Allied Express Transport Pty Ltd v Michelle Anderson [1998] FCA 799 (8 July 1998)

Last Updated: 13 July 1998

FEDERAL COURT OF AUSTRALIA

INDUSTRIAL LAW - Termination of employment - Whether valid reason for termination based on conduct - Appropriate quantum of compensation - Whether damages payable in lieu of notice.

Workplace Relations Act 1996 (Cth) (formerly Industrial Relations Act 1988 (Cth)), ss 170DE(1), 170EA

Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371

Murdoch University v Mainsbridge (Full Court, Industrial Relations Court of Australia, 12 June 1998, unreported)

ALLIED EXPRESS TRANSPORT PTY LIMITED v MICHELLE ANDERSON

NG 941 of 1997

LEE, TAMBERLIN AND MARSHALL JJ

Sydney

8 July 1998

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 941 of 1997

BETWEEN:	ALLIED EXPRESS TRANSPORT PTY LIMITED Appellant
AND:	MICHELLE ANDERSON Respondent
JUDGES:	LEE, TAMBERLIN AND MARSHALL JJ
DATE OF ORDER:	1 JULY 1998
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. The money paid into Court by the appellant in accordance with the order of the trial judge be paid to the solicitors for the respondent, together with interest thereon, if any.

Note: Settlement and entry of orders is dealt with in order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 941 of 1997

BETWEEN:	ALLIED EXPRESS TRANSPORT PTY LIMITED Appellant
AND:	MICHELLE ANDERSON Respondent

JUDGES:	LEE, TAMBERLIN AND MARSHALL JJ
DATE:	8 JULY 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

THE COURT:

On 1 July 1998 the Court ordered that the appeal in this matter be dismissed. The reasons for the judgment of the Court are as follows:

The appellant ("Allied") appealed from a judgment of a Judge of this Court (Wilcox J) on an application for review of a decision of a Judicial Registrar on an application made under s 170EA of the Industrial Relations Act 1988 (Cth), now the Workplace Relations Act 1996 (Cth) ("the Act") in which the respondent ("Ms Anderson") alleged that her employment had been unlawfully terminated by Allied.

The review was conducted on the basis that the evidence as recorded before the Judicial Registrar was the evidence in the hearing before his Honour, supplemented by the further viva voce evidence of cross examination of Ms Anderson.

FACTUAL BACKGROUND

Ms Anderson was employed by Allied as a telephonist/receptionist. Allied conducts a courier business. One of its main clients is Australian Consolidated Press Limited ("ACP"). Allied maintains a desk in the loading section of ACP's premises in Central Sydney ("the courier dock"). Ms Anderson's usual workplace was at the desk at the courier dock. The ACP loading section is a discrete part of the ACP building with separate access.

At 4.25 pm on 20 August 1996, two employees of Allied attended the desk at the courier dock and told Ms Anderson her duties were to be taken over by one of them and that she was to be escorted by the other to the Allied office at Wynyard, also in Central Sydney. Ms Anderson was given no explanation for the peremptory actions of her employer. On leaving the ACP premises Ms Anderson took only her handbag. She left other personal effects behind, including her reading glasses. On her way to Wynyard she was asked by her co-employee "what have you done wrong" to which she replied that she had no idea. On arrival at Wynyard when Ms Anderson asked where she was to work she was informed that she was not required to do any work but was to remain until 6.00 pm, her usual finishing time, and report to Allied's Bankstown office at 8.30 am the next morning. Ms Anderson asked why she was being dealt with in that way and was given no explanation.

On 21 August 1996 Ms Anderson reported at Bankstown as directed. She was interviewed by Ms Michelle McDowell, the general manager and Mr Alan Neil, national revenue manager. Ms McDowell commenced the interview by asking Ms Anderson why she thought she was there. In the interchange that followed Ms Anderson was informed that ACP had told Allied that it was investigating a report that an ACP employee and Ms Anderson, had been in the ACP building after normal hours and that it "would prefer" that Allied transfer Ms Anderson from her position at the courier dock. Ms Anderson confirmed that she and an ACP employee were friends but denied that she had been in the ACP building after hours. At the end of the interview Ms McDowell instructed Ms Anderson not to go to her former workplace at the ACP premises and to report for work at Bankstown pending the ACP investigation. It was suggested that Ms Anderson could start work at Bankstown that afternoon.

Ms Anderson advised that a medical condition from which she was suffering, exacerbated by the stress of the interview, made it inappropriate for her to start work at Bankstown that day. Before she commenced work on the previous day Ms Anderson had attended her doctor for treatment of the medical condition from which she suffered and had been given a certificate that she would be unfit for work for the following three days. Ms Anderson caught a train to the city and met the friend employed by ACP outside the ACP building. They had lunch at a nearby hotel. Whilst at the hotel, Ms Anderson telephoned another friend, Ms Rennard who worked for Allied as a courier. Ms Rennard arrived at the hotel at about 2.00 pm. The two women walked from the hotel to Ms Rennard's car which was parked at the courier dock. After they entered the vehicle and started to drive out Ms Anderson recalled that she had left her reading glasses and belongings at the desk. She got out of the car and went to her former workstation, asked for, and obtained, her property. The receptionist, Ms Reuben, asked Ms Anderson what was going on. Ms Anderson replied that she could not comment but she would no longer work at the courier dock and would be located at Bankstown. She returned directly to the car and left with Ms Rennard. During the afternoon Ms Anderson accompanied Ms Rennard while the latter carried out her work. In the course of the afternoon Ms Anderson informed Ms McDowell that she would not be at work for the next two days.

Apparently, Ms Reuben informed another Allied employee that Ms Anderson had attended at the courier dock on 20 August 1996. That employee informed Ms McDowell. On 22 August 1996 Ms Anderson spoke to Ms McDowell by telephone. In the course of that telephone conversation Ms McDowell terminated Ms Anderson's employment. Before his Honour Allied sought to suggest that the evidence could support a conclusion that when Ms Anderson attended her former workstation she had spoken to more people than Ms Reuben and had done more than collect her personal belongings. On the appeal, Allied accepted his Honour's finding that the evidence of Ms Anderson was uncontested regarding her attendance at the courier dock. Counsel also conceded that in the circumstances an instruction to Ms Anderson not to attend ACP premises would be subject to a caveat that attendance at the courier dock to collect belongings would not breach the employer's direction. It was contended, however, that the "totality" of Ms Anderson's conduct gave Allied a valid reason to terminate Ms Anderson's employment and, further, that summary dismissal was justified.

THE REASONING OF THE TRIAL JUDGE

His Honour held that Allied had not discharged its onus, under s 170DE(1) of the Act, to establish a valid reason for the termination of Ms Anderson's employment connected with her conduct. Before his Honour, Allied's counsel submitted that his client had two valid reasons for the termination of Ms Anderson's employment. The first reason was that Ms Anderson had failed to comply with Allied's lawful instruction not to return to the ACP premises. His Honour found that Ms Anderson's return to the ACP premises was "only in the most technical, fleeting and understandable circumstances." His Honour added that:

" ... the appropriate finding is that Ms Anderson returned to the ACP building but did no more than go to the courier desk in the loading area to pick up her personal belongings while Ms Rennard waited in the car."

The second reason, relied on by Allied's counsel before the trial judge, was Ms Anderson's lack of truthfulness when confronted by Ms McDowell with evidence that Ms Anderson was observed at the courier dock. On this issue his Honour found as follows:

"Even on her own account of the telephone conversation of 22 August, Ms Anderson was not totally frank. She said she went into the ACP "just to retrieve my glasses and the rest of my personal possessions"; she did not mention getting into the car with Ms Rennard. That lack of frankness is understandable, she did not wish to expose Ms Rennard to possible trouble; but it can be argued it was reprehensible because it was erosive of trust between employer and employee. However, trust cuts both ways. It is clear, on Ms McDowell's own account of the matter, that she herself was guilty of some dissimulation in this conversation, at least of "gilding the lily". She said in evidence she told Ms Anderson "I have witnesses to say that you were at ACP last night". She agreed she used the plural. When asked who were those witnesses, she replied "Tanya Reuben contacted Cindy Alexander who contacted myself". It was put to her that her statement was not, therefore, strictly correct. She replied "Well, if you want to take it literally, no". Later in the conversation with Ms Anderson, Ms McDowell referred to "the people who called last night". Once again, she agreed this was "not strictly true".

Additionally, his Honour expressed concern that Ms McDowell had, in deciding to terminate Ms Anderson's employment, taken into account an unfounded assumption that Ms Anderson had been untruthful to Allied regarding her state of health. Although not appearing in a letter of termination which post-dated the actual termination, this reason was conveyed to Ms Anderson by Ms McDowell, in the oral termination of Ms Anderson's employment.

For all of the above reasons, his Honour was of the view that Allied had not established that the termination was for a valid reason connected with Ms Anderson's conduct. His Honour found it unnecessary to deal with the submission that s 170DC of the Act was also breached by Allied. His Honour rejected the submission that Ms Anderson's employment would have been terminated shortly thereafter, in any event, had she not been terminated in August 1996. Consequently, he was not prepared to reduce the amount of compensation ordered by the Judicial Registrar to be paid and paid into Court pending the outcome of the appeal, a sum his Honour found to have been properly calculated.

THE CENTRAL SUBMISSION OF ALLIED

The solicitor for Allied took no issue with any of his Honour's findings of fact. His submission was that if an employee disobeys a lawful instruction and then tells "a lie" that employee, if dismissed, will in all circumstances be dismissed for a valid reason connected with that employee's conduct. We reject that submission. The entire relevant factual matrix must be considered in determining whether an employee's termination is for a valid reason. It has been held that the expression "valid reason" is used in the sense of a reason which is sound, defensible, or well-founded: see Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373 per Northrop J. See also Murdoch University v Mainsbridge (Full Court, Industrial Relations Court of Australia, 12 June 1998, unreported). We share the view of his Honour that the so-called disobedience was "fleeting and understandable" and largely the making of Allied itself by the manner in which it effected Ms Anderson's removal to Wynyard. Also, in the light of the finding of his Honour as to the content of the telephone conversation between Ms McDowell and Ms Anderson on 22 August 1996 we share his Honour's view that, if Ms Anderson was not entirely frank with Ms McDowell regarding the circumstances of her return to the courier dock, any lack of frankness was minimal, and being based on her intention not to cause trouble for Ms Rennard, was "understandable" in the circumstances.

In any event, no submission made by Allied's solicitor on the appeal, dealt with his Honour's conclusion that the termination was effected, in part, for an improper reason, that is, Ms McDowell's erroneous view that Ms Anderson had misrepresented the state of her health.

SECTION 170DB

Allied submitted that the termination of Ms Anderson without notice was justified because Ms Anderson had engaged in serious and wilful misconduct, and, therefore, it was under no obligation to make a payment to Ms Anderson in lieu of notice. Having rejected Allied's submission that it had a valid reason for terminating Ms Anderson's employment, it follows that termination without notice was not justified. Accordingly, as held by his Honour, Ms Anderson is entitled to damages for contravention of s 170DB of the Act.

COMPENSATION

His Honour properly rejected Allied's submission that, but for the termination in August 1996, Ms Anderson's employment would have ended shortly thereafter in any event. There was no evidence to suggest that Ms Anderson was an unsatisfactory employee, and on the material before his Honour the only proper conclusion was that it was likely that Ms Anderson's employment would have continued.

Allied's solicitor took no issue with the quantum of compensation awarded in the event that the Court rejected his submission that there was no entitlement to compensation.

ORDER

The Court orders that:

1. The appeal be dismissed.

2. The money paid into Court by the appellant in accordance with the order of the trial judge be paid to the solicitors for the respondent, together with interest thereon, if any.

I certify that the preceding six (6) pages are a true copy of the Reasons for Judgment herein of the Full Court.

Associate:

Dated: 8 July 1998

Solicitor for the Appellant:	Mr J Hassett
Solicitor for the Respondent:	Mr J Capsanis
Date of Hearing:	1 July 1998
Date of Judgment:	1 July 1998
Date of Publication of Reasons:	8 July 1998