for his dismissal either at the time of termination, or at any other subsequent time. -- 3 of 4 -- 3 November, 2000 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 209 Section 77(c)(i) provides for the employee to receive a warning in respect of conduct, capacity or performance. I consider that whilst a number of not so formal references were made to both the conduct and performance of the applicant in the twelve (12) month period prior to his termination, none of these references, in my view, were sufficient in either content or structure for the applicant to draw a reasonable conclusion that termination from his position as General Manager of the QRI may be eminent. Section 77(c)(ii) relates to the employee being given the opportunity to respond to allegations relating to conduct, capacity or performance. In this matter the applicant provided an extensive response (of some forty (40) pages) to the eight points of concern raised by the respondent and after the applicant’s response was considered by the Management Committee, I find it difficult to accept that no further dialogue occurred between the parties prior to the termination of the applicant. After proper consideration of the evidence before the Commission, I find that the termination of the applicant, Mr Eaton, was harsh, unjust and unreasonable for the reasons referred to in the above mentioned first, second and third paragraphs. In determining an appropriate remedy, the options of reinstatement and compensation that are available under s. 78 and s. 79 of the Industrial Relations Act 1999, were given consideration. With the decision of the QRI Management Committee not to fill the General Manager position on a permanent basis until this matter was finalised, I am in a position of being able to consider both options free of any barriers or restrictions. In considering firstly reinstatement, I am of the view that matters raised by the respondent during evidence relating to the failure of the applicant on numerous occasions to implement decisions of the Management Committee, the serious allegations in respect of falsifying Management Committee minutes, coupled with the general nature of the relationship between the parties at the time of termination, in my view, it would be most difficult for the parties to re-establish a reasonable long term workable relationship. In a letter attached to the applicant’s statement of evidence, addressed to Ms Karen Prins of the Australian Liquor, Hospitality and Miscellaneous Workers Union, Queensland Branch, Union of Employees the applicant, when responding to a claim for reinstatement of a QRI employee (Ms Priestly) stated “the QRI workplace is small, and the number of employees is small. It is not practicable that there be reinstatement by reason of the nature of the breakdown in the relationship as expressed by Ms Michelle Priestly.”. Whilst during the course of the hearing there was some conjecture as to whether Ms Priestly resigned, or whether her letter was really in effect a grievance issue, despite the fact that Ms Priestly has been re-employed to her previous position at the QRI after the termination of the applicant, what, in my view, is important is the relevance of Mr Eaton’s comments in respect of the size of the workplace and it not being practicable to reinstate by reason of the breakdown of the relationship, which, for all intents and purposes, was of a minor nature compared to the breakdown between the General Manager and the Management Committee of QRI. Accordingly, I find that the reinstatement of the applicant, Mr Eaton, as General Manager, is in all circumstances impracticable and that it would be more appropriate that an award of an amount of compensation be the remedy. In awarding compensation, I have taken into account the following factors:– • applicant’s length of employment with the respondent (six (6) years); • termination pay received in lieu of notice (five (5) weeks); • time elapsed since termination and recommencing paid employment (eighteen (18) weeks); and • what steps (if any) has the applicant attempted to mitigate his financial loss. In consideration of all of those factors, and of the evidence before the Commission, I order that the respondent pay to the applicant an amount of $7,971.25 gross, being seven (7) weeks pay, within twenty-two (22) days of the release of this decision. J.M. THOMPSON, Commissioner. Released: 24 October 2000 Appearances:– Mr C. Wilson, of Counsel, for the Applicant. Ms K. Downes, of Counsel, instructed by Mr A. Anderson of Clayton Utz, for the Respondent. -- 4 of 4 --