Bruce Raymond Carroll v Makoni Holdings Pty Ltd Trading as Rossy's Smash Repairs

[1995] IRCA 397

CATCHWORDS

INDUSTRIAL LAW - Termination of employment - capacity and or conduct of employee - whether a valid reason for termination - procedural fairness - applicant denied opportunity to answer allegations during hearing of the application - rule in Brown -v- Dunn

Industrial Relations Act 1988 ss 170 EA, DB, DC

Bruce Raymond CARROLL -v- Makoni Holdings Pty Ltd trading as

Rossy’s Smash Repairs

NI 1656 of 1995

Before:           Tomlinson JR
Place:              Sydney
Date:              28 August 1995

In the Industrial Relations Court
of Australia
New South Wales District Registry  No NI95/1656

BETWEEN:               Bruce Raymond CARROLL
  Applicant

AND:Makoni Holdings PtyLtd trading as Rossy’s Smash    Repairs

Respondent

MINUTES OF ORDER

28 August 1995  Tomlinson JR

THE COURT ORDERS THAT:

1. The respondent to pay to the applicant the sum of $6,544.00 within 21 days of the date of this decision.

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY                Matter No   NI 95/1656

B E T W E E N :        Bruce Raymond Carroll
  Applicant

A N D :  Makoni Holdings P/L Trading as

Rossy’s Smash Repairs
  Respondent

Before            Tomlinson JR
Place               Sydney
Date               28 August 1995

REASONS  FOR  DECISION

This is an application under Section 170 EA of the Industrial Relations Act 1988 (“the Act”) for compensation arising out of a breach of Division 3 of Part VI of the Act.

The applicant Bruce Carroll was employed as a manager by the respondent for a period of some seven weeks from February 1994.  The respondent owns and operates a motor vehicle smash repair and paint business together with a tow truck business.

Initially the applicant commenced proceedings on 24 May 1994 by application numbered 290 of 1994.  There were differing submissions as to whether the respondent appeared at any or some of the directions hearings of that initial matter but suffice it to say that that matter was discontinued by notice dated 16 November and filed 21 November 1994.  The applicant’s representative on 12 July 1995 told the court that the reason for discontinuing at that time was that he lacked financial resources to retain legal assistance.  Judicial Registrar Locke made an Order dismissing that application on 19 June 1995 when Mr G Parker, solicitor, appeared on behalf of the applicant and the respondent appeared in person.

By application dated 20 March 1995 and filed 24 March 1995 the applicant sought compensation.  The matter proceeded to hearing on the basis of Order 22 Rule 7 as the court found it had jurisdiction to hear the fresh claim.

In his evidence in chief the applicant stated he commenced a degree course in mechanical engineering but left to commence employment a the used car yard of his father where he learned spray painting and panel beating.  Thereafter he was in business by himself in the vehicle repair industry for several years.  The applicant subsequently took various courses in computer skills and management at technical colleges.

On 12 February 1994 the applicant answered the advertisement of the respondent and submitted a curriculum vitae admitted into evidence as exhibit 1.  The respondent told the applicant he was looking for someone on the floor to manage his panel shop.  The position was a new one as the applicant was not filling a vacancy.  The parties agreed the applicant would be paid “$600.00 per week in the hand”.  The applicant commenced work on 21 February 1995.  There was no written job description.  There was a two week trial period and the respondent indicated he was happy with the performance of the applicant.  The duties of the applicant included the preparation of panel beating quotations, ordering spare parts, liaising with customers and answering telephone enquiries.  Additionally the applicant stated he did some panel beating and that only written work he performed was the preparation of quotes.  The applicant did not handle cheques or invoicing.  At the commencement of employment it was made clear that the workshop was to be opened and running by 8 am sharp.  As manager of the panel shop to be at work early and to make ready for the day was the responsibility of the applicant.  The applicant stated that he worked 2 out of 3 Saturdays.  In evidence the applicant stated that although he felt he did not get on well withe the respondent Mr Ross, there were no particular difficulties.  On occasion the applicant admitted being late for work - 10 to 15 % of the time during which he was employed.

The applicant stated he saw several things wrong with the running of the respondent’s panel shop especially in the area of the price of the materials ordered and the quality of the workmanship.  In consultation with Mr Ross the applicant stated that one of the spray painters was terminated.

The applicant gave evidence of personality clashes between himself and the respondent and further of a specific incident towards the end of March 1994 relating to the over-ordering of spare parts apparently the fault of the applicant.  According to him the respondent was angry and said

“You stuff up again and you are out”.

On a day towards the end of April 1994 the applicant stated that his car would not start and that he tried to telephone work and the phones were engaged.  The applicant allegedly arrived at 8.40 am whereupon the respondent said to him words to the effect

“I’ve been thinking about it over the week end - I don’t want you to work here I am going to have to let you go.  The (NRMA) cars not the reason  - I am having troubles with the NRMA and I cannot afford to pay you the sort of wages I am paying you.”

In relation to the NRMA job the applicant told the court a 1984 Tercel was repaired by another employee, Carlos, on Saturday 2 April 1994.  The removal, repair and replacement (“R and R”) of the hood lining was an item noted on the repair quotation.  It was the evidence of the applicant that on occasion “R and R” items are not performed.

It was also the evidence of the applicant that it was possible to become “blackbanned” as a repair shop for failing to meet the standard of insurance inspections.  The applicant stated that part of his job was to check to see if the “R and R” jobs had in fact been done and in doing this the applicant would ask the panel beater while he was actually doing the job if all items were being attended to.  According to the applicant an NRMA inspector called at the premises of the respondent on 15 April 1994 and performed a spot check.  In relation to the Tercel the applicant was asked whether he had seen the hood lining come out and he answered “no’.

The applicant told the court it was difficult to assess if the lining had been removed or not.  The “R and R” had been quoted for as costing $100.00 and the applicant, together with the respondent Mr Ross and the NRMA inspector Mr Douglas agreed in consultation that the lining had not been removed in accordance with the quote.  The court then heard evidence about the practice of “factoring” the money due to be received from the insurance company to a finance company but for the purposes of these proceedings I find there is nothing relevant from the entirety of the evidence concerning factoring provided by either the applicant or the respondent and accordingly it is of no weight.

The applicant gave evidence in chief that he was terminated on 26 April 1994 and that on 2 July 1994 he began as a sub-contractor in another position and that the reason for his termination being “misconduct” was not alluded to until after the cessation of employment and that that was via the telephone.

In cross examination it was put to the applicant it was a condition of his employment that he be at work at 7 am.  The applicant denied this and further stated that he could not recall if he did the actual quote for the Tercel.  The applicant stated again he was not there when the roof repair was done, and that it was all over and done in the one day, 2 April 1994 and that Mr Douglas from the NRMA called on 11 April 1994.  The applicant agreed that it would be possible to lose accreditation as an NRMA authorised repairer for incorrect quoting such as had been done on the Tercel.  It was put to the applicant on the morning of the 26 April 1994, the day after Anzac Day, that the respondent put to him words to the effect

“All this drama with the NRMA - it is all your fault”.

The statement was denied by the applicant.  It was not put to the applicant that as a result of the visit of Mr Douglas a serious conversation ensued between himself and the respondent.  Nor was it put to the applicant in cross examination that the respondent in examining files concerning repairs in progress discovered discrepancies and that a serious conversation ensued between the applicant and the respondent.

Mr David Ross, the respondent stated he had been in the panel beating and repair business for some 15 years and that to-day he employs 17 people and has a turn-over of $1.5 million.

Mr Ross stated the applicant was to start at 7 am, and that he assessed the applicant’s abilities as a manager of his panel shop by asking him to do two trial quotes.  These it seems were satisfactory and so a 3 month trial period was entered into.  Mr Ross stated that a condition of employment was that the applicant work every second Saturday and that his main job was to oversee and check on the staff in the panel shop.  In relation to the running of his business the respondent said he had been “spot checked” by the NRMA many times to see precisely if the work quoted for in fact was carried out.  Never had a discrepancy in quotations been discovered - until the repairs of the Tercel motor vehicle allegedly managed by the applicant.  The respondent stated as a result of Mr Douglas from the NRMA finding matters of concern the respondent for the first time ever received a verbal warning of that fact and it was recorded on his record with the NRMA that the respondent my lose its accreditation to perform repairs on behalf of the NRMA.

The respondent said that after the inspection of Mr Douglas he stressed to the applicant the importance of doing “R and R” quoted items and the necessity to be careful in this regard.  The court was told by the respondent that if his workshop lost NRMA accreditation he would lose not only his business but his house and everything he owned as his income would lower considerably.  The respondent said on the morning of the termination, the morning of 26 April 1994 he arrived at work and 7.30 am and the applicant was not there and the workshop was not opened or work.  The respondent stated he checked various files relating to work in progress to his mind discovered discrepancies.  According to the respondent Mr Ross a conversation ensued between the applicant and the respondent the upshot of which was the respondent said words to the effect

“When do you want to finish?”

and the applicant in response said words to the effect

“I will finish now”.

The evidence of the respondent was that he contacted his employer organisation and received advice about holiday pay and how to word the separation certificate.  The respondent specifically denied the evidence of the applicant that his panel shop had been denied spare parts by suppliers as accounts were unpaid.  In re-examination the respondent stated that the repairs of the Tercel motor vehicle was a long job and had taken more than one day, and that the roof lining would have been out for considerably longer than one day.  The respondent said that he said to the applicant after the business of the Tercel words to the effect

“If I catch you doing that again I will sack you.”

On behalf of the respondent the court heard evidence from Mr Robert Douglas a branch assessor with the NRMA.  Mr Douglas confirmed that NRMA referral work would be denied to any smash repair shop found to be breaking the regulations and that related particularly to not carrying out all the work for which quotes had been made.  Mr Douglas stated that when the matters on 11 April 1994 were put squarely to the applicant concerning work not performed he found the applicant to be “fairly evasive” in his answers.  Mr Douglas stated that it was “blatantly obvious” the lining of the hood of the Tercel had not been removed and that the work that had been done was attributable to lazy workmanship.

On behalf of the respondent the court heard evidence from Mr Joe Attard, an employee at the time of the incidents giving rise to the termination.  It seems various conversations took place between the applicant the respondent when Mr Attard was present but as the substance of those conversations were never put to the applicant such evidence was ruled against.

CONCLUSION

As stated earlier, the evidence concerning factoring is of no importance in these proceedings.  It is also a finding of this court that it is of no relevance that the respondent may or may not have been denied supplies in the form of spare parts as the applicant alleged on the basis that the respondent had unpaid accounts.  The applicant applied for and accepted the position as manager on the floor of the respondents rather large panel beating and repair shop.  The position was one requiring expertise and accurate assessment and a knowledge of how to keep both the customer and the insurance company paying the bill on side.  I find it to be of prime importance that all regulations imposed by insurance companies, especially by the NRMA on the respondent’s business, be both adhered to and followed.

It is clear that the applicant was lax and often arrived late for work.  In contrast the curriculum vitae of the applicant is impressive.  The applicant on the information before the court should have been aware of failing to see that the “R and R” items quoted for, and presumably approved for payment and then in all probability paid for by the insurance company, were in fact performed on the vehicle in question.  For a panel shop to be paid by an insurance company on behalf of an insured vehicle owner for work not carried out falls into the category of fraud.  Naturally the extent of the knowledge of the panel shop is relevant, and so elements of actual knowledge and imputed knowledge are important.  I found in his evidence in chief the applicant prevaricated.  It is not possible for someone with the years of experience allegedly possessed by the applicant to state that sometimes “R and R” work is not carried out.  From the demeanour of the applicant in giving this evidence to the court and listening to his words he was afforded little credibility in this regard.  The importance of dealing with someone as important as the NRMA to the respondent with integrity and absolute honesty cannot be stressed to much.  To my mind in relation to the Tercel that the applicant failed to do and accordingly the consequences for the respondent loomed large.  The respondent, solely because of the poor work standard of the applicant, received a warning it could lose NRMA accreditation.

I found the respondent to be informed and anxious to maintain a high standard of reliability of workmanship particularly with the NRMA.  I found the witness for the respondent Mr Douglas to be expert in his field and I prefer his version of what occurred on the 11 April 1994 when the spot check was done to the version offered by the applicant.

Various matters concerning an alleged conversation between the applicant and the respondent were not put to the applicant, neither were certain matters relating to alleged discrepancies in repair quotations discovered by the respondent on 26 April 1994.  There was no application to re-open the case of the respondent.  There was a strong objection mounted by counsel on behalf of the applicant that matters not dealt with in the applicant’s cross examination should not be brought to the attention of the court by way of evidence from the respondent.

However I agree with the submission of the applicant that there was unchallenged evidence that the respondent said

“I have been thinking about it over the weekend and you’ve got to go”

and that those words reflect a final decision which did not permit of counter argument and accordingly the applicant was denied procedural fairness.

On behalf of the applicant it was argued there was no valid reason for termination on the following grounds:

*         the respondent conceded that lateness was not a major issue

*it was never put to the applicant that there was any subsequent failure by him to check on NRMA jobs analogous to the allegation in relation to the Tercel.  In accordance with the court’s evidentiary ruling, the respondent’s case can only be founded on the basis of the one incident on 11 April 1994

*on the respondent’s case, the applicant was warned that on 11 April 1994 that subsequent conduct similar to that alleged in respect of the NRMA job would lead to dismissal.  In the absence of evidence of any such subsequent conduct termination in respect of the incident of 11 April 1994 would be harsh and unjust.

*there was no complaint in respect of the applicant’s work performance between April 1994 and 26 April 1994, which is relevant to the principles of fairness

It was common ground that part of the evidence adduced in the respondent’s case relating to other non-completed work on the Toyota Tercel brought to the attention of the applicant by the respondent and Mr Douglas and an inspection of NRMA work by the respondent and an employee of the respondent John Attard on 26 April 1994 prior to the applicant’s arrival at work was rejected under the rule in Brown v Dunn.

However argued on behalf of the respondent was it was adduced on behalf of the respondent that

*         the applicant was aware of the importance of the NRMA work to the respondent

*         the applicant’s duty included supervision of all work done in the workshop

*another employee, John Attard, gave evidence that NRMA work was of importance to the respondent’s business

*Mr Douglas gave evidence that the work on the Tercel was not done correctly as per the quote

*Mr Douglas warned the respondent the job had not been done correctly as per the quote and when the applicant was confronted with this information he was unable to give an adequate response.

I agree with this submission but it is beyond doubt that the court was prevented from hearing evidence that the applicant was accorded procedural fairness within the provisions of the Industrial Relations legislation.

Having considered all the evidence before the court I am unable to dismiss this application and I find the legislation has been breached. An employer must give an employee a chance to answer claims relating to his conduct, capacity and work performance under the provisions of Section 170 DC. I cannot agree with the contention that a conversation between the applicant and the respondent took place in which the applicant was given the opportunity to explain his actions. Such conversation may well have taken place but that fact was not proved to the satisfaction of the court.

I turn now to compensation.  It was common ground the applicant was receiving $600.00 per week net.  The court heard he lost 10 week’s employment.

Accordingly I order the respondent to pay to the applicant the sum of $6,544.00 within 21 days of the date of this decision

I certify that the foregoing 10 pages are a true and correct copy of the reasons of decision of Judicial Registrar Tomlinson handed down this 28th day of August 1995.

Associate:

Date:  28 August 1995

Appearances:

Applicant:                  Mr David Carter
  Lawrence & Lawrence

Respondent:               Mr K Pryde