Christopher John Watson v David Fleming t/a South Oakleigh Motors

[1995] IRCA 297

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 1271 of 1995

B E T W E E N :

CHRISTOPHER JOHN WATSON
Applicant

AND

DAVID FLEMING t/a SOUTH OAKLEIGH MOTORS
Respondent

Before:       Judicial Registrar Chancellor
Place:         Melbourne
Date:          19 June 1995

REASONS FOR JUDGMENT (EX TEMPORE)

This is an application pursuant to section 170EA of the Industrial Relations Act by Christopher Watson with the respect to the termination of his employment by David Fleming, trading as South Oakleigh Motors on 12 January 1995. There is also a claim in the accrued jurisdiction of the court with respect to commissions which the applicant alleges are owing to him with respect to finance contracts which he organised on behalf of the respondent in November/December of 1994 and January of 1995. He has indicated that the claim is for a sum less than $10,000. Given that the claim with respect to the commissions was clearly claimed in the application, and in my view properly falls within the accrued jurisdiction of the Court, I am prepared to hear that claim in relation to that matter.

There has been no appearance on behalf of the respondent.  The court records indicate that a copy of the application was sent to the respondent. Mr Watson has given evidence that on 10 or 12 February, Darren Holmes, who was then the general manager of the respondent, telephoned him acknowledging receipt of the documents and urging him not to continue with the application. The respondent has failed to lodge any appearance or other documents with the Court. 

As a result of that failure, Mr Watson arranged for personal service of the application on the respondent which he carried out himself on 12 April 1995 at the respondent's premises at 83-99 Whiteman Street, South Melbourne.  The document was handed to the receptionist who indicated that she would give it to Mr Fleming.  I note that the Court wrote to the respondent by letter dated 25 May 1995 advising the respondent of the hearing date on Monday 19 June 1995. 

Mr Watson has given evidence that on 9 June 1995, he received a telephone call from Jeffrey Reynolds, the current General Manager of the respondent, advising him not to proceed with the claim.  It appears that Mr Reynolds was aware of the fact that the claim was listed for Hearing on 19 June.  In those circumstances I am prepared to proceed with the hearing of the matter in the absence of the respondent. 

Mr Watson gave evidence that he had experience in the motor car industry from 1987 and in recent years, particular experience with the financing of car purchases.  He commenced employment with the respondent on 6 October 1994.  Prior to that time he was working for John Michael Motors as a business manager involving him with finance companies and financing of motor cars.  He was approached by the then sales manager of the respondent and subsequently attended an interview and commenced employment.  His base salary was $665.00 gross per week. Initially Mr Holmes said that something would be worked out with respect to commissions due in relation to the finance contracts.

Mr Watson spent the first part of October familiarising himself with the respondent's business.  He took over the position of the previous business manager in October and was subsequently paid 10 per cent of the respondent's October finance commission earnings.  Mr Watson continued to perform his work quite successfully.  However, it seems there was some ongoing friction with Mr Holmes in relation to the commissions he was to be paid.  Eventually an agreement was reached on 9 December 1994 that Mr Watson would be paid a 7.5% commission on finance company commissions paid with respect to successful car finance applications.

There was no agreement reached concerning the November commission.  Mr Holmes paid Mr Watson the sum of $1000.  It seems to me that in the absence of any agreement that a 10 per cent commission figure being a fair industry standard should have been paid with respect to the November period.  The total finance commissions earned during that period were $28,000 and it seems to me that a commission of $2,800 should have been paid, not the sum of $1,000. 

With respect to the December period, commission on finance deals totalled $28,812.  Mr Watson's 7½ per cent commission on that sum totals $2160 and has not been paid.  With respect to the January period, commissions on finance deals total $21,000.  Mr Watson's 7½ per cent commission with respect to that amount totals $1575 and has not been paid.

Mr Watson presented to the Court evidence of the December commissions earned.  He was unable to produce evidence in relation to the January commissions, but obtained information from the company's computer and says that the $21,000 figure which would have included some roll-offs from the December period, accurately represented the commissions earned during that period and I accept his evidence in this regard.  On the basis of those findings, I find that the respondent has failed to pay Mr Watson a sum of $5535 by way of commissions due to him.

In relation to the termination of his employment, I note that Mr Watson was obviously working very successfully up until the end of December of 1994.  Indeed, at that time, he was congratulated by Mr Holmes and was given the opportunity to buy a couple of suits and ties as a reward for his work.  It appears that on 10 January 1995, there was a clash between Mr Watson and Mr Holmes.  A woman had taken out a finance company loan in order to purchase a car from the respondent.  She was obviously upset with the quality of the car and wanted to pull out of the deal.  Eventually, the finance company and the respondent agreed to this.

There was some problem with the paperwork.  Mr Holmes had asked Tammy Quinlan, one of Mr Watson's assistants, to organise all of the paperwork, but she failed to complete all matters and the woman had to be called back to the respondent's office.  Mr Holmes was very unhappy about this and abused both Mr Watson and the woman and, at that stage, said to Mr Watson "I do not want you working for me any more".  Mr Watson spoke to Jeff Reynolds and hoped that the matter could be sorted out.  It appears that there was a further small problem on the Thursday in relation to a man who had, on one view of it, been pressured into purchasing a motor vehicle through a finance deal and wanted to pull out.

Again, there seems to have been some conflict between Mr Holmes and Mr Watson in relation to that matter.  At 6 pm on Thursday, 12 January, Mr Jeff Reynolds advised Mr Watson that his services had been terminated.  The reasons he gave seemed to indicate that the problem with the woman on the Tuesday and the problem with the other man on the Thursday were the motivating factors.  However, I note on the employment separation certificate dated 19 January 1995 that the reason for termination is given as:

Unsuitability for this type of work.

I am not satisfied that there has been a valid reason for the termination of Mr Watson.  He has provided a more than satisfactory explanation to the Court in relation to the incidents on Tuesday and Thursday of the week of his termination and, indeed, it seems that he acted properly and in good faith in relation to both matters.  In relation to the reason given on the employment separation certificate, Mr Watson's employment history prior to commencing with the respondent and indeed his employment history with Kevin Dennis Motors since his termination indicates that he is a more than capable business finance manager.

I therefore find that the respondent has breached section 170DE(1) of the Act in that there was no valid reason for his termination. In relation to the question of compensation, I note that Mr Watson commenced employment with Kevin Dennis Motors on 11 February 1995. This job was at a lesser position than his position with the respondent, but he was keen to recommence employment as soon as possible and obtained a job as a new car salesman earning $423 gross per week. He obviously impressed Kevin Dennis and, by 24 March, he was promoted to the position of business manager which was very similar to the position that he held with the respondent.

Given that the applicant has obtained suitable alternative employment and given the circumstances of his termination, I find that reinstatement is impracticable in this particular case.

In relation to the question of compensation, I propose to award Mr Watson the sum of $2680 representing four weeks remuneration lost between 12 January and 11 February.  Further, I propose to award the sum of $1452 representing the partial loss of earnings between 11 February and 24 March when he was eventually promoted to his current position. 

THE COURT ORDERS THAT:

(1)the respondent pay the applicant the sum of $5535 with respect to commissions due and payable;

(2)the respondent pay the applicant the sum of $4132 by way of compensation pursuant to section 170EE of the Act.

(3)the Registrar write to the respondent indicating to them the orders that have been made by the Court;

(4)the total monies payable of $9667 be paid within 21 days of this day.

I certify that this and the preceding nine (9) pages are a true copy of the reasons for judgment of Judicial Registrar Chancellor.

Associate:            
Dated:  

Applicant in person

No appearance for the Respondent  

Date of hearing:  19 June 1995
Date of judgment:                   19 June 1995

C A T C H W O R D S

INDUSTRIAL LAW - Termination of Employment - Accrued Jurisdiction - Valid Reason - Compensation.

Industrial Relations Act 1988 s170EA, s170DE(1).

No VI 1271 of 1995

CHRISTOPHER JOHN WATSON  -v- DAVID FLEMING t/a SOUTH OAKLEIGH MOTORS

Before:  Judicial Registrar Chancellor
Place:  Melbourne
Date:  19 June 1995

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI-1271/95

B E T W E E N :

CHRISTOPHER JOHN WATSON
         Applicant

AND

DAVID FLEMING t/a SOUTH OAKLEIGH MOTORS
Respondent

MINUTES OF ORDERS

Judicial Registrar Chancellor  19 June 1995

THE COURT ORDERS:

(1)the respondent pay the applicant the sum of $5535 with respect to commissions due and payable;

(2)the respondent pay the applicant the sum of $4132 by way of compensation pursuant to section 170EE of the Act.

(3)the Registrar write to the respondent indicating to them the orders that have been made by the court;

(4)the total monies payable of $9667 be paid within 21 days of this day.

NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.