David Claude Webb v Techwrite International Pty Ltd
[1995] IRCA 379
•19 July 1995
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - claim for UNLAWFUL TERMINATION - whether PROCEDURAL FAIRNESS - whether employee waived right to notice
INDUSTRIAL RELATIONS ACT 1988, Ss 170EA, 170DC, 170DE, 170DB
DAVID CLAUDE WEBB -v- TECHWRITE INTERNATIONAL PTY LTD -
WI 95/1615
BEFORE: BOON JR
PLACE: PERTH
DATE: 19 JULY 1995
IN THE INDUSTRIAL RELATIONS )
COURT OF AUSTRALIA )
WESTERN AUSTRALIA )
DISTRICT REGISTRY ) No. WI 95/1615
BETWEEN: DAVID CLAUDE WEBB
- Applicant
AND: TECHWRITE INTERNATIONAL
PTY LTD
- Respondent
MINUTE OF ORDERS
BEFORE: BOON JR
PLACE: PERTH
DATE: 19 JULY 1995
THE COURT ORDERS THAT:
The respondent pay to the applicant the sum of $400 for damages in lieu of notice within 28 days of this order.
The application is otherwise dismissed.
NOTE: Settlement and entry of Orders is dealt with by Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS )
COURT OF AUSTRALIA )
WESTERN AUSTRALIA )
DISTRICT REGISTRY ) No. WI 95/1615
BETWEEN: DAVID CLAUDE WEBB
- Applicant
AND: TECHWRITE INTERNATIONAL
PTY LTD
- Respondent
BEFORE: BOON JR
PLACE: PERTH
DATE: 19 JULY 1995
REASONS FOR JUDGMENT
(Delivered ex tempore and revised from transcript)
The applicant has claimed under section 170EA of the Industrial Relations Act 1988 for payment of compensation relating to the alleged unlawful termination of his employment by the respondent on 14 May 1995.
The respondent, Techwrite International Pty Limited, owns and operates two bicycle shops in the Perth metropolitan area. The applicant was engaged to manage one of the shops and he commenced employment on 7 March 1995.
It was contended that there are several matters in issue. Firstly, the applicant states that the respondent did not provide him with written notice of termination as required by section 170DB. The respondent states, firstly, that the applicant agreed to leave without notice and, secondly, that, in any event, the applicant was guilty of serious misconduct and, as such, the employer was not required to give notice within the provisions of section 170DB.
Secondly, the applicant alleges that his employment was terminated for reasons relating to his conduct or performance and that he was not given an opportunity to defend himself against the allegations made. The respondent, on the other hand, says that the applicant was given two written warnings and several verbal warnings that the applicant's employment was in jeopardy for reasons related to his conduct or performance.
Thirdly, the applicant states that there was no valid reason for his termination within the meaning of that term in section 170DE. The respondent, on the other hand, says that there were valid reasons for the termination.
Fourthly, the applicant makes claim for allegedly unpaid wages, arising out of this court's accrued jurisdiction. The applicant states that he was significantly underpaid according to the provisions of an award which he says applied to him. The respondent denies that this was so.
The applicant gave evidence that through a friend in the bicycle business he heard that the respondent may be looking for someone to manage its City Beach shop. He had a number of interviews with Mr Terry Dowling, the Managing Director of the respondent company, and it was agreed that the applicant would commence work with the respondent at a rate of $400 per week. There was no contract in writing.
The agreed hours would be 9.00 am until 5.30 pm on Mondays, Tuesdays, Wednesdays and Fridays, 9.00 am until 6.30 pm on Thursdays and 10.30 am until 2.30 pm on Sundays. It was agreed between them on the applicant's evidence that the $400 a week was to cover all of the time worked. Mr Terry Dowling was to work on Saturdays.
The applicant's duties included opening the shop, serving customers, doing repairs, cleaning the shop, working the till, ordering parts and servicing bikes. The bicycle shop in question sold bicycles, cycle clothing and spare parts. It also carried out repairs for customers. The applicant has been involved with bicycles since he was a child and at some stage owned his own bicycle shop in Karratha.
It was agreed between the two men that the applicant would be paid on a fortnightly basis. It was also common ground that the applicant was considering buying the City Beach shop himself and for this reason he kept a record of every transaction within the shop. It was agreed that the applicant would work for two to three months in the shop so that he would be in a position to judge the turnover of the shop before making a decision on the purchase of the shop.
The applicant's evidence was that he worked every day on which he was required to work and that he kept the shop tidy and clean. He said that he kept up the repairs and in general did what he was asked to do by his employer. Mr Terry Dowling worked on Saturdays and sometimes he left notes for the applicant in relation to what he was required to order from various companies. Most of the discussions between the two men were conducted over the telephone as Mr Dowling had other employment. The applicant gave evidence that he was not aware of any complaints by customers during the 10 weeks he was employed.
After his initial three weeks of work, the applicant had still not been paid and he raised the matter with Mr Dowling. He received his first pay cheque at the end of the month. It was then another three weeks before he was paid and he once again had to approach Mr Dowling with this matter. At this stage, the applicant contacted a wages tribunal to find out how much he should be paid and because of information he received from that source he gave Mr Dowling a written demand as to what he said he was due. In his evidence-in-chief, the applicant said that this took place shortly before his employment was terminated on 14 May; however, during cross-examination, he agreed that this probably did not happen until some time in June.
On 14 May, according to the applicant, Mr Dowling came into the shop at about 2.25 pm and said "I've come bearing bad news. I'd like you to finish as of now". According to the applicant, he did not question Mr Dowling at all and helped him close up the shop. Since that time he has not returned to the shop to work.
The applicant's evidence was that the only written warning he received in relation to his performance at his job occurred in the third week of his employment when he received a letter from Mr Dowling dated 3 April 1995 but issued on 6 April 1995. The letter reads:
Dave, I have been fairly disappointed with the way things turned out in the shop. I know that it is not all your fault but I also know that your effort or lack of it is a large contributor. I have put this in writing so that there is no ambiguity in what needs to be communicated. I feel uncomfortable writing this and my hope is that we can reach an amicable and suitable arrangement.
Major sources of my discontent are your level of effort and initiative in the shop. To me it seems I've been paying you to read the paper while tasks within the shop do not get done. Some of the areas where I expect your performance to improve are: you seem to do nothing when there are things like pumping tyres, dusting, cleaning windows, et cetera to do; you seem to order the wrong things, even though instructions have been quite explicit - these usually include items that won't sell quickly; you let items that move quickly run out of stock; not pricing items when they arrive - this is largely due to me not telling you of the pricing structure; not following up non-delivery of ordered items; not labelling bikes in the workshop.
There are now a few alternatives that we have to look at. My preferred option is for you to buy the shop. By the way, no agreement has been reached between Lewis and myself for the Nedlands shop. Other choices include you working better, reducing your pay or hiring someone else. I will be interviewing people this weekend in preparation for the last option should it be required. It will be required if there is not a marked improvement within 2 weeks.
The applicant states that he was shocked by the contents of that letter and that he was careful to improve his performance after he received it. The letter was accompanied by a list of instructions issued by Mr Dowling in relation to various aspects of the operation of the shop.
The respondent stated that the applicant received a further written warning from Mr Dowling dated 24 April 1995 but the applicant stated he did not have any recollection of it.
During cross-examination, the applicant admitted that he had had several discussions with Mr Dowling relating to his performance prior to termination. As far as the applicant was concerned, his performance in his job was excellent and he always did what was asked of him.
Mr Dowling gave evidence on behalf of the respondent. Mr Dowling's evidence was that because it was known that the shop was fairly quiet, the salary of $400 per week was based on a 40 hour week. It was to be paid fortnightly by cheque although Mr Dowling had run into some difficulties with obtaining a cheque book on time from his bank. It was mentioned in the interview that because it was a fairly quiet business and because Mr Webb would have a lot of breaks, a low salary was warranted.
It was agreed that 15 to 20 per cent of the net profit of the shop was to be paid to Mr Webb if the turnover picked up. Neither man expected the turnover to increase significantly in the short term. Given the way the shop had operated in the past, it was expected that the actual workload for Mr Webb would be somewhat less than five hours total per day, although he was expected to remain physically on the shop premises during the shop's opening hours.
Because Mr Webb had previous experience in running a bicycle shop, Mr Dowling considered that he would be sufficiently qualified to manage the shop on his own. Sometime after Mr Webb started work, Mr Dowling became aware that there were some problems with Mr Webb's performance. Mr Dowling stated that he noticed that the bikes that were being built were not built according to the requirements and were therefore not safe for the customers to take away. The tyres that Mr Dowling had pumped up at the beginning of January when he had been in the shop had slowly gone down and some of them were quite flat by April.
As a result, Mr Dowling gave Mr Webb a letter setting out his complaints and a list of instructions. On 6 April Mr Dowling visited the shop and spoke with Mr Webb about the contents of the letter. Mr Webb conveyed to Mr Dowling that he had been shocked by the letter and said that if Mr Dowling ever wanted to terminate his employment, he did not require payment in lieu of notice or actual notice but that he would leave at the end of that day.
In the meantime, the person who had managed the respondent's Nedlands store had resigned and when Mr Dowling replaced that manager he found that a lot of the applicants for that job were very keen and appeared to be better qualified than Mr Webb for the management of the shop. Several instances were raised of jobs which had been carried out by Mr Webb and which were returned to Mr Dowling on his Saturdays in the shop for alleged poor workmanship.
When these complaints were made to Mr Dowling, he could find no record of either a job card or that money had been received and this was contrary to his specific instructions to Mr Webb. These instances occurred on the 15th and the 22nd April. Mr Dowling stated that on Monday 24 April, he wrote a letter to Mr Webb outlining these complaints and stating that he was not happy with the pricing Mr Webb was doing. A copy of that letter was Exhibit 3 at the hearing and clearly states that Mr Dowling was dissatisfied with Mr Webb's performance and further states that unless there was a marked improvement in his work and in the level of trust Mr Dowling felt he could have with Mr Webb, there may be no alternative but to terminate Mr Webb's employment.
The letter went into detail in relation to the two instances I have just referred to. It also states that Mr Webb should pay more attention to the costing and pricing of stock. Mr Dowling states that he put this letter in a yellow A4 envelope and included in that envelope a price list of helmets. He slid the envelope under the door of the shop on Anzac Day and when he came into the shop on the following Saturday he found the price list of the helmets had been put up in the shop.
Mr Dowling further states that he contacted Mr Webb by telephone during the week to discuss the poor workmanship and the missing transaction cards. He stated to Mr Webb that the shop could not afford the poor workmanship. Mr Webb stated that he had not been stealing the money and that it must have been an oversight. Mr Dowling said that he reiterated the question of the pricing of the stock and that they discussed the options available to Mr Dowling, namely, reducing Mr Webb's pay; Mr Webb buying the shop; or, terminating Mr Webb's employment. According to Mr Dowling, Mr Webb said that he was not ready to buy the shop and that he would be happy to go at a day's notice.
During the first week of May, Mr Dowling told Mr Webb that he was still dissatisfied and that there had been no improvement in the areas previously brought to the applicant's attention. Some expensive bikes and bike-lights had come into the shop and they had all been incorrectly priced. Mr Webb had said that he thought he had priced them correctly but, once Mr Dowling went into the matter with Mr Webb, Mr Webb agreed that he had in fact priced the items incorrectly. On Saturday 13 May Mr Dowling went into the shop and found that many of the bikes still had flat tyres and he paid a regular 9-year old customer to pump up the tyres for him on that day. On that day also, Mr Dowling decided it was not worth keeping Mr Webb on as his employee.
On 14 May, Mr Dowling went into the shop at 2.15 pm and advised Mr Webb that he was terminating his employment. He asked Mr Webb if he wanted to work out his notice but said that he told him that his poor workmanship and the disregarding of his instructions was sufficient to let him go that day. Mr Webb said that he would leave that day. The impression Mr Dowling gained was that Mr Webb seemed to be agreeable to that arrangement. They packed up the shop and Mr Dowling did not hear from Mr Webb until he received a letter of demand on 10 June. Mr Dowling's evidence was that he was stunned to receive a demand of back pay of over $4000 as Mr Webb had agreed to the wages at the beginning of his employment.
Both the parties were unrepresented at the hearing of this matter and I have taken into account that Mr Dowling is obviously a better educated and more articulate person than Mr Webb. It is always difficult in a situation like this when one is faced with a conflict of evidence to decide what is the true situation. I will go through each part of the claim in turn and give my findings.
As to the claim for unpaid wages arising out of the accrued jurisdiction of the court, the burden of proof is on Mr Webb to satisfy this court that he was underpaid. The evidence of Mr Webb in relation to the alleged underpayment was somewhat vague. I also accept that Mr Dowling entered into the arrangement in a bona fide way and that the arrangement was struck because of the shop's position and the fact that it did not have a very high turnover. I do not accept the argument that Mr Webb was only working for five hours every day, because he was required to be in attendance for quite a long period each day. However, on balance, I am unable to be satisfied that there was an underpayment. Therefore I must dismiss that part of the application.
As to the question of the notice of termination, section 170DB(1) says:
An employer must not terminate an employee's employment unless (a) the employee has been given either the notice period required by subsection (2) or compensation instead of notice; or, (b) the employee is guilty of serious misconduct, that is misconduct of the kind such that it would be unreasonable to require the employer to continue the employment during the notice period.
Mr Dowling submitted that Mr Webb was guilty of serious misconduct in wilfully disobeying Mr Dowling's instructions, ignoring several warnings and because of the missing cash transactions. It is also said that Mr Webb agreed to forego the notice. I have assessed Mr Webb's demeanour in the witness box and although, on balance, I find that Mr Dowling had received the impression from Mr Webb that he had agreed to forego the notice, I am still not satisfied, on the basis of the requirements of section 170DB, that notice should not have been given.
Under section 170DB where an employee has been employed for not more than one year the period of notice required to be given is one week. I am satisfied that Mr Webb should have been given one week's notice.
As to the matters raised by Mr Webb in relation to section 170DC, I have weighed up the evidence of both the parties and, on balance, I prefer the version of the facts given by Mr Dowling. I found Mr Webb's evidence in relation to this somewhat vague, whereas Mr Dowling's evidence was quite clear and I am satisfied that Mr Webb was given two written warnings and that the matters complained of had been put to him verbally by Mr Dowling on a number of occasions. I am not satisfied that the respondent has breached the provisions on section 170DC.
Further, because of the matters I have just raised, I prefer the evidence of Mr Dowling also in relation to the questions of Mr Webb's performance and I consider that there was, in any event, a valid reason connected with Mr Webb's capacity or conduct for the termination. I think Mr Dowling, and I do not mean this as any criticism of Mr Webb, was quite accurate when he said that Mr Webb had shown that he and Mr Dowling were not on the same wave-length. Perhaps it was not Mr Webb's fault, but I consider that, in any event, the employment relationship would not have lasted much longer because of the problems Mr Webb had in relation to the pricing of the goods and I consider that his suitability for the position of manager of the shop was not as good as could reasonably be required by the respondent. For that reason I dismiss the other parts of the applicants claim.
I certify that this and the preceding nine pages are a true copy of the Reasons for Judgment of Judicial Registrar Boon.
Associate
Date:
The applicant represented himself
The respondent represented himself
Hearing date: 19 July 1995
Judgment date: 19 July 1995
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