Gazzo v Foldaway Industries Pty Ltd
[1996] IRCA 119
•29 March 1996
DECISION NO: 119/96
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 5391 of 1995
B E T W E E N:
Joseph GAZZO
Applicant
A N D
FOLDAWAY INDUSTRIES PTY LTD
Respondent
REASONS FOR DECISION
29 March 1996 PARKINSON JR
These are my written reasons for ruling and for decision and orders made in this matter on 21 March 1996.
On 21 March 1996 I refused to grant the applicant an adjournment sought by the applicant in correspondence to the court by facsimile on that day. The request for an adjournment followed a number of similar requests being made in writing by the applicant, and previous rulings on this question. It should be noted that for the purposes of this ruling I treated the letters of request sent to the court by the applicant as applications for the purposes of the Rules although no steps were taken by the applicant to comply with the requirements of the Rules.
Reason for Ruling
This matter was adjourned part heard at 5.00pm on 29 February 1996 to 21 March 1996. It was adjourned as a result of a desire in the court to ascertain various matters from the transcript of proceedings. In the interim period the applicant’s legal representatives informed the court by notice of their intention to cease to act for the applicant.
This notification was given by them on 14 March 1996 and notification was made to the respondent. On 13 March 1996 the applicant advised the court by typewritten facsimile that he requested access to various exhibits and transcript for his legal advisers. He informed the court that he was “initiating new legal representation” and he referred to a firm of solicitors and in particular to a partner of that firm. In a handwritten notation on the facsimile he also advised that he was seeking an adjournment to the proceedings because he was seeking further legal representation.
The applicant and respondent and the solicitors referred to by the applicant in his correspondence to the court were advised that the matter was to be listed for further mention on 19 March 1996 so that the applicant could be heard in relation to the matters which he had raised in his facsimile of 14 March 1996. The court was advised by the solicitors to whom the applicant referred, that they did not have instructions to act on behalf of the applicant. This they confirmed again in subsequent communications. The applicant, however, continued in his documentation to the court to refer to the solicitors.
The applicant was informed on 18 March 1996 of the mention scheduled for 19 March. He did not appear at the mention nor was he represented. At that proceeding I made the following observations:
I am not satisfied at this point that the applicant has been or will be prejudiced by the matter proceeding to hearing on 21 March 1996. At this point I am satisfied that there has been sufficient opportunity to the applicant to take steps to arrange for representation if that is his wish in these proceedings.
Further, as to the Workcover certificate of capacity received at 3.06 pm this day, there is insufficient information or detail in that certificate of capacity to adequately inform the Court as to the nature of the illness that the applicant advises, or to the extent to which that illness prevents him from attending the Court either this day or on the adjourned date of the proceedings being 21 March 1996.
I then ruled that the hearing would not be adjourned, and that the question of costs to date be reserved. Further correspondence was initiated by the applicant.
The proceedings resumed on 21 March 1996. At resumption there was no appearance for the applicant. Further correspondence was forwarded by the applicant to the court on 21 March 1996. By facsimile he pressed the adjournment request, however there was no appearance by the applicant or on his behalf at the hearing resumption. None of the material referred to in the letter of 21 March 1996 in any way added to or altered the views I had previously formed as to the adjournment request. I ruled that the hearing was to proceed as scheduled in accordance with my ruling on 19 March 1996.
On 21 March 1996 the court heard submissions from counsel for the respondent as to the future conduct of the matter. It was submitted on behalf of the respondent that the proceedings ought be dismissed and that an order for costs ought lie. The dismissal was sought on the basis of failure to prosecute the proceedings. It was further submitted that there was sufficient material for the application to be dismissed on its merits. I agreed with this submission and what follows are my written reasons for judgment on the substantive aspects of the proceeding together with the application for costs.
Reasons for Decision
This is an application made pursuant to s170EA of the Industrial Relations Act 1988. The applicant was employed by the respondent as sales manager for it product. The applicant was employed on 3 April 1996 and his employment was terminated summarily by the respondent on 13 October 1996.
The respondent is a wholesaler of baby goods such as cots, car seats and other equipment. This product is sold wholesale to various retail outlets both in Victoria and interstate. The applicant’s duties were to promote and to sell to these retail outlets the product of the respondent.
Evidence was taken from the respondents witnesses on 28 and 29 February 1996 and each witness was cross-examined by counsel for the applicant. The respondent’s case was closed on 29 February. On that day the applicant commenced his evidence, completed his evidence in chief and was then cross-examined at some length by counsel for the respondent. The proceedings were adjourned before the cross-examination of the applicant had concluded. The applicant contested the respondent’s contention that it had valid reason for the termination of the employment.
The evidence in these proceedings was that the applicant engaged in selling and distributing the respondent’s product for his own personal profit. The evidence is that the applicant also engaged in altering and/ or converting cheques payable to the respondent by various retail clients of the respondent to his own advantage.
The applicant’s evidence included direct admissions to a number of dealings with cheques of the respondent and to various activities which, put at best for the applicant, were inconsistent with his obligations as an employee of the respondent. All of the conduct admitted occurred whilst the applicant was in the employ of the respondent and in the course of that employment. These activities included altering, without the permission of the drawer, the detail of cheques made payable to the respondent, making unauthorised additions to the detail of cheques, payment of cheques made out to the respondent into his personal bank accounts, dealing in the product of the respondent for his own personal gain and operating a business selling the respondent’s product and a competitor’s product from his domestic premises.
The conduct admitted by the applicant and established on the evidence called by the respondent establishes that the respondent had valid reason for the termination of the employment. I am satisfied that this is the case and that the respondent complied with the provisions of S170DE(1) of the Act. I turn now to consider the operation of S170DE(2).
The applicant’s evidence in mitigation as to all of these matters was that he engaged in such conduct at the instigation or with the endorsement of the General Manager of the respondent, Mr Nicholas. I do not accept that there is any evidence that this was the case; rather the evidence is to the contrary. Mr Nicholas gave evidence in the proceedings and denied any knowledge or endorsement or involvement in the applicant's conduct. The evidence of other witnesses called in the proceedings as to their bringing certain discrepancies to Mr Nicholas’s attention supports his evidence, in particular the evidence of Mrs Harris to which I refer later in this judgment. I am of the view that Mr Nicholas was a frank and truthful witness. I prefer his evidence to that of the applicant.
However, it is relevant to observe that for the purposes of these proceedings, the question of endorsement of the applicant’s conduct by a more senior manager is not important. The applicant was not employed by the general manager of the respondent, but by the respondent. Improper conduct of the type admitted by the applicant cannot be justified or mitigated before this court merely because he alleges that other employees were engaged in such activity. The duty of fidelity which existed was one between the applicant and the respondent company and this was in my view known by the applicant. His evidence that he took various steps, albeit subsequent to investigations into his own conduct, to contact the principal officers of the respondent in New Zealand satisfies me that he was well aware of the nature of his responsibilities and obligations to the respondent as his employer.
In these proceedings there was a large amount of documentary material which I am satisfied was material created by the applicant. The documents include various invoices which are Exhibits R5, R6, R35 and A1. These documents were sent to the various retailers by the applicant after the commencement of police investigations and after these proceedings had been initiated. There were also facsimiles which the applicant allegedly sent to various customers, and “receipts” or invoices for goods which the applicant sold to them. I am satisfied that these materials were not genuine or regular documents of the respondent. This is apparent from comparisons between the usual business records of the respondent and the documents provided by the applicant to some of the retailers.
The applicant’s conduct was disclosed to the respondent when a retailer, Mr Natale, enquired of the general manager why it was that he was asked by the applicant to write a cheque out to cash, and when another retailer, Mrs Harris, queried of the general manager where the packaging for certain items was. Both of these witnesses gave evidence of these conversations and their circumstances and I am satisfied that they were truthful and frank witnesses.
The evidence establishes that it was as a result of these customer enquiries that Mr Nicholas investigated the matters and identified that there were discrepancies between payments said to have been made by the retail customers and monies paid into the respondent by the applicant. The fact of these discrepancies is not denied by the applicant. It is established in these proceedings that monies payable to the respondent were paid to the applicant’s own private accounts without any accounting for those funds through the records of the respondent and without authorisation from any person in the respondent.
The applicant put no evidence before the court, other than that relating to the alleged involvement of Mr Nicholas in his conduct, which would suggest that in the circumstances the decision taken by the respondent to terminate his employment could be characterised as harsh, unjust or unreasonable. I have already set out my conclusions as to the evidence relating to Mr Nicholas’s alleged involvement and the effect of such evidence. Those findings are also applicable to this aspect of the proceeding.
I am not satisfied that the termination of the applicant's employment was harsh, unjust or unreasonable. The respondent has complied with its obligations arising from S170DE(2) of the Act. I turn now to the consider the operation of S170DC.
The applicant was accorded many opportunities by the respondent to explain the various matters of discrepancy. Each of these opportunities was avoided by the applicant. His method of communication with the respondent in this regard was by facsimile (Exhibits R20, R22, R25, R28.) In none of those facsimile communications did the applicant give any explanation as to the issues of concern to the respondent, notwithstanding that the applicant did detail various other unrelated matters. The applicant's illness was relied upon as having prevented him from explaining his conduct or responding to the matters raised by the respondent. I do not accept that this was the case, as it is clear that the applicant had the ability in that period to communicate directly with the respondent extensively on various matters by facsimile and had done so. I am of the view that he was in a position to respond to the allegations made by the respondent had he so desired.
On 13 October 1996 Mr Nicholas, having been informed that the applicant was being interviewed by police in relation to various matters associated with the employment, attended at the police station and advised the applicant in person, by way of written notice, that his employment was terminated. This advice occurred in the context of the applicant having persistently refused to explain his conduct to the respondent. He failed to take the opportunity accorded to him to do so.
Having regard to these factors, I am satisfied that the respondent met any requirement which may have existed for it to accord the opportunity to the applicant to explain the misconduct alleged against him. The respondent complied with the requirements of S170DC. I am also satisfied that the respondent was entitled in the circumstances of the conduct of the applicant to terminate the employment summarily and without notice. The applicant’s conduct may be reasonably characterised as gross misconduct. There has been no failure to comply with S170DB of the Act.
Costs
In so far as the issue of costs is concerned, it was submitted by Mr Riordan that the provisions of S170EHA(1) as amended on 15 January 1996 operated to enable the court to exercise a general discretion in these circumstances to order costs. It was submitted that this discretion applied in respect of all proceedings instituted pursuant to s170EA and not merely proceedings instituted after the date of the amendment. I do not agree with this submission. The transition provisions enacted by the Industrial Relations and other Legislation Amendment Act 1995 (Cwth) operates to confine the costs power contained in S170EHA to termination of employment which occurred after 15 January, 1996 or to applications filed after 15 January 1996. The applicable transition provisions are set out at Schedule 2 item 14 of the amending Act. The Schedule applies by virtue of S 4 of the amending Act and the Schedule provides:
14. Application
The amendments of the Industrial Relations Act 1988 made by an item of this Schedule other than item 2, 9 or 10 apply:
(a) in relation to a termination of the employment of an employee that occurs on or after that day fixed by Proclamation for the commencement of that item; and
(b) in relation to the termination of the employment of an employee that occurs before that day if neither the employee nor a trade union on behalf of the employee has made an application to the Industrial Relations Court of Australia for a remedy under section 170EA of the Industrial Relations Act as in force before that day.
This application was filed on 20 October 1995 in respect of a termination of employment which occurred on 13 October 1995 and I am satisfied that S170EHA of the Act does not apply. It is therefore necessary to consider the application of S347 of the Act.
That section provides:
A party to a proceeding (including an appeal) in a matter arising under this Act shall not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause.
An interpretation of the meaning of the term "vexatiously or without reasonable cause" may be found in the decision of Kanan v Australian and Postal Telecommunication Union (1992) 43 IR 264. In that case Wilcox J, as he then was, expressed it as being where a case has on its facts "no substantial prospect of success” (at 264). This approach may extend to include cases where a finding is made as to the veracity of the evidence of the applicant, such as in this case where on the version of the facts of respondent, the applicant had no substantial prospect.
However in this matter it is sufficient to rely upon the fact that in these proceedings the applicant’s own version of events, even had it been accepted by me, established that there was no substantial prospect of success in this matter. I am further satisfied in view of the applicant’s conduct that this fact ought to have been known to him. I am of the view that the applicant’s evidence in these proceedings is to be characterised as untruthful. I am satisfied that he engaged in a deliberate attempt to reconstruct the events which were relied upon by the respondent to terminate the employment.
For the reasons set out herein the adjournment request was refused and the application was dismissed and an order for costs was made.
The orders of the court will be:
The application by the applicant for an adjournment of the proceedings is refused.
The applicant’s application pursuant to section 170EA is dismissed.
The applicant pay the respondent’s party/party costs of the application, such costs to be determined by the Registrar of the Court pursuant to
Order 62 (1) (c) of the Rules of Court.
I certify that this and the preceeding eight (8) pages
are a true copy of the reasons for judgment of
Judicial Registrar Parkinson.
Associate:
Dated: 29 March 1996
APPEARANCES
Solicitors for the applicant: Mason Sier Turnbull
Counsel appearing for the applicant: Mr A Flower
Solicitors for the respondent: Barker Gosling
Counsel appearing for the respondent: Mr J Riordan
Dates of hearing: 28 & 29 February, 19 & 21 March 1996
Date of judgment: 29 March 1996
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 5391 of 1995
B E T W E E N:
Joseph GAZZO
Applicant
A N D
FOLDAWAY INDUSTRIES PTY LTD
Respondent
MINUTES OF ORDER
21 March 1996 PARKINSON JR
THE COURT ORDERS THAT:
The application by the applicant for an adjournment of the proceedings is refused.
The applicant’s application pursuant to section 170EA is dismissed.
The applicant pay the respondent’s party/party costs of the application, such costs to be determined by the Registrar of the Court pursuant to
Order 62 (1) (c) of the Rules of Court.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules
CATCHWORDS
INDUSTRIAL LAW - complaint of UNLAWFUL TERMINATION - whether termination for VALID REASON of CONDUCT OR PERFORMANCE - whether termination HARSH UNJUST OR UNREASONABLE - whether PROCEDURAL FAIRNESS - application by applicant for ADJOURNMENT OF PROCEEDINGS - COSTS
Industrial Relations Act 1988, ss 170EA, 170DE(1), 170DE(2), 170DC, 170DB, 170EHA, 347
Industrial Relations and other Legislation Amendment Act 1995, s 4, Sch. 2
Kanan v Australian and Postal Telecommunication Union (1992) 43 IR 264
JOSEPH GAZZO v FOLDAWAY INDUSTRIES PTY LTD
VI 5391 of 1995
Before: PARKINSON JR
Place: MELBOURNE
Date: 29 MARCH 1996
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