Pritchard v Measurement Resources Pty Limited [2006] NSWIRComm 1149 (18 October 2006)

Last Updated: 18 April 2007

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Pritchard v Measurement Resources Pty Limited [2006] NSWIRComm 1149



FILE NUMBER(S): 1886

HEARING DATE(S): 16/11/05, 27/03/06.

DECISION DATE: 18/10/2006
PARTIES:
APPLICANT
Julie Pritchard

RESPONDENT
Measurement Resources Pty Limited

JUDGMENT OF: Macdonald C


LEGAL REPRESENTATIVES

APPLICANT
Mr H Sonmez, Barrister.
RESPONDENT
Mr J Boyle, solicitor.

CASES CITED: Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
Hollis v Vabu Pty Ltd (2001) 207 CLR 21
Outboard World Pty Ltd (t/as Budget Waste Control Sydney) v Muir (1993) 51 IR 167
David R Commercial Pty Ltd v Flood (2002) 113 IR 344

LEGISLATION CITED: Industrial Relations Act 1996



JUDGMENT:

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: MACDONALD C

18 October, 2006

Matter No IRC 1886 of 2005

Julie Pritchard v Measurement Resources Pty Limited.

Application by Julie Pritchard re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996

DECISION

[2006] NSWIRComm 1149

1 This is an application by Julie Pritchard ("the Applicant") for unfair dismissal against Measurement Resources Pty Limited ("the Respondent") pursuant to section 84 of the Industrial Relations Act 1996 ("the Act").

2 The matter was set down for Conciliation and Directions on 9 May, 2005. The matter remained unresolved and a program for the filing of witness statements was put in place.

3 The Hearing took place on 16 November, 2005 and 27 March, 2006.

4 At the Hearing, the Applicant was represented by Mr H Sonmez, barrister who called the Applicant as a witness.

5 At the Hearing, the Respondent was represented by Mr J Boyle, solicitor who called Mr Lawrence Neale, director as a witness.

6 On 24 November, 2005, the Applicant filed a claim against the same Respondent, being an Application for Relief From Victimisation, pursuant to s213 of the Act: IRC 05/6105.

This file was arbitrated on 15 August, 2006 but only as to an "Out of Time" issue.

BACKGROUND

7 The applicant had been in the employ of the Respondent from 25 August, 1993 till 23 March, 2005 and worked in the office.

8 The Applicant claimed that she had been dismissed when she queried with Mr Neale (a director) her entitlement to long service leave.

9 Mr Neale denied the Applicant had been terminated. He said she had put an ultimation to him that he pay her long service leave or she would leave the job. Mr Neale said she stormed out of the office.

He also claimed that the Applicant had been employed as an independent contractor.

FINAL SUBMISSIONS

For The Applicant

10 Mr Sonmez, barrister for the Applicant, put the following, inter alia, in final submissions:

(a) The Applicant's legal relationship with the Respondent was that of employee-employer and not that of independent contractor.

(b) The issue of the Applicant's entitlement to long service leave is relevant to the determination of these proceedings. (The Applicant's claim for long service leave is before the Chief Industrial Magistrate).

(c) The Applicant had been dismissed by Mr Neale, following her enquiry of him as to her long service leave entitlement.

During the notice period given by Mr Neale, the Applicant walked out of the office at short notice, but in the circumstances of a hostile work environment. Accordingly, the walk-out could not be construed as a resignation by the Applicant.

(d) The dismissal of the Applicant was unfair and compensation was sought as reinstatement was impracticable.

For the Respondent

11 Mr Boyle, solicitor for the Respondent, put the following, inter alia, in final submissions:

(a) The Applicant was an independent contractor.

(b) The Applicant was not dismissed.

(c) The Applicant was not constructively dismissed.

(d) The Applicant stormed out of the office, saying: "I can't stay here anymore". She abandoned her position admittedly in unhappy and controversial circumstances.

(e) Even if the Commission found that the Applicant was an employee and had been dismissed unfairly, the Commission should take into account for the purpose of considering compensation, that the Applicant found other employment and had not always been looking for other employment.

Applicant in Reply

12 Mr Sonmez in reply said the Commission had a discretion it could use when awarding remedies.

He rejected Mr Boyle's submission that the credit of Mr Neale should be preferred to that of the Applicant.

He rejected Mr Boyle's submission that there was no Jones v Dunkel inference available, to the advantage of the Applicant. That is, Mr Sonmez relied upon the fact that Mr Neale had not called other witnesses who were present when the Applicant allegedly stormed out of the office and said "I can't stay here anymore".

CONSIDERATION

13 The Commission has two threshold issues for determination: (a) whether the Applicant was an independent contractor as asserted by the Respondent; and (b) if the Applicant was held to be an employee (rather than an independent contractor), had she resigned her employment or been dismissed (overtly or constructively)?

Independent Contractor or Employee?

14 The Respondent claimed that the Applicant was an independent contractor and therefore could not bring an unfair dismissal claim. That is, the Commission can only entertain an unfair dismissal application from an "employee": s83(1)(b).

15 The Respondent's assertion that the Applicant was an independent contractor, revolves around Mr Neale's recollection of the discussion with the Applicant when being interviewed in September, 1993 for a job position and a letter of 10 September, 1993 confirming her engagement.

16 The letter of engagement advised that the "hourly rate is the total remuneration (excluding superannuation), holiday loading, sick pay and long service leave etc, are not applicable". (Ex 1 - Annex A)

The same letter advises that the hours per week are twelve and the Respondent is giving the Applicant flexibility about the hours to be worked given her other commitments.

17 The recollected discussion from September, 1993 is disputed by the Applicant. The thrust of his recollection (and consistent with the letter of engagement) is the concept of an "all-inclusive figure" and "global sum", in exchange for no entitlement to certain working conditions (eg sick leave). (Ex 5 - para 4).

18 The foregoing extracts from the letter of engagement represent, then, the Respondent's evidence in support of its claim that the Applicant was an independent contractor.

19 The Applicant's final submissions listed a number of factors in support of an employee-employer relationship. Thus:

(a) The letter of engagement uses the term "employment".

(b) The letter of engagement advised that the Applicant would be entitled to "superannuation". The "Employer's Reply To Application For Relief In Relation To Unfair Dismissal" confirmed that the Applicant was entitled to "compulsory Supa contributions". (Ex 6 - para 6, page 2 cont.)

(c) Mr Neale's witness statement states that "Julie (the Applicant) was paid by MR (the Respondent) as a PAYG employee,..." (Ex 5 - paras 22 & 23).

(d) Exhibit 3 is a bundle of Group Certificates (1996 to 2005 inclusive) for the Applicant. The name of the employer is shown as the Respondent. Tax instalments for each financial year for the Applicant are shown and quantified.

(e) Exhibit 1 - Annex G are copies of "Zions Wage Summary Sheet For Each Employee" (emphasis added). The Applicant's name is handwritten on the three copies covering the period July, '01 to July '04.

(f) Exhibit 1 - Annex E is a "To Whom It May Concern", signed off by Mr Neale and dated 27 January, 1999, and on the Respondent's letterhead.

Mr Neale states: "This company has employed Julie Pritchard (the Applicant)...on a part-time basis". (emphasis added)

(g) Exhibit 1 - Annex F is a "To whom it may concern", signed off by Mr Neale and dated 14 April, 2005, and on the Respondent's letterhead. Mr Neale states: "This company employed Ms Julie Pritchard (the Applicant) ...in a casual part-time capacity from 1994 to April 2005). (emphasis added)

(h) Exhibit 1 - Annex D is an email from Alan (Mr Neale) to the Applicant, dated 21 March, 2005, stating of her relationship with the Respondent as: "your employment was at an end". (emphasis added)

(i) There was no evidence provided by the Respondent that the Applicant was required to provide invoices/bills for work performed.

(j) The Respondent provided tools of trade being the office space, stationery, equipment and materials required for the performance of the work.

(k) There is evidence of the right to control by the Respondent over the Applicant. Thus, the letter of engagement advises that the Applicant is to report to the General Manager and provide information as requested by the Directors and Auditors (Ex 1 - Annex A)

Other factors were listed in support of an employer-employee relationship.

20 The Respondent brought out evidence, especially in re-examination of Mr Neale, in support of its claim that the Applicant was an independent contractor. Thus:

(a) The Applicant organised the hours she worked.

(b) There was no control over her day to day work.

(c) The Applicant calculated her own remuneration. (The Commission does not understand this response because the Applicant and Respondent negotiated the hourly rate to be paid to the Applicant).

(d) The Applicant decided how many hours she worked per day.

(e) The Applicant was not paid holiday pay. (The Commission rejects this factor as determining the issue in question. The Applicant's letter of engagement describes her as a "casual" and as such, it is possible for a casual employee to be engaged on the basis that a part of their hourly rate incorporates a holiday component - that is, in lieu of taking holidays).

(f) The Applicant did not delegate her bookkeeping work. (The Commission places no weight on this evidence. She was the only bookkeeper, in a very small office (number of staff) and it was not shown that there was an ability to delegate her work).

(g) Mr Neale said that the Applicant "paid her own tax", but then said she raised a cheque for him to sign. (The Commission rejects this evidence. "There is evidence, consistent with the group certificates, that the Applicant paid tax as a PAYG employee).

21 The approach of the courts to determining the issue of employee versus independent contractor, is the multi-factor test. That is, the approach is to consider a number of indicia, in order to have regard to "the totality of the relationship between the parties..." Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 29 per Mason J (with whom Brennan J agreed).

That approach was followed by the High Court of Australia (Full Bench) in Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at 41 (Paras 43 to 45).

Accordingly, and having regard to the totality of the relationship, the Commission finds that the Applicant was engaged as an "employee" by the Respondent.

Resignation or Constructive Dismissal or Dismissal or Abandonment of Employment

22 The Applicant claimed that she had been dismissed or constructively dismissed.

The Respondent claimed that she had resigned her employment or had abandoned her employment.

23 The issue that led to the parting of the ways, as it were, was the Applicant's claim that she was entitled to long service leave, given her lengthy service.

The long service leave issue came to a head in March, 2005. There were face to face meetings, one telephone call and two emails, between the Applicant and Mr Neale over this issue. Somewhere in the foregoing events between those two parties, the four competing alleged scenarios took place: resignation - constructive dismissal - dismissal - abandonment of employment.

The Commission has to determine which one of the above four scenarios brought the contract of employment to an end.

24 The Commission has set out below the relevant dates for March, 2005 and corresponding events in respect of the meetings, the one telephone call and two emails, to help in determining the scenario that brought the contract to an end. Thus:

(a) 8 March (Tuesday)

Around this date, the Applicant submitted a request for 8 days long service leave to be taken from 30 March till 15 April, 2005. This request form was signed off by Mr Neale.

(The type of leave being requested was "long service". Mr Neale deposed that those two words "Long Service", had not been circled at the time of his signing the form: Ex 5 - para 29).

(b) 15 March (16 March?)

Two meetings held between the parties on what was probably 15 March (Tuesday). The parties give differing versions about those meetings.

There is agreement, however, that Mr Neale put an offer to the Applicant for her consideration and reply. The parties do not entirely agree about its content but agree that Mr Neale's offer to settle the long service leave issue was twofold: She can stay on the all inclusive hourly rate (that he says includes a long service leave component), that he has been paying her in her capacity as a casual or take a 20% pay reduction and become a permanent part-timer (and entitled to long service leave).

The Applicant needed time to consider this offer. She was not due to come back to work till the following Monday, but said she would come in the next day (Thursday) with a response to his offer.

(c) 16 March (17 March?)

The parties had another meeting on what was probably 16 March (Wednesday).

The parties give differing versions about that meeting.

However, there is agreement that the Applicant spoke of lodging (or having lodged?) a complaint about the long service leave issue with the Department of Industrial Relations.

There was also agreement that the long service leave issue could go to Court - but the context of how that was said by either party was in dispute.

The parties agree that the conversation concluded on the basis that the Applicant would contact Mr Neale with a response.



(d) 17 March (Thursday)

The Applicant did not come into the office to give her response.

(e) 18 March (Friday)

Applicant sent an email to Mr Neale. (Ex 1 - Annex C)

In this email, the Applicant refers to the meeting of 17 March and asks that Mr Neale put his offers of employment to her, in writing, so that they can come to a mutual agreement.

She expressed her disappointment about not resolving the long service leave issue and stated she was "prepared to take my leave as LWOP and to continue my employment at Measurement Resources..."

Mr Neale deposed: "We did not hear from Julie (the Applicant) at all on Thursday 17 (error? - Macdonald C) or Friday the 18th of March, 2005. I could only presume that she had decided not to accept one of the offers, and resign". (emphasis added)

He further deposed that her email of Friday 18 March was brought to his attention on the weekend. He said that the content of her email was unacceptable.

(f) 21 March (Monday)

Mr Neale said he had sent her an email first thing that morning. (Ex 1 - Annex D). He was not in the office that day but had given a direction to staff to lock one of the cabinets. This direction was due to her threat of litigation and hence he could not have all the staff records and commercially sensitive accounts of the business so freely available to her. He also said he "no longer trusted her". (Ex 5 - paras 42 to 59 inclusive).

The Applicant was at work that day. She said she spoke to Chris Neale (son of Mr Neale) and advised him that her filing cabinets containing her work had been moved and the locks changed. She deposed she said to Chris Neale: "I am here to work and carry out my normal duties." (Ex 1 - para 42). Chris Neale was not called as a witness by Mr Neale.

The Applicant confirmed receipt of Mr Neale's email. (Ex 1 - Annex D). The "Subject" of that email sent at 9.03am on Monday 21 March is: "Termination of Casual Bookkeeper Employment". The Commission will consider below the content of this email.

There was a telephone conversation between the two parties. The parties had differing versions for that telephone call. It is clear that the issue of long service leave was raised and, as well, the Applicant's employment standing.

(g) 22 March (Tuesday)

The Applicant was at work.

The Applicant claimed that Mr Neale spoke to her about finishing up with the Respondent tomorrow. He denied this conversation and said he avoided her all day.

(h) 23 March (Wednesday)

The Applicant was at work.

The Applicant said she had a conversation with a Branko Skibola. That person did not appear as a witness.

Mr Neale said that Skibola (production manager) and John Bird (former retired director of the Respondent) spoke to the Applicant. He said the latter gave her a bunch of flowers "as he understood that she had decided to resign, and wanted to try to cheer her up". (Ex 5 - para 61).

The Applicant agreed that Mr Bird gave her flowers but disputed the resignation understanding attributed to Mr Bird by Mr Neale. She agreed she was upset that day but disagreed she was angry and disrupted the harmony and workings of the office. (Ex 2 - para 61).

Mr Neale did not call Skibola or Bird as witnesses.

Around 2.15pm on 23 March, the Applicant said out loud in the office: "I am sorry. I can't take this any longer". She said she proceeded to sign off and leave the office. She said that Mr Neale, Chris Neale and Leanne Bass were present in the office at this time.

Mr Neale concurs she said words to the effect of the above quotation. But he said the Applicant stormed out of the office with no explanation or goodbyes.

Mr Neale deposed that we "accepted this conduct as her resignation. Her pay was sent to her". (emphasis added) (Ex 5 - para 62).

Mr Boyle put in final submissions the alternative view that this conduct by the Applicant could be seen as an abandonment of employment.

The Applicant did not come back to work.

25 In assessing which scenario brought the contract of employment to an end, the Commission was faced in determining that issue against there being no witnesses to the crucial face to face conversations between the two parties. There was the additional problem of confusion as to what was the correct date for a particular conversation or event and hence the Commission has inserted a question mark against certain dates above. But irrespective of that lack of witnesses and odd chronological confusion, the Commission has still drawn a conclusion as to what scenario brought the contract of employment to an end.

26 Matters came to a head between the parties from and including 15 or 16 March.

The Applicant deposed that Mr Neale said to her that if she thought she was entitled to long service leave, then there is the door. (Ex. 1 - para 32). Mr Neale denied this allegation.

27 It appears that during this conversation, Mr Neale put an offer to the Applicant: (a) the status quo stays in place (that is, the all-up inclusive hourly rate); or (b) the Applicant converts to part-time (contra her current casual status) and becomes entitled to long service leave.

The parties agree that this offer (or something very close to it) was made by Mr Neale.

The parties agree that the Applicant was to consider this offer and respond to it.

The parties agree that the Applicant said that she was not due to work again until the following Monday, but the Applicant volunteered to come into the office before then with a response. Although there is confusion about chronology, it would appear, she was to come into the office on the Thursday.

28 It is also important to note the atmosphere in which the one-on-one conversations were taking place around 15 and/or 16 March. It could not have been a social chit-chat atmosphere. Although the parties have differing versions as to their conversations, there is agreement that the Applicant spoke of lodging (or having lodged) a complaint about the long service leave issue with the Department of Industrial Relations. There was also agreement that the long service leave issue was raised in the context of "going to Court" to resolve it.

The later in time evidence recorded by the Commission below, shows that there was tension between the parties and it escalated as events unfolded.

29 The Applicant did not come into the office on the Thursday as previously stated by her that she would. She sent, however, an email to Mr Neale on the Friday, 18 March. (Ex 1 - Annex C). She deposed that the email was sent at 9.04am on that day (Ex 1 - para 41) but no time is recorded on that email.

The Applicant's email does not give a response to Mr Neale's alternate offers but asks that the offers be put in writing, "...so that we can come to a mutual agreement."

In conclusion she writes, "I am prepared to take my leave as LWOP and to continue my employment at Measurement Resources and hope that this matter does not become a personal issue and that we can continue with a good working relationship."

Mr Neale confirmed that the reference to "LWOP" was a reference to "Leave With Out Pay" and that all leave taken by her had been without pay. (Tr 27/03/06 - p62, line 55 to p63, line 13). In other words, the Applicant's email was saying that she would have her leave without pay, as she had done for the last 12 years.

The Commission finds that the Applicant's email evinces an intention to continue her working relationship, which the Commission has already determined to be an employer - employee relationship.

30 Mr Neale deposed that because he had not heard from the Applicant, he "presume(d)" she had decided to resign. (Ex 5 - para 37,38,39, page 13).

The Commission finds that there was no basis for Mr Neale to make this presumption. The Applicant had not resigned her employment. The email, as already discussed above, evinced no intention to resign.

The claim that he had not heard from her by Friday, close of business, might be in itself correct but so what? There was no evidence that if the Applicant did not contact Mr Neale, then it should be taken she had resigned her employment.

To the extent that it was sought to be argued by Mr Boyle that the Applicant's working week varied, and she was to work the Thursday and Friday of that week, and had not done so and therefore this constituted a resignation - is rejected by the Commission.

Even if the Commission accepted that her working week varied (the Applicant disputed this claim), she was not rostered to work the Thursday and Friday of that week. Her evidence (accepted by the Commission) was that she was not working that Thursday and Friday and was not due to work until the Monday, 21 March.

31 In summary so far, the Commission finds that neither party had brought the contract of employment to an end as at close of business, Friday 18 March.

32 Mr Neale deposed that the Applicant's email of Friday, came to his attention over the weekend.

He described her email as "totally unsatisfactory" and as "another veiled threat of the legal action. Her demand that I know put all our discussion in writing, ...was a total abuse of my time and a rejection of the offers I had explained and put to her. She was continuing to ignore the deadlines I was setting for a concrete answer ....(I) could not accept this conduct from a part-time employee." (Ex 5 - para 41) (emphasis added)

33 A few matters need to be said about this deposition extract.

Firstly, it describes the Applicant as an employee (contrary to the Respondent's claim she was an independent contractor).

Secondly, it describes her as a "part time" worker, but her letter of engagement describes her as a "permanent casual".

Thirdly, Mr Neale describes her email as a "demand" but the Commission rejects this description. The tenor of the email does not read that way. That part of the email dealing with putting Mr Neal's offer in writing, is prefixed with the words of a request: "...I would like you to put into writing..."

Fourthly, Mr Neale described her email as "another veiled threat". The Applicant makes no reference in her email to lodging a complaint (or having done so) with the Department of Industrial Relations or of going to Court. But, in any event, Mr Neale described the email as "another veiled threat". That description by him is relevant for the Commission's consideration as to who brought the contract of employment to an end. That description is also seen, in its tenor, as being consistent with the next observation of Mr Neale's response to her email.

Fifthly, Mr Neale said he "could not accept this conduct from a part time employee".

These last two observations by the Commission are consistent, so the Commission will explain below, with the conduct engaged in by Mr Neale first thing Monday morning, 21 March.

Further to that, Mr Neale under cross-examination, described the Applicant's email as not conciliatory. (Tr 27/03/06 - p63, line 20 to 23).

34 Mr Neale was not at work on Monday, 21 March. He made two decisions consistent with the tenor of his deposed view about the Applicant's email. Firstly, he sent an email to the Applicant. Secondly, he gave a direction for the locking of a filing cabinet in order that the Applicant could not access it. (Ex 5 - paras 42 to 59 inclusive; page 13 and 14).

35 Mr Neale's email (Ex 1 - Annex D) was initially sent to Chris Neale at 9.03am for forwarding onto the Applicant. It was done so at 10.17am.

The subject of the email is: "Termination of Casual Bookkeeper Employment". The email is reproduced below and a reading of it shows that it is predicated on the basis that the Applicant has resigned her employment:

"Dear Julie.

Further our meeting of Thursday 17th, the conclusion was you would no longer work at Measurement Resources. You left saying you would call me later that day advising when your last working day would be, As you did not call we have proceeded on the basis you would not be attending again and your employment was at an end.

Turning to your e-mail of the 18th, With your stated intention of legal action against the company we cannot have you working in the company while planning this. Reemployment on the conditions we discussed before you advised your plan for litigation is therefore out of the question.

I want to thank you for personally and on behalf of the company for the good job you have done for us. If you wish you can use us as a reference.

Regards.
Alan"

36 The first paragraph of his email is based around a view that the Applicant had resigned her employment and this came out of a meeting between the parties on Thursday, 17 March.

The Commission firstly notes that the witness statements of the Applicant and Mr Neale do not refer to a meeting between them on Thursday, 17 March. They refer to two discussions on 15 March and one discussion on 16 March.

More importantly, both parties agree that what came out of those meetings, was an either/or offer given by Mr Neale to the Applicant for her consideration and response. The Applicant was due to work the following Monday but volunteered to come into the office beforehand (on the Thursday) to give her response to Mr Neal's alternate offers.

Accordingly, Mr Neale cannot assert in the opening paragraph of his 21 March email, that "Further our meeting of Thursday 17th, the conclusion was you would no longer work at Measurement Resources." Nor can Mr Neale assert, "you left saying you would call me later that day advising when your last working day would be". This is so, because it is again an assertion contrary to what Mr Neale deposed in his own witness statement, which agreed with the Applicant's version that she was to go away and consider/respond to his alternate offers.

The last sentence in the opening paragraph is based on the presumption that the Applicant had resigned her employment "As you did not call..." The Commission has already considered and rejected this presumption.

The Commission has already found that the contract of employment had not been brought to an end by close of business, Friday 18 March and reiterates that finding.

37 The second and third paragraphs of Mr Neale's email are read by the Commission, as bringing the contract of employment to an end.

38 The reason for bringing the contract to an end is the "stated intention of legal action against the company" and as a result, the Respondent "cannot have you working in the company while planning this". This reasoning is consistent with his response to her Friday email expressed in his witness statement and commented on above by the Commission. (Paras 32 and 33) His witness statement (para 41) concluded with the response, "(I) could not accept this conduct from a part-time employee".

Mr Neale carried out his response by doing two things first thing Monday morning: (a) his email to her headed: "Termination of Casual Bookkeeper Employment"; and (b) the direction by him to lock one of the filing cabinets.

39 The third paragraph of his email is expressed in unequivocal terms that show that the contract is at an end.

40 The Commission does not accept that the Applicant and Mr Neale came to some arrangement at the conclusion of their conversations the week before, whereby the Applicant had agreed to resign her employment.

Mr Neale's email of Monday 21 March is a true expression of the culmination of his view (and escalating tension against the Applicant) about the events of the foregoing week. He saw her email as "totally unsatisfactory"; it was "another veiled threat of the legal action" against his company; it was a "demand"; it was a "total abuse of (his) time"; and he "could not accept this conduct from a part-time employee".

41 The other thing Mr Neale did, in response to the Applicant's Friday email, was to issue a direction that a particular filing cabinet in the office be locked. He deposed his reasoning to be, "...in view of Julie's threat of litigation we could not have all the staff records and commercially sensitive accounts of the business so freely available to her... Frankly, given her aggressive conduct towards me, which I found totally unacceptable and offensive, (especially given our otherwise cordial 12 year friendship), and the legal threats (which I found totally incomprehensible), I no longer trusted her". (Ex 5 - para 42 to 59 inclusive).

The Commission finds that this view (escalating tension against the Applicant) of Mr Neale's is consistent with his decision to terminate the services of the Applicant.

42 A telephone conversation took place between the parties on that Monday.

The Commission finds that Mr Neale initiated that telephone call. The Applicant said that he telephoned her and this is not denied by him.

43 The parties have differing versions as to that conversation.

An important feature of their differing versions is their agreement that the Applicant's employment is at an end. Mr Neale's version questions the Applicant as to when she will finish up her employment - on the basis of a resignation. The Applicant's version has Mr Neale speaking of her resigning and there is a statement attributed to Mr Neale that he told her she could work up to Tuesday 29 March.

44 The Commission accepts that part of the Applicant's version wherein she said Mr Neale told her to finish up on 29 March.

The Commission does so, having formed the view that Mr Neale had decided to end their employment relationship. He initiated the telephone call and it is reasonable to infer that he did so to advise of the notice period for the Applicant to finish up her employment. He had not given that notice advice in his email to her on that Monday morning.

45 The Applicant deposed that Mr Neale spoke to her on Tuesday, 22 March and advised her to finish up the next day. Mr Neale denied this claim.

It is probably the case that Mr Neale did bring the notice period forward because of the escalating tension and his lack of trust in the Applicant. The Commission therefore finds that he did bring the finishing date forward to 23 March.

Summary

46 The Commission, having considered all of the evidence, has decided two threshold issues.

Firstly, the Commission has decided that the Applicant was engaged as an employee and not as independent contractor.

Secondly, the Commission has decided that the Applicant's contract of employment was brought to an end by Mr Neale's email of Monday morning. She was given notice by Mr Neale to finish up on Tuesday 29 March. Mr Neale then varied that finishing date to be on Wednesday 23 March.

Unfair Dismissal?

47 Was there an unfair dismissal? That is, was the dismissal harsh, unjust or unreasonable?

48 The Commission has already concluded that there was an employer-employee relationship and that that relationship came to an end on 21 March 2006 at the hand of the Respondent. In coming to that view the Commission set out the events surrounding the cessation of that employer-employee relationship.

49 At the heart of that cessation was the Applicant's claim that she was entitled to long service leave. (That entitlement is not a question before myself but the Chief Industrial Magistrate. To the extent that it is of assistance to the parties in that matter, the Commission cites the following decision of Chief Industrial Magistrate Miller in: Melissa Hatherly DSE (Holdings) Pty Ltd t/as Dick Smith Electronics [2003] NSW CIMC72 (7 July 2003)].

50 In any event, the issue of entitlement to long service leave was at the heart of the cessation of the contract of employment. The Applicant clearly held a firm conviction as to that entitlement and Mr Neale also held a clear and escalating conviction to the contrary, as it was a matter that in his view had been taken care of by giving the Applicant an all-up inclusive rate, which included he said, long service leave.

51 Although Mr Neale's escalating conviction was no doubt based on his understanding of what was "legally right", he took the step of terminating the Applicant's employment on Monday, 21 March. In doing so, he acted harshly against the Applicant.

The Applicant's firm conviction as to her long service leave entitlement, even if wrong at law, is still a conviction that she is entitled to have. The Applicant is free to choose in this society to pursue that conviction by way of enquiries (such as the Department of Industrial Relations as she described it and did) or pursue that conviction through legal proceedings (such as the New South Wales Industrial Magistrate's Court as she has done).

52 Mr Neale repeatedly pressed his view that he could not have the situation where the Applicant was threatening him with legal action and "going to Court". Mr Neale found that to be an intolerable situation. It cause him to say he no longer trusted the Applicant. He dismissed the Applicant. But in doing so, he dismissed an employee who is entitled in our society to pursue grievances against their employer. Mr Neale acted harshly in dismissing the Applicant when all she was doing was pursuing her right to ask the question at law - and it matters not whether her conviction is soundly based at law or not.

The Commission appreciates the difficulty that parties to an employment relationship can have in working together, especially in a very small office, where both parties are against each other in legal proceedings over some entitlement or right, at law. Be that as it may, the Applicant was entitled to pursue her conviction by way of enquiry or legal proceedings.

CONCLUSION

53 Having considered all of the evidence, the Commission concludes that the dismissal of the Applicant was harsh, Outboard World Pty Ltd (t/as Budget Waste Control Sydney) v Muir (1993) 51 IR 167 at 183.

54 The Applicant has sought compensation as her remedy. In assessing a claim for monetary compensation, the Commission must consider the provisions of s 89(6) - that is, whether an Applicant made a reasonable attempt to find alternative employment and the remuneration gained by an Applicant who succeeded in obtaining alternative employment.

However, s 89(6) is not to be taken as a simple, mathematical formula in the assessment of compensation and the Commission retains its discretion to order the appropriate quantum of compensation, as the Commission deems appropriate for the circumstances under consideration: D and R Commercial Pty Ltd v Flood (2002) 113 IR 344.

55 The Commission also notes the reinstatement was not sought and the Commission has formed the view that reinstatement is impracticable.

56 In considering the quantum of compensation that is appropriate, the Commission has had regard to a number of matters:

* the circumstances surrounding the cessation of the employer-employee relationship;

* the manner of dismissal, that is an email rather than face to face communication given the Applicant's 12 year service;

* the Applicant's lengthy service;

* the Applicant's important standing within the Respondent's business, that is, bookkeeper;

*the Applicant's post dismissal earnings; and

* the Applicant's otherwise unblemished work performance;

O R D E R S

In this matter, for reasons outlined herein, I have determined that the dismissal was harsh and I hereby make the following orders:

(a) The Commission orders that the Respondent pay to the Applicant an amount of compensation of $12,000 gross.

(b) The amount of compensation specified above has been determined, having regard to section 89(5) and 89(6) of the Act.

(c) The amount of compensation specified above is to be paid by the Respondent to the Applicant within twenty-one days from the date of this Decision.

A Macdonald

Commissioner

LAST UPDATED: 18/10/2006