Lipa Management and National Union of Workers, NSW Branch [2003] NSWIRComm 43 (11 February 2003)

Last Updated: 2 June 2003

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Lipa Management and National Union of Workers, NSW Branch [2003] NSWIRComm 43

FILE NUMBER(S): IRC181

HEARING DATE(S): 11/02/2003

EX TEMPORE DATE: 11/02/2003

PARTIES:

APPELLANT:

Lipa Management Services

RESPONDENT:

National Union of Workers, NSW Branch

JUDGMENT OF: Kavanagh J

LEGAL REPRESENTATIVES

APPELLANT:

Mr B. Gee, Fisher Cartwright Berriman

RESPONDENT:

Mr A. Joseph, National Union of Workers, NSW Branch

CASES CITED: Campbells Cash and Carry Pty Limited v National Union of Workers, New South Wales Branch (2001) 104 IR 400

Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685

Bellambi Recreation and Sports Club (2001) 107 IR 104

Transport Industry Carrier and Taxi Trucks, Contract Determination (unreported, Hungerford J, IRC2533 of 1992, 21 December 1992)

Bankstown City Council v Paris (unreported, Peterson J, IRC262 of 1999, 29 January 1999)

LEGISLATION CITED: Industrial Relations Act 1996

JUDGMENT:

- 11 -

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: KAVANAGH J

Date: Tuesday 11 February 2003

IRC181 of 2003

LIPA MANAGEMENT AND NATIONAL UNION OF WORKERS, NSW BRANCH

Application by Lipa Management Services Pty Ltd for leave to appeal and appeal against decision of Patterson C given on 24 December 2002 in Matter No. IRC 5919 of 2002

EX TEMPORE DECISION

(Application for Stay)

[2003] NSWIRComm 43

1 Lipa Management Services Pty Limited ("the Appellant") seeks a stay of a Decision and Orders of Patterson C. The Commissioner issued his Decision and Orders on 24 December 2002, in which Decision he made a number of qualified comments as to the circumstances of the employment and termination of Ms Lynn Cunningham represented by the National Union of Workers, NSW Branch (the Respondent). The Orders were as follows:

1. That the employer, Lipa Management Services Pty Ltd reinstate Lynn Cunningham to her former position as a process operator in the packaging department on day shift within 21 days of today's date.

2. That Mrs Cunningham's reinstatement shall provide for continuity of service from the date of her dismissal and the effective date of reinstatement and for her to be reimbursed for all income lost during the period save for that which she has earned from sources elsewhere during the period; and

3. This order shall take effect forthwith.

2 The learned Commissioner then published Reasons for Decision on 7 February 2003. He made also an amendment to Order No. 2.

3 There is some dispute between the parties as to when from the Decision of the learned Commissioner the reinstatement was to take effect in accordance with Order 1: either from 24 December 2002, the date of the Decision or allowing the period of 21 days on 14 January 2003.

4 Lipa Management Services filed its Application for Leave to Appeal and Appeal in the Commission on 13 January 2003 pursuant to s188 of the Industrial Relations Act 1996. In the application for a Stay of the Orders of the Commission, Mr B. Gee appeared for the appellant and Mr A. Joseph of the National Union of Workers, NSW Branch appeared for the employee, Ms Lynn Cunningham.

BACKGROUND

5 The learned Commissioner recited a number of facts not in dispute. Mrs Cunningham was a casual employee of an Employment Agency and her services were contracted to Lipa Management Services on 30 May 2002. She was engaged primarily in the Packaging Process Division. She regularly worked at Lipa Management over the course of the next 13 weeks, a full week on day shift 7am to 3.15pm with some overtime. For those 13 weeks, her employer was still the Employment Agency.

6 She was made an employee of Lipa Management Services on 3 September 2002. On 17 September 2002 she received a letter confirming her employment, stating:

. . .

I have pleasure in offering you a permanent position as a Process Operator in the Packaging Department with Lipa Management Services Pty Limited with your appointment to commence on 2 September 2002.

. . .

You are employed under the Drug, Factories (State) Award, a copy being available for review at the administration office.

7 She was required to sign the Letter of Appointment and return it to the employer. She was also handed an Employment Handbook. She continued performing the same duties.

8 On 11 October 2002, Mrs Cunningham was called before Mr Cornish, Operations Manager, and offered a night shift. Her personal situation is such that she cares for an invalid husband. The night shift was from 11pm to 7am. The learned Commissioner noted:

. . . she was told her selection was due to the fact of her superior experience when compared with that otherwise available from other packaging department employees.

She rejected the offer explaining her personal situation.

9 The next day, Saturday 12 October 2003, Mrs Cunningham was working overtime. She was called again to see Mr Cornish who had with him a witness. He dismissed her with one week's pay in lieu of notice. He then accompanied her to her work location to collect her personal belongings and escorted her from the premises.

THE APPEAL

10 Given the recent publication of the Commissioner's Reasons for Decision, at this hearing of the Stay Application, Mr Gee, for the appellant, submitted:

1. The respondent was a probationary employee and the learned Commissioner erred in failing to so find.

2. A probationary employee is to be excluded from a reinstatement order under s137 of the Act, or alternatively,

3. In considering whether or not the Commission ought to make an order under s137 the Commission must have regard to the effect of the relevant award provision.

4. The Commissioner erred in not considering whether he had jurisdiction to hear the Appeal under s130 of the Act.

5. The Commissioner erred in a number of findings of fact.

THE DECISION

11 The Commissioner considered the evidence of Mr Cornish, the appellant's Operations Manager and Mrs Cunningham as to the circumstances in which Mrs Cunningham was given her permanent employment. The content of her Letter of Appointment was compared with a Letter of Appointment to another employee, Mr Sua, which letter specifically outlined his "probation" terms. Mrs Cunningham said when asked:

Q. Mr Cornish never said to you, did he, that the 13 weeks with the agency was your probationary period?

A. Yes, he did in the hallway. He said 'your 13 weeks with the agency is just about up and you will be on the Lipa books shortly. That was said in the hallway.

Mr Cornish in his evidence said he said to Mrs Cunningham:

After a period with (the agency), at that point she began her probation with us.

12 As to the practice of hiring someone through an Agency for the first 13 weeks (three months) and then issuing a Contract of Employment which began a further three month's probation period, the learned Commissioner noted of the practice:

No doubt Lipa has considered this employment strategy as a convenient form of de facto or discrete probation in the event that an agency employee might be seeking "permanency".

13 The Commissioner found as a matter of fact:

The absence of a reference to "probation" in discussions leading up to the appointment and in the letter of appointment provided well after the event may well reflect an "oversight" as described by Mr Cornish. However, in my opinion he and his principals must accept full responsibility for that – not Mrs Cunningham.

He reasoned:

Clearly the term of "probation" was neither expressed or implied before, or during, the employment relationship becoming a reality.

He found Ms Cunningham was a permanent employee who was not on probation.

14 As to the circumstances of the termination, the Commissioner first examined the offer of night work made to Ms Cunningham the day before she was terminated. The learned Commissioner accepted her selection for night work was due to her superior experience when compared to that otherwise available from other Packaging Department employees. He relied on the words of Mr Cornish:

Lynn was the person that we saw could really make that sort of process reliable on night shift.

15 The learned Commissioner noted Mrs Cunningham, when she refused the offer, expressed her fears for the welfare of her disabled husband who was heavily reliant upon her. The Commissioner accepted when Mrs Cunningham was called in the next day, while on overtime, Mr Cornish told her she had not "fitted in" and terminated her.

16 As to the allegation, made only after she refused the night shift, that she did not "fit in", the Commissioner said:

Since he believed that she was not entitled to proper guidance or consultation in this regard due to his understanding of 'probation' that he let her go in the expectation that his decision was incapable of challenge.

Even when I attempted to identify his concerns as to her not fitting in he is unable to elaborate."

17 The Commissioner also considered relevant that Ms Au Huong, her Group Leader, was not called to give evidence, commenting:

. . . who I expect would have been most directly aware of her performance and attitude . . .

18 The learned Commissioner then found:

. . . the evidence clearly discloses Mrs Cunningham's appointment was not subject to a probation agreed in advance. Probation was never mentioned until the occasion of her dismissal. She was not provided with her letter of employment and the employee handbook until two weeks after she had commenced. Since probation had never been mentioned – "permanency" being the only description articulated – she quite reasonably assumed that the handbook reference did not apply to her.

As to the manner of termination the learned Commissioner found:

Whatever the understanding of Mr Cornish in respect to the meaning of 'permanency' in the circumstances of this matter it is clear that he believes that an employee on probation has lesser rights to procedural fairness – or has no rights at all – when considering the future tenure of Mrs Cunningham.

The learned Commissioner also noted:

. . . Mrs Cunningham has been treated with the utmost indignity and lack of respect in the manner of her dismissal and the Respondent's belligerent approach to these proceedings.

19 The learned Commissioner then ordered Ms Cunningham be reinstated within 21 days.

RELEVANT GENERAL PRINCIPLES

20 The general principles applicable to a determination of an application for a stay were outlined by Walton J, Vice-President in Campbells Cash and Carry Pty Limited v National Union of Workers, New South Wales Branch (2001) 104 IR 400 [at 49-69]. The Vice-President then went on to discuss some aspects of the principles to be applied in relation to Stay Applications particularly relevant in this matter. Those aspects are conveniently set out in his judgment at [63-65]:

63 The filing of an appeal per se does not provide a sufficient basis for the grant of a stay. The determination of whether a stay will be granted involves an exercise of the discretion of the Commission. Having regard to the discussion of the foregoing principles, the question is whether the appellant has demonstrated a proper basis for the grant of an application for a stay. In other words, the question is whether the applicant for a stay has demonstrated an adequate reason for, or an appropriate case to warrant, the exercise of the Commission's discretion to grant a stay of the decision at first instance.

64 In the exercise of that discretion, the Commission will have regard to a variety of considerations, including the balance of convenience and the competing rights of the parties. In this matter, it is also appropriate to have regard, in a preliminary way, to the appellant's prospects of success. . . . It would also appear necessary to consider the prospects of success in order to properly assess the balance of convenience.

65 The assessment of the Commission as to the prospects for success of the appeal must be necessarily preliminary. The Commission has not heard the appellant upon the question of leave to appeal and some grounds of the appeal were not fully developed. In these circumstances, I do not propose to come to any view as to the question of leave and make a purely preliminary assessment as to the strength of the appellant's case on the appeal.

The appellant relied upon the views expressed by Wright J, President in Re Transport Industry - Waste Collection and Recycling (State) Award (2000) 102 IR 192 [at 18]. Wright J, President adopted similar considerations relying on the views expressed by the NSW Court of Appeal in Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685. This Commission has also considered the views expressed by Walton J, Vice-President in Bellambi Recreation and Sports Club (2001) 107 IR 104 [at 113]; Hungerford J in re Transport Industry Carrier and Taxi Trucks, Contract Determination (unreported, IRC2533 of 1992, 21 December 1992) and Peterson J in Bankstown City Council v Paris (unreported, IRC262 of 1999, 29 January 1999).

21 As a guide to the way a court goes about its consideration, Peterson J in Paris referred to the application of the principles saying (at 5):

. . . the appellant is required to demonstrate a reason or an appropriate case to warrant the exercise of discretion in his favour on the stay application.

22 The balance of convenience between the parties must also be considered. Also for consideration is the question of any terms of the stay if so granted. It is also appropriate to have regard to the applicant's prospect of success in this matter in order to consider the specific terms of any stay 'that will be appropriate fairly to adjudge the interests of the parties' (see Alexander v Cambridge Credit Corporation (Receivers Appointed) (1985) 2 NSWLR 685 at 695).

CONSIDERATION

23 It is therefore proper for the Commission to assess the appellant's prospects for success in this matter. Any such assessment must be preliminary in nature as neither party has been fully versed on either the grounds for the Application for Leave to Appeal or the grounds of the Appeal.

24 The respondent to the Appeal submits of the eleven questions raised on Appeal and considering the issues for Appeal defined before me today, many of the grounds of Appeal are challenges to the learned Commissioner's findings of fact. They are couched in terms of:

"The Commissioner erred in finding ..." or

"The Commissioner erred in failing to find ..."

Ground No 11 sits separately and pleads – and this has been better enunciated in submissions - the Commissioner erred in not finding the probationary provisions of the Drug Factories (State) Award applied to the employment of Mrs Cunningham and therefore, the question of jurisdiction of the Commission arises as, if she was on probation, Ms Cunningham had no right of Appeal to the Commission from the employer's decision to terminate.

25 The appellant also pleads the Commissioner failed to consider whether he had jurisdiction to hear the Appeal.

26 The submissions of the Appellant in support of the Application for Stay are the following:

(a) The appellant has a reasonable concern the workplace would be disrupted in the event the respondent was to return to the workplace.

(b) The appellant has a reasonable concern that the reinstatement of the respondent would undermine the respect for, and the observance of, policies and procedures by employees of the respondent.

(c) The appellant holds a reasonable belief the reinstatement would affect the harmonious employee relationship of the respondent.

(d) the appellant was concerned that the quality of their product would be affected by the reinstatement of the respondent.

27 The respondent submits the findings of fact were supported by the evidence and were open to the learned Commissioner. As to the balance of convenience, the respondent submits the submission of the appellant be, on the facts, rejected.

28 I find on a preliminary basis the learned Commissioner's findings of fact were supported by evidence before him and his findings could be upheld. It was, I find as a preliminary view, open to the Commissioner to find, on the evidence the Ms Cunningham was hired on a permanent basis and not required to serve a probationary period. If in the circumstances of the Ms Cunningham's employment she was not probationary as the learned Commissioner found then the learned Commissioner had jurisdiction to hear the application and had no need to address the submissions as to jurisdiction.

29 I am not persuaded the appellant has made out in the Stay Application an arguable case on Appeal necessary for the exercise of the discretion in its favour. I consider in the circumstances as a preliminary assessment there would appear to be some real difficulties with the Grounds of Appeal thus far argued by the appellant employer.

30 I now turn to the question of balance of convenience.

31 This consideration must be made with an overview of the nature of the industry in which the appellant conducts its business. The learned Commissioner had before him evidence this employee was a good employee and the evidence was she was chosen to work the night shift because of her competence. While the question as to her "perceived declining attitude towards management" was raised, it was dismissed by the learned Commissioner. He found there was no evidence to support this allegation. I cannot be persuaded the appellant's return to the workplace would be disruptive or would undermine the respect for and observance of the policies and procedures of the employer or affect the harmonious employee relations of the employer as the appellant pleads before me. It has never been suggested the employee's output affected the quality of their product and I find no evidence to support the proposition Ms Cunningham's return to duties could have a detrimental affect on the quality of the product. There is no further evidence before me to suggest that there would be a detrimental monetary effect on the company if the Stay Application was not granted.

32 The appellant further argues as to the issue of "Probation" if a Stay is not granted it would lead to a nugatory effect on the Appeal. I do not believe that such would be the effect given the number of grounds on which the Decision is appealed.

33 At the bar table today the appellant made an offer related to terms the Commission might consider appropriate if a Stay was granted on terms. The appellant put on record it was prepared to pay, from 14 January, that is, 21 days from the date allowed in the Commissioner's Order Number 1 for reinstatement, Mrs Cunningham her average weekly earnings under the Award less what moneys she earns on the open labour market. The appellant invites the Commission to consider such term would, in the circumstances, be appropriate and therefore the Commission should give serious consideration to a Stay on Terms.

34 I have considered this submission. Mrs Cunningham has had some odd days of employment. I have especially considered the appellant's offer in light of its submission that if a Stay was refused the effect is the appeal would be nugatory. I am not persuaded that the effect of the refusal of a grant of stay would lead to negating the appeal. I reject the application of the appellant as to terms to be applied to any Stay application granted.

35 In all the circumstances I find the balance of convenience favours no granting of a Stay.

36 In all of the circumstances taking into account the respective interests of the parties I do not accept the balance of convenience and the competing rights of the parties favours the appellant.

37 The Application for a Stay of the Orders of Patterson C of 24 December 2002 in the use of the Commission's discretion is rejected.

LAST UPDATED: 20/03/2003